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Sustainability in retail

Profit, people and the planet

Retailers increasingly direct their strategy and investments towards sustainable and responsible growth. They are re-evaluating the sustainability credentials of their products and of their overall brand in order to resonate with the wishes of an increasingly wide range of consumers. We look into some of the drivers behind this increased focus on sustainability.

The responsible consumer

A first driver for retailers to increase their focus on sustainability is, naturally, following their customers’ wishes. Consumers are making it pretty clear that they find sustainability important, so it is no wonder the retailers are ensuring that they have the same focus.

Our Global State of the Consumer Tracker gathers monthly data on consumer sentiment and behaviour around the world. The Tracker asked, for example, whether consumers had purchased a sustainable product or service within the past four weeks. Data from the 2021 Tracker showed that 55% of consumers had done so. Of the consumers that made sustainable purchases, 32% also said that they paid significantly more for their sustainable purchase than the price of an alternative product or that were willing to wait longer to obtain it. The largest category of sustainable purchases made by respondents was in food and beverages, at 42%, followed by everyday household goods at 25%.

Almost 79% of executives see the world at a tipping point for responding to climate change compared to just 59% eight months prior. Despite the gravity of the moment, there is a prevailing sense of optimism as 88% (compared to 63% eight months prior) agree that with immediate action, we can limit the worst impacts of climate change.

When it comes to consumer demographics, we see the topic of sustainability especially high on the agenda of Millennials and Gen Zs. For Gen Zs, it is their number one concern. For Millennials, it comes just after concerns about healthcare and unemployment. 28% of the Millennials and Gen Zs surveyed, stared that they had started or deepened their relationships as customers with businesses whose products and services benefit the environment.

Shareholders support sustainability

Retailers are also facing pressure from their shareholders and other investors, to adopt sustainable strategies. Investors are conscious of how their own brand and reputation are affected by the retailers they support – according to a global survey by BNP Paribas, 59% of investors surveyed invest in companies that align with their values.

Shareholders are also urging retailers to provide equal employment opportunities in their organisations and to change management strategy to ensure customers, employees and the environment are protected from toxic chemicals, for example. The number of shareholders in favour of releasing the EEO-1 report, which consists of demographic data such as race/ethnicity and gender of employees, increased from just 25% to 70% in 2020. A clear call for a change in mindset.

Positive pressure from the boardroom

According to Deloitte’s 2022 CxO Sustainability Survey, 86% of consumer industry CxOs believe that, with immediate action, they can limit the worst impacts of climate change and move towards an improved future. As a result, the majority expects climate change to have a big impact on their company’s strategy and operations over the next three years.

The table below shows how retailers are developing their sustainability strategies in line with these wishes from the boardroom.

" For a better, more inclusive and sustainable future, retailers must continue to incorporate ever-evolving consumer, shareholder and boardroom needs and expectations into their strategies. "


– Evan Sheehan, Global Retail, Wholesale and Distribution Leader

Where to go from here?

The pandemic has significantly altered consumer sentiment and purchasing behaviour and there seems to have been a change in consumer consciousness over the past two years, which will continue to shape future shopping patterns, along with the increasing preference for convenience and shopping online. This has led to greater focus by retailers on ESG issues, with many of them committing to ambitious environmental and social goals. Retailers are also pressured to report metrics relating to sustainability, employee diversity and inclusion and corporate governance.


Review the full report or get in touch for more details

Please check out our Global Powers of Retailing 2022 report to find out more about the performance of the world’s largest and fastest-growing retailers and dive deeper into their sustainability strategies. We also look forward to hearing from you if you would like more information or if you would like to discuss the implications for your company.

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