BCG study says retailers lagging on sustainability progress

Study from Boston Consulting Group in partnership with World Retail Congress says sustainability progress lags behind ambitions despite clear advantages

According to a new study by Boston Consulting Group (BCG) in partnership with World Retail Congress, the retail industry has work to do to deliver its climate change commitments.

The study, entitled Sustainability In Retail Is Possible – But There’s Work To Be Done, says that while sustainability is certainly high on the agenda, most retailers are failing to make meaningful progress.

Companies with annual revenue of between US$1bn and US$500bn were polled around the world, from grocers to electronics.

It seems retailers are taking a rather long-sighted view on sustainability, even though they have a good grasp of the competitive advantage it could bring them – from attracting new customers to retaining staff. That said, despite a firm commitment and belief in sustainability, only a few of the 37 global organisations surveyed had made significant progress.

Six out of 10 firms believed their company’s goals were bold and differentiated, more than half had still not set any sustainability KPIs, less than one in five were on track to cut Scope 3 emissions to meet targets set by the Paris Agreement in 2015.

With greenwashing being levelled at companies across most industries, some retailers are simply doing the basics to meet regulations and keep investors and stakeholders happy. More can certainly be done.

The report says there has to be a large shift in attitudes and processes to create value, and BCG suggests three strategies for success:

  • Prioritise: Sustainability targets should carry as much weight as other parameters when embarking on new business opportunities as well as when evaluating business performances, and sustainability indicators must be weighted equally with costs and profits.
  • Embed: Retailers should strive for end-to-end integration, with sustainability-related KPIs at all levels of the business.
  • Reimagine: Companies must reimagine their value chains. This can be done by localising their production or integrating vertically. Closer interactions with suppliers will be essential too. 

“As the industry moves in the direction of greater sustainability, a focus on progress, rather than perfection, will be critical,” says Ian McGarrigle, Chairman of World Retail Congress.

“There may be an inclination to wait for perfect data on sustainability drivers and constraints before starting to act, but that would be a mistake,” adds Shalini Unnikrishnan, a managing director and partner at BCG, and a co-author of the report.

The study says collaboration will be critical to sustainability progress, with laggards learning from leaders to solve problems.



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