New Barclays research shows consumer demand driving action on sustainability for retailers and wholesalers

The issue of environmental sustainability has never been higher up the agenda for businesses across all sectors of the economy.

The implications of the government’s commitment to achieving net-zero carbon emissions by 2050 affects us all – there is no organisation that won’t be affected by the transition to a net zero economy in some way.

Every business will need to act now and take climate change into account. The tipping point has arrived.

With this in mind, I’m delighted to share the results of a new Barclays survey on progress towards environmental sustainability across a wide range of industry sectors, including retail and wholesale. The survey looked at firms’ carbon ambitions going forward, the threats they perceive to their operations, and how they plan to invest in environmental measures in future.

The findings across all sectors reveal a positive momentum for change, but the report also paints a detailed picture of how different industries are faring in terms of their commitment to environmental issues.

It also reveals some interesting shifts in attitude since we last surveyed organisations about their environmental and sustainability outlook back in 2017.

I hope our specific findings for the retail and wholesale sector will help firms to benchmark their progress against others in the sector.

How is the sector doing?

Our research shows that compliance and reputational concerns are really putting sustainability front and centre for retailers and wholesalers.

The vast proportion of retail and wholesale firms view compliance with environmental rules and regulations as extremely important to their business – the second highest of all sectors at 81% (versus an overall average of 75%).

In a sector in which firms’ reputations can be quickly damaged by failure to comply with customer expectations, an above-average 63% (versus 58% overall) of firms said the issue of environmental sustainability is extremely important to their clients/ customers. More than half said it’s extremely important to their suppliers and exactly half said environmental sustainability is extremely important to investors and stakeholders – those with a vested interest in protecting the brand’s reputation.

As a result of these pressures, the proportion of retail and wholesale brands that said environmental issues are important to their business was exactly in line with the average across all industries – at 61%.

However, I think it’s worth highlighting that while the sector is clearly focused on driving environmental sustainability, it needs to continue to evolve amid an expectation of heightened regulations on the horizon. Over the next five years, a higher-than-average 83% of firms in the sector expect to be subject to greater regulation in this area.

Interestingly, firms in the sector rank highest when it comes to their appetite for recycling – 80% (versus 69% overall) said increasing recycling is extremely important to them in the next five years.

Key takeaways

While the retail and wholesale sector clearly views environmental sustainability as integral to its future success, firms across the sector need to keep their pedal to the floor and continue to invest for environmental success – not least with more than four-fifths of firms expecting greater regulation in the next five years.

Although the vast majority of retailers surveyed are confident in their plans to meet the challenges of the next five years, 19% said they are ‘not very prepared’, which indicates that in some areas there is still work to do in embedding sustainability in?businesses.

Overall, I think the results of this survey show that sustainability is, rightly, a major strategic priority for the retail and wholesale sector. The data shows that businesses understand the changing expectations of their customers, suppliers and wider stakeholders and, in most part, are already taking steps to address these.

We expect to see this focus increase in the coming years as the sector continues to adapt to meet the demands of an ever more sophisticated audience.

I hope this provides some useful food for thought.

At Barclays, we launched our own approach to tackling climate change in March 2020 – ensuring we are a banking partner that can demonstrate its environmental credentials and is playing its part in a sustainable future. This includes becoming a net zero bank by 2050, aligning our financing with the goals of the Paris Agreement and committing to specific goals, such as ￡100bn of green financing by 2030.

For further information, you can download the full Benchmarking sustainability report here and if you would like to discuss any of the issues it raises for your organisation, please get in touch.