RILA Tracks Sustainability Strides

New study reveals growing interest in environmental and worker issues.

Big retailers are planning big strides in sustainability.

This story first appeared in the March 11, 2013 issue of WWD.  Subscribe Today.

That’s the conclusion of the 2013 Retail Sustainability Report being released today by the Retail Industry Leaders Association and cosponsored by the sustainability practice of Ernst & Young.

“All of the trends are upward,” noted Adam Siegel, RILA’s vice president of sustainability and retail operations. “Everyone is projecting that they’re going to be working on far more in the next few years than they are today. They’re already heavily involved in management of waste and recycling and energy usage.”

Among the sustainability executives surveyed, 97 percent are already working on waste and recycling in their facilities, meaning stores, headquarters and distribution centers, and that number is expected to remain at that level two years from now. Similarly, 94 percent are acting on energy usage, a number expected to inch up to 97 percent.

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However, greenhouse gas emissions and water usage are currently under the microscope at 68 and 55 percent, respectively, figures expected to rise to 87 percent and 84 percent by 2015.

Siegel noted that an issue barely on the radar of most sustainability officials — end-of-life disposal of products — is creeping into view. Less than half of the respondents — 48 percent — are addressing it now, but more than four in five — 81 percent — expect to be looking into it two years from now.

“I’ve already begun to see the cusp of that trend,” Siegel told WWD. “Some stores are taking back products, making arrangements for customers to give or even sell products back after the product’s life is over or helping small companies develop businesses in this area.”

The survey revealed relatively low levels of involvement in some of the implications of stores utilizing global supply chains, with signs of growing awareness in light of tragedies like the Tazreen fire that killed 111 workers in Bangladesh on Nov. 24.

The “manufacturing impacts” of their products were already being addressed by 52 percent of retail officials included in the survey, a number seen growing to 68 percent in the next two years. Factory labor conditions are on the agenda of 48 percent of officials, but 65 percent expect to act on them by 2015, and sourcing locations, also addressed by 48 percent now, will grow to 77 percent in that time frame.

“Sustainability is a business imperative,” said Craig Coulter of Ernst & Young’s sustainability practice. “This report demonstrates that companies are developing the operational strategies and the systems and infrastructures — personnel, metrics, goals, tracking systems, reporting, etc. — to effectively manage and implement sustainability.”

It also demonstrates a determination to “do well by doing good.” Although they acknowledge the importance of goodwill in their efforts to adapt more sustainable practices in their facilities and their products, about a quarter expect financial payback on sustainability initiatives in two to three years, versus about 22 percent who expect it in between one and two years and about 15 percent who put the return horizon at three to five years.

RILA, whose members include many of the largest U.S.-based mass merchants, issued a white paper on transportation sustainability in January.