The Consumer Goods Forum’s Global Summit, which took place in Dublin last June, was heavily themed around the action that consumer companies need to take to help deliver a sustainable future. At the Summit, we collaborated with The Consumer Goods Forum to launch The Path to 2030: Delivering a Sustainable Future, a report based on interviews with the leaders of CGF member companies, exploring the challenges and imperatives for companies to consider in support of the United Nations Sustainable Development Goals of 2030.
Just a few months on, and June seems like a distant memory. The disruption that was already impacting consumer businesses when the Summit took place has accelerated, as inflation and rising interest rates have alarmed investors and undermined consumer sentiment. Disruption to the supply of energy and raw materials has driven up costs, leading to rises on cost-of-living that many consumers are unwilling, or unable to meet, with policy responses hampered by government debt.
But the need to act on sustainability has never been stronger. Price volatility in fossil-based energy supplies is driving an imperative to increase focus on renewables. Disrupted supply chains highlight the need to create sustainable and local sources for raw materials. The strain on household budgets adds impetus to the necessity of scaling efforts quickly to make them cost-effective and affordable. The latest EY Future Consumer Index, a global survey of consumer behaviors and aspirations, found that 62% of consumers intend to pay more attention to the environmental impact of what they buy, but 67% are deterred from making sustainable choices because of high prices.
With the Sustainable Retail Summit approaching, the power that retailers have to help drive change will clearly come under the spotlight, with an agenda covering a multitude of relevant topics ranging from decarbonisation and waste management, to health and human rights. As with the June Summit, there will be fresh emphasis on “doing”, with the CGF’s eight Coalitions of Action taking a prominent role.
As part of the research for The Path to 2030: Delivering a Sustainable Future, we conducted interviews with 13 industry leaders. Seven of these leaders hailed from the retail sector, and although there was significant common ground in the activities and goals of all the leaders, three areas stood out specifically for retail:
- Retailers occupy a pivotal position in the value chain: Not many organisations can view the entire supply chain in one direction and consumer use and disposal in the other direction. Retailers can help set standards that shape what they sell and positively influence the behaviors of the customers they sell to.
In the report, Malina Ngai, Chief Executive Officer at AS Watson (Asia & Europe) Ltd., talked about the work that A.S. Watson do with partners to promote a responsible upstream value chain, while Frans Muller, President & Chief Executive Officer at Ahold Delhaize, identified Ahold Delhaize’s SuperPlus loyalty program as a way of shaping healthier consumption. Daniel Zhang, CEO of Alibaba, also outlined Alibaba’s Scope 3+ concept which extends decarbonisation activities to its entire ecosystem, both upstream and downstream.
- Retailers can deliver greater impact in certain material areas: Retail leaders interviewed focused heavily on areas where they could wield the greatest influence.
This may come from reducing emissions from refrigerants, a key target set by Ian McLeod, Chief Executive Officer at DFI Retail Group, or it may come from eliminating plastic and food waste, both of which sit high on the sustainability agenda of any grocery retailer.
- Retailers are bound by the needs of the communities they serve: While many consumer products brands have a global footprint, retail stores are in a position to deliver local impact.
Carlos Mario Giraldo Moreno, Chief Executive Officer of Grupo Éxito, is seeking to address child malnutrition in Colombian communities through the Fundación Éxito initiative, while Noel Keeley, Chief Executive Officer of Musgrave Group, has overseen the launch by Musgrave Group of many community initiatives, including the TidyTowns litter picking scheme in Ireland.
As discussions and decisions are made in Amsterdam at the Sustainable Retail Summit, attendees should bear in mind the closing remarks of CGF’s Managing Director Wai-Chan Chan at the Dublin CGF Summit, who commented: “We’ve all done lots of planning. It’s time to do, do, do!”
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.