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Is it Possible to Measure Sustainability Within the Retail Industry?

Leon Kaye | Monday May 3rd, 2010 | 1 Comment

At a fundamental level, there’s really nothing sustainable about the retail industry as we know it today.  In the United States and abroad, as the economic engine evolved from one of production to one of consumption, retailers and their suppliers have become the dominant companies.  Take a look at the Dow Jones Industrial Average:  the index showcases companies including Walmart, Home Depot, Kraft, Coca-Cola, and other firms like 3M, Alcoa, Hewlett-Packard, GE, and Walt Disney, which have some role in our consumer-driven economy.  The results?  A flood of cheap goods, the increased consumption of energy and resources, and, some would argue, lower wages.  Nevertheless, more retailers are conscious of their impact on people and the planet, and some are becoming sustainability leaders.  But is this concern genuine or simply crass marketing, or even “greenwashing?”

Five Winds International, a strategic environmental consulting firm, released the first in a series of studies evaluating a select group of large retail firms and sets some benchmarks.  Companies in this survey include big box chains Walmart and Target, UK-based Marks & Spencer and TESCO, and Whole Foods.  Five Winds measured several factors, including logistics, carbon efficiency, green buildings, and how the companies’ employees—and the communities in which they operate—were treated.  The results may surprise you, and of course will spark debate.

The way to view Five Winds’ study is that it is a compelling framework by which to benchmark a retail firm’s actions when compared to its words (i.e., the web pages devoted to sustainability and corporate social responsibility)The big winnerMarks & Spencer, chiefly because of its devotion to the greening of the company’s supply chain, energy efficiency, focus on greenhouse gas emissions, water conservation, and procurement policy.  Meanwhile, Sears Holdings was considered a laggard, surprising to me considering the efforts the company has made to source more environmentally-friendly paper and its crown as the EPA’s ENERGY STAR Retail Partner for 2010.  They survey may not be entirely fair:  many of Sears’ and K-Mart’s locations are in older buildings, and with all the turmoil the company has experienced over the past decade, revamping and greening its stores may not be high on the list right now, but is now turning a corner.

Of course there are surprises.  Walmart ranks relatively high.  Then again, the company has been taking steps such as painting its roof tops white the last several years, and since its ascendancy in the 1970s, the company has not only saved money from an efficient transportation network, but fuel as well.  Whole Foods, the company that redefined the supermarket customer experience, ranks low, due to its poor performance (or lacking disclosure) in matters related to water usage, waste, and energy efficiency.

Overall, the strength of this survey is not what Five Winds reveals or how it may shock some consumers and companies, but how it can give everyone an idea of how to vet a company’s sustainability policy versus how those ideas are put into practice.  One company that already scores high using these benchmarks is Timberland, which recently announced an ambitious plan to reduce its carbon footprint.

Though we may have more questions than answers, Five Winds is releasing more about the study in two more installments, so stay tuned.


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