Will climate action become less of a priority for retail post-pandemic?
Deloitte’s latest “Climate Check“ report shows that over 80 percent of executives are concerned about climate change. The pandemic and economic downturn, however, have stalled ambitious actions, according to the respondents.
Asked about the biggest environmental sustainability/climate change issues already impacting or threatening to impact their organization, the top five answers were:
- Operating impact of climate-related disasters (e.g., facilities damage, workforce disruption), cited by 27 percent;
- Scarcity/cost of resources (e.g., food, water, energy), 26 percent;
- Regulatory/political uncertainty, 26 percent;
- Increased insurance costs/lack of insurance availability, 24 percent;
- Reputational damage, 17 percent.
Almost two-thirds of the 750 executives participating in the survey cited a need to cut back on their sustainability efforts in response to the pandemic and economic downturn.
“The pandemic has slowed some of the momentum toward combating the climate crisis that has been building over the last couple of years,” said Michele Parmelee, Deloitte’s chief people & purpose officer. “On the other hand, there has emerged a newfound sense of determination that if we act now, we can alter the course of climate change and avoid worst-case scenarios down the line.”
For retail, surveys show sustainability has become a purchasing driver.
The sixth “EY Future Consumer Index,” a survey of 14,500 consumers globally fielded in January and February, found 49 percent will prioritize the environment and climate change in how they live and the products they buy. For 26 percent, sustainability will be their most important purchase criteria three years from now.
Frequent/or extreme weather patterns stemming from climate change will also drive extensive supply chain disruptions, finds a McKinsey case study, released last August. The impact could include physical damage to facilities, inventories and other assets; interrupted production and shipments; higher costs and prices to restore operations; and ultimately reduced revenues. McKinsey wrote, “Supply chains and the infrastructure that supports them are designed for a stable climate.”
Andrea Ranger, shareholder advocate with Green Century Capital Management, told S&P Global that President Joe Biden’s environmental agenda may soon force retailers to offer more detail on long-term climate goals. More evidence is expected to be sought in areas such as decarbonizing supply chains and transitioning away from fossil fuels.
- 2021 Climate Check: Business’ views on environmental sustainability – Deloitte
- Is business too busy saving itself to save the environment? – RetailWire
- Survey: Americans Embrace Sustainability Despite COVID-19 Upheaval – Genomatica
- Can retailers drive climate change action? – RetailWire
- The Hidden Price of Climate Change for the Retail Industry – Loss Prevention Media
- Could climate become the weak link in your supply chain? – McKinsey
- New Survey of Experts Finds COVID-19 Pandemic Risks Slowing Progress Towards the Sustainable Development Goals – GlobeScan
- U.S. Cotton Trust Protocol: A Year Into Lockdown, Research Finds Sharp Increase In Consumer Demand For Sustainable Products And Business Practices – U.S. Cotton Trust Protocol
- US Future Consumer Index Edition 5 – EY
- Retailers could face more investor scrutiny amid Biden climate policy agenda – S&P Global
DISCUSSION QUESTIONS: Will the pandemic slow or accelerate retail’s initiatives to combat climate change? How have the drivers of climate action for retail changed over the last year?