A fifth (21%) of UK retailers said they cancelled contracts with suppliers last year due to concerns over ethical and sustainable standards, according to Barclays Corporate Banking research.
It means UK retailers have cancelled £7.1 billion in contracts across the last 12 months with suppliers that don’t meet their ethical and sustainable standards, the study estimated.
In a Barclays Corporate Banking report – Reshaping retail: how ethics and sustainability are changing retail’s ecosystem – it is claimed the pandemic has brought a renewed focus on environment, sustainability and governance issues – and it is shifting business priorities as a result.
In a study of more than 300 retail decision makers, 51% say sustainability is more important now than it was two years ago and 49% say the same about ethical standards.
Additionally, almost four in five (79%) retailers think that a long-term strategy to improve their ethical and sustainable credentials is more important than overcoming short-term supply chain disruption. On average, retail businesses with more than ten staff are investing £504,000 per year to improve their own footprints.
Of those who have cancelled supplier contracts based on ethical and sustainable standards, the average is six contracts cancelled per retailer, with an average value of £306,000 per contract.
The most common reasons for cancelling contracts with suppliers were use of unsustainable materials (39%), unfair working hours (37%), and lack of membership to trade body that monitors ethical and sustainable standards (32%).
Barclays also questioned 2,000 members of the public on attititudes to sustainability and ethics in business, with quality of product (78%) and price (76%) the purchasing factors that are of most importance to consumers. Ethical and sustainable credentials were cited by 52%.
On average, shoppers said they would pay 4.55% more for an ethically-sound product and 4.36% more for sustainably-sourced goods.
Some 63% said they wanted to see retailers make more ethical and sustainable upgrades in the future.
[Image credit: Green Retail World]