IGD has trawled the CSR reports of 20 international retailers so you don’t have to!   IGD Senior Business Analyst Mala Morris reveals the findings.

As retailers develop their own strategy on sustainability, there is a growing need and opportunity for suppliers to engage with their key customers in a number of initiatives across the supply chain.

Coca-cola promoting recycling in-store       Wal-Mart's Earth Month

Our research shows that the most advanced retailers in this area have made environmental initiatives central to their corporate strategy. They are also leveraging their sustainability strategy to generate cost savings and to gain a market advantage and reinforce their connection with shoppers.

Retailers are not only focusing on limiting the environmental impact of their stores but are also engaging with suppliers to drive change across the wider supply chain.

For example, Carrefour has rolled out a computer-based self assessment tool for private label suppliers with an aim to include sustainability criteria into tenders within three to five years. Meanwhile, Wal-Mart and Tesco are developing a “closed-loop system” whereby waste generated in-store finds its way back into the system with suppliers using recycled material as input for new products.

Retailers are also investing in pricing and promotional strategies to influence ethical shopper behaviour at the point of purchase and promote energy efficient products. Wal-Mart’s “Earth month” organised last  April was a key step in this direction, and featured a range of promotions from leading branded  manufacturers such as Coca-Cola.

One area of particular focus for retailers in recent months has been packaging reduction. Aggressive targets have been announced by retailers around the world in this area.

International retailers' Packaging reduction targets:

• Wal-Mart: Reduce overall packaging by 5% by 2013
• Carrefour: Reduce packaging by 10% by 2013
• Tesco: 25% reduction in own-label and branded packaging by 2010
• Metro: Minimise the packaging of own brand products
• Ahold: Make packaging recyclable wherever possible
• Seven & I: Reduce the use of containers and packaging
• Woolworths Australia: Find cost-effective ways to reduce packaging and minimise waste from private label products
• Sainsbury’s: 5% reduction in packaging by 2008
• Morrisons: use 15% less own brand packaging by 2010
• Marks & Spencer: 25% reduction in packaging by 2012
• ASDA: 25% reduction in own-labelling packaging by 2008
• Musgrave: Reduce primary and secondary packaging in own label products

What does sustainability mean for suppliers?

As retailers work to build a more sustainable supply chain, sustainability-related criteria are likely to become an increasingly important factor in evaluating and negotiating with suppliers in the future. Aligning with your retailer customers on sustainability is likely to provide your business with further opportunities to differentiate from competitors.

More information:

To understand how IGD can help you integrate the latest insight and best practice on sustainability and help you future-proof your customer engagement plan, find out about IGD’s report, ‘Sustainability: Planning Your Approach’ report

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Mala Morris is a Senior Business Analyst in IGD's International Research team. Since joining IGD, Mala has led IGD’s Asian research with a specific focus on the Indian retail market. Mala has produced IGD’s India – Planning Your Approach (2007) and has presented at IGD’s Emerging Markets Seminar. Another key focus area for Mala is IGD’s research into the sustainability strategies of retailers. She is the lead author for IGD’s report, Sustainability: Planning for the Future and has contributed to the Trading with Tesco (2008) report with a focus on the retailer’s sustainability initiatives.