Collaboration, competition & regulation for sustainability
I would argue retail sustainability emerged in its current form in 2007 with Walmart announcing their ‘Sustainability 360’ strategy. Since then its become part of doing business and Walmart has been followed by strategies such as Marks & Spencer ‘Plan A’, Kingfisher’s ‘Net Positive’ or more recently Tesco’s ‘Scale for Good’, amongst numerous others.
But what drives retailers to adopt sustainable business practices and alter the way they have done business for years and how do they go about delivering this change? I’ve been in major retail for nearly 20 years, half of that in CSR roles and I’ve seen different, sometimes conflicting, motivations emerge.
During the recent deep recession there was undoubtedly a drop off in the ambition of many sustainability plans as it was felt they ‘couldn’t afford to be sustainable!’. This view cracks open the deep debate between those companies who view sustainability as essential for future growth and those that see it as a philanthropic add-on. Retailers have embedded it
better than most other sectors but it’s still a work in progress.
Much criticism has been thrown at retailers over the years for not collaborating more with each other, such as on phase out of inefficient light bulbs or the installation of doors on fridges but the reality is that sustainability has to be sustainable and there is often a risk in being the first mover, such as loss of trade due to fridge doors getting in the way.
Competition law compounds this issue by refusing to give assurances that collaboration on these types of issues would not lead to an anti-trust investigation due to cartel concerns and so the risk of large fines. Corporate lawyers then, quite rightly, squash the ability to collaborate on many issues.
Cross sector collaboration does exist, albeit generally in narrow areas. One of the best examples has to be the Courtauld Commitment. Undoubtedly having WRAP as a convener is the single biggest reason for the success of the programme over nearly 10 years. Or the ECR group that has undoubtedly reduced milllions of road miles and other benefits. But this
Internal collaboration, between retailers and their suppliers, offers massive opportunity to accelerate progress. Whether its Asda’s Sustain & Save Exchange, Tesco’s Knowledge Hub or Marks & Spencer’s holistic activity these areas are growing and so are the benefits accrued. But it has to be based on mutual trust and turn on its head many people’s
assumption that supermarkets dominate all supplier relationships.
An extension of this trust and at its heart are buying practices. A world class retail business has already adopted the ‘better together’ approach instead of the old days of ‘them versus us’ supplier relationships. Sure retailers have new product development teams but much innovation comes from the suppliers themselves and this will only flourish if given licence to
operate outside of a purely transactional relationship. And extended to sustainability outcomes.
By contrast competition is a far more powerful force. Whether it was the race to stop sending waste to landfill, to install the latest renewable energy solution or to develop innovative products, competition harnesses the power of what makes retailers great.
Whereas collaboration challenges existing ways of working, competition uses them for the
power of change and change for the better. This discussion would be incomplete without analysing the role of NGOs. Since Lee Scott of Walmart’s landmark speech, the NGOs themselves have also been evolving. The more effective players have limited their ‘activist first’ approach to one involving discussion and mentoring, albeit behind closed doors, with the threat of direct action as a motivator but not guaranteed action. This has led to a significant increase in engagement with NGOs across all elements of sustainability. A ‘stick’ though, or the threat of one, is a powerful motivating force and often helps to gain internal traction that might otherwise take longer, take the recent successful Greenpeace campaign against Lego for example.
But the simple fact is that there will always be a place, rightly, for well thought out regulation too. Only lawmakers can transform entire sectors at a stroke, look at the effect of the ban on incandescent light bulbs, energy efficiency standards or the EU Timber Regulations for evidence of this.
Where retailers are concerned there certainly is no ‘one size fits all’ approach and this complexity adds greatly to the workload of their sustainability teams. But progress is being made, largely due to the combined forces of collaboration, competition and regulation.