Western European consumers and governments are pressuring businesses to operate in a sustainable manner. Student-led protests and debates over investing 25% of the European Union’s budget to fight climate change are shining a brighter light on ethical business practices.
Players in the retailing industry have been making efforts to be more sustainable over the past 20 years. Grocery retailers are focused on eliminating food waste and rethinking packaging while fashion retailers are using recyclable or locally sourced materials. In Western Europe, the retailing industry will need to do more, and quickly, to bolster their sustainability credentials and be on the right side of history in the minds (and wallets) of consumers and governments.
Consumers value sustainability
Understanding the values, attitudes and behaviors of eco-conscious consumers* underscores the increased prevalence and importance of sustainability. In 2019, 14.3% of Western Europeans are eco-conscious consumers. Interestingly, the percentage of eco-conscious consumers is split almost evenly among age groups and mirrors the overall income level brackets; no specific age group leans toward eco-consciousness. Sustainability is a priority regardless of life stage or income level.
These consumers have shopping behaviors that meet their green philosophies: 44% try to shop locally, 56% like to buy fewer, better things and 57% buy secondhand items at least once a year.
Governments are getting involved
In addition to consumers exerting pressure on retailers to become more sustainable, Western European governments are also passing legislation that impacts how retailers operate.
The European Commission approved the Circular Economy Action Plan in December 2015. The goal is to set Europe on a path “toward a climate-neutral, circular economy where pressure on natural and freshwater resources as well as ecosystems is minimized.” The plan outlines ways to extend the life of raw materials and recycle products at the end of their lifecycle. The idea is to create a circular, instead of a linear, path for production. The 54 action items outlined in the Plan have either been completed or are in the stage of completion as of March 2019.
Following the Circular Economy Action Plan, the European Strategy for Plastics was approved in January 2018 to ensure that all plastic packaging in the European Union is recyclable or reusable by 2030.
The European Union is also tackling the challenge of food waste through its EU Platform on Food Losses and Food Waste, which launched in 2016. One of the initiatives is to halve the amount of food waste per person in the retail and consumer sectors by 2030 and minimize waste along the supply chain.
Apps help minimize food waste
Both technology companies and grocery retailers are using apps to sell food that is about to expire at low prices to minimize food waste. Businesses upload the food they want to sell, and buyers use the app to find local deals.
Too Good To Go is an app that launched in London in 2016. The app sells surplus food from restaurants and retailers at a discount. Too Good To Go is currently available in nine countries with 21,000 partners and 8.3 million downloads. A similar service, Karma, launched in Sweden in 2018. The app allows partners to sell their surplus food at a 50% discount. Karma has 2,000 companies on its platform and 500,000 app users across approximately 150 cities in Sweden, Paris and London. Comparable services are available in other countries throughout Europe like Last Minute Sottocasa in Italy.
The retailing conglomerate Salling Group, based in Denmark, launched an app in 2018 called Mad Skal Spise (Food Waste Fighter) that allows its grocery banners and other grocery retailers to sell food that is close to expiring at a discount.
Retailers rethink packaging
Responding to legislation and consumer demand, retailers are rethinking packaging, especially in the grocery space with three main tactics:
- Minimize: Retailers are minimizing their use of plastic packaging. In 2017, Marks and Spencer in the UK reduced the amount of air in its popcorn packaging as part of its “Project Thin Air”. The brand claims that 37% less packaging material is used while maintaining the same product content weight.
- Recycle: In 2019, H&M set two goals with regards to recycling packaging. First, all packaging will be designed to be reusable, recyclable or compostable by 2025. Second, their packaging will be composed of 100% recycled or sustainably sourced materials by 2030.
- Eliminate: Zero-waste grocery stores are popping up in Western Europe. Consumers bring their own containers to fill and pay by the weight. Gram is an example of a zero-waste grocery store in Sweden. The Bulk Market and The Zero Waste Shop are two similar concepts in the UK. Original Unverpackt is another grocer in Berlin that embraces the zero-waste philosophy.
Ethical fashion gains steam
The fashion industry is one of the most resource intensive industries in the world with low recycling rates. The industry also has serious social issues to tackle as revealed by the Rana Plaza tragedy in 2013 where more than 1,000 garment workers lost their lives.
As a result, apparel and footwear retailers are embracing ethical fashion in three main ways: fair trade (offering fair working conditions and supporting local craftsmanship), sustainability (reducing environmental impact) and slow fashion (producing quality, longer-lasting garments).
H&M, despite being a pioneer in fast fashion, is taking ethical fashion seriously. In its home market, 17% of Swedes are eco-conscious consumers. H&M is committed to becoming 100% circular by 2030 with these goals: 100% usage of recycled and sustainable resources, store waste recycling, use of renewable energy and reduced CO2 emissions. The company’s “100% Fair & Equal” program ensures that their employees and suppliers have fair compensation and a safe workplace. H&M brands also launched a recycling program in stores where consumers drop off used or unwanted clothing to be recycled and receive a coupon in exchange.
H&M has taken this a step further by listing a wealth of information about the garment production process like the materials and suppliers used on H&M websites. Consumers can access this information in store using the H&M app to scan the price tag which brings up the product detail page.
Sustainability will need to be at the core of any retail operation
With endless information at their fingertips, consumers are more educated about the entire supply chain and its impact on the environment and humanity. They are keen to support the most sustainable retailers with their wallets and are pushing governments to pass laws that encourage sustainable practices.
The sense of urgency around preserving the environment and human rights will only grow. All retailers operating in Western Europe must get ahead of these demands and evaluate each of their processes to ensure they are implementing ethical practices.