3 Challenges for Sustainable Retail

In April 2011, Bloomberg reported on a law suit that was filed in Florida on behalf of the Southeast Consumer Alliance Inc.  against Whole Foods over supposed irregularities with organic frozen vegetables sourced from China. The allegations raise some important issues and concerns about the retail industry’s ability to ensure that environmentally and socially responsible products are what they claim to be.  In this case the claim (which has not been, and may not be, proven) involves a potentially dubious certification scheme, possible use of forced labor and sourcing of “organic” product from what maybe highly contaminated area of China.  When I read about the lawsuit it brought to mind some of the many challenges for both retailers and suppliers in sourcing and providing environmentally and socially responsible products.

1.  Eco-Certification Schemes

From the retailer’s perspective, an obvious challenge is a heavy reliance on certification schemes and labels. Retailers are marketers at heart and logistics experts by necessity; they are not environmental and social performance experts. Last time I checked there were over 550 different labels and certification schemes in the market covering a wide range of product categories.  There is little real control over the developers of these schemes and labels and where there are controls, they are usually based on complaints rather than enforcement. In Canada, the Competition Bureau does have Environmental claims: A guide for industry and advertisers and in the US, the Federal Trade Commission (FTC) has developed Guidelines for the Use of Environmental Marketing Claims. These documents provide guidance on what is a good claim, in line with existing legal requirements, but I doubt most food producers and product manufacturers have read them and I am pretty sure they are not priority reading in China. So retailers are somewhat left to themselves to determine what is a reasonable claim.  In my experience the best labels are; 1) based on a multi-attribute analysis – that is they do not look at only one aspect such as water or carbon, rather they are based on an analysis a range of aspects across the life cycle of the product, 2) supported by a governance structure, process and verification system that is transparent and involves relevant stakeholders, 3) is based on scientifically sound and rigorous standards.

Retailers are somewhat left to themselves to determine what is a reasonable claim.

Unfortunately the Wild West nature of the market for environmentally and socially responsible products means there is money to be made and there are a number of labels that do not have sufficient backing and support to provide confidence that they are fair and accurate.  In addition to the three characteristics of a good label mentioned, from the planets perspective a good labeling or certification scheme must actually encourage improvement in product performance. A good example is the EPEAT system for electronic products, where the product manufacturer can move up the tiers in the scheme (bronze, silver, gold) by doing more to improve their product’s performance.  Retailers need more schemes like this.

2.  Consumer Apathy

A second and major challenge for retailers is consumer apathy. People simply do not buy environmentally and socially responsible products consistently and often enough.  The data shows that the percentage of conscious consumers who consistently buy these types of products remains pitifully low. Fortunately there are a lot of other business benefits (e.g. risk management, cost reductions, brand enhancement) for retailers who source more sustainable products. But imagine what would happen if more consumers got on board and actually bought more responsible products on a regular basis.

3.  Confustion on where to focus

A third challenge is that deciding what is more environmentally and socially responsible is bloody hard.  In today’s market of global supply chains and interrelated systems it is difficult to make the right choices.  There were a few sustainability experts who knew that ethanol from corn was not what it appeared to be from an emissions perspective but not many saw how it would affect food prices.  I use life cycle assessment software and data to help compare product systems and it is a good tool, but it does not tell me about the people that made the product, or the sustainability of the resource base that the materials came from.  This challenge is debilitating, particularly when you also understand that in the sustainability game, if you make a mistake, there is no shortage of people waiting to publically flog and humiliate you.  This is a particularly annoying aspect of sustainability as it impedes progress.  It is disappointing that the cosmetic industry makes outrageous claims about their products anti-aging properties every day with no consequences, yet if a company measures its carbon footprint and gets it wrong there will be a pile on of negative comments.

I use life cycle assessment software and data to help compare product systems and it is a good tool, but it does not tell me about the people that made the product, or the sustainability of the resource base that the materials came from.

Retailers do not want to be associated with bad products yet many of them are courageously still trying to make the right choices, this should be applauded and rewarded. We want them to keep trying because retailers are a crucial pivot point in the sustainability movement, linked to thousands of suppliers and millions of consumers.  So next time you read about a retailer getting it wrong, maybe cut them a bit of slack because it is hard getting it right.
Kevin Brady is a management consultant and author whose work and writings focus on improving the sustainability performance of organisations and products. He was a founding partner of Five Winds International and is now director of Sustainable Enterprise Consulting. Kevin has been a guest speaker to a sold out crowd at TSSS twice in the past, enjoy the event summaries of his past talks.