Retailers are taking environmental, social and governance (ESG) matters seriously, and in many cases are realising the commercial benefits that come with focusing on these issues as opposed to solely chasing profit at all costs.
B&Q and Screwfix owner Kingfisher, for example, reported in July that almost 50% of its sales in the 2023-24 financial year came from its sustainable home products range, generating £6.4bn in total. By investing in and stocking product ranges that help consumers reduce their carbon footprint or energy use, for example, the retail group is effectively playing a role in reducing the overall environmental footprint and making money at the same time.
B&Q CEO Bell says: “We’ve launched lots of these things to encourage customers to make their homes more sustainable – loft insulation and new boilers, for example, and this education is a big element alongside doing our own work environmentally.”
Meanwhile, much of retailers’ work right now is about stemming the flow of talent leaving the industry, and this means new benefit schemes and the introduction and improvement of diversity and inclusion strategies to attract and motivate the workforce.
It has become top of the agenda for retailers and brands to ensure they are welcoming and open places for people of all races, genders, sexual orientations, identities, ages and abilities – and many of the executives we interviewed are overseeing some progressive work in this space.
Below, we have highlighted four case studies looking at retailers making a noteworthy effort in boosting their sustainability efforts. We have also listed four retailers introducing initiatives showing their commitment to the S in ESG.
Retailers and the environment
Anjun Murari: “Customers that are buying into sustainability are clearly bigger fans and more loyal to the brand and, actually, spending more often”
Anjun Murari: “Customers that are buying into sustainability are clearly bigger fans and more loyal to the brand and, actually, spending more often”
Ramping up refills at Molton Brown
The beauty and cosmetics brand has set itself an ambitious goal that, by 2030, 50% of what it sells will be either reusable or refillable, highlighting the company’s ambition to reduce its environmental footprint significantly this decade.
Body and hand washes, which make up 50% of Molton Brown’s sales, already have refill options, with 40% of body washes sold either as a refill pouch or in an aluminium refillable bottle, according to EMEA general manager James.
The company’s manufacturing facility in Elsenham, Essex, has been using renewable electricity since 2016 and it has ambitions for the future to achieve carbon zero.
But the senior team are aware that there are costs to absorb now before sustainability becomes a commercial driver, particularly because glass and aluminium are more expensive than the brand’s traditional packaging materials.
Anjun Murari, VP of global sales channels and strategic development at Molton Brown, adds: “We‘re trying to incentivise more customers to buy into sustainability.
“For example, in our pouches, we offer the customer around an 8% saving. So, we‘re taking a double hit. We‘re always trying to find the balance between what‘s the level of investment in the product versus the pricing and how much margin hit we take in the short term versus the long-term good of the category.”
He adds: “People that are buying pouches and refillables, their lifetime value is about 15% higher than people that are not. So, those customers that are buying into sustainability currently are clearly bigger fans or becoming bigger fans and more loyal to the brand and, actually, spending more often, by about 15%.”
N Brown’s top-down commitment
N Brown has established an internal Sustain programme to cover its ESG work, driven by the senior team and embedded organisation-wide.
Within the plan, N Brown is working towards having all own-brand products sustainably sourced by 2030, focusing on using responsible materials and reducing greenhouse emissions in line with scientific targets, and by 2025 it hopes to have cut out materials sourced from endangered forests in its viscose and packaging.
There is a commitment through Sustain for N Brown to work more closely with suppliers. But, importantly, the senior team is realistic and acknowledges there are huge challenges for the wider industry to overcome in order to make significant progress.
CEO Johnson says: “We‘ve made our commitments, and I think that‘s probably the key thing – sustainability is something that we are committed to.
“It‘s important to recognise that some of those bigger commitments on net zero become quite difficult when you get to Scope 3. And there‘s still work to do across the industry to resolve that.”
Scope 3 emissions are those created by partners in a retailer’s supply chain, and therefore the retailer is not directly responsible for them. One reason for increased supplier communication and collaboration in recent years is to tackle Scope 3.
According to N Brown, 47.1% of its product mix is deemed “responsibly sourced” and it has established an internal forum to keep improving in this area and advance its ESG agenda.
“We have a fleet of vans that are now fully electric, we‘ve changed all the lighting in the office, in the distribution centre, and we’re taking really practical actions to continue to make this world a better place,” Johnson notes.
“There‘s still work to do on this one, for all businesses, not simply N Brown. But we are committed, we take it seriously, and Sustain will deliver.”
Steve Johnson: “We have a fleet of vans that are now fully electric, we've changed all the lighting in the office, and we’re taking practical actions to continue to make this world a better place”
Steve Johnson: “We have a fleet of vans that are now fully electric, we've changed all the lighting in the office, and we’re taking practical actions to continue to make this world a better place”
Mamas & Papas has a preloved pushchair service, encouraging consumers to donate their used prams for resale (Mamas & Papas)
Mamas & Papas has a preloved pushchair service, encouraging consumers to donate their used prams for resale (Mamas & Papas)
Mamas & Papas’ circularity play
The baby and parent products retailer Mamas & Papas continues to roll out initiatives to support a more circular economy within its operations. CEO Williams recognises that the business can keep goods in circulation for longer, support good causes and help people find more affordable products in a challenging economy.
Since launching its clothing take-back scheme in June 2022, which allows consumers to return any unwanted garments they have via the retailer, Mamas & Papas has ensured two tonnes of baby clothing has been sent to Oxfam, much of it sold on to fund the charity’s good work.
And in September 2022, the retailer launched a preloved pushchair service, encouraging consumers to donate their used prams for resale, as well as allowing them to get products repaired rather than thrown away.
Some 25 used pushchairs are being sold each week by the retailer, with profits going to its charity partners, according to Williams, who also wants to extend the repairs service to other product lines in order to further boost the company’s circularity credentials.
Commenting overall on environmental progress, Williams notes: “While the business grew 15% last year, our Scope 2 and 3 emissions reduced by 18%.”
Hera – it starts with the product
Hera is a fashion brand that brings clothes into the world with longevity in mind, according to CEO Beadle – the opposite of fast fashion, which is often criticised for engendering a throwaway clothing culture.
“We make sure that product can live multiple lives, so it‘s of a quality that you could wear it for however long you want to wear it, and then you could always sell it on or donate it further down the line,” she says.
A partnership with The Salvation Army, which started in January 2023, allows Hera customers to choose a pre-paid bag in their online order, which they can use to donate products they no longer want to the charity. And this year Hera Rewear was launched to facilitate the trade-in and purchase of pre-loved Hera products.
The next step, according to Beadle, is to promote to shoppers that they can buy secondhand goods as part of their typical shopping journey online. “You can buy it together, you can mix it in your cart – it‘s the same delivery, there‘s no third party involved,” she explains, adding that it is something the brand wants to do regardless of commercial success at this stage.
“I‘d say it's very hard to make it financially viable, but that‘s not the KPI we have behind it. It is to make it a lot easier for our customers and new customers to buy into the fashion industry, with that circulatory in mind.”
Hera enables customers to donate clothes to The Salvation Army via its online store (Hera London)
Hera enables customers to donate clothes to The Salvation Army via its online store (Hera London)
Diversity drive
Diversity, equity and inclusion strategy is increasingly becoming a boardroom priority (Shutterstock)
Diversity, equity and inclusion strategy is increasingly becoming a boardroom priority (Shutterstock)
Colleague-driven culture club
When the CEO of a fashion and home retailer joined their business, they instantly set about strengthening the leadership team with new faces and new positions. And much of the work is with diversity and inclusion in mind.
“Historically, the business had only ever had one female on its executive team and, actually, in this first year in role, we‘re now 50/50,” the CEO explains.
“We‘ve got a new diversity and inclusion manager role that we brought in during the last year and a new chief people officer as I reset the executive team. We‘re setting up a culture club, which is essentially driven by colleagues across the business in terms of how they want to see us focus on diversity and inclusion.”
This involves creating network groups, building the company’s ESG credentials and changing recruitment processes “to drive more inclusivity”.
“Then there are some wider things around inclusion that we‘re doing for customers, so we‘ve extended our ranging, our sizes, to give much more choice to people of all different sizes,” the CEO adds.
“We've extended some of our ethnic ranges, so we‘ve done some really great things for Eid, just to reflect the demographics in some of our localities in a better way.”
David Wood: “It's really important that people outside of Wickes can look inside Wickes and see people like them not just in the business, but people like them in the business doing really well”
David Wood: “It's really important that people outside of Wickes can look inside Wickes and see people like them not just in the business, but people like them in the business doing really well”
Wickes and Diversity in Retail
As a founding member of Diversity in Retail, a group dedicated to driving diversity in retail and bringing the industry together through events and programmes to do so, Wickes boss Wood firmly believes in creating an inclusive and diverse environment where people feel at home and everyone is valued in the organisation they work for.
“Promoting a more inclusive and diverse culture – it‘s just the right thing to do,” he says. “But it’s also a fundamental source of strategic, competitive advantage, and the role of any CEO is about how you organise your business to harness distinctive competitive advantage.”
Wood says having a more diverse workforce “means you're probably a lot better at problem-solving”.
“I think it‘s really important that people outside of Wickes can look inside Wickes and see people like them not just in the business, but people like them in the business doing really well,” he continues.
In practice, at Wickes this is represented via six network groups, while colleagues – whatever their position in the company hierarchy – are encouraged to feed back and help advise on strategy in this area.
And, in 2023, Wickes sponsored the Diversity in Retail Ethnic Senior Leaders Programme, aimed at supporting and encouraging people from diverse cultural backgrounds to move higher up the industry ranks.
Dobbies’ diverse demographics
Dobbies’ Robinson says the composition of the retailer’s workforce proves its commitment to diversity, with two-thirds of the workforce being female and more than a third of those over 50.
He adds that the business works with industry charity the Retail Trust to offer financial and wellbeing support.
Partnerships with the Teenage Cancer Trust and the Stroke Association also highlight its good citizenship.
“Each store picks a local charity or community to help out with free product and volunteering time,” Robinson continues.
“So, effectively, that combination of community and diversity is part of who we are.”
David Robinson: “The combination of community and diversity is part of who we are”
David Robinson: “The combination of community and diversity is part of who we are”
Rosie Brown: “We have a raw talent scheme where we take people who have barriers to employment and we bring them into work”
Rosie Brown: “We have a raw talent scheme where we take people who have barriers to employment and we bring them into work”
Cook’s JEDI warriors
There are several retailers, including Timpson and Greggs, that have dedicated schemes to help recruit people with barriers to employment. And Cook is also doing this through its JEDI strategy, spelled out as its Justice, Equity, Diversity and Inclusion work.
Co-founder Rosie Brown says: “We have a raw talent scheme where we take people who have barriers to employment, including long-term unemployed, those with mental health issues, people from prison, and we have a programme that brings them into work.”
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