How can retailers improve their sustainability amid a cost-of-living crisis?

A blog post by Head of Sustainability at Reconomy, Nathan Gray.

Sustainability in a retail environment remains a hot topic for businesses large and small. Whether it is due to increased waste and wastage, changes to legislation, or responses to changing consumer behaviours.

We wanted to put a spotlight on retail sustainability and ask our Head of Sustainability some questions that will likely be on the minds of retailers today:

How important is sustainability in the retail sector? And how much demand is there from customers for sustainably sourced products?

As the UK transitions to a more circular economy, businesses operating in the retail sector will come under increasing pressure to embed sustainability at the heart of their retail offering. Waste is often a by-product of convenience – think single-use, cheap or disposable items which can often be made with non-environmentally friendly materials – so the sector must work harder to fall in line with best-in-class standards.

This is because consumers are becoming increasingly eco-conscious in their shopping habits. When shopping, they are looking for sustainable products and services that minimise their impact on our climate and natural resources. If the retail sector cannot attract and retain these customers, their commercial businesses will suffer as a result. Sustainability is no longer just a nice to have, it is critical for reputation and growth.

There is also a legislative necessity for retailers to embrace sustainability. The financial consequences of not procuring 30% recycled content packaging (EPR) and segregating waste (Environment Bill) in a DRS (Deposit Return Scheme) world will ultimately hit bottom lines.

What is the best way for retailers to promote their sustainably sourced products?

The modern-day consumer is more alert to ‘Greenwashing’ than ever, making it critical for retail brands to be completely authentic and able to back up their claims. Doing rather than saying is the best approach. Reward consumers for bringing their own cups/receptacles if they are on-the-go or provide reusable crockery and utensils.

Transparency and honesty are critical, and the more collaborative the journey, the better.  Providing solutions that help people to make an informed choice is crucial, so providing a disposable single use cup option is important but charge them accordingly so that they think twice the next time.

Reporting is another critical part of a retailer’s sustainability journey. Putting these measures in place can help demonstrate to consumers the progress being made and how they can help to improve even more. The best approach for a modern business is to utilise ‘triple bottom line’ accounting (financial, environmental, and social), but make it simple and easily digestible through accessible reporting and communication.

What else can retailers do to make their stores run more sustainably without investing large sums of money?

Not only can retailers use sustainable practices as a unique selling point, but pushing their waste further up the waste hierarchy and utilising it as a resource can produce huge cost benefits, potentially reducing manufacturing costs as well as disposal costs through food share schemes. This will demonstrate that actions are better than words and that everyone in the chain gets a benefit.

There are also some simple steps that convenience stores can take to improve their sustainability through the provision of extra bins. For example, even just segregating cans and bottles to ensure they are recycled – rather than consigning them to be burnt or buried when using a regular bin – demonstrates commitment to reducing plastic and other streams of waste. The DRS scheme in 2025 will force this segregation to happen, but why wait when we know it is the right thing to do now?

How can retailers reduce their food and drink wastage, while also growing sales?

Circular economy mechanisms, such as deposit return systems, rely on technologies such as reverse vending machines.

Reverse vending machines (RVM) are used in over 40 countries, achieve a return rate of up to 97%, and are efficient and easy to use.

Anyone can deposit an empty single-use drinks container in return for a pre-paid deposit (where DRS is in place) or other rewards such as a voucher, discount, credit, or charity donations. Once a machine is full, the compacted bottles and cans are collected for onward high-quality recycling. The machines are in-store or out in the open and provide additional benefits such as usage data and advertising space.

Deposit Return Schemes often rely on RVMs where retailers will likely have shared responsibility for the recycling of plastic, aluminium, and glass placed on the market. EcoVend is a highly engaging and accessible technology, it will alert the retailer when it needs emptying and will even detect what products people are buying and recycling.

A Deposit Return Scheme is set to be implemented across the UK in 2025.

How can retailers reduce their plastic usage without making life difficult for themselves and their customers?

Packaging and supply chains are two key areas where retailers can make a big difference without inconveniencing their customers or themselves.

By improving processes in a supply chain, retailers have the potential to not only minimise waste but also can create a circular solution by pushing their waste back into the supply chain as a resource. The first area retailers should consider is the packaging footprint, by seeing if they can implement some quick wins to ensure there is less packaging waste and that more of it can become recyclable content. The use of zero waste reusable packaging isles for regular bulk items is well practiced across many retailers now

It shouldn’t stop at the packaging; brands should then make their way up the supply chain process to see if any other areas can be improved by encouraging sustainable practices that may reduce plastic usage or minimise wider environmental impacts.

What recycling initiatives are out there for retailers to use?

As mentioned, reverse vending initiatives such as the Deposit Return Scheme are set to be a major focus of independent convenience stores and retailers over the coming years in the UK.

This is a key part of the transition to a more circular economy; boosting drinks container recycling rates and reducing plastic waste as the government looks to encourage more positive consumer behaviours. The introduction of the Extended Producer Responsibility for Packaging means that obligated companies must report their packaging data by 1^st April 2024 (record from 01.01.23 or 01.03.23) as a part of the ‘full net cost recovery’ for packaging placed into the market. It is therefore important for companies to make recycling easy and to arrange takebacks where feasible.

What are three sustainable projects you’ve seen retailers doing that have impressed you?

UK Supermarket, Iceland, recently introduced a great waste reduction plan that also gives something back to loyal customers. To combat food waste in stores, Iceland have introduced a ‘free on last day of life’ scheme, offering customers the chance to purchase items on the last day of their best-before-date at no charge when they transact online. A great initiative that not only incentivises purchases but also prevents stock potentially ending up as food waste.

Levi Jeans decided to act after noticing a growing issue with denim as a waste stream and the high levels of water needed to create a single pair of jeans. Levi’s recent Water<Less range uses up to 96% less water in its production, saving an estimated 3 billion gallons of water so far. This simple change from Levi helped tackle a growing problem in the manufacturing process of their product.

Reconomy brand ReBound worked with Oh Polly women’s fashion brand to improve energy management and carbon reporting practices by accurately tracking their carbon emissions on deliveries and in-country warehousing to support their strategic business decisions.

We then delivered a custom retailer report detailing which country of operation had the most efficient logistics, including carbon footprint modelling. ReBound allows retailers to see their carbon emissions in real time, for all parcels in their network, removing the manual element of plotting the carbon emission reports in the UK.

What are you doing to be more sustainable?

First and foremost, Reconomy is helping the independent convenience sector create a closed-loop philosophy when it comes to waste, encouraging steps towards a circular economy model. We portray this journey via our Zero Waste index and help companies to visualise where they are on the journey to 1.5°C and where they need to focus immediate attention to help drive down non-renewable waste.

On our side, we are making strong progress toward our sustainability objectives if they have not already been completed.

Since 2018, Reconomy Group has delivered £2.2 million in social value, has funded 86 apprenticeships and 60 internships for care leavers and hard-to-reach groups, and allocated a total of 84% supplier spend to local and/or SME suppliers.

On its environmental commitments, the Group now diverts 97.5% (up from 96% in 2021) of the waste managed through its operations away from landfill. It has also reduced its Carbon Intensity (Scopes 1 and 2) by 8.2% representing positive progress given its growth in operations and is on track to use 100% of its electricity through renewable sources by 2028.

The Group’s efforts were also recognised via several industry awards. The highlights of this included an Ecovadis Gold Award, receiving the top award in environmental, social, and governance management at the 2022 British Private Equity & Venture Capital Association Summit, and the prestigious CIO 100 Award.