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Sector Briefing: Retailers: greening the aisles
01 July 2011
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Key Findings
- Suppliers are responsible for most of the carbon emissions and water use measured from 149 retailers worldwide.
- Seven of the 15 lowest-carbon retailers are based in the UK. Carphone Warehouse Group has the lowest carbon intensity of firms disclosing data.
- Food Retailers & Wholesalers and Home Improvement Retailers have wide variations in carbon exposure. Companies with the lowest profit risk could find it easier to fully pass on carbon costs.
- At £12 per tonne of carbon dioxide emissions from operations and electricity use, carbon costs could total £148 million (US$238 million) for 34 UK retailers.
- Carbon costs could cut profits by up to 6% for Speciality Retailers in the UK.
Extract
Large retailers have taken to “greening” their performance in a big way. Drivers include opportunities to cut costs, tap into consumer demand and reduce exposure to rising commodities and environmental costs. Retailers are honing in on related risks and opportunities from supply chains. Suppliers will want to know how they rate on resource use and pollution compared with sector peers, and investors will want to understand which retailers are leading the environmental charge, or falling behind.
Retailers in many countries will have to pay rising costs for using fossil fuel-based energy that emits carbon dioxide, using water and disposing of waste. Water prices will rise as suppliers pass on growing operating costs. And waste charges are going up to encourage businesses to send less to landfill and recycle more. Leading retailers are turning to resource efficiency and better environmental practices to reshape the market place, shake up the rules of engagement with competitors and suppliers, help the bottom line and boost brands.
Why did Trucost carry out the research?
Data on the environmental performance of retailers and their suppliers provide the hard facts to support “green” claims – or refute them. This study looks at 149 retailers worldwide based on Trucost’s comprehensive data on corporate environmental impacts. The briefing analyses greenhouse gas (GHG) emissions, measured in carbon dioxide equivalent (CO2e), water and waste impacts. These are key environmental issues that could be material to the bottom line.
Report image: suppliers account for most carbon
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