The Middle East retail sector is undergoing a revolution, driven not only by economic trends but also by an increasing emphasis on environmental, social, and governance (ESG) concerns. Consumers are increasingly expecting sustainable products and practices, and investors prefer organisations with strong ESG commitments. This poses challenges and opportunities for regional retail players:
- Energy Consumption: Shopping malls have substantial energy requirements for lighting, cooling, and other operations. This greatly increases the region's carbon footprint, which is already high due to reliance on fossil fuels.
- Trash Generation: The "buy-and-dispose" attitude that exists in the region results in excessive trash generation, ranging from packaging to wasted products. This places a strain on landfills and waste management systems.
- Supply Chain Challenges: Ethical sourcing and sustainable standards are frequently absent across the supply chain, generating issues about working conditions, resource exploitation, and environmental impact.
Retail's Impact on Climate Change and ESG:
Regardless of these issues, the retail sector has the potential to be a positive influence in the region. Here are some important actions retail sector may take:
- Energy Efficiency: Invest in energy-saving technologies such as LED lighting, smart building systems, and solarpanels. Encourage renters to adopt sustainable practices, such as installing energy efficient equipment.
- Waste Reduction: Promote reusable shopping bags, encourage product recycling and upcycling, and work with waste management providers to ensure appropriate disposal. Implement circular economy techniques such as take-back programmes for discarded products.
- Sustainable Sourcing: Work with suppliers who value ethical labour methods, responsible resource management, and environmental sustainability. To reduce transportation emissions, use local sources whenever available.
- Sustainable Product Offerings: Increase the availability of environmentally friendly items created from recycled materials or with low environmental impact. Educate consumers on these options and their advantages.
- Community Engagement: Support local environmental efforts, collaborate with non-governmental organisations (NGOs), and educate consumers and staff about sustainability concerns. Advocate for government policies that encourage sustainable practices in the retail industry.
Leading Examples in Middle East Retail:
- The group is committed to attaining net-zero emissions across all operations by 2040, setting a high standard for the region.
- They make significant investments in renewable energy sources such as solar power, with over 100 MW of solar capacity installed across its shopping malls and assets. Their new structures are certified under LEED (Leadership in Energy and Environmental Design), while older buildings are retrofitted for energy efficiency.
- Their water conservation policies aim to reduce water usage through efficient irrigation systems, rainfall gathering, and wastewater treatment plants.
- Their sustainable waste management involves diverting garbage from landfills through recycling, composting, and waste-to-energy programs.
- The group encourages environmental projects such as beach cleanups, tree planting, and educational programmes.
- The group introduced "Lulu Nature's Harvest" and "Lulu Eco Choice" lines, which include organic, ethically sourced, and environmentally friendly items.
- Their local sourcing approach prioritises sourcing fruits, vegetables, and other products from local farms, lowering transportation emissions and promoting regional agriculture.
- The group’s investments in waste management solutions help reduce trash generation and encourage recycling in its operations.
- The group also implements activities to reduce food wastage across the whole supply chain, from farm to shop.
- They also work with food banks and organisations to donate surplus food and help local communities.
- The Landmark Group implements a complete ethical sourcing programme that considers labour standards, environmental effect, and social responsibility throughout its supply chain.
- They aim to reduce plastic usage in packaging and operations by 20% by 2025.
- The group invests in energy-efficient technologies and renewable energy sources throughout its stores and distribution centres.
- The group has been introducing environmentally conscious apparel lines produced from recycled materials or organic cotton.
- The group is extensively working to increase sustainability awareness and training among employees to support environmentally friendly actions.
By adopting ESG principles, Middle Eastern retailers can not only contribute to a more sustainable future, but also gain the trust of environmentally aware consumers and investors. This demands a shift in thinking and a dedication to innovation, but the potential benefits are considerable. The time for action is now, and the retail sector has the potential to lead the region's green transformation.
