Retailers leading the way on climate action to enhance competitivenessAdam Siegel, Senior Vice President of Research, Innovation & Sustainability at Retail Industry Leaders Association (RILA)
Retail can be a tough business. Responding to changing consumer expectations, keeping costs low, and working with complex supply chains can make it challenging for retailers to be profitable and sustainable in today’s rapidly changing global economy.
But many leading US retailers are proving that taking action on energy reduction, renewable energy, and climate change is good for business, the customer, and the environment.
A growing list of retailers are making strategic climate commitments, including a commitment to set science-based targets to ensure their emission reduction plans are in line with the level of decarbonization required to keep global temperature increase below 2°C.
So far, this list includes ALDO Group, Best Buy, Eileen Fisher, Gap, Guess?, H&M, IKEA Group, Levi Strauss & Co., NIKE, Target, VF Corporation, Walmart and many more — many of which are RILA members. Of this group, IKEA Group and Walmart have also had their targets successfully approved by the Science Based Targets initiative.
Walmart, the world’s largest retailer, is looking to enlist the help of its supply chain as part of its efforts to drive down emissions. Last year the company launched Project Gigaton, a challenge to its direct Tier 1 suppliers to collectively cut one gigaton (1 billion metric tons) of greenhouse gas (GHG) emissions from their operations by 2030. That is equivalent to taking more than 211 million passenger vehicles off US roads and highways for a year.
And it’s already yielding results. At this year’s Sustainability Milestone Summit, Walmart announced that more than 400 suppliers with operations in over 30 countries have joined the program. Together these suppliers are already reporting emissions reductions in excess of 20 million metric tons.
What’s more, Walmart itself saved nearly $1 billion in a single year and cut almost 650,000 tonnes of CO2 emissions in their own operations, as part of its science-based target, which is approved by the Science Based Target initiative. Walmart is also committed to transitioning to 100% renewable electricity with RE100.
The world’s leading apparel and footwear brand NIKE is also a member of RE100. Earlier this year NIKE announced it had signed its second major wind contract with Avangrid Renewables — this time for 86 megawatts of Texas wind power. The agreement enabled the company to source 100 percent renewable energy across our owned or operated facilities in North America.
IKEA recently unveiled its updated People & Planet Positive strategy. A key component of this strategy is IKEA’s science-based target — recently approved by the Science Based Target initiative — to reduce emissions from their stores and other operations 80% by 2030, as well as reducing GHG emissions from customer and co-worker travel and customer deliveries by 50% in relevant terms, and reducing GHG emissions from their value chain relating to home furnishing products and food by at least 15% (all against a 2016 baseline).
IKEA recognizes, as a company with a large global footprint, they have the ability to help drive dive down emissions in households around the world and have addressed the emissions associated with the products they sell, saying that their commitment to tackle supply chain emissions translates to a 70% reduced climate footprint on average per IKEA product.
This is part of the company’s long-term net zero vision and is backed by a strong track record of action on climate. IKEA has, for example, already switched its entire range of light bulbs to LEDs and has to date sold some 85 million LED bulbs. If all the bulbs that IKEA has sold replaced incandescent light bulbs, they would save enough energy to power 750,000 households for a year.
Meanwhile, Best Buy has committed to reduce carbon emissions 60 percent by 2020 as part of its bid to take action on climate change. In 2016, Best Buy passed its own goal to reduce absolute carbon emissions by 45 percent, from a 2009 base year. Stepping up from 45 percent to 60 percent carbon reduction is equivalent to removing 32,000 cars from the road for an entire year, the company said.
This helped Best Buy achieve a top-ranking A- CDP score in 2017 for its climate-management strategies and carbon-emissions reduction, which clothing retailer Gap Inc. also gained last year.
Gap Inc. has installed LED lighting at 1,000 stores while pursuing energy efficiency measures, as part of its climate action strategy. The clothing maker is committed to reducing absolute scope 1 and 2 GHG emissions in its owned and operated facilities globally by 50% by 2020.
Last year, six top apparel companies announced that they were joining the Science Based Targets initiative during Climate Week NYC. Beyond Gap and NIKE, this list included Levi Strauss & Co., Guess?, Eileen Fisher and VF Corporation, which all committed to set emission reduction targets consistent with global efforts to limit warming to well below 2 degrees Celsius.
Meanwhile, Target is committed to reducing its absolute Scope 1 and 2 GHG emissions by 25% by 2025, compared to 2015 levels, and is the process of developing an additional Scope 3 goal. The retailer is making progress on these targets by ramping up its use of renewable power, increasing the energy-efficiency of heating and lighting sources in stores and actively managing its refrigerant inventory.
These retailers are harnessing climate action through their science based target commitments as a driver of innovation, competitiveness, risk management and growth. Given the central role cost-effective renewable energy will play in meeting these commitments, it is no surprise many of these brands are all also members of Employers for Renewable Energy (ERE), a coalition representing job creators nationwide who support state policies that enable greater customer choice of renewable energy and strong competition among producers.
By setting targets that go beyond their direct operations, leading companies in the retail sector set an example. These targets also help them to collaborate with their supply chains and customers in new ways, while future-proofing profitability and addressing climate change impacts and risks.
Join RILA, We Mean Business, CDP, and CVS Health for an introduction to science-based targets and the Science Based Targets initiative (SBTi). This webinar, on Wed, Jul 25, 2018 12:00 PM – 1:00 PM EDT, will explore how and why retailers are setting SBTs and how they are working to achieve them in their own operations by working closely within their supply chains to drive action. Learn more and register here >