UK’s largest retailers are greener but less focussed on D&I says new study
A new Environmental, Social, and Governance (ESG)* report suggests the UK’s largest retailers are stepping up their efforts to become greener but losing focus on diversity & inclusion initiatives and cyber security.
National law firm Irwin Mitchell has analysed the Annual Reports of the retailers in the FTSE 350**. The study looks at the frequency of the phrase, ‘ESG’, along with other related words such as ‘diversity’, ‘net zero’, and ‘Scope 3’ emissions. As part of the study, Irwin Mitchell has examined the current and the previous annual reports.
References to ‘ESG’ amongst retailers increased from 1,105 to a total of 1,192 across all the retail businesses listed in the FTSE 350. Furthermore, 62.5% of companies use the phrase ‘ESG’ more frequently in their most recent annual reports compared to the previous edition.
In terms of the frequency of ‘ESG’ mentions by consumer sub-sectors within the FTSE 350, retail appears to lag a behind those involved in the production of consumer goods and leisure & hospitality. Consumer goods companies use the ESG acronym the most whilst leisure & hospitality recorded a 20% rise in mentions. Retail’s increase in the use of the ESG phrase stands at just 6.5%.
Diversity & Inclusion
There are variations in the number of mentions about diversity, equity & inclusion (DE&I) also. The leisure & hospitality sector had a small rise of 3%, with mentions increasing from 63 to 65. In contrast, the retail sector had a decrease of almost 7% in DE&I mentions.
Charlotte Rees-John, partner and head of Irwin Mitchell’s retail and leisure group, said: “Annual Reports are a window into the soul of an organisation. They are carefully curated documents and are a vital tool for companies to communicate their commitment to their numerous stakeholders on a range of issues, including ESG.
“The report raises concerns about the potential loss of focus on diversity and inclusion initiatives amongst the FTSE 100 and underscores the need for businesses to prioritise DE&I, alongside sustainability efforts, to foster a truly responsible business environment.”
Environmental
According to Irwin Mitchell, there is a notable increase in the use of environmental words such as ‘climate change’, ‘net zero’ and ‘decarbonisation’ within the retail sector’s annual reports. Mentions of climate change have gone up by 8% whilst ‘net-zero’ and ‘decarbonisation’ increased by 46%.
References to Scope 3 emissions, the category of greenhouse gas emissions that are indirect emissions resulting from the activities of an organisation but occur from sources not owned or controlled by the organisation, has increased by 73% in the most recent reports.
Keith Davidson, environmental law partner at Irwin Mitchell, said: “Businesses of all sizes must prioritise climate action and sustainability to succeed in an evolving business landscape. For some, reporting on Scope 3 emissions is now a legal requirement, not just a voluntary commitment.
“Companies are now choosing business partners based on their environmental credentials and carbon reduction actions. If you’re unable to demonstrate climate action, you may risk losing clients.”
Irwin Mitchell offers a comprehensive range of ESG advisory services including DE&I, including diversity training modules, cyber security, and Net Zero readiness assessments.
