It would not make sense for retailers to cut their focus on and investment in sustainable business, argues BRC chief executive Helen Dickinson
It’s been a torrid few weeks for British politics. Following the sweeping tax cuts announced in the chancellor’s ‘mini-budget’, we’ve seen the pound plummet, mortgage rates rise, and a backbench rebellion, all culminating in a dramatic u-turn on some of its intended tax cuts.
That said, the mini-budget contained a mix of good news and missed opportunities for retailers and their customers.
The reinstatement of tax-free shopping for tourists was good and calls for action on energy bills from business groups, including the BRC, were heard, with the government acting to shield both households and companies from the worst of the energy price increases.
But the chancellor missed a vital opportunity to bring clarity over next year’s business rates bills, which could see a 10% rise – £800m for retail – unless further action is taken.
“Everyone I speak to talks of rising costs across their business, exacerbated by the fall of the pound”
Despite the interventions on energy, pressure on households continues to build. While the government has capped the rise in energy prices at 27%, with protections from further rises for two years, this still represents a doubling of energy bills since October 2021.
Mortgage rates have been steadily rising and pressures on food prices continue. Sadly, this will mean too many households being forced to make the devastating choice between heating or eating this winter.
As a result, we are likely to see demand struggling to keep up across certain categories as we approach peak trade. At the same time, everyone I speak to talks of rising costs across their business, exacerbated by the fall of the pound.
This includes their own rising energy bills (mitigated by the six-month cap), higher commodity prices, still-high transport costs, and all in a particularly tight labour market.
Understandably many retailers are looking for more ways to find efficiencies and cut operational costs as they work hard to protect their customers from the worst of these cost pressures. But there is one area that retailers must not be tempted to cut – the focus and investment in ensuring they have a sustainable business.
Ambition matched by action
Putting sustainability at the heart of business operations is not a marketing ploy. It is not virtue signalling. It is not a nice-to-have. It is a vital part of the answer to the current challenges.
From reducing packaging to green fleets, and from solar panels to cutting waste we are seeing essential action that will not only help tackle climate change and build a more circular economy but help to reduce energy use, cut future costs and build more sustainable and resilient businesses.
On October 17, we start the BRC’s Climate Action Week, putting a focus on the momentum of retailers to tackle climate change. The week provides an amazing opportunity to share the best practice needed to move the industry to net zero by 2040 – our shared ambition as part of the Climate Action Roadmap.
It includes webinars on cutting emissions and saving energy, insight on moving consumers to more sustainable choices and the inaugural Climate Action Roadmap Showcase.
“Retail requires a fundamental change to its business model to meet the net-zero challenge”
The Showcase is designed to share and celebrate the achievements of retailers in reducing their carbon emissions and improving sustainability.
Our judges, including eminent retailer Nick Beighton; experts from WWF, CISL and WRAP; and the editor of Retail Week, Luke Tugby, are deciding which of the 40 entries have been the most impactful and impressive initiatives across our five categories.
Fabulous as I am sure they will be, they are just a drop in the ocean of what is needed if we are to play our part in limiting global temperature rise to 1.5°C above pre-industrial levels.
In 2017, the full lifecycle of UK retail’s sold goods had a footprint of around 215 million tonnes of CO²-equivalent – more than 30% of all household greenhouse gas emissions. Both the responsibility of the industry and our opportunity to make a difference are enormous.
Retail requires a fundamental change to its business model to meet the net-zero challenge. So, while retail faces major headwinds in the current economic and geopolitical landscape, we must not miss the wood for the trees.
The cost-of-living crisis will be here to stay for months to come, but the climate crisis will be here forever unless we act now.
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