Shopping for sustainability

8th May 2017


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Author

Gizela Liebert

the environmentalist discovers what some of the biggest brands on the high street are doing to address their impacts

Asda

Asda is owned by US retailer Walmart. It announced three key goals in 2005: to create zero waste, run on 100% renewable energy, and sell products that sustain people and the environment. These continue to apply and it is also now focused on ten priorities including: promoting growth of suppliers, local manufacturing and small businesses, especially women; reducing energy intensity and emissions in its operations and the supply chain; helping to preserve natural resources, especially forests, water and land; and supporting the safety and dignity of workers.

Walmart’s 2016 global responsibility report, which covers the period between 1 February 2015 and 31 January 2016, reveals that 75% of the company’s global waste had been diverted from landfill. Asda alone diverted 98.9%, with 91% reused or recycled (including anaerobic digestion), and had kept its food throwaway rate at less than 1% over the previous five years.

Walmart was the largest onsite renewable energy user in the US in 2015, with more than 340 solar installations throughout the country. Meanwhile, Asda has installed 3.8 MW of solar PV across its estate and, since 2010, reduced its energy reduction intensity by 19%. The UK operation has set a target to use 30% renewable energy by 2020. Overall, Walmart eliminated 35.6 million tonnes of greenhouse-gas emissions from its supply chain. In the UK, Asda operates Sustain & Save Exchange, an online tool that contains information and ideas for suppliers, enabling them to share best practice and identify opportunities to increase resource efficiency. Asda says the 1,250 suppliers registered have tracked savings worth £11m and carbon reductions of 35,000 tonnes since 2013.

Asda sponsors Stronger Together, a multi-stakeholder initiative to reduce the risk of human trafficking, forced labour and other hidden third-party exploitation of workers in the UK.

Boots

Pharmacy and beauty retailer Boots is owned by a US company, Walgreens Boots Alliance, which has set objectives connected to its business activities to help to meet the UN sustainable development goals (SDGs). The 12 areas targeted are: (community) health and wellbeing; young people; cancer programmes; (environment) energy; waste; deforestation; (marketplace) transparency; ethical sourcing; external stakeholders; (workplace) employee wellbeing; equal opportunities; and health and safety.

The three environment goals are: to reduce energy consumption and scope 1 and scope 2 emissions on a comparable basis (including acquisitions and disposals) as defined by the Greenhouse Gas Protocol; to reduce the waste we create, on a comparable basis, and to contribute to the drive for increasingly circular economies through increased reuse and recycling; to develop plans to help achieve zero net deforestation by 2020, collaborating with other organisations in a global initiative.

In the UK, Boots is aiming to reduce emissions by 30% by 2020 compared with 2005. The CSR report from Walgreens Boots Alliance, published in February and covering the fiscal year to 31 August 2016, says the UK retailer was on track to reach this target at stores that were open in 2005. LED lighting replacements in Boots stores in the UK over the reporting period accounted for a reduction in energy consumption of 7.9 million kWh. Overall, Walgreens Boots Alliance businesses generated almost 17,000 mWh of electricity through solar panels during fiscal 2016.

The firm says it took various measures in 2016 to mitigate any risk of exploitation in its operations and to meet the requirements of the UK Modern Slavery Act 2015 and the California Transparency in Supply Chains Act of 2010. These included a global ethical trading standards policy that sets out the company’s opposition to forced or bonded labour, slavery, human trafficking or labour practices that involve harsh or inhumane treatment.

Costa

Whitbread owns Premier Inn and restaurant brands, Beefeater, Brewers Fayre and Table Table as well as coffee business Costa. Its corporate responsibility programme, Good Together, is described as fundamental to the way the business is run. The group has set targets for 2020, including reducing carbon by 15% and water consumption by 20% against 2014-15 levels, and increasing the direct operations recycling rate to 80%. It has also targeted 100% accredited supply for products for its critical-sourced commodities by 2020. The purpose is to ensure people in the supply chain are treated fairly, their human rights are upheld, the products do not have a negative environmental impact on the planet, and animal welfare is protected.

Whitbread’s 2015-16 corporate responsibility report reveals a 12.3% and 6% improvement in carbon and water efficiency respectively across the group. Last year, the coffee business opened its first ‘Eco-Pod’ in Telford. It is described as the only ‘zero energy’ coffee shop building in the UK, incorporating an environmentally friendly building design and innovative energy-saving technology, including solar panels on the roof. Meanwhile, its new roastery in Basildon, Essex, which opened in March and is Europe’s largest, is rated BREEAM Outstanding. It boasts a roof-mounted 249kw solar PV system and a rainwater harvesting system. It will operate on a zero waste-to-landfill basis.

In 2015-16, 76% of waste from Costa stores in the UK was diverted from landfill, with 60% recycled. In February, Costa launched a nationwide cup recycling scheme. It will be available in more than 2,000 stores and guarantees the recycling of any paper takeaway cup, including those from competitors. Costa claimed the scheme was the first of its kind among coffee shop retailers.

All the coffee beans used by Costa come from farms certified by the Rainforest Alliance, which supports farmers and farm workers and aims to protect the planet.

Debenhams

Department store business Debenhams operates more than 240 outlets, including franchises, in 27 countries. Its environmental responsibilities focus on carbon, energy and waste. The company says it aims to reduce impacts through improved awareness, efficiency and sustainable investment. It sources products from 900 suppliers and says ethical sourcing underpins everything it does as a responsible retailer.

Debenhams has set a group-wide 10% carbon reduction target for 2020 against 2007-08 levels. The latest data shows that the firm’s overall carbon footprint increased by 7% between 2015 and 2016, from 190,930 to 204,136 tonnes CO2e. Debenhams says the increase is mainly due to widening the inventory boundary to include scope 3 emissions from water supply and treatment in Hong Kong and Bangladesh, UK rail and plastic material in UK carrier bags. If the new sources are discounted, scope 3 emissions declined by 8% compared with 2015, mainly because of a reduction in business travel. Scope 1 and 2 emissions declined by 12% between 2015 and 2016.

Around £4m was invested in 2016 installing LED lighting in 50 stores. Some 96% of store waste was diverted from landfill last year, up 2% on 2015. It is aiming for zero waste to landfill.

The company’s supplier code of conduct, which is incorporated into conditions of trading, requires factories to pay ‘fair’ wages, treat staff with dignity and provide safe working conditions and not discriminate or exploit. Debenhams says it supported the introduction of the Modern Slavery Act. It is a signatory to the Accord on Fire and Building Safety in Bangladesh, an independent agreement between brands and trade unions that was established after the Rana Plaza building collapse in 2013.

Dixons Carphone

Electrical goods retailer Dixons (Currys and PC World) and mobile phone business Carphone Warehouse merged in 2014. The combined Dixons Carphone says it is committed to building a sustainable, responsible and ethical business, adding that sustainable business practices make sound business sense. Its CSR principles cover people, ‘connected communities’, environment and supply chain. In terms of environmental sustainability, the company says it is working towards best practice sustainability with minimal waste and optimal efficiency.

Its annual report and accounts for 2015-16 reveal that £1.3m was invested in energy efficiency, with LED lighting installed at 19 stores as well as at the retail support centre in Acton, west London, and one of two buildings at the Newark distribution centre in Nottinghamshire. Solar was installed on roofs at large retail outlets in Coventry and Southampton.

According to the firm, each year these and other efficiency measures would save about 4,300 mWh of energy and reduce carbon emissions by more than 2,200 tonnes. Overall, the company emitted 132,945 tonnes of CO2e in 2015-16, 12% less than in 2014-15. Its carbon intensity (tonnes of CO2e per 1,000 sq ft of floor area) was 6.36 in 2015-16. This worked out at 5.76 (5.73 in 2014-15) for the Dixons side of the business and 13.75 (17.41) for Carphone Warehouse.

In 2015-16, 75% of material generated by Dixon Carphone stores went to recycling schemes and not to landfill.

Although many of the electrical products sold by Dixons Carphone are sourced from major international brands, which have their own strong ethical and environmental policies in place, the company operates its own. This is based on the Social Accountability 8000 and the FTSE4Good criteria and takes account of the Modern Slavery Act.

Gap

The US retailer has more than 110 stores in the UK. In 2014, the firm began an assessment, with third-party experts to identify and evaluate environmental, social, governance, economic and other issues. It identified 15 sustainability-related factors that guide the company’s strategy. These are grouped into three categories: governance and operating context; human rights and social impact; and resource use, scarcity and impacts. The last category consists of water and energy and climate stewardship, management of chemicals and toxics, waste and end-of-life, and materials sourcing.

By the end of 2020, it is aiming to reduce greenhouse gas (GHG) emissions by 50% from its owned and operated facilities globally compared with 2015. The target was set in January 2016 after what Gap describes as the urgent reality of climate change forced it to rethink its approach and strive toward more aggressive, science-based goals. Others include: 80% waste diversion from landfill across US-owned and operated facilities by the end of 2020 (just 29% was diverted in 2014); phasing out the use of hazardous chemicals in products by 2020; partnering with fabric mills to fight pollution and conserve water; and providing access to clean water for 17,000 people in India through its Women + Water programme.

The company’s most recent sustainability report, Our Futures Are Woven Together, contains only emissions reduction data for the US. It shows that, in 2014, GHG emissions (scope 1 and 2) from its US-owned and operated facilities were 33% lower than in 2008. It also reports that LED lighting was installed in more than 30% of its US stores and all its UK outlets.

In 2016, Gap joined the Better Cotton Initiative (BCI) to partner on sustainable cotton farming initiatives worldwide. The firm wants all branded apparel from ‘strategic suppliers’ (84% of sourcing expenditure in 2015) to achieve a sustainability rating of green or yellow by 2020.

H&M

Swedish company Hennes & Mauritz has several clothing retail brands, including H&M and Cos. A key feature of its sustainability strategy is to become ‘100% circular and renewable’. This requires the business to rethink how products are designed and made – including use of water, chemical and energy – the materials that are used and how customers use and dispose of them. Identifying ways to significantly reduce climate impact is also necessary.

The firm says that, wherever possible, it is adopting a science-based approach to define its targets and actions. Circularity targets include use of 100% recycled or other sustainably sourced materials by 2030 and to use cotton from sustainable sources only by 2020. Its overarching aim is to become ‘climate positive’ throughout its value chain by 2040; reduce electricity use in stores by 25% by 2030; and have a climate-neutral supply chain (first and second tier) by 2030, with two milestones: 20% of factories to be enrolled in an energy efficiency programme by 2018 and all by 2025; and a 30% reduction in greenhouse gases per product by 2025 compared with a 2017 baseline.

The H&M sustainability report shows that 26% of total materials in 2016 were from sustainable sources (up from 20% in 2015), as was 43% of the cotton used (34% in 2015). Carbon emissions per million Swedish krona sales turnover were 47% lower in 2016 than the previous year. The firm wants all energy used in its own operations to come from renewable sources. In 2016, 96% of electricity was from renewable sources, compared with 78% in 2015.

H&M’s ambition to ‘continually identify, address and remediate human rights impacts in its value chain’ was addressed in 2016 through several initiatives, including: training on modern slavery and forced labour; conducting a gap analysis of modern slavery to identify areas for improvement; and updating risk assessment for new and existing materials to further integrate a human rights perspective.

M&S

Plan A is the retailer’s sustainability strategy and is focused on protecting the planet by sourcing responsibly, reducing waste and helping communities. Launched in 2007, M&S says Plan A was a move away from corporate social responsibility ‘towards a more holistic approach that addresses all the sustainability issues affecting our business and supply chains’.

The plan was updated in 2010 and, in 2014, M&S revamped it again, setting new, revised and existing commitments for 2020. In 2011, the company said it had achieved 95 of the 180 Plan A commitments set in 2007 and 2010. Highlights from the most recent progress report, published in June 2016, include: four consecutive years of zero net carbon emissions from M&S operations; all operational waste from stores, warehouses and offices recycled; and 73% of products have at least one Plan A environmental or social quality (64% in 2015). Overall, 57 Plan A 2020 commitments had been achieved and five had not. A further 40 were on time and one – customer clothes recycling – was running late.

In terms of carbon, M&S believes it is the only major retailer with carbon-neutral global operations. Its total gross emissions (CO2 equivalent) in 2015-16 were 566,000 tonnes, down 4% a year earlier and 23% lower than the Plan A baseline of 2006-07. The firm says its continuing carbon neutrality has been due to a combination of reductions, procuring renewable energy, and by purchasing and retiring high-quality carbon offsets. All waste from its UK and Ireland operations in 2015-16 was recycled and, since 2008-09, the amount of waste from stores, warehouses and offices has fallen by 31%.

M&S updated its global sourcing principles last year to incorporate the requirements of the Modern Slavery Act. These cover human rights and labour standards, working conditions and working hours and wages.

Next

Next has 540 outlets in the UK and Ireland plus more than 190 stores or franchise operations across 35 other countries as well as a manufacturing plant in Sri Lanka. Its approach to corporate responsibility involves ‘acting in an ethical manner, developing positive relationships with suppliers, taking care of employees and being responsible for its environmental impacts’.

The company’s environmental priorities are: to improve energy efficiency and work to reduce energy use in its buildings; to minimise waste produced and increase the quantity recycled; and to increase the efficiency of its in-house delivery fleet. In 2015, its global direct carbon footprint was 191,127 tonnes of CO2e, 3% lower than in 2014 despite total floor space rising 2%.

Electricity consumption, meanwhile, was stable, although the firm reported that it had exceeded its target to reduce consumption by achieving an overall reduction of 36% since 2007. Over the 2007–15 period, the carbon footprint of the business fell by 33%. Some 91% of waste created in stores, warehouses, distribution centres and offices was diverted from landfill, slightly below the 95% target. New targets for 2020 include reducing electricity consumption through a 10% reduction in kg CO2e per sq m.

Next has set standards for suppliers, which include no child or forced labour, freedom of association, healthy and safe working condition and fair wages and benefits. In 2015, auditors assessed 88% of factories manufacturing for Next, with 92% ranked ‘acceptable’.

Sainsbury’s/Argos

20X20 is the name of the sustainability plan Sainsbury’s adopted in 2011. It included 20 commitments to achieve by 2020, including five on the environment. The company revised the plan in December 2015 to focus on the most material issues, particularly food waste. The target to reduce absolute operational carbon emissions by 30% compared with 2005 was retained.

The 2016 annual report shows absolute emissions at the end of the 2015-16 financial year were 3.4% lower than in 2005-06 and that the firm was targeting a 10% reduction in 2016-17. The business also published an emissions intensity measure, calculated using sales area (000 sq ft). Using this, emissions in 2015-16 fell by 4.7% and have decreased by almost 37% since 2005-06. Projects to reduce energy consumption and emissions include switching to natural refrigeration (at 40%, refrigeration consumes the largest proportion of the annual energy used across Sainsbury’s operations), and installing ground source heat pumps and solar arrays.

The firm says resource efficiency, water stewardship and waste are global issues that it is addressing through an updated commitment to sustainable sourcing. Meanwhile, its code of conduct for ethical trade covers the employment practices expected from its suppliers, both in the UK and abroad.

J Sainsbury completed its acquisition of Home Retail Group (Argos and Habitat (HRG)) in September 2016. Its approach to corporate social responsibility had focused on 12 areas, including operational carbon, waste, products and raw materials, and suppliers. It was targeting a 40% reduction in its carbon footprint by 2020 compared with 2006. It reported in 2016 a 34% reduction in its footprint relative to space and a 29% absolute reduction between 2006 and 2015.

Over the same period, absolute carbon emissions from the operation’s commercial fleet declined by 26%. It also reported that 94% of operational waste was recycled in 2015.

Starbucks

US-owned coffee chain Starbucks has more than 25,700 outlets worldwide, with almost 900 company-operated and licensed stores in the UK.

In 2008, amid the global financial crisis, the Seattle-based firm announced it would, by 2015, improve ethical sourcing in coffee throughout its supply chain and decrease the environmental footprint of its store operations. Its 2015 global responsibility report reveals a mixed picture. Some 99% of coffee was sourced from ethical sources audited by, for example, C.A.F.E and Fairtrade – slightly shy of its 100% goal (up from 77% in 2008); purchased enough renewable electricity to power all company-owned stores in the US and Canada (up from 59.3% in 2014); energy use was 4.3% lower than 2008 against a 25% target; and water consumption declined 26.5% between 2008 and 2015, surpassing the 25% anticipated.

In October 2016, the firm announced it had secured renewable energy contracts to more than 550 company-owned outlets in the UK, France, Switzerland and the Netherlands. Stores in Austria have since been added to those covered by such agreements, so the power that lights, heats, cools and runs equipment in the stores is matched against these contracts. The firm says more than 90% of the waste generated at store level, excluding paper cups, is diverted from landfill. It is trialling a new approach to separate paper cups from the rest of its waste, so they can be properly recycled.

LEED, the US rating system that evaluates a building’s environmental performance and encourages sustainable design, is being extended by Starbucks to other countries. The firm reports that each new store in Europe is designed, constructed and operated to LEED standards, while energy audits are carried out in existing, non-LEED certified stores.

Starbucks is a member of BICEP, a coalition of US businesses committed to working with policymakers to introduce ‘meaningful’ energy and climate legislation.

Tesco

Tesco is the UK’s largest retailer and has stores across Europe and Asia. In December 2015, Tesco joined the UN Global Compact, an initiative that encourages businesses worldwide to adopt sustainable and socially responsible policies. Its corporate responsibility commitments include tackling food waste in its operations, reducing carbon emissions and raising human rights and labour standards.

Tesco has targets to halve carbon emissions per square foot of its stores and distribution centres (DCs) and cut by 25% CO2 emissions per case of goods delivered by 2020 – against 2008 and 2012 levels respectively. Its latest update, published in November 2016, reveals that in 2015-16 it had achieved a 39.5% reduction in emissions from its stores and DCs compared with 2008 and a 17.4% reduction in distribution emissions compared with 2012. Year-on-year absolute emissions declined 3.1%. Tesco also reported that its largest grocery category suppliers were on track to exceed a 30% cut in their emissions by 2020.

Chief executive David Lewis is chair of Champions 12.3 – an international coalition of businesses committed to reaching the UN sustainable development goal 12.3 of halving global food waste by 2030. Tesco has pledged that, by the end of this year, no food safe for human consumption will go to waste from its UK stores. It operates a scheme that enables staff to alert charities about what surplus food is available to pick up.

Last year, Tesco introduced a new approach to assessing human rights risks and driving improvement. It is focused on where risk in the supply chain is greatest and is based on key factors, such as country risk, type of work and the supplier’s capability to manage the issues.

Uniqlo

The Fast Retailing Group, the Japanese apparel business, operates the Uniqlo brand. It has 837 stores in Japan and more than 950 elsewhere, including ten in the UK, mainly in London, where its first international outlet opened. It is set to unveil a fresh sustainability strategy and targets this year but its current priorities are clustered under four headings: production, environment, people and community.

Its approach to the environment is on using best practice, tools, industry collaboration, and consumer engagement to minimise its footprint. Material issues are chemicals, environmental management system, GHG emissions and climate change, and water use. The company is targeting a 10% reduction in CO2 per unit of floor space in its stores in Japan by 2020 and is committed to eliminating hazardous chemicals from its production processes by January 2020.

The company is using the Higg Index, the apparel and footwear industry self-assessment standard for environmental and social sustainability throughout the supply chain, to measure the performance of suppliers and set goals for environmental reductions. ‘After understanding that our biggest environmental impact is with our suppliers, we are now looking to baseline and set targets for our strategic fabric suppliers,’ says Yukihiro Nitta, senior vice-president and sustainability director.

Its 2016 sustainability report was published in February. It shows that scope 1 and 2 GHG emissions in 2015-16 from its Japanese operations totalled almost 138,000 tonnes CO2e.

WH Smith

News and stationery business WH Smith has more than 600 high street stores and operates more than 750 units in airports, railway stations, motorway service areas, hospitals and workplaces. Its targets for 2020 include: to reduce CO2e emissions from stores and distribution centres by 40% per square foot (from 2007 baseline); to reduce CO2e emissions from transport by 20% per pallet (from 2007 baseline); to send less than 5% of waste to landfill; to make 95% of own-brand stationery from certified or recycled timber sources; and to continue to work with the Woodland Trust to plant more than 250,000 trees in UK woodlands between 2010 and 2020.

The company’s latest corporate responsibility report shows it is making progress in each area. Its GHG emissions in the year to 31 August 2016 totalled 35,276 tonnes CO2e (scopes 1, 2 and 3 (employee business travel)), down from 40,126 in 2014-15. Carbon intensity (per 1,000 sq ft) was 8.03 in 2015-16 compared with 9.16 in 2014-15.

Overall, the firm said it had achieved a 49% reduction in CO2e emissions per sq ft from stores since 2007. Investment in LED lighting across most of its stores, distribution centres and in back of house, such as stockrooms and offices, had delivered significant savings – group energy consumption (kWh per sq ft) fell from 21.1 in 2011-12 to 17.55 in 2015-16.

Transport emissions (CO2e emissions per pallet) have declined by more than 25% since 2007. In 2015-16, 11% of waste was sent to landfill, while 284,000 trees were planted and 85% of own-brand stationery was from certified sources.

WH Smith says it is committed to maintaining good labour standards across its supply chains. By 2020, it wants 90% of supplier ethical trade improvement plans completed on time. It had achieved 81% in 2015-16.

Zara

Spanish company Inditex operates more than 7,000 stores worldwide. Its main brand is Zara and it has 68 UK outlets. The company says sustainability forms the basis of all its decisions and is ever-present in all its processes. Its overall philosophy is called Right to Wear, with its social and environmental commitments tagged Social to Wear and Green to Wear. The latter is focused on three major strategic initiatives – water management, energy and greenhouse gas emissions, and biodiversity protection.

As a signatory to the Joint Roadmap to Zero Discharge of Hazardous Chemicals initiative, Inditex is working to achieve zero discharge of undesired chemical substances by 2020 and is committed to sustainable water management across each of the six areas covered by the CEO Water Mandate: direct operations; supply chain and watershed management; collective action; public policy; community engagement; and transparency. Its energy strategy is centred on reducing the energy intensity of its own operations by 15% and reducing the use of energy in stores by 10% – both by 2020 against 2012 levels and measured against each garment placed on the market.

The biodiversity strategy aims to conserve and develop diversity of species in the communities in which Inditex has a direct presence as well as those connected to its supply chain.

Sustainability performance data for 2015 was included in the company’s latest accounts. They show that the consumption of electricity per garment released on the market in Inditex logistics centres, own factories and head offices declined by 4% compared with 2014. Its scope 1 and 2 emissions based on CO2e g per garment were 548.38 in 2015 compared with 674.72 in 2014 and 706.70 in 2011. The firm says more than 85% of its waste was managed in a way that did not harm the environment in 2015.

The Inditex supply chain consists of 1,725 suppliers and 6,298 factories across more than 50 countries, with 60% of production in Spain. The firm’s code of conduct for manufacturers and suppliers set out standards of mandatory compliance in issues of labour rights, health and safety of products, and environmental factors.

CSRHub – rating companies

CSRHub uses 525 CSR/ESG data sources to rate and rank more than 17,000 companies in 133 countries. Sources include: AccountAbility, CDP, CorporateRegister.com, Dow Jones Sustainability indices, Forest Stewardship Council, FTSE4Good, GRI, Newsweek Top 50 Green companies, Thomson ASSET4 ESG, MSCI ESG and Trucost.

CSRHub rates firms by dividing corporate social responsibility performance into four main categories (community, employees, environment and governance) and 12 sub-categories – from human rights and supply chain to transparency and reporting.

The environment category covers environmental policy and reporting, waste and resource management, energy use, and climate change policies and performance.

Subcategories are: energy and climate change, which measures the effectiveness of actions; policy and reporting, including reporting performance, adherence to standards such as GRI, and compliance with investor, regulatory and stakeholders’ requests for transparency; and resource management, including how well resources are used in manufacturing and delivering products and services. There is also an open-ended number of special issue topics covering CSR issues that do not fit into any of the sub-categories.

Each element of data from a source is mapped into one or more subcategory and/or one or more special issue, and converted into a rating on a 0 to 100 scale (100 = positive rating). Scores for the same company are compared from different data sources and examined and adjusted to remove bias and create a more consistent rating. Sources are weighted based on CSRHub’s estimate of credibility and value. All data on a company is then combined to generate base ratings at the subcategory level, which are aggregated further to the category level to arrive at an overall score.


Visit csrhub.com to find out more. the environmentalist would like to thank CSRHub, especially chief operating officer Cynthia Figge, for supplying scores for this article.


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