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Sustainability continues to march up the agenda
Archived article dated Wednesday May 6th 2009
Sustainability should be seen as the new IT by the world's retailers as this will enable them to more effectively adapt their operations to take into account this crucial issue that is increasingly affecting all businesses.
By Glynn Davis in Barcelona
Speaking at the World Retail Congress in Barcelona this week on the subject of 'Making Sustainability Good Business' Guy Champniss, head of intelligence unit at Havas Media, has told delegates: "We believe sustainability cannot be annexed to one department as it is elemental to all parts of a business. It needs to be made fundamental to a business and to challenge the status quo. We should see it as the new IT whereby it is horizontal across a business, is a business driver, and is instrumental in a company."
He says consumers think the same way, judging by research Havas conducted with 22,000 people across 10 markets. It found 90 per cent of consumers recognise the term sustainability, with the highest level found in China and the lowest in the US. For 70 per cent of people, sustainability represents the future and more than 80 per cent of consumers believe companies should be more active in making their businesses sustainable.
Champniss says one of the fundamental changes among consumers in recent years is that they have moved beyond simply boycotting retailers who they do not believe are operating sustainably, to now rewarding those merchants which are proactively adapting their businesses to operate more responsibly.
This represents an opportunity for retailers: "The good news is that consumers see retailers as working hard on the issue. They have a low impact on the environment but are making a high effort." The Havas research also ranked retail brands on their Sustainable Futures Quotient (SFQ) and scoring highly were Wal-Mart, El Corte Ingles and, in the UK, Marks & Spencer, Asda and Tesco.
Highlighting just how important sustainability is to consumers, Tesco corporate and legal affairs director Lucy Neville-Rolfe says: "The environment is the fourth
Neville-Rolfe says sustainability and community issues are "hardwired" into Tesco's business and that it sets tough targets. As an example she points to the company's efforts to 'green' its supply chain, with 3,500 projects with individual suppliers underway, involving the likes of packaging and re-using boxes.
David Shriver, former special advisor to the chief executive of Carrefour, is positive on the future progress of sustainability among retailers. He believes they "increasingly recognise it is not just ethical and moral but there is also an important economic benefit". What should also help matters are the capital markets, with the of investment in socially screened investments - or socially responsible investments (SRI) - rising quickly.
Shriver says that at the beginning of 2008 in the US as much as $1 in every $9 was invested in companies that are regarded as socially responsible - equating to $2.5tn. In Europe the figure was $1.6tn. Shriver suggests a big driver for retailers to be even more pro-active with sustainability agendas will be when the share prices of unsustainable retailers are rated at a discounted level by the stock markets.
Woolworths in South Africa needs little such impetus, having won the 'Responsible Retailer' award in 2008 among global merchants. Andrew Jennings, managing director of retail at Woolworths South Africa, says: "Sustainability is integral to all parts of our business. We are changing the culture of the organisation to be sustainable and we call it the 'good business journey'." This encompasses everything from turning out lights when leaving a room to constantly looking at new forms of packaging.
Tagged as: World Retail Congress | Tesco | Havas Media | Woolworths South Africa
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