Retail Horizon 2024 Sustainability report: How can retailers accelerate efforts to tackle climate change?

This dichotomy continues to test organisations’ strength and differentiates those retailers with a true commitment to the cause. 

With 2024 anticipated to bring a welcome easing of cost-of-living pressures, retailers and consumers must refocus their efforts to drive lasting change. 

Retail Horizon 2024 Sustainability analyses the conflicting demands that are challenging progress and how retailers can accelerate their efforts to tackle climate change.  

Key trends for 2024 

• Cross-industry collaboration to speed change   
• Leading the way for future generations 
• Polarised consumer attitudes 
• Technology investment driving innovation 
• Traceability moving up the agenda 

Cross-industry collaboration to speed change 

Retailers are facing continued pressure to grow ahead of inflation while delivering profit. As governmental and company-based deadlines edge closer, sustainability will dominate stakeholder discussions and action plans.  

Partnerships and collaboration are accelerating efforts. From becoming a B Corp (certified by a third-party movement requiring companies to meet sustainability standards) to joining a coalition, retailers should think creatively about how to drive progress.  

The role of the consumer remains key, playing their part by reducing their own carbon footprint. And retailers must work to make sustainable consumption easy, from examining product design and longevity to improving in-store signposting and aftercare. 

Leading the way for future generations  

The 2023 Net Positive Employee Barometer shows that 69% of UK employees polled are worried about the future of the planet and society, seeking action from the companies they work for.  

Retailers that fall short in communicating and executing their actions towards climate change risk employee exit, especially from the younger Gen Z and millennial demographics.   

Reverse mentoring continues to be an avenue retailers should exploit if they are to truly understand the demands of multiple generations. It will also become commonplace for executive teams’ bonuses to be linked to ESG targets. 

Polarised consumer attitudes 

As consumers grapple with tighter budgets thanks to rising rents, bills and food inflation, discretionary spending remains challenged. This is driving polarised behaviour when it comes to purchasing decisions. 

The rise of Shein and Temu, which frequently ship items at low cost from the other side of the world, should also be a concern. With little in the way of a solid ESG strategy from either retailer but rapidly rising sales, their growth suggests value remains a larger driver than ethics for many UK consumers. 

There are, however, reasons for optimism. GlobalData research shows that the international apparel resale market is set to grow 85.5% between 2022 and 2026.  

Consumers are looking for retailers to lead the way. With big players such as Inditex and H&M both launching pre-loved services, attitudes to secondhand will change and the deceleration of new products should follow. 

Technology investment speeds up innovation

Sustainability is not linear; retailers will face setbacks along their journeys, with new technology often meaning trade-offs.  

Technology such as artificial intelligence (AI) can enhance progress while potentially using up vital energy sources. Gartner research shows that the use of AI can be detrimental to natural resources, using both large amounts of energy and water.   

Retailers must balance progression with responsibility to reach the best outcome for their targets. Gartner expects that, by 2025, 50% of chief information officers will have performance metrics tied to the sustainability of the IT organisation. 

Traceability is a high priority 

Significant investment and infrastructure from government, retailers and suppliers is required to provide full transparency and traceability throughout the supply chain. 

Many retailers have recognised that they alone do not have these capabilities and are working with experts to understand and improve their value chains. Remaining up to date on the latest policies and regulations is crucial. 

Authenticating an item’s provenance will also become a key decision-maker for customers choosing pre-loved items over new ones.  

Ultimately, technology and traceability will help both retailers and consumers to make better-informed decisions.