Can retail solve its indirect carbon emissions problem? – RetailWire

April 15, 2022

A survey of leading global retailers reveals that less than 20% are on track to reduce their Scope 3 emissions – those related to activities outside their operational control – enough to meet the 2015 Paris Agreement targets to limit the rise in global temperatures to 1.5 degrees.

Scope 3 emissions typically account for more than 90% of a company’s total environmental impact, depending on the report of the Boston Consulting Group (BCG) in partnership with the World Retail Congress.

Scope 3 emissions are more challenging because they include all emissions generated to manufacture the products that retailers sell (upstream emissions) and emissions that customers create by using and ultimately disposing of the products they purchase (downstream emissions),” Scot Case, vice president of corporate social responsibility and sustainability at the National Retail Federation, wrote in a blog entry last fall.

To reduce upstream emissions, suppliers are encouraged to increase the energy efficiency of their operations and use more sustainable materials for products and packaging.

Regarding downstream emissions, some retailers facilitate the purchase of more energy-efficient products. Some also offer more sustainable products that last longer, making it easier for customers to return used clothes for recycling or resale, or explore reusable and refillable packaging, according to Case.

In a recent blog entry, Kathleen McLaughlin, director of sustainability at Walmart, noted that the retailer has helped suppliers learn about energy purchases. Walmart is also offering enhanced financing and advance bill payments available to private label suppliers who set science-based emissions goals in accordance with the Paris Agreement.

Ms. McLaughlin noted, however, that Scope 3 emissions are “notoriously difficult to measure” given that the calculation takes into account “multiple variables at every stage of the production, transportation and consumption of millions of items”.

BCG called for closer collaboration with suppliers and industry peers, as well as prioritizing sustainability goals alongside costs and benefits. The BCG survey found that 54% of retailers have not set key performance indicators (KPIs) for sustainability in their businesses. The consultant wrote: “Retailers that score well on governance do two things consistently: they regularly publish key performance indicators internally and they incorporate sustainability metrics into their business analytics. »

DISCUSSION QUESTIONS: What advice would you give to retailers on reducing their Scope 3 or indirect greenhouse gas emissions? What are the quick wins versus the tougher challenges?

Braintrust

“Transparency will increase along with stakeholder expectations and this is a clear opportunity for leadership that can pay dividends, literally and figuratively.”

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