RILA`s 2015 Retail Sustainability Management Report

Transcription

2015 Retail Sustainability
Management Report
FOR THE RETAIL INDUSTRY LEADERS ASSOCIATION'S RETAIL SUSTAINABILITY INITIATIVE
PROGRAM SPONSORS
From The Retail Industry Leaders Association
On behalf of the Retail Industry Leaders Association (RILA) and our member
companies, we are proud to present RILA’s third Retail Sustainability
Report. RILA has been providing the industry with a forum to learn about
sustainability activities in the retail industry and accelerate its progress for
the past nine years.
This report is different from our first two Retail Sustainability Reports,
published in 2012 and 2013, because its content is structured according to
a tool that RILA recently developed, the Retail Sustainability Management
Maturity Model. Tools like the Maturity Model and reports like this are the
cornerstone of RILA's efforts to help companies understand how they
compare to others in the industry, and how they may want to progress in
the future.
Since the publication of the last report, we have seen companies grow
more sophisticated by focusing their efforts on the most material issues—
whether energy reduction in stores, engaging their suppliers, accessing
product ingredient information, etc.—and engaging the most critical
stakeholders—internal and external—to drive change. Companies are also
better quantifying the business and environmental benefits of their
programs, further justifying their efforts. As you will see illustrated in this
report, these benefits are fueling the continued development of
sustainability programs over time. But of course with progress on any
major issue comes challenges as well.
Please use this report to understand the core components of a retailer's
sustainability program. We will continue to publish this report in future
years to show how the industry is progressing on key sustainability
indicators.
Adam Siegel
Vice President,
Sustainability &
Retail Operations
Sandy Kennedy
President
Find more at www.rila.org/sustainability
2
Report Contents
Letter from the Retail Industry Leaders Association
About the Retail Industry Leaders Association
About this Report
About the Maturity Model
Sustainability Team Structures & Resources
Dimensions of Sustainability Management
Conclusion
2
4
5
6
7
10
47
3
About The Retail Industry
Leaders Association
About RILA
The Retail Industry Leaders Association (RILA) is the trade association for the
world’s largest and most innovative retail companies. RILA members include more
than 200 retailers, product manufacturers, and service suppliers, which together
account for more than $1.5 trillion in annual sales, millions of American jobs, and
more than 100,000 stores, manufacturing facilities, and distribution centers
domestically and abroad.
About RILA’s Retail Sustainability Initiative
RILA’s Retail Sustainability Initiative (RSI) engages retail sustainability executives to
share leading practices, develop new processes, and communicate their efforts to the
industry’s stakeholders. RILA uses its annual conference, benchmark studies,
collaborative partnerships, and research on behalf of retail sustainability interests to
help our members learn and develop their programs.
Learn more or access the program’s resources at www.rila.org/sustainability
4
About This Report
RILA’s first sustainability report, the 2012 Retail
Sustainability Report, highlighted the major trends and
best practices within the industry in a case-study format.
The report found that environmental and social
considerations were beginning to supplement traditional
measures of competition, including price, service, and
quality.
In 2013, we then determined that it was important to
update that first report format to provide a RILA-wide
snapshot. Therefore, RILA's second retail sustainability
report highlighted indicators that the largest retail
companies use to assess their sustainability programs.
We promised to update that format periodically to see
how the industry progresses. This latest report continues
that tradition, but in a more organized format.
Specifically, this report is aligned with a tool that RILA
recently developed called the Retail Sustainability
Management Maturity Model. This report summarizes
retailers' current progress along the Maturity Model.
We also recognize that it is important to show future
trends. So for each dimension of the Maturity Model, we
report not just on retailers' current progress, but also
where they expect to be in 2017. While we cannot
definitively state that the industry will follow these
projections, the trends provide a view of current
priorities.
We will continue to update the data periodically to follow
the industry's progress.
Sources of Information
This report was developed through an online survey. The
survey was disseminated in June of 2015; 42 retail
companies responded, representing more than 50,000
locations and $620 billion in global revenue.
Retail Categories
In analyzing the results of the survey, we broke down
respondents into four retail categories, namely small,
medium, and large format, and grocery retailers. This
breakdown accounts for differences in operational
characteristics and allows for similar retailers to be
compared to one another.
Sustainability Teams and Operations Questions
Our first set of questions asked retailers about their
sustainability teams and budgets to get a better context
for what “sustainability management” really means at a
national retail company.
Sustainability Management Dimensions Questions
Retailers were then asked to consider their company’s
progress in 27 dimensions of sustainability management.
5
About the Maturity Model
This report is structured around RILA’s Retail
Sustainability Management Maturity Model.
The Maturity Model is a tool for retail sustainability
executives to identify the management practices that will
drive improved corporate and environmental
performance, and assess the maturity of their programs.
It is divided into seven sections, including: Strategy &
Commitment, People & Tools, Visibility, Retail
Operations, Supply Chain, Products, and Environmental
Impacts.
The Maturity Model is a tool that can be used for
individual company and industrywide purposes.
Individual retailers can use it to: identify the maturity of
their program and opportunities for improvement,
facilitate internal conversations about the sustainability
program’s development, access more funding for
sustainability programs, train employees with
sustainability responsibilities, obtain buy-in from
leadership and other departments, evaluate internal and
external perceptions about the program, and more.
The Maturity Model is based on Deloitte Consulting LLP
and RILA's primary knowledge of the industry, and
confirmed through three review periods that solicited
input from environmental nonprofits and experts, and
numerous retailers. While the first version specifically
focuses on environmental impacts; subsequent versions
may also include aspects of social, community, and
diversity impacts.
To download the RILA Retail Sustainability Management Maturity Model visit www.rila.org/sustainability
6
Sustainability Team Structures
& Resources
Team Structures
The first set of questions asked respondents about
their sustainability teams' size, budgets, titles, and
reporting structures to determine how roles and
responsibilities of those teams are defined at
nationwide retail companies.
Resources and Benefits
We also asked about the benefits, risk mitigation
opportunities, budgets, and payback periods that
sustainability teams work toward. That information
illuminates the opportunities and constraints that
teams must work within.
While 30 percent have of respondents have just one
executive dedicated to sustainability, nearly 20
percent have six or more people on the team. Further,
sixty percent of respondents indicate that their
company also has staff with part-time sustainability
functions; often those executives manage other
operational functions and work to integrate
sustainability into those functions.
For the most part, sustainability budgets stayed the
same this year relative to last, however, 30% of
budgets did increase. Not surprisingly, the typical
payback period that sustainability projects need to
achieve is 2-3 years—on par with the projects of
other functions.
Senior Director, Director, and Vice President are the
most frequent titles for the senior-most sustainability
executive, and they report to a wide range of places
within the organization.
Interestingly, sustainability is most often seen as a
source of innovation for the company, though there
are many other benefits: it can help companies enter
new markets (regions, consumer segments, product
types), mitigate risk, and enhance their brand.
7
Sustainability Team Structures
Respondents provided information about their sustainability team sizes, structures, titles, and goal-setting processes.
Percent of peer respondents
Staff Devoted to Sustainability
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Title of Senior-Most Sustainability Lead
# people:
> 10
8 to 10
Senior Manager/ Manager
Senior Director/ Director
6 or 7
5
Vice President
4
EVP/SVP
3
2
Other / N/A
1
0%
0
Full-time
Part-time
25%
50%
75%
100%
Percent of respondents
Sustainability Team Reporting Structure
Sustainability Goals Set By
Public Relations
C-suite
Human Resources
Legal
Sustainability team
Marketing
Facilities / Real Estate
Functional department(s)
Merchandising
Supply Chain
We do not have
sustainability goals
Other
0%
25%
50%
75% 100%
0% 25% 50% 75% 100%
8
Resources for Sustainability
Respondents also provided information about their sustainability programs' budget trends, payback requirements, and benefits.
Budget for Sustainability in 2015
Capital Investment Payback Requirement
Less than a year
Increased
1-2 years
2-3 years
Remained the same
3-5 years
Decreased
More than 5 years
No minimum
No dedicated budget
It depends
0%
25%
50%
0%
75% 100%
50%
75%
100%
Benefits of Sustainability
25%
Risk Mitigating Benefits of Sustainability
Increase profits
Reduce costs
Source of innovation
Employee retention
Brand enhancement
Risk management
New markets
Satisfy stakeholders
Satisfy consumers
Address regulation
Reputation
Recruiting
Energy dependencies
Price fluctuations
Human rights
Financial instability
Weather conditions
0%
25%
50%
75%
100%
0%
25%
50%
75%
100%
9
Respondents were also asked to consider their company’s
progress in 27 dimensions that define an effective retail
sustainability program. On the following pages, we track
the current status and projections of the industry’s retail
sustainability programs. Each page documents one of the
27 dimensions by overlaying the industry’s average
maturity, the maturity of the current industry leader, and
the average and industry leaders’ desired maturity two
years from now. These “flags” are placed over the
description of the corresponding maturity stage.
Those dimensions, and corresponding maturity stages,
were initially described in RILA’s Sustainability
Management Maturity Model. The Maturity Model as a
standalone document is a roadmap to help retail
sustainability managers optimize their programs. Retailers
can use it first to baseline the maturity of their program
and then to identify the highest leverage opportunities for
improvement.
Further, each dimension is linked to a range of resources,
case studies, and existing working groups that are already
informing management of that particular dimension and
catalogued in RILA’s Sustainability Management Resource
Library.
In the survey, retailers were asked to select the maturity
stage that is most representative of their current state and
then the maturity stage that most closely reflects where
they plan to build their program in the next two years.
Having those two data points allowed us to plot the
industry’s current average and the highest performing
“leader,” as well as their ambitions for development over
the next two years.
You can view the complete Maturity Model and the Resource Library at www.rila.org/sustainability
10
12 Maturity Comparison Across All Dimensions
13 Strategy & Commitment
14 Strategy
15 Materiality / Risk Identification
16 Goals
17 Governance & Executive Engagement
18 Incentives
19 People & Tools
20 Stakeholder Engagement
21 Employee Engagement
22 Funding Mechanisms
23 Business Innovation Mechanisms
24 Visibility
25 Metrics & Measurement
26 Reporting & Communicating
27 Point-of-Purchase Consumer Education
28 Marketing Campaigns
29 Collaborative Involvement
30 Retail Operations
31 Stores / Corporate Offices
32 Warehouses / DCs
33 Data Center & Applications
34 Supply Chain
35 Transportation / Logistics
36 Supplier Engagement
37 Supply Chain Transparency & Traceability
38 Products
39 Product & Packaging Design and Development
40 Owned Manufacturing / Production
41 Product & Packaging End-of-Life Stewardship
42 Environmental Issues
43 Energy & GHG Emissions
44 Water & Wastewater
45 Waste & Recycling
46 Chemicals & Toxics
11
2015 Average Maturity
2017 Prediction
27) Chemicals & Toxics
26) Waste & Recycling
25) Water & Wastewater
24) Energy & GHG Emissions
23) Product & Packaging Stewardship
22) Owned Manufacturing / Production
21) Product & Packaging Design
20) Supply Transparency & Traceability
19) Supplier Engagement
18) Transportation / Logistics
17) Data Center & Applications
16) Warehouses/DCs
15) Stores / Corporate Offices
14) Collaborative Involvement
13) Marketing Campaigns
12) Consumer Education
11) Reporting & Communicating
10) Metrics & Measurement
9) Business Innovation Mechanisms
8) Funding Mechanisms
7) Employee Engagement
6) Stakeholder Engagement
5) Incentives
4) Governance & Executive Engagement
3) Goals
2) Materiality / Risk Identification
1) Strategy
Program Maturity
Maturity Comparison Across All Dimensions
A snapshot of the 2015 average and leaders' programs across all maturity dimensions is presented below.
Next practice
Leading
Excelling
Standard
Starting
2015 Leader
12
Strategy & Commitment
The first critical steps toward achieving the desired outcomes of any business program is a strategy
that reflects the company's priorities, operating environment, assets, and challenges; as well as strong
senior executive commitment.
In this section:
Dimension 1 | Strategy
Dimension 2 | Materiality / Risk Identification
Dimension 3 | Goals
Dimension 4 | Governance & Executive Engagement
Dimension 5 | Incentives
13
Dimension 1 | Strategy
Overview
Business programs can only be effective with a strategy that makes the best use of company resources, and addresses the material issues with the greatest potential for
business, environmental, and societal outcomes.
Key Findings:
- This dimension currently ranks as one of the most mature dimensions for the industry, and is planned to be one of the most ma ture in 2017
- Both large and medium format retailers plan to grow signficantly in this dimension in the next two years
The industry's maturity
6
•
9
2
1
2015 Maturity
25
22
3
8
2017 Predictions
1
5
Ad hoc efforts, no formal
• Defined sustainability team
• Defined sustainability team
• Sustainability strategy aligns • Sustainability strategy and
sustainability program or
with responsibilities on short
aligns with various key
across departments and with corporate strategy are one
program relies on volunteers
and long-term sustainability
departments on sustainability overall corporate strategy
and the same
only
strategy
strategy for the short-and
• Incorporates internationally
• Sustainability strategy /
• Sustainability strategy is
long-term
recognized standards (e.g.,
results regularly reported to
primarily focused on
• Sustainability strategy
UNGC, SA8000, etc.) into
executives and the board
operational priorities rather
encompasses operations,
long-term organizational
• CEO regularly incorporates
than sourcing or
and merchandizing and
strategy
sustainability strategy in
merchandizing practices
sourcing practices
• Balanced scorecard (people,
meetings and
planet, and profit) system in
communications (e.g.
place for reviewing strategies employee town halls /
and projects
investor calls, etc.)
2015 Average
2017 Prediction
2015 Leader
Example resources to improve
• Sustainability SWOT framework
• Kroger
• Retail Sustainability Management Maturity Matrix
• ISO 50001 Energy Management System Standard
• UN Global Compact
• Ceres Roadmap for Sustainability
14
Dimension 2 | Materiality / Risk Identification
Overview
Defining the issues most material to the business is critical for all corporate functions; and resources are best directed at those issues with the potential for a significant
material impact.
Key Findings:
- The industry on average plans to make significant improvement over the next two years in this dimension
- Large format retailers plan to grow signficantly in this dimension in the next two years
2015 Maturity
22
15
19
16
•
Ad hoc efforts to identify
sustainability risks and
opportunities
2015 Average
•
Assesses risks and
opportunities through a
formal materiality process
Assesses risks and
opportunities and conducts
bi-annual review
• Assessment incorporates a
timeframe of 3-6 years
•
3
2
1
0
Individual departments (e.g., •
sourcing, operations) review
materiality assessment
•
• Uses the same processes to
review sustainability risks and
opportunities as corporate
risks and opportunities
• Assessment incorporates a
timeframe of more than 6-10
years
•
2017 Predictions
1
3
Integration of sustainability
and corporate risks
Assessment incorporates a
timeframe of more than 10
years
2015 Leader
2017 Prediction
• GRI Materiality
• Gap
• Sustainability Accounting Standards Board
• Return on Reputation for the Retail Industry
• adidas
• Ceres
15
Dimension 3 | Goals
Overview
Goals signal commitment, and drive focus and internal alignment. Some companies prefer to perform rigorous analysis before setting goals that they are certain to achieve,
while others opt for ambitious goals to inspire employees to action. And some companies choose internally-facing goals, while others see value in publicly promoting them.
Key Finding: Both large and small format retailers plan to grow signficantly in this dimension in the next two years
2015 Maturity
25
10
8
1
Annual goals based on cost
saving only
• No efforts in place to
benchmark sustainability
goals against peers
•
2015 Average
2017 Predictions
22
4
2
Short- and long-term
• Identifies absolute reduction •
sustainability goals, mostly
goals for two or more material
focused on operations
risk categories (i.e., energy
• Efforts in place to benchmark
consumption, water,
sustainability goals against
waste/recycling, sourcing,
•
peers
consumer education)
• Routine and comprehensive •
benchmarking efforts in place
to prioritize focus areas
•
2017 Prediction
8
0
2
Defines comprehensive,
• Uses global and local context
aggressive, and crossof environmental conditions
functional goals addressing
and aligns with scienceall material risk categories
based targets to set
Goals address most aspects
appropriate goals
of sustainability
• Quantitatively links profit
Includes separate goals
goals with sustainability goals
focused on supply chains,
products, sourcing, and
marketing
2015 Leader
2017 Leader
• PivotGoals
• Eileen Fisher
• WWF's The 3% Solution
• Staples
• RILA's Retail Sustainability Initiative
• Power Forward
16
Dimension 4 | Governance & Executive Engagement
Overview
Strong governance structures ensure buy-in from company leadership and focus the program's efforts. Further, program execution is more streamlined with engaged
executives who can direct their teams and resources as appropriate.
Key Finding:
Large and medium format retailers, and grocers, plan to progress the most in this dimension in the next two years
16
18
15
13
4
1
Ownership and accountability •
for sustainability has either
not been defined or is
confined to one function (e.g.,
Environmental Health and
Safety)
•
• No sustainability council in
place
Dedicated sustainability
•
executive to design, manage,
and continuously improve
sustainability program and
initiatives
•
Sustainability council
comprises senior leaders
from key functional roles and
meets periodically
• Accountability is clearly
•
defined for sustainability
goals and initiatives
•
10
2015 Average
2015 Maturity
2
Board and company
•
leadership develop and/or
endorse goals and initiatives
to improve sustainability
•
Sustainability council
comprises executives,
defines priorities, and
•
periodically reports to senior
leaders
Senior management's
sustainability roles are clearly
defined
2017 Predictions
1
Board oversees and
•
endorses sustainability goals
and initiatives
Dedicated executive
•
champion for sustainability
appointed by board
Executives from all of the
•
relevant parts of the business
are engaged (e.g., strategy,
innovation, finance, HR,
legal, marketing, sourcing)
2
Board and key executives
held accountable for
sustainability performance
Dedicated Chief
Sustainability Officer reports
directly to CEO
CSO & CEO partner to
demonstrate business
relevance of program to
investors and other
stakeholders
2015 Leader
2017 Prediction
• Governance for Sustainability
• Best Buy
• RILA's Retail Horizons
• Marks and Spencer
• Ceres Roadmap for Sustainability
17
Dimension 5 | Incentives
Overview
Incentives drive all business behavior. Implementing programs will be more streamlined when the proper organizational, management, and employee incentives are
aligned for achieving sustainability objectives.
Key Finding:
This dimension is one where nearly all companies are just starting
12
2
•
Sustainable business and
•
leadership practices do not
factor into annual evaluations
and compensation
2015 Average
2015 Maturity
28
27
1
Performance evaluation and •
compensation considers
multiple "balanced" goals and
performance metrics
Include basic sustainability
•
goals for select leaders as
part of metrics
8
Includes sustainability metrics•
in annual reviews and
performance ratings for each
business function
Rewards (monetary or non- •
monetary) biggest
contributions to sustainability
performance
0
2
2017 Predictions
1
1
Reviews mid-level
• Links executive
management processes
compensation to
regularly and links it to
• Invests in incentives to
Provides some incentives to
influence positive employee
influence positive personal
behaviors (e.g., charging
behaviors for all employees
stations for electric vehicles
(e.g., hybrid car or mass
at store or office parking lots)
transit subsidy)
2015 Leader
2017 Prediction
• Incentivizing and Valuing Employee Engagement
• Loblaw
18
People and Tools
An appropriate amount of resources, mainly in the form of personnel, funding, tools, and stakeholder
input, is critical in order to execute business priorities. A strong strategy and senior executive
commitment can unlock access to resources that can drive a successful program.
In this section:
Dimension 6 | Stakeholder Engagement
Dimension 7 | Employee Engagement
Dimension 8 | Funding Mechanisms
Dimension 9 | Business Innovation Mechanisms
19
Dimension 6 | Stakeholder Engagement
Overview
If properly engaged, stakeholders—from customers to investors to nonprofits and government—can be a sustainability program’s greatest ally. Those stakeholders have
valuable perspectives, expertise, resources, and more that can greatly benefit companies.
Key Finding:
This dimension is one where nearly all companies are just starting
2015 Maturity
25
1
•
•
9
19
3
Identifies key stakeholders
• Assesses stakeholder
Identifies some stakeholder
concerns systematically
concerns on a periodic basis
through materiality analysis
but no defined method of
• Establishes and
proactive engagement
communicates methods of
stakeholder engagement
2015 Average
13
2
6
2017 Predictions
2
2
Addresses stakeholders
• Identifies comprehensive list • Consistently monitors and
concerns through materiality
of KPIs through stakeholder
reports publically on KPIs
analysis and identifies some
engagement process
identified through stakeholder
KPIs from the process
• Establishes and
engagement
• Builds relationships with key
communicates methods of
stakeholders
stakeholder engagement by
type and stakeholder group,
including frequency of
engagement
• Incorporates feedback from
key stakeholders into
sustainability strategy
•
2015 Leader
2017 Prediction
• Making Stakeholder Engagement Meaningful
• Coca-Cola
• 10 Tips for Activists When Engaging Companies
• Nike
• The Future of Stakeholder Engagement
• 10 Tips for Stakeholder Engagement
20
Dimension 7 | Employee Engagement
Overview
Company employees are the lifeblood of the organization; nothing will be accomplished without engaged employees from across the company. Further, the store
associates are also the direct connection to customers, so getting them excited about sustainability can energize customers.
Key Finding:
Small format retailers plan to grow the most in this dimension in the next two years
17
18
14
4
1
•
Educates through basic
environmental-awareness
signage in stores
2015 Maturity
17
2
7
0
Develops store sustainability • Posts store sustainability
• Provides collaborative forum •
team(s) or sustainability
performance (e.g., energy
for high-initiative employees
advocates to monitor on-site
consumption, waste/recycling to receive recognition for their
performance and provide
generation) for all store
sustainability efforts while
feedback to corporate
associates to compare their
sharing best practices with
sustainability team
store to other similar stores
colleagues
• Solicits sustainability
• Develops and maintains
• Holds highly visible senior
•
suggestions from corporate
online platform for employees leadership meetings on
employees
to review store & company
sustainability where store
• Hosts events for corporate
employees, sourcing,
employees to learn about
and submit ideas to reduce
merchants, logistics, and
sustainability in their retail
environmental footprint
other staff are recognized
roles and in their home (e.g.,
Earth Month events)
•
2015 Average
2015 Leader
2017 Prediction
2017 Predictions
2
Regularly educates
employees on company
sustainability vision and
business case to underscore
relevance to employee daily
work
Trains in-store employees to
educate customers about
company’s sustainability/ecoawareness efforts
2017 Leader
• PwC Employee Engagement
• Nestle
• GreenBiz Employee Engagement
• RILA Retail Employee Engagement Report
• Green Office Challenge-Chicago
21
Dimension 8 | Funding Mechanisms
Overview
Access to capital for resources and projects is a critical component in any corporate initiative. Sustainability can drive business value, but it needs to be measured in
financial terms in order to demonstrate that value and receive funding and support.
Key Finding:
This dimension is the one where most companies plan to be "excelling" in 2017
7
9
8
1
Minimal funding dedicated for •
sustainability programs
• No mechanism to track ROI
of sustainability efforts
Ad-hoc funds for
•
sustainability programs (e.g.,
energy efficiency, recycling
programs, marketing, etc.)
• Conducts some adjustment of
ROI on internal projects to
account for sustainability
metrics
•
2015 Average
2015 Maturity
28
25
2015 Leader
2017 Prediction
0
4
Dedicated fund for
• Key retail functions include
•
sustainability programs (e.g., sustainability budgeting (e.g.,
energy efficiency initiatives,
distribution, sourcing,
recycling programs, etc.)
merchandizing, store
operations)
•
• All corporate funding
requests routinely include
relevant sustainability metrics
• ROI of projects considers
total cost of ownership and
reputational value
2017 Predictions
0
0
Corporate funding requests
always include sustainability
metrics relevant to the
division or business unit
Sustainability related funding
on an upward trajectory over
time
2017 Leader
• Energy Project Evaluation & Guide Usage
• Kohl's
• Funding and Financing for Energy Projects
• Energy Funds-Best Practices
22
Dimension 9 | Business Innovation Mechanisms
Overview
As the retail industry is undergoing profound changes—resulting from changing demographics, new consumption patterns, technologies, big data, transparency, and
more—retailers must innovate. Sustainability provides a valuable frame in which to assess long-term trends and identify critical innovations.
Key Finding:
Nearly half of the respondents indicate that they will be "excelling" in this dimension in 2017
2015 Maturity
19
3
•
13
13
6
No specific channels in place • Innovation mechanisms in
to invest in sustainable
place - sustainability is a
innovation (e.g., 3D printing,
criteria but not weighted to
RFID innovations, mobile,
receive favorable score
etc.)
2015 Average
2017 Predictions
20
2
3
1
2
Innovation mechanisms in
• Dedicated team to create and • Innovation fund and
place to invest in sustainable invest in sustainable
dedicated team in place to
innovations
innovations
invest in retail innovation
• Solicits ideas from
around sustainability
employees, suppliers, and
• Chief Innovation Officer
external stakeholders
incorporates sustainability
and continuous improvement
into goals
•
2015 Leader
2017 Prediction
• Sustainable Innovation
• Nike
• Network for Business Innovation and Sustainability
• Model Behavior
23
Visibility
While successfully executing on business priorities is the most important step, visibility is critical in
order for senior executives and outside stakeholders to assess a program's progress and recognize a
program's benefits. Metrics, measurement, reporting, and marketing all contribute to ongoing
visibility campaigns.
In this section:
Dimension 10 | Metrics & Measurement
Dimension 11 | Reporting & Communicating
Dimension 12 | Point-of- Purchase Consumer Education
Dimension 13 | Marketing Campaigns
Dimension 14 | Collaborative Involvement
24
Dimension 10 | Metrics & Measurement
Overview
Every strong business program or initiative requires metrics to define success and track progress. Those metrics should align to both the goals of the program and the
whole organization; and should be periodically measured and shared with relevant stakeholders across the organization and outside.
Key Finding:
This dimension currently ranks as one of the most mature dimensions for the industry
27
2
•
10
5
0
No defined metrics for
sustainability
Limited set of sustainability
metrics; focused mainly on
operations
• Basic Excel spreadsheets
used to track metrics
•
2015 Average
2015 Maturity
25
Sustainability metrics focused •
on only certain aspects of
sustainability
• Metrics informed by
•
materiality assessment and
aligned to global frameworks
(e.g., GRI, IIRC, SASB)
• Sustainability metrics tracked •
for some regions of the global
business
• Measurement tools track
metrics
•
1
9
Sustainability metrics focused •
on all material aspects;
including innovation
Sustainability metrics tracked
for all of the most relevant
•
regions of the global
business
Automated measurement
tools; IT systems in place to •
periodically track the majority
of sustainability metrics
2017 Prediction
2017 Predictions
1
2
Comprehensive metrics
defined to cover all aspects of
sustainability; linking people
& planet with profit
Material metrics chosen from
most global frameworks with
rationale for metric selection
clearly communicated
Metrics captured consistently
across entire organization,
globally
2015 Leader
• UNEP Sustainability Metrics
• Macy's
• Sustainable Packaging Framework Project
• Global Protocol on Packaging Sustainability
25
Dimension 11 | Reporting & Communicating
Overview
More than ever before, customers, investors, regulators, and others are looking for metrics and qualitative stories about retailers’ sustainability efforts. Reporting and rating
systems have been developed to help companies report on their sustainability impacts and compare them against one another.
Key Findings:
15
13
15
11
2015 Maturity
18
1
0
6
Regularly published report
• Company either publishes a • Sustainability information is
• Scores in top 10% of industry •
contains cursory mention of
sustainability report on a
readily accessible in multiple
peers in sustainability
sustainable business
regular basis, or provides
formats and sustainability
measures and indices (e.g.,
practices
detailed webpages covering
goals publicly articulated and Dow Jones Sustainability
• Some limited
all aspects of sustainability
tracked
Index, Carbon Disclosure
sustainability/CSR
• Sustainability report includes • Includes a balanced and
Project)
information is available on
both quantitative metrics and honest discussion of
• Uses 3rd-party standards
•
website (e.g., a webpage, or
qualitative stories
challenges as well as
(e.g, GRI)
•
grouped with corporate
progress
Sustainability statements are
philanthropy)
• Discloses climate change,
independently audited
water, or forest-risk impacts • Communicates sustainability
as part of the CDP
programs in multiple,
accessible formats (e.g.,
•
websites, product marketing
and labeling, advertising)
•
2015 Average
2017 Predictions
1
2
Scores in top 5% of industry
peers in sustainability
measures and indices (e.g.,
Dow Jones Sustainability
Index, Carbon Disclosure
Project)
Uses integrated reporting
Focused multi-channel
sustainability campaign with
features such as an
interactive sustainability
website
Communicates sustainability
as integrated with brand
ethos
2015 Leader
2017 Prediction
• GRI Resource Library
• Whole Foods
• Carbon Disclosure Project
• Best Buy
• GRI Network
26
Dimension 12 | Point-of-Purchase Consumer Education
Overview
Consumers now are seeking more “sustainable” products, especially as that relates to certain product categories. But of course they are using terms they can relate to, like
healthy, natural, local, organic, non-toxic, energy efficient, recyclable, etc. Providing information about product attributes can drive loyalty and sales.
Key Finding:
Respondents identified this dimension as one that will grow the least in the next two years
17
17
18
3
0
Few products are explicitly
• Some specifically designated •
designed to reduce negative
products offered have
environmental impacts
sustainability benefits; ad hoc
• Limited education for
communication on the
consumers to learn about
benefits of those products
sustainability dimensions of
•
products
•
2015 Average
2015 Maturity
17
7
2017 Prediction
2015 Leader
High percentage of products •
offered have specific
sustainability benefits; regular
communication on the
benefits of those products
•
Provides some information or
tips to consumers to use
products/services in a
responsible way (e.g.,
"Please recycle this cup
when finished", "Wash this
garment in cold water")
•
3
Dedicated online storefronts •
encourage consumers to
select products with
sustainability benefits
Provides consumers with
tools or incentives for
•
sustainable behavior change
and actively engages with the
consumer even after the
purchase (via website,
product packaging, etc.)
Significant in-store signage or •
sections dedicated to
products with advanced
sustainability benefits
2017 Predictions
0
0
Engages consumers about
products with sustainability
benefits (e.g., catalogs, web
filters, icons, online
calculators, product stories)
Actively engages with
customer even after the
purchase (via website,
product packaging, etc.) to
mitigate any environmental
impact of products
Most own-brand products
have advanced sustainability
benefits, and communicate
benefits on packaging
2017 Leader
• Marks and Spencer
• Walmart Sustainability Leaders
27
Dimension 13 | Marketing Campaigns
Overview
Marketing is the fundamental channel between retail brands and consumers. So as consumers increase their demand for more "sustainable" products—whether that's
healthy, natural, local, organic, non-toxic, energy efficient, recyclable, or other product attributes—marketing those attributes will grow in importance.
Key Findings:
- Respondents identified this dimension as one where nearly the most number of companies are just starting
- Small format retailers plan to grow signficantly in this dimension in the next two years
2015 Maturity
23
17
4
•
16
1
0
3
Ad hoc sustainability-related • Regular sustainability-related • Ongoing efforts and funding • Dedicated sustainability
marketing campaigns
marketing programs
related to marketing
focused marketer within
• Tend to focus on specific
sustainable products and
marketing team
themes or times (e.g. Earth
services
• Marketing effectiveness
Day)
metrics focus on
reputation/brand value
2015 Average
2017 Prediction
2015 Leader
2017 Predictions
18
0
0
Significant marketing budgets
for sustainability-related
marketing
• Marketing effectiveness
metrics include financial ROI
•
2017 Leader
• Green Biz-Sustainability Marketing
• Levi's
28
Dimension 14 | Collaborative Involvement
Overview
While some aspects of sustainability performance lead to a competitive advantage for a retailer, there are often opportunities to work together to benefit not only the
collaborators, but also consumers and the environment. Additionally, often sustainability performance can be enhanced more efficiently through a collective effort.
Key Findings:
- This dimension currently ranks as one of the most mature dimensions for the industry, and is estimated to be one of the most mature in 2017
- Both large format retailers and grocers are currently most mature in this dimension
14
3
•
13
2015 Maturity
15
9
7
9
2
1
Does not formally engage
with peers on sustainability
issues
•
Actively shares sustainability • Member of one or more
•
information with peers
industry associations focused
on sustainable supply chain
issues
• Actively collaborates with
peers to make positive impact•
within industry
2015 Average
2017 Predictions
9
Premier member of one or
•
more industry associations or
multi-lateral groups focused
on relevant sustainability
issues
Partners with NGOs,
•
governments, academia, or
other institutions to identify
improvement opportunities
2017 Prediction
Takes a leadership role in
developing new tools or
capabilities that will enable
peers to improve
sustainability impact
Takes a leadership role in
developing new tools or
capabilities that will enable
entire value chains to
improve sustainability
performance
2015 Leader
• Collaboration and Leadership for Sustainability
• Best Buy
• RILA Retail Sustainability Initiative
• The Lego Group
• The Sustainability Consortium
• The Sustainable Apparel Coalition
29
Retail Operations
Retail operations relate to a company's physical infrastructure -- from stores and corporate offices, to
distribution centers and data centers. This infrastructure consumes energy and generates wastes, and
therefore pose eco-efficiency opportunities.
In this section:
Dimension 15 | Stores / Corporate Offices
Dimension 16 | Warehouses / DCs
Dimension 17 | Data Center & Applications
30
Dimension 15 | Stores / Corporate Offices
Overview
Retail facilities often represent the main environmental impacts that are directly under the company's control. Stores are the major touch-point for customers; and corporate
offices for the headquarter employees. Therefore it is necessary to focus on energy, water, and waste reduction at those facilities.
Key Findings:
This dimension currently has the most number of "standard" performers, but is a dimension where many companies plan to be "excelling" in 2017
2015 Maturity
30
3
11
0
2017 Predictions
23
7
0
6
1
1
Construction, renovation, and •
leasing decisions adhere to
local regulations, but little or
no 'green' standards
• Environmental impact, energy•
use, and occupant health are
only minor considerations
Incorporates some 'green
• Routinely incorporates
• Majority of store site
• Green building and
building' opportunities into
sustainability metrics into
incentivizes customers to
certification (LEED,
construction, renovation, or
construction, renovation, and practice sustainable
BREEAM, Living Building
leasing projects
leasing decisions
behaviors (e.g., premium
Challenge, EPA ENERGY
Opportunities are limited to • Accounts for sustainability
parking spaces for hybrid or
STAR, etc.) is expected on all
lower-cost options (e.g.,
factors (e.g., recycling
electric vehicles)
projects, except in extreme
efficient toilets, faucets, light
infrastructure, alternative
• At least half of facilities have
cases
bulbs, and ceiling fans;
transportation for customers, ENERGY STAR or LEED
• Routinely employs smart
recycled / reclaimed flooring; etc.) in store site selection
certification
landscaping, solar panels,
low-VOC paint)
• Higher percent of facilities
• Implements smart
wind turbines, or other
• Small percent of facilities
have ENERGY STAR or
landscaping at some store
technologies in the design
have ENERGY STAR or
LEED certification
and warehouse sites to
and construction of new
LEED certification
improve water efficiency
stores, and warehouses
•
2015 Average
2015 Leader
2017 Prediction
• RILA’s Green Lease Primer
• Starbucks
• USGBC
• USGBC Calculators
• Walgreens
• RILA's Retail Energy Management Program
• Green Lease Library
• DOE's Better Building's Alliance
31
Dimension 16 | Warehouses / Distribution Centers
Overview
In addition to stores and corporate offices, warehouses and distribution centers are often in the control of retailers (though in many cases they are leased spaces). Due to
their size, there are a lot of opportunities to improve the environmental performance of these facilities.
Key Findings:
- This dimension currently ranks as one of the most mature dimensions for the industry
- Large format retailers plan to be further ahead on this dimension in two years
2015 Maturity
24
3
9
8
1
20
5
Storage facilities do not
• Programs are in place to
• Redesigns warehousing
employ any eco-efficient
minimize waste and improve
facilities in order to optimize
technologies or practices
work flow
space and reduce energy
• Emissions are compliant but • Upgrades moving
consumption
not fully contained and
technologies (forklifts,
• Continuously minimizes
inventoried
automated belts, etc.) with
footprint and resource
energy-efficient power
consumption to create best
sources
uses for storage space and
• Installs low-energy lighting,
replaces non-sustainable
HVAC, and refrigeration
products
equipment
•
2015 Average
2017 Prediction
8
Regularly adds new
•
technology to reduce energy
consumption in moving and
storing goods within
warehouses
• Incorporates green standards •
for all new warehousing to
minimize energy and safety
costs
•
2015 Leader
2017 Predictions
0
4
Incorporates green standards
for all new warehousing or
retrofits existing warehousing
to minimize energy and
safety costs
Develops partnerships with
customers, upstream
processes, and transportation
vendors to maximize flow of
goods through facilities while
minimizing waste
2017 Leader
• Best Practices in Warehouse Efficiency
• Prologis
• ENERGY STAR Portfolio Manager - Warehouses
32
Dimension 17 | Data Center & Applications
Overview
Data centers are one of the fastest growing consumers of energy in the U.S. While they currently only represent a small fraction of retailers' impacts, they will be
increasingly important as retailing continues to move to internet-enabled platforms like the internet and mobile devices.
Key Finding:
Respondents identified this dimension as one that will not significantly grow in maturity in the next two years, likely becau se it is a minimal component
of retailers' environmental impacts
2015 Maturity
17
22
5
2
Application development has •
little or no awareness of
potential techniques for
•
greening
• Does not consolidate
•
applications
• Sizing and layout of owned or
contracted data center
•
infrastructure is ad hoc and
geared towards meeting
current needs
• There are no explicit
decisions around green IT
considerations
•
2015 Average
20
14
0
2
2017 Predictions
0
0
Reduces redundant functions •
in inventory of applications
Employs some efforts to
consolidate applications
Takes advantage of new
•
efficiency methodologies in
application development
Identifies and monitors some •
green metrics around power,
cooling, and airflow
2017 Prediction
Considers and tracks green • Fully leverages enterprise
• All data center build outs or
impact along with other
software across the
contracts must pass through
business objectives in data
organization to maximize
a rigorous green evaluation
center
use/capabilities
process before approval
Shares applications and
• Actively tracks green metrics • Seeks to improve ENERGY
related platforms across
against business green
STAR scores for all data
business units
objectives
centers
Software development
• Participates in ENERGY
• Employs effective 'big data'
lifecycle regularly uses new
STAR recognition program
strategies to analyze
efficiency technologies (e.g.,
for energy efficient data
sustainability data and
virtualization, SOA and other centers
metrics
sharing and flexible
technologies)
• Follows green technology
standards throughout
organization
2015 Leader
2017 Leader
• ENERGY STAR Data Centers
• Verizon
• DOE Data Centers and Servers
• Apple
• National Data Center Efficiency Program
33
Supply Chain
One of retailers' most critical strengths lies in efficiently transporting goods around the globe and to
retail stores just when they are needed. Further, they often interact with product suppliers to ensure
that their product requirements are being met.
In this section:
Dimension 18 | Transportation / Logistics
Dimension 19 | Supplier Engagement
Dimension 20 | Supply Chain Transparency & Traceability
34
Dimension 18 | Transportation / Logistics
Overview
Fast and efficient logistics systems allow retailers to ship goods to stores and even to customers' homes at low cost. Since fuel consumption is the largest contributor to the
environmental impact of transportation, retailers have a keen interest in reducing its use and associated costs.
Key Finding:
Nearly half of the respondents indicate that they are currently "standard" in this dimension
2015 Maturity
9
20
3
9
9
18
3
Aware of impact of
• Employs improved blend of
• Packaging and transportation •
transportation decisions on
rail, road, and air
system designs concurrently
the environment
transportation modes
occur to optimize flow of
• No precision or baseline
• Includes capacity
goods and minimize space
emission measurements
management as a criteria in
and energy usage
•
• Does not implement
managing distribution
• Develops innovative shipping
sustainable transportation
• Uses or tests some
mechanisms to maximize
•
initiatives or they are in early
alternative fuels in
load capacity
planning stages
transportation vehicles
• Uses reusable
• Participates in EPA
containerization for nearly all
SmartWay
products
• Recognized EPA SmartWay
Carrier & Shipper with a
highly ranking score
•
2015 Average
Demonstrates reduction of
environmental impact by
optimizing transportation &
warehouse network
Replaces vehicle fleet with
'green vehicles'
Considers emissions when
selecting transportation
vendors
2015 Leader
2017 Prediction
8
2017 Predictions
0
3
Forms transportation
alliances to maximize load
capacity and minimize waste
• Recognized excellence in
reducing environmental
impact from transportation
strategies
•
2017 Leader
• DOE's Vehicle Technology
• FedEx
• EDF's Green Fleet
• Workplace Charging Challenge
• EPA SmartWay Program
• EPA SmartWay Resources
35
Dimension 19 | Supplier Engagement
Overview
While the environmental impacts in product supply chains are often not in the direct control of retailers, many work with product manufacturers to reduce the energy, water,
and material use, and waste and wastewater generated during production.
Key Findings:
- The industry plans for this dimension to be one of the top performing in two years
- Both large and medium format retailers plan to progress the most in this dimension in the next two years
2015 Maturity
21
14
18
1
Does not explicitly consider •
sustainability dimensions in
sourcing process
• Supplier code of conduct
addresses various
environmental aspects, but •
may be missing certain key
attributes from recognized
industry standards (e.g.,
SA8000)
•
• Audits suppliers according to
a risk profile or in response to
problems
•
• No formal internal
management system for
tracking audits and
remediation steps
•
•
2015 Average
1
Incorporates key
•
sustainability considerations
into initial supplier
onboarding and ongoing
•
sourcing decisions
Supplier code of conduct
incorporates all dimensions of
recognized industry
standards
•
Delivers some training or
guidance to suppliers on
sustainability opportunities
•
Performs mix of internal and
external audits on a regular
basis according to supplier
risk profile
Works closely with suppliers
to remediate sustainability
issues
10
Assesses all suppliers
according to sustainability
criteria
Supplier code of conduct
includes measurable
sustainability metrics that
auditors can objectively
check against
Tracks supplier sustainability
performance quantitatively
over time
Actively collaborates with
suppliers to capture shared
savings through
improvements in
2
9
Sourcing/merchandise teams
use sustainability scorecards
as integral part of sourcing
decisions
• Hosts annual "Sustainability
Summit” with key
suppliers/vendors
• Encourages vendors to
improve and report on
sustainability metrics (e.g.
energy, waste, water) of their
products, possibly leveraging
services like CDP Supply
Chain
• Works closely with suppliers
to monitor subcontracting
arrangements
•
• RILA Supplier Engagement Report
• IKEA
3
•
•
•
•
•
2015 Leader
2017 Prediction
2017 Predictions
3
Encourages sustainable
manufacturing practices for
all products and suppliers
Employs in-house team of
expert auditors to check
suppliers according to
supplier risk profile
Develops remediation plans
in collaboration with supplier
and closely monitors
quantitative progress against
them
Relevant departments test
and actively partner with
research groups or vendors
to design next generation
equipment for sustainable
performance
Defines and executes on
appropriate actions with
suppliers failing to meet
performance criteria
• CDP Supply Chain
• Target
36
Dimension 20 | Supply Chain Transparency & Traceability
Overview
Data on a product's make-up, the source of the raw materials and finished goods, and the manufacturing process, are increasingly valuable—to identify the product
lifecycle stages with the greatest impacts and opportunities for improvement. Transparency and traceability are enabling that exchange of critical data.
Key Finding:
Respondents identified this dimension as one where nearly the most number of companies are just starting
2015 Maturity
25
10
6
•
18
3
Does not publish any
•
information on suppliers or
country of origin beyond what
is mandated by law
10
Publishes some summary
•
audit statistics (e.g., % of
factories non-compliant)
•
Publicly discloses where
products are made (without
factory-specific details)
•
• May disclose some anecdotal
factory-specific information
Makes audit results available
publicly (e.g., through FLA)
Supply chain information is
available through a number
of channels/media
Publishes supplier code of
conduct and summary of
monitoring and enforcement
mechanisms
• Efforts to trace supply chain
from suppliers to
subcontractors/vendors back
to raw materials suppliers
3
•
•
•
•
•
2015 Average
Active member of supply
•
chain transparency
organizations (e.g., CDP
Supply Chain, TSC, SAC)
Publishes summary audit
statistics (e.g., % of noncompliant factories)
Explains challenges in the
supply chain through a
number of channels (e.g.,
website, reports)
Works with credible third
parties to introduce
sustainable best practices
(e.g., FSC, MSC)
Actively markets supply chain
stories to consumers
2015 Leader
2017 Prediction
6
2017 Predictions
0
1
Publishes list of factories and
locations, with stories,
photographs, or other
information on all key
suppliers
2017 Leader
• Harvard's The Transparent Supply Chain
• Walmart
• The Sustainable Apparel Coalition
• Patagonia Footprint Chronicles
• The Sustainability Consortium
• EICC Supply Chain Code of Conduct
37
Products
The full lifecycle of products, from the initial design, to manufacture, to transportation and sale, poses
the largest environmental footprint of all of retail's impacts. Therefore, it is critical to address those
product-related impacts.
In this section:
Dimension 21 | Product & Packaging Design and Development
Dimension 22 | Owned Manufacturing / Production
Dimension 23 | Product & Packaging End-of- Life Stewardship
38
Dimension 21 | Product & Packaging Design and Development
Overview
The design phase of product development may often be the best place to intervene to reduce a product's environmental impact, as this is the phase where the product's
materials, configuration, functionality, etc. is determined. That influences the manufacture, use of the product, and eventual disposal options—its full lifecycle.
Key Finding:
Nearly half of the respondents indicate that they are currently "standard" performers, but many companies plan to be "excelli ng" in 2017
2015 Maturity
16
20
4
11
3
2
Products are not measured • Ad hoc measures employed • Employs credible criteria to •
for environmental impact and to reduce product impacts
evaluate sustainability
not designed to minimize use such as the purposeful
performance of products
of materials, energy, water,
merchandizing of products
representing > 30% of retail
and toxics
using credible certifications
sales
• Minimal attention given to
(e.g., FSC, fair trade), and
• Collaborates with suppliers to •
packaging optimization
general pronouncements or
identify, develop, and market
guidelines to suppliers to
product/service innovations
minimize product and
that further reduce
packaging impacts
environmental impact
•
2015 Average
2017 Predictions
22
4
Employs credible criteria to •
evaluate sustainability
performance of products
representing > 60% of retail
sales
Sets meaningful business•
relevant revenue targets for
product sustainability
performance (e.g., 30% of
sales will come from products
that meet design criteria)
0
0
Designs all products with a
"cradle to cradle" outlook,
using tools based on life
cycle and hazard
assessments
Publicly reports on product
sustainability goals and the
net benefits of product
2015 Leader
2017 Prediction
• Global Protocol on Packaging Sustainability
• McDonald's
• US EPA's Products/Packaging
• UPS
• Sustainable Packaging Coalition
• Product Sustainability Webinar
39
Dimension 22 | Owned Manufacturing / Production
Overview
While only a few retailers own manufacturing plants, the ones that do see opportunities to save costs through resource efficient operations. These manufacturing facilities
can often be some of the retailer's most energy and water intensive operations.
Key Finding:
Respondents identified this dimension as one that will not significantly grow in maturity in the next two years, likely because it is a minimal component
of retailers' environmental impacts
2015 Maturity
27
13
9
11
3
13
1
3
Basic understanding of
• Develops plans and policies • Sets targets for key
• Benchmarks key
•
sustainability principles and
to make manufacturing
sustainability KPIs (e.g.,
environmental and social
practices
processes more sustainable
waste, GHG, water) inclusive sustainability KPIs against
• Sustainability principles have
(including agricultural
of raw material,
industry standards and
•
been incorporated to meet
practices as applicable)
manufacturing, and other
exceeds industry average
only regulatory requirements
production activities
• Sets plans to achieve highly
• Measures against those
aspirational goals (e.g., 100%
targets and communicates
renewable power, zero
success and improvement
waste, zero accidents)
opportunities to facilities
• Uses renewable energy
sources in most
manufacturing processes with
limited exceptions
•
2015 Average
2017 Predictions
1
1
Achieves world class
sustainability manufacturing /
production levels
Publicly report success
against aspirational goals
2015 Leader
2017 Prediction
• Business Case for Sustainable Manufacturing
• REI
• US EPA Life Cycle Assessments
• Safer Choice Product Manufacturing Resources
• Eileen Fisher
40
Dimension 23 | Product & Packaging EOL Stewardship
Overview
Customers are increasingly concerned about the disposal of the products they purchase after their useful life, and environmental laws are increasingly targeting product
disposal. To respond, retailers are providing more options for responsibly handling those products.
Key Finding:
Respondents identified this dimension as one that will not significantly grow in maturity in the next two years, likely becau se retailers do not have any
major influence on product disposal
2015 Maturity
17
21
6
15
2
Products are not designed
• Some limited mechanisms in •
with their end-of-life in mind
place to design products that
• No recycling or product takeconsider reuse or recyclability
back initiatives available to
at end of their useful life
customers
• Offers select recycling and
•
product take-back bins in
some retail locations
•
2015 Average
2017 Predictions
17
1
Designs >20% of all products •
to consider reuse or
recyclability of product at end
of useful life
Offers select recycling and
•
product take-back bins are
located in all retail locations
3
Designs >40% of all products •
to consider reuse or
recyclability of product at end
of useful life
•
Collaborates with other
stakeholders (e.g., trade
associations, civil society,
•
competitors, value chain) for
system change to
upcycle/recycle product
components
• Markets product take-back
services to consumers and
see as a competitive
differentiator
• Begin designing and selling
consumer services to mitigate
the one-way consumption
cycle
0
0
Designs all products to
consider reuse or recyclability
of product at end of useful life
Actively retrieves products at
the end of their life for reuse
and recycling
Measures and reports the
percentage of reclaimed
products and their packaging
materials for each product
category
2015 Leader
2017 Prediction
• The How2Recycle™ Label
• Best Buy
• Wrap Recycling Action Program
• US EPA Life-Cycle Assessments
• Sears
• EPA Responsible Appliance Disposal
• Product Stewardship Institute
41
Environmental Impacts
The outcome of a robust sustainability strategy, executive and employee engagement, access to
appropriate resources, and a visibility campaign results in improvements in a company's
environmental performace.
In this section:
Dimension 24 | Energy & GHG Emissions
Dimension 25 | Water & Wastewater
Dimension 26 | Waste & Recycling
Dimension 27 | Chemicals & Toxics
42
Dimension 24 | Energy & GHG Emissions
Overview
Energy represents a significant operational expense for retail stores and therefore an opportunity for cost savings. New technologies, enhanced controls, and behavior
changes can result in large reductions in energy usage.
Key Finding:
Over half of the respondents indicate that they are currently "standard" performers, but more than half of companies plan to be "excelling" in 2017
2015 Maturity
24
6
9
4
7
No concerted strategies or
•
policies to reduce energy
consumption in retail portfolio
• Energy usage is not
methodically measured or
analyzed
•
• Traditional (non-renewable)
energy sources are relied
•
upon; no consideration of
alternative energy sources
Measures and analyzes
•
current energy usage and
future projections of retail
portfolio in manual or
•
fragmented way
Outdated, inefficient
equipment has been replaced
Undertakes some
investigation of alternative
•
energy sources
• Currently draws less than 5%
of energy use from alternative
sources
•
2015 Average
2017 Predictions
24
Develops coordinated energy •
efficiency policies across
operations and value chain
Designs and executes
•
systematic energy
management program (data
tracking, training of relevant
employees)
Uses only energy efficient
refrigeration equipment and
tracks GHG emissions of
equipment continually
1
3
Capital expenditure decisions •
consider energy cost
implications
Relies on alternative energy
for >25% of energy needs,
•
through combination of RECs
and onsite generation
2017 Prediction
3
1
Relies on alternative energy
for >40% of energy needs,
through combination of RECs
and onsite generation
Joins external alliances to
drive energy/climate policy
2015 Leader
• Commercial Buildings Resource Database
• Home Depot
• RILA's Retail Energy Management Program
• Walmart
• Better Buildings Alliance
43
Dimension 25 | Water & Wastewater
Overview
Water and wastewater are especially important to certain retail segments (e.g. those with grooming facilities or food preparation stations), companies with landscaping
needs, and stormwater run-off from paved surfaces. And retailers are raising the priority of water, considering the increased emphasis on addressing regional droughts.
Key Finding:
Over half of the respondents indicate that they are currently "standard" performers, but more than half of companies plan to be "excelling" in 2017
2015 Maturity
13
•
9
4
3
2
No concerted strategy to
• Measures current water
•
reduce water consumption in usage of stores, warehouses,
retail operations, product
distribution centers and
manufacturing or supply
offices across some portion
chain
of the portfolio
Conducts comprehensive
•
water footprint across retail
portfolio including stores,
warehouses, distribution
centers and offices to
understand where impacts lie
• Efforts and technologies in
place to minimize company's •
direct water usage, such as
low-flow faucets
2015 Average
2017 Predictions
24
23
0
1
• Pursues innovative water
water footprint exercise
reduction techniques such as
across value chain, including grey water recycling,
stores, warehouses,
xeriscaping, storm water
management, etc.
offices and develops
• Identifies water withdrawal
reduction strategy
sources and remediates any
Efforts and technologies in
localized risks
place to recycle water
Identifies water withdrawal
sources and communicates
localized risks
2015 Leader
2017 Prediction
3
2017 Leader
• US EPA Wastewater Management
• Gap
• EPA WaterSense
• EDF-AT&T-GEMI Water Efficiency Toolkit
• Alliance for Water Efficiency
44
Dimension 26 | Waste & Recycling
Overview
Operational wastes at retail stores include cardboard, plastic shipping wraps, and a variety of other materials. While each local area has different abilities to recycle those
materials, the trend is toward more recycling, which can often represent a cost savings, or even new revenue, for retailers.
Key Findings:
- This dimension currently ranks as one of the most mature dimensions for the industry, and is estimated to be one of the most mature in 2017
- Both large and medium format retailers plan to be farthest ahead on this dimension in two years
14
4
15
19
13
2
1
2017 Predictions
1
Aware of main sources of
• Measures waste footprint of • Measures waste footprint
•
waste generation in own
stores, warehouses,
across retail portfolio
company operations, product distribution centers and
including stores, warehouses,
manufacturing and supply
offices, across some portion
chain
of the portfolio
offices, comprehensively
• Little active efforts to reduce • Ad-hoc efforts to reduce and • Implements waste
•
waste beyond required local
recycle waste at stores,
minimization programs
regulations and limited
involving reduction, reuse,
recycling options
centers and offices
and recycling at stores,
•
centers and offices
•
2015 Average
2015 Maturity
7
6
Implements leading waste
• Conducts comprehensive
technologies and policies
waste footprint exercise
(e.g., balers for hard-toacross value chain
recycle materials, customer • Efforts in place to completely
recycling options)
remove hazardous waste
Waste reduction targets and
from retail operations,
continuous improvement
product development and
method in place for products, supply chain
supply chain and operations • Commitment to zero waste
Commitment to zero waste
goals across all locations
goals at some retail locations
2017 Prediction
2015 Leader
• Waste Prevention and Recycling at the Office
• Dean Foods
• Closed Loop Fund
• Pepsico
• Waste Management
45
Dimension 27 | Chemicals & Toxics
Overview
Customers are increasingly asking about product ingredients to make informed purchasing decisions, and NGOs are becoming vocal about toxic chemicals. Chemicals,
whether a true or perceived hazard, are top of mind; and as a consequence, retailers are ever-more diligent about monitoring the ingredients in products.
Key Findings:
16
18
5
4
•
Complies with minimum
environmental regulations
2015 Maturity
19
13
2
Maintains a list of regulated • Defines relevant metrics to
•
chemicals or a restricted
monitor use of chemicals and
substance list (RSL)
toxins throughout value chain
• Undertakes beyond• Defines goals around use of •
compliance measures to
chemicals and toxics in
reduce the use of chemicals
products
and toxics across the value
chain
•
•
2015 Average
Understands sources of
•
toxins throughout value chain
and what's driving them
Establishes green chemistry •
program with the goal of
reducing toxics across the
value chain
assessment of chemicals in
products and processes, with
an evaluation of hazard and
exposure potential
2015 Leader
2017 Prediction
4
2017 Predictions
0
1
Establishes alliances with
industry peers to further
green chemistry innovation
Communicates green
chemistry policies to
suppliers
2017 Leader
• US EPA Toxic Chemical Resources
• Walmart
• Chemicals Management Module
• Green Chemical & Commerce Council
• US EPA Pesticide Pilot Project
• Sustainable Chemicals Management Report
46
Conclusion
Evolution of retail sustainability
Over the time we have tracked the progress of retail
sustainability programs, we have noted a specific
development trajectory. Retailers' programs typically
begin with a focus on their own operations—with an
emphasis on energy and waste reduction in stores and
distribution centers—and then turn to addressing the
product and supply chain impacts. Finally, the leading
companies go one step further by engaging consumers
and other stakeholders in the company's journey, and
help consumers to understand the full impact of their
product purchases.
The industry's development dynamic
Retail sustainability programs are following the same
dynamic as other critical business functions, namely to
hone their focus, align business resources, and expand
their breadth of activities.
As more retailers build their sustainability strategies and
report on their successes, they will further solidify the
business case for sustainability. That, in turn, will
increased commitment to these programs and expand
programs' resources, building momentum across the
industry.
The leading companies are already taking advantage of
this development dynamic by leveraging the key
ingredients for success: engaging executives, investing in
people and systems, measuring and tracking progress,
setting goals, and storytelling. And they are getting a wide
range of benefits from it.
What is next for RILA
RILA will continue to engage retail executives on the
sustainability journey, further building the business case
for such programs, and providing venues for retailers to
share with one another. And we look forward to tracking
and reporting on these developments in the future.
47

RILA`s 2015 Retail Sustainability Management Report

Transcription

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