This is a message from Colin Neil, managing director of Adyen, which is a Green Retail World partner.
Storm Eunice recently battered our shores, and scientists warned extreme weather events could continue to hit Britain because of the effects of the climate crisis. Many retailers are responding with transformative change. Tesco, for example, was the first to use electric lorries in Britain earlier this year. Others have put environmental activism at the heart of business, with Patagonia outlining its mission: We are in business to save our planet.
I believe that doing good and giving back should underpin every decision and step a business makes.
Acting as a force for good when no-one is watching is satisfying and creates a happier productive team. In 2020, the British Retail Consortium set out its roadmap for the industry to reach net zero, giving momentum for retailers to decarbonise their stores by 2030, deliveries by 2035 and products by 2040. And, as we emerge from the pandemic, the trade association says brands will be able to refocus their energy on progress against this timeline.
Shoppers have become increasingly aware of how their own purchasing habits impact the environment too. Research we recently commissioned shows 65% of shoppers believe retailers have a responsibility to ensure their stock is ethically sourced and produced, while 54% state they will not shop with a retailer if it has an ethical issue within its supply chain. So, retailers who are conscious of their environmental responsibilities and clearly communicate their progress to consumers could achieve a better bottom line in future.
Socially conscious consumers
Many retailers are taking a proactive approach to reducing their carbon footprint as the world warms, and environmental, social and governance (ESG) principles outline a better way businesses can create societal value. Action makes sense for customers too, with Adyen research finding that 47% of consumers prefer to shop with retailers who stand up for causes they believe in, and 46% prefer to shop with outlets who track and mitigate their environmental impact.
The race to achieve net zero by 2050 is on, and it’s important businesses find their niche in the ethically and responsibly-sourced market so they’re not left behind. For those making progress now, they’ll find a green offer an integral differentiating factor for customers, who’ll vote with their feet and their wallet.
For example, 31% of shoppers will pay to offset the carbon emissions associated with goods delivery.
However, only 15% of retailers actually give customers the opportunity to offset emissions associated with purchase delivery.
Green for growth
The value of the ‘green pound’ in the UK has risen by 90% since records started in 1999, with UK annual spend predicted to reach a record £122 billion, according to Co-op’s 2021 Ethical Consumerism Report. And as the retail sector continues to emerge and recover from the pandemic, competition between stores becomes more fraught as all look to set themselves apart.
The modern shopping experience needs to spark joy in the head and the heart of the consumer, and knowing brands have done all they can to mitigate the impact on the environment is key to this. A report from Social Enterprise UK last year found that 12,000 social enterprises were created, a record, as entrepreneurs sought to better their communities.
The popularity of organisations accredited with B Corp status, meaning they have demonstrated high social and environmental purpose, is also growing. UK B Corps have reported an average revenue growth of 14% year-on-year since launching in 2015.
But it’s not just where consumers shop that can have a positive impact on the environment but how, too. For example, retailers could give shoppers the opportunity to offset the carbon footprint of their purchases at the end of the checkout process, as airlines have done for years. Adyen’s Restore application helps retailers do this. Funds donated through Restore directly support climate action projects like reforestation and renewable energy, with no extra cost to the retailer or friction for the customer.
Establishing strong policies and integrating innovative ways to address climate change will be vital for those retailers serious about a low carbon future, while offering products that meet their shoppers demands.
The opportunity for retailers is clear. By publicly actioning environmental policies, while delivering excellent customer service, retailers can demonstrate they’re serious about meeting consumers’ demands and addressing the urgent climate crisis. The opportunity for growth from going green is there for retailers, but the catalyst for change must be to achieve greater good in society otherwise customer loyalty and increased sales may not come to fruition.
Colin Neil is managing director of Adyen, which is a Green Retail World partner.
[Image credit: Adyen]