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Sector Briefing: U.S. Retailers: greening Main Street
01 July 2011
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Key Findings
- Suppliers are responsible for 60% of the carbon emissions from 53 U.S. based retailers.
- Profit risk from carbon costs varies widely among Speciality Retailers and Food Retailers & Wholesalers. Carbon-efficient companies could find it easier to fully pass on carbon costs.
- At US$14 per tonne of carbon dioxide, retailers could see carbon costs of US$750 million passed on by electricity suppliers.
- Carbon, water and waste costs could total US$26 billion. Environmental costs would be most material to Food Retailers & Wholesalers.
- Retailers that have more resource efficient operations and supply chains than sector peers will be better positioned for rising input costs.
Extract
Large retailers have taken to “greening” their performance in a big way. Major retailers such as WalMart, ranked 59th in Newsweek’s Green Rankings of America’s 500 largest corporations last year, are putting environmental performance at the heart of the market place. Drivers include opportunities to improve efficiency, cut costs, tap into consumer appetites for environmental stewardship and reduce exposure to rising commodities and environmental costs. Oil, cotton and food prices are set to exert further upward pressure on prices during 2011. Retailers in the U.S. and elsewhere will have to pay rising costs for using fossil fuel-based energy that emits carbon dioxide. Water prices in the U.S. increased 9% on average between 2009 and 20101 and will rise further as suppliers pass on rising operating costs. Waste disposal costs will rise to encourage retailers to take greater responsibility for waste and materials management. Leading retailers are turning to resource efficiency and better environmental practices to shake up the rules of engagement with competitors and vendors, help the bottom line and boost brands.
Why did Trucost carry out the research?
Retailers and their suppliers will want to know how they perform on carbon and resource efficiency compared with sector peers, and investors will want to understand which retailers are leading the charge, or falling behind. 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 53 retailers in the U.S. based on Trucost’s data on their corporate environmental impacts. The briefing analyzes greenhouse gas (GHG) emissions, measured in metric tons of carbon dioxide equivalent (CO2e), water and waste impacts. These key environmental issues could be most material to the bottom line.
Report image: suppliers deliver carbon emissions
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