Emission critical: the retail industry’s race to net zero

The net-zero challenge looks particularly daunting for a sector with such a colossal carbon footprint. But there are ways it can make a big difference – and quickly
illustration of cutting retail emissions

The retail industry is among the UK’s biggest contributors to global warming. The British Retail Consortium (BRC) has acknowledged that the sector’s annual greenhouse gas emissions are 80% higher than those of all road traffic in the country.

The industry imposes its hefty carbon footprint throughout the value chain, from the upstream emissions of farms and factories all the way down to the energy used by customers to power their purchases. 

Clearly, everyone relies on retailers to supply them with the essentials of life and more, and the sector is a huge employer and contributor to GDP. But the United Nations’ COP26 climate summit last month reinforced the need, if it were not already clear, for urgent action to keep global warming to 1.5C below pre-industrial levels to stand a chance of saving humankind from the worst effects of climate change.

It’s not as though the industry has been sitting on its hands – far from it. For instance, more than 70 leading retailers have committed themselves to following the BRC Climate Action Roadmap. This aims to bring the CO2 emissions of the industry and its supply chains down to net zero by 2040. The plan has three key decarbonisation milestones: stores by 2030, deliveries by 2035 and products by 2040.

In addition, the CEOs of five supermarket chains – Co-op, Marks & Spencer, Sainsbury’s, Tesco and Waitrose – have signed up to the World Wide Fund for Nature (WWF) Retailers’ Commitment for Nature. They are working closely with the WWF to reduce the environmental impact of their operations by half before 2030, focusing on aspects such as agricultural methods, food waste and packaging.

But more big retailers need to “come on board, so consumers can be confident that they aren’t inadvertently fuelling the climate crisis or the destruction of nature when they shop”, stresses Dr Mike Barrett, the WWF’s executive director of science and conservation. 

Chris Stark, CEO of the Climate Change Committee, the independent expert group that advises the government on emissions policy, agrees. “Retailers have a real opportunity to offer the low-carbon products and services that are integral to the net-zero transition,” he says.

So what more should retailers – SMEs as well as the big high-street names – be doing? What does best practice look like? 

In the run-up to COP26, the government issued guidance to retailers on its UK Business Climate Hub that makes numerous recommendations. Retailers should, it says, respond to growing consumer demand for sustainable products. They should assess existing products and consider more sustainable options; they should source products made sustainably from recycled and recyclable materials, with minimal or no plastic packaging. 

Reducing packaging, or switching to more eco-friendly packaging, will help to cut emissions and plastic pollution. Suppliers should reduce non-essential packaging when they ship products and reuse or collect essential packaging for recycling when they next deliver.

Stocking products made closer to home not only supports the local economy. Locally produced goods can also reduce transport costs and emissions. Retailers should think beyond products and consider how they can source locally for other items, such as shop fittings. And, crucially, stores should be powered by renewable energy.

Additionally, shop staff should ask customers before printing receipts. It’s estimated that more than 11.2 billion receipts are printed in the UK annually. Most of these use thermal paper, which should not be recycled because the process would release excessive amounts of an environmentally harmful chemical called bisphenol A into the air. Till providers should enable receipts to be emailed.

The UK needs to shift away from its current throwaway consumer culture and adopt a truly circular economy. This requires retailers and manufacturers to put more thought into designing products made to last, alongside redesigning retail systems to enable customers to exchange, repair and reuse goods.

The recently enacted Ecodesign for Energy-Related Products and Energy Information Regulations 2021 require manufacturers to make spare parts for products available to consumers, aiming to extend the lifespan of goods by up to a decade. Retailers could also run customer swap-shops or collection points for items that are no longer wanted. Initiatives such as the John Lewis Partnership’s furniture rental scheme need to become the norm, with products made to last.

Retail organisations and environmental campaign groups are united in calling for greater state assistance to help retailers reach net-zero carbon emissions as quickly as possible.

The BRC’s director of food and sustainability, Andrew Opie, says: “Our roadmap is already helping the retail industry on its journey to net zero by 2040, but we need government support and cooperation.”

Given that the effects of climate change are already hitting hard, 2040 is not soon enough for Friends of the Earth. The environmental pressure group’s senior sustainability analyst, Clare Oxborrow, wants retailers in the UK to make an ethical and sustainable transition to net-zero emissions by 2030. 

“The government needs to facilitate this by implementing the right policies and incentives to make it happen,” she says. “By creating new standards to make businesses operate in line with nature’s limits, including legally binding regulations to drive down climate-wrecking emissions, the government can ensure that retailers are doing all they can to meet that all-important 2030 target.”

Legislation requiring all retailers to act should ensure that no business would be put at a competitive disadvantage and therefore deterred from adopting a more sustainable operating model, Oxborrow argues. Retail businesses, large and small, would then be more inclined to cooperate and take concerted action. 

No one says that achieving net zero in retail will be easy, but industry leaders and politicians have to be bold. The transition will be a massive operation, requiring collaboration among retailers, manufacturers, logistics providers, consumers and government.

Why three is the magic number for cutting retail’s emissions

A retailer’s scope-three greenhouse gas emissions – those produced by its supply chain and by consumers in the process of using its products – are typically both the biggest element of its carbon footprint and the hardest one to measure.

According to the Carbon Trust, the retail industry cannot develop a valid climate strategy unless it accurately accounts for its scope-three footprint. Yet the reliability of emissions reporting along the supply chain can be difficult to verify.

Shortening their supply chains and ensuring that logistics partners use green vehicles to transport materials and finished goods are both important ways for retailers to move towards net zero. Insisting that their direct suppliers and those further up the chain use sustainable materials and renewable energy are also important steps.

Food production accounts for a large proportion of retail’s scope-three emissions. This means that supermarkets in particular can make a significant impact by offering less and better-quality meat, supporting more sustainable local producers and reducing the amount of food that goes to waste.