julian walker-palin - what motivates retailers to become more sustainable?
TRANSCRIPT
Sustainable Best Practice Exchange 2016
Retailers’ motivations on sustainability
14 | 04 | 16
Solid retail expertiseASDA: 7 yrs - Head of Corporate Sustainability ➔ Created and ran Sustainability Department ➔ Wrote and managed Asda’s strategy and policies ➔ Responsible for external engagement – governments, NGOs, media ➔ Responsible for internal alignment – Board to stores across 180,000+
Co-opted to support Walmart activity ➔ Created and co-directed the Global NGO Management Network ➔ Wrote policy and delivered global sustainable palm oil procurement ➔ Subject matter lead on timber & wood fibre sustainability ➔ Embedded into US Team on regular basis
Tesco: 10 yrs - Head of Regional Corporate Affairs ➔ Led Tesco’s local engagement across a third of the UK ➔ Responsible for all local stakeholders – MPs, Councils, other traders ➔ Media spokesman on local issues
I set up ETANTEETANTE set up in 2014 with clear aims & principles ➔ Deliver value through sustainability ➔ Unlock competitive advantage ➔ Mitigate future risks to operating model ➔ World class communications & engagement
➔ Unique position having ‘been there and done it’ in-house
➔ Support FMCG brands, retail, food service, government, academia, finance & certification
New markets • Emerging markets needs • Westernised diets growing • £45m gov funds to encourage
exports • More lucrative than UK / EU?
New Product Development • War on sugar • C-stores growth in fresh • Use of certification by
Discounters • On-line packaging needs
More power to producers • Grocery Code Adjudicator • Consolidation = more power • New contractual terms likely • Greater competition for security
of supply
New marketplace • ALDI larger than Waitrose • Discounters = 10% • Discounters growing fastest • Pound shops expansion • C-stores now ‘destination’ shops
New ways to shop • Omni-channel growth • Smaller baskets prevalent • Top up shops normalised • Click & collect common
New Challengers • Collection when it
suits you • Amazon Fresh &
Google Express • New concept stores
Retail is changing & fast
Sustainable development case is made
In UK by 2080 4° higher summer temps 1/4 less rainfall 1 metre higher sea level
By 20203 need 50% more food & energy 30% more fresh water ~8.3 billion people
Will hit profits
Higher agri-chemical prices Water reflect real cost Soil health! Costly mitigation
Retailers have serious strategies
5 key priorities • Reduce direct emissions by 50% by 2020 • 75% reduction in fleet emissions by 2020 • Reduce water usage • Support supply chain to reduce emissions • ZWTL & prioritise food waste reduction
20x20 • Reduce direct emissions by 30% by 2020 • Use 100% natural refrigerants by 2030 • Fewer, Fuller vehicles • 20% renewables by 2020 • Maintain 50% water reductions • Source 35 key raw materials sustainably
7 key priorities • Supplier engagement – SSE • Communities – the modern-day hub • Food waste – all food should be eaten! • Climate resilience - adaptation • Carrier bags – supporting charities • Energy – efficiency & renewables • Farming – resilience & British
6 key priorities • Reduce direct emissions by 30% by 2020 • Lower fleet emissions YOY • Increase renewables – PV & PPAs • 20% water reduction by 2020 • Support supply chain efficiencies • Zero waste to landfill (ZWTL)
What about consumers?1. They do care & this concern is increasing 2. They will not / cannot pay more for green products 3. Visible waste in the home drives them crazy! 4. Their loyalty is driven by CSR activity – if price, quality &
convenience are the same 5. Supportive initiatives can drive sales
Customers care about green • ~ 80% in
2012/13 • > 90%
today
Sustainability is a rising topic • ~3% in
2011 rank ‘a lot’
• >11% today rank ‘a lot’
• >80% talk
Provenance ranks highly • 77%
question food sources & sustainability
Sustainability drives buying • >70%
make this claim (all things price & quality being
Food waste • >90%
waste food and so money
• ~85% want retailer’s help
Info above based on Asda Green Britain Index 2015
External factors cannot be ignoredWRAP’s Food Futures lays out the challenge & need to act (video):
External factors cannot be ignoredWRAP’s Food Futures lays out the challenge & need to act (video):
Sustainability supports success1. Things just got real! Climate change is affecting ability to source & operate
2. Being left behind is no option Cost to operate is directly linked to level of sustainability
3. Loyalty & trust ride on this Consumers care and make increasing demands
4. Communities really count You have to earn loyalty and community support
5. Externalities are biting Valuing natural capital is essential to building a resilient business
