The retail industry has suddenly got very ambitious on climate change. Ahead of the COP26 climate conference, a string of new sustainability commitments and decarbonization pledges were made by major retailers and supermarkets.

But will these ambitious climate pledges now turn into climate action? Here we take a look at what’s driving the urgent shift to sustainable business, and the best action companies should take to reach their targets to halve greenhouse gas emissions by the end of this decade.

Retail urgently pledges for Net Zero around COP26.

• Jul 2021: With the launch of the Race to Zero Breakthroughs: Retail Campaign, retail giants H&M, IKEA, Kingfisher, and Walmart have committed to work together to halve greenhouse gas emissions by 2030.
• Jul 2021: German discount grocer Lidl pledged to become carbon neutral by 2022 and cut operational emissions by 80% by 2030.
• Sep 2021: UK supermarket Tesco raised the bar with a commitment to reach Net Zero in their own operations (scopes 1 & 2) by 2035 and achieve net-zero across all scopes by 2050.
• Sep 2021: M&S revamped “Plan A” pledging to cut its carbon footprint by a further third by 2025 and become Net Zero by 2040 (across scopes 1, 2, and 3).
• Oct 2021: Walmart pledged net zero emissions by 2040 and are bringing together their value chain behind the “Project Gigatonne”.
• Oct 2021: COP26 sponsors Sainsbury’s announced in October 2021 they are cutting 5 years off their target to achieve Net Zero in their own operations (scopes 1 & 2), bringing it forward to 2035 (with net-zero across all scopes by 2050).
• Nov 2021: Five of the UK’s biggest supermarkets (Tesco, Sainsbury’s, Waitrose, Co-op, and M&S) promise to halve the environmental impact of your shop by the end of the decade.

These sustainability targets are all aligned to limiting global warming to 1.5°C above pre-industrial levels, the highest level of ambition expressed in 2015’s Paris Agreement and one of the key objectives of COP26 to avoid the worst impacts of the climate emergency.

What’s driving these ambitious net-zero commitments for retail?

Unequivocal science.

The IPCC’s 6th Assessment Report makes it clear that the only goal we must aim for is 1.5°C. The Science-Based Target initiative (SBTi) shines the light on what targets are aligned to that future, allowing retailers to understand the short-term goals they must set to play their part in achieving 1.5°C.

Mandatory disclosure and reporting.

Last week in Glasgow saw the launch of the new International Sustainability Standards Board (ISSB), which creates a globally consistent baseline for the disclosure of ESG and sustainability data. With TCFD disclosure becoming mandatory in the UK, and other countries likely to follow, companies are under greater scrutiny than ever before (not least from their investors and capital providers) to demonstrate their action and results to address climate change.

Consumer pressure.

Retailers sit in the sweet spot between responding to (and stimulating) consumer demand and managing hugely impactful global supply chains. With the rise of climate change impacts worldwide and high-profile activism, people are increasingly voting with their wallets for the companies and products that they see taking the most immediate action to solve climate change.

The Race to Zero.

The UN-backed Race to Zero campaign has brought together the largest-ever coalition of non-state actors committed to taking rigorous and immediate action to halve global emissions by 2030. With the moral imperative now aligned with a strong business case, CEOs have been eager to join.

Clear pathways for action.

Industry initiatives such as the BRC’s Climate Action Roadmap have brought the sector together behind a singular level of ambition, laying out clear pathways to get there across operations, logistics, product, supply chain, data, and reporting. This makes it far easier than before to plan out the step-by-step actions on the path to Net Zero, with emerging best practices and cost-competitive technologies to get there.

What can retail do to decarbonize rapidly?

If there’s one clear message from COP26 so far, it’s that it’s now all about urgent action. That means deep emissions reductions now; not just offsetting.

In fact, SBTi’s recently published Net Zero Standard requires companies to cut emissions by 90% before offsetting any residual emissions. Walmart is leading here, planning to achieve their Net Zero goal with no carbon offsetting.

For retailers, deep decarbonization means:

• Taking whatever action you can immediately. Investing in renewable energy, switching to LED lighting, implementing cost-saving energy efficiency measures, fixing or upgrading your refrigeration, electrifying your fleet, piloting reusable packaging and food waste schemes, promoting more sustainable choices now, etc.
• Getting your sustainability data in order. You should not wait for this to start acting. Growing maturity in tracking sustainability metrics is important to continuously improve performance and identify and scale up what works. Start conversations with your supply chain to bring them on this journey with you, and figure out the best ways to work together to reduce supply chain emissions.
• Doubling down on sustainable product innovation. Consumers are hungry for innovative choices that are better for them, as well as for the planet. They need retailers to make it easy for them to make sustainable choices and celebrate their role. Ultimately that needs to be backed by Lifecycle Assessment (LCA) for each product, but like with data, you can start acting even before you’ve done that. Supporting the development of eco-labeling and industry standards will help level the playing field and give customers trustworthy means to make those choices.
• Engaging your whole workforce. Working for an employer that’s at the leading edge of the exciting transition to sustainable business can be hugely motivating for staff. Engage your teams behind this, educate them, involve them and harness their unique perspectives and ideas to boost your efforts even further, adapted to the unique local context that they know best. When your people know in their hearts the good that you’re doing, and can evangelize that to customers, you’re going to have more loyal staff and customers too.

The quickest way retail can meet Net Zero targets.

Here’s a glimpse of what it looks like in Quorso to get your store teams engaged (working with operations, logistics, merchandising, and supply chain teams) and taking urgent action towards your Net Zero and 2030 decarbonization goals right now.

Wherever you are along the journey, we’re here to help you turn the pledges of the last year, and the energy of COP26, into effective, impactful action throughout your business. Quorso have our very own Sustainable Impact Accelerator: book a demo with us to see exactly how you could be driving your sustainability targets ahead of the pack.