Sustainability: It’s Everyone’s Business

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Sustainability Spotlight Report Highlights Leading Eco Retailers

Consumers Demand Greater Transparency And Sustainability From Brands

With climate change identified as a leading issue in Australia’s recent federal election, and 83 per cent of voters wanting more climate action, it comes as no surprise that retailers are feeling the pressure to make changes that meet new consumer values and demands.

Power Retail, a leading source for Australian e-commerce insights and intelligence, has joined forces with The Purpose Agents, to publish a spotlight report that highlights the work of leading sustainable retailers, and makes a strong call to action to Australian brands to revamp their business model to reduce their environmental impact.

Significant findings from the spotlight report include:

  • Almost half of Australians (47.16%) prefer shopping with retailers that are open about their sustainability practices.
  • Over 65% of Australians believe that the retail industry creates too much waste, with 1 in 3 considering the product’s lifecycle and packaging before purchasing it.
  • 63% of consumers would be willing to pay more for products made using ethically sourced or sustainable materials and practices.
  • 1 in 2 Australians would be more likely to return to a retailer with sustainable or ethical practices.

When it comes to sustainable practices, the majority (56%) of consumers say recyclable packaging is the most appealing to them when making an online purchase, followed by animal cruelty (42%) and transparency about the origins of the products (41%). There is a strong link between sustainability, loyalty, and conversions. The majority (55%) say that they would be more likely to return to an online retailer that has sustainable and / or ethical practices.

In a time where retention is more important than ever before, retailer should not only have a strategy when it comes to sustainability, but ensure their consumers are aware of their values.

Anna Forster, Co-Founder of The Purpose Agents says, “The goal of this spotlight is to inspire the retail industry to move further towards sustainable action and showcase the businesses that are doing their bit for people and our planet. For retailers, investing in a sustainable and ethical business model will be a long-term win for business revenue. We know that customers are more likely to return to retailers that are transparent about ESG policies, and with the carbon tax on the horizon, now is the time to get ahead of the curb.”

“For this spotlight, we assessed retailers across different social and environmental responsibility categories, e.g. human rights, reduction of environmental impact or community engagement to arrive at our top brands in this area.”

Awarded retailers include Flora and Fauna, World’s Biggest Garage Sale, Biome, Modibodi, Go for Zero, B2C Furniture and TWOOBS.”

Ally Feiam, Editor at Power Retail says, “We are seeing growing unrest amongst socially conscious and eco-friendly consumers as they demand more from retailers that are neglecting their corporate social responsibility to act on climate change and source ethical products.

“The time for change is now if retailers want to align their business model with consumers’ demands and see a financial return on their investment.”

So, what does a sustainable retailer look like in 2022 and why should it be at the forefront of businesses’ minds? With the insights of awarded retailers, The Purpose Agents and Power Retail have identified four key areas that retailers must address and act upon in order to improve their environmental impact:

  1. Reduce carbon emissions

The latest UN report on climate change (IPCC, April 2022) warns that it is now or never to curb emissions, emphasising the need to cut emissions by at least 50% by 2030 to prevent global warming of more than 1.5 degrees by the end of this century.

About 90 per cent of total emissions from retailers come from product supply chains, production, and processing of raw materials. Therefore, retailers must tackle their supply chains, gain transparency on all processes, and work with their suppliers to reduce their overall carbon footprint.

While carbon neutrality ranks low among the sustainability practices that make a retailer appealing, this is because there is a lack of education around the impact of carbon emissions of the average consumer. Whereas recyclable packing, which ranks highest, is a tangible practice that consumers can see and understand.

  1. Transparency and greenwashing

The European Commission conducted a screening of websites for greenwashing and found that 42% of claims made on websites are exaggerated, false or deceptive.

In Australia, the ACCC is closely watching companies that make environmental claims and may prosecute companies that make deceptive claims or contain a false representation.

Retailers must be authentic and transparent about their sustainable policies and ethical practices to consumers, as false claims risk brand reputation damage. 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.

  1. ESG is an investment in business growth 

Many businesses still see an inherent trade-off between choosing a more sustainable future and business growth and profit.

They see Environmental, Social, and Governance, (ESG)-related spending as purely cost, not an investment. However, the data from the spotlight report shows that sustainable practices create long term value, minimises business risk, attracts customers and talent and most certainly reduces cost in the long term.

With the introduction of a price on carbon imminently pending, those who invest early in decarbonization will be in an advantageous position to reap cost benefits in the future.

  1. Investigate and set an ambitious goal

The sustainable retailer in 2022 is investigating and implementing ways to improve their impact. They are looking into their supply chain and collecting research from their consumers to hear what the most important environmental practices to them are.

As 1 in 2 Australians are more likely to return to a retailer with sustainable or ethical practices, this process of research is crucial to customer retention and business growth.

Retailers must then set ambitious goals to act upon their corporate social responsibility and minimise their environmental impact.

Founder of Go for Zero, Ellie Degraeve says, “Perfection isn’t the goal; change is. Transitioning from plastic to sustainable pens, for example. Or from bottled water to an under-sink purifier and glasses for your customers. Starting with something simple can create a ripple effect across your staff, workplace, customers, and communities.

“While one change may not seem like much, it might just be the challenge you need to start your sustainable business journey.”

Likewise, Julie Mathers, Founder of Flora & Fauna says, “We need to drive change as retailers – it’s what our customers want and it’s what our planet needs. At Flora and Fauna, the drive for sustainable change runs deep within the veins of our company, from the warehouse to the customer’s doorstep, and even inside the office”

“We’ve set ambitious targets for our company to achieve before the end of 2024, including closing the loop of all our waste and making our warehouse operations completely plastic-free by 2024. This is what retailers need to and that change starts at the top with CEOs and business leaders to instil the importance of sustainability into their everyday practices.”


For more information, visit: https://powerretail.com.au/power-retail-sustainability-spotlight to download the full report.

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