This week, Power Retail launched the Power Retail Sustainability Spotlight in collaboration with The Purpose Agents.
The Sustainability Spotlight highlights leading sustainability initiatives in retail, and makes a strong call to action to Australian brands to revamp their operations and rethink their business models in order to reduce their environmental impact.
Power Retail has joined forces with sustainability consultancy The Purpose Agents to publish a spotlight report that highlights leading sustainability initiatives in retail and makes a strong call to action for Australian brands to revamp their operations and business models in order to reduce their environmental impact.
Tell me a little bit about The Purpose Agents. What inspired you to start The Purpose Agents?
We both strongly believe that doing good for people and the planet is also good for business. Through our previous careers, we’ve seen the impact of retail on the environment and knew that we wanted to mobilise a more sustainable way of doing business. Anna came from a senior management position in e-commerce and Alice had lots of experience in stakeholder engagement and harnessing partnerships to drive change, which we both consider sustainability’s secret weapon. We also both grew up in Germany, where our mums in the ’80s were already meticulously washing out yoghurt cups before recycling them. That might have also had a strong influence on our values and decisions.
The topic of sustainability in retail has been around for some time, but it has become far more prominent in the last few years. What do you believe has accelerated this?
There have been multiple factors driving this development. In the public domain, we have seen an adjustment of values towards a rising of eco- and social consciousness with movements such as Earth Hour and the “MeToo” campaigns. Likewise, new policies such as the introduction of the Modern Slavery Act in 2018 has forced businesses to take a closer look at ethical issues within their businesses and supply chains.
Then came the pandemic as a big circuit breaker which has shown us the vulnerability of healthy societies. It made us think even more about who we are as a society, who we buy from as consumers and what responsibility businesses have in these challenges.
With an increase in drought and extreme weather around the globe, humanity, thankfully, has been waking up to the fact that we are destroying the only thing we truly need to survive – our planet. In Australia especially, experiencing the recent disaster-level wildfires and floods has highlighted the severity and urgency of climate change at our doorstep.
Sustainability is now at the front of board meetings with climate change being considered not only an existential but also material business risk and shareholders and customers demanding action.
What is the purpose of The Purpose Agents; what is the goal?
As “Chief Sustainability Officer in a Box”, we help businesses design and implement sustainability and social impact initiatives aligned with their company values.
In this, we follow the triple bottom line approach, which means a focus on value generation for people, the planet and profit.
We strongly believe that the Australian retail ecosystem has the right players and conditions available to drive some really transformative change while also creating value for the business.
Especially in the e-commerce industry, there is a strong entrepreneurial spirit and willingness to challenge the status quo. We certainly need a new way of doing business because business as usual is outdated and unsustainable.
What is the sort of strategic advice that The Purpose Agents offer retailers and e-commerce businesses?
The sustainability and social impact strategies we create are tailored to the specific and unique situation of each of the companies we work with. To do this, we work with all key stakeholders in the business to identify what sustainability really means to the business, and what is material from a business, market, customer or regulatory perspective.
We help draw this together into a powerful strategy and also support in implementation and communicating it to key stakeholders and the community.
Along the way, we will always advise the business to be transparent about their sustainability work, because the sustainability journey demands action and not perfection. Also, from our experience, customers do appreciate being taken along on the journey.
What have been some of the key learnings of The Purpose Agents since launching the business?
Whilst there are some low hanging fruits that businesses can access, there are simply no shortcuts in sustainability. Impactful sustainability initiatives require time to design and resources and collaboration across departments to implement. Smaller businesses can be more agile, while transformation in larger businesses typically takes more time.
Crucial elements in all the work we have been doing with brands have been investigations into current business practices, creation of policies and processes to change old ways of doing business, and data to back up sustainability claims.
With the increased awareness of sustainable practices in retail, many businesses can give the appearance of being sustainable without actually being sustainable, better known as greenwashing. How may greenwashing negatively impact businesses?
The most important advice in this regard is that authenticity and transparency of claims is key.
The European commission conducted a screening of websites for greenwashing and found that 42 percent of claims made on websites are exaggerated, false or deceptive and could qualify as unfair commercial practices under EU rules.
In Australia, the ACCC is closely watching companies that make environmental claims and may prosecute companies that make misleading and deceptive claims or contain a false or misleading representation.
Making a false claim risks brand and reputation damage, and fines or legal action as this space becomes increasingly regulated. In a time when brand loyalty is low and choice is high, brands can’t afford to risk trust with consumers, especially when it comes to sustainability claims.
Are there any false assumptions that businesses may have when it comes to being a more sustainable business?
Many businesses still see an inherent trade-off between choosing a more sustainable future and business growth and profit. They see ESG-related spending as purely cost, not an investment, however, the data contradicts this assumption and supports that sustainability creates long term value, minimises business risk, attracts customers and talent and most certainly reduces cost in the long term.
This becomes readily apparent when considering the high chance of an introduction of a price on carbon. At this stage, inputs from the natural world are not accurately priced, e.g., using the sky as a free space to offload our emissions. Every tonne of carbon emitted raises the temperature and reduces air quality, but companies have traditionally never paid for those costs to society. Having a price on carbon will, eventually, drive up costs in the supply chain.
From our perspective, we are working to help businesses understand the cost of inaction because we are long past the point where the cost of action is far lower than the cost of action.
What is the most important aspect of sustainability that retailers need to address?
Many retailers will readily address sustainable packaging initiatives or work on improving recycling rates in their operations, and whilst these are noteworthy initiatives, the most critical task is to reduce carbon emissions to get to Net Zero.
The latest UN report on climate change (IPCC, April 2022) warns that it is now or never to curb emissions and again emphasises the need to cut emissions by at least 50 percent by 2030 in order to prevent global warming of more than 1.5 degrees by the end of this century.
When looking at the emissions of a typical retailer, emissions from shops, offices, and corporate activities such as business travel contribute only a small share to total emissions. About 90 per cent of total emissions sit in the product supply chains, with around half of all emissions driven by the production and processing of raw materials.
For retailers, this means they have to really tackle their supply chains, gain transparency on all steps and processes and work with their suppliers to reduce the overall carbon footprint. This is not an easy task and will require collaboration and partnerships to drive systemic change.
Power Retail and The Purpose Agents are working together to launch the Power Retail Sustainability Spotlight. Who are some of the key retailers that have stood out for you?
The Purpose Agents have developed an assessment across different categories of social and environmental responsibility, e.g. human rights, reduction of environmental impact or community engagement. Anna, with the support of the Power Retail team then evaluated the submissions and the spotlight will highlight those brands and initiatives whose work really stood out to the judges in a certain category. To find out which ones, you will have to read it.
The goal of the spotlight is to inspire the retail industry for sustainable action and showcase the retailers that are doing their bit for people and the planet. We high five everyone who submitted and celebrate their contribution in lifting up the retail industry as a whole.
For the Future: Why is it important for retailers to take part in the Power Retail Sustainability Spotlight?
We firmly believe in collaboration as sustainability’s (not so) secret weapon. Sustainability is everyone’s business and there is no such thing as competition when people and planet urgently need our attention. We believe the spotlight is a powerful tool to highlight the right things to do and share this with the industry.
If everyone started working on what some of the spearheading retailers are already doing, we would already be further underway in transforming the retail industry for good. As such, we hope that The Power Retail Sustainability Spotlight can provide guidance and inspiration to help accelerate the sustainability journey of the industry as a whole.
What does a sustainable retailer look like in 2022?
The sustainable retailer is aware that their business has a social and environmental impact and is investigating and implementing ways to improve that impact. They are doing the work to understand their business and supply chain and consider all stakeholders, such as their employees, customers, workers, the environment and the community. They understand the importance of driving the necessary change and have started to collect data, set some ambitious targets and are walking the walk, one day and one initiative at a time.
They will also use their sphere of influence to enable customers, suppliers and other stakeholders to act more sustainably.
While they understand the urgency, they also understand that it is a journey and every step forward is a step in the right direction. It is a difficult path and it takes courage to accept the fact that it is an iterative process and requires vulnerability to share one’s experiences and challenges. We applaud everyone who is walking it.
Thank you to The Purpose Agents for their hard work and dedication in crafting the Sustainability Spotlight with Power Retail. High five to these retailers for their innovative efforts to drive sustainability in their product category!
You can find the full Sustainability Spotlight report here, with the full list of highlighted retailers, retailer interviews and Power Retail data and insights on sustainable retailing.
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