Retail Compass Autumn 2022

Casting your net zero ambitions: eight key steps for retailers

Published on 24 November 2022

What is happening? 

In our Autumn 2021 edition of Retail Compass, we explained how retailers can avoid falling foul of the CMA's greenwashing guidance on protecting consumers from misleading environmental claims (see page 7 to 8 here). 

Looking ahead, ESG strategies in the retail sector will be coming into even sharper focus – not only for consumers but also existing and prospective employees. 

With climate change at the forefront of the ESG agenda, the employment relationship, and the opportunities to engage with the workforce on this subject, are crucial ingredients in the quest to becoming a truly green retailer. 

Why does it matter? 

Many retailers are now striving for net zero status, where their carbon emissions are reduced as far as possible. With eco-anxiety now at an all-time high among the gen Z population, the steps you take in aiming for net zero status can significantly impact your ability to recruit, engage and retain the right people, which in turn affects productivity, brand reputation and staff morale. 

On the flip side, failing to comply with environmental obligations risks costly whistleblowing and discrimination claims, as well as disruptive industrial action – not to mention serious damage to your brand. 

However, action taken now to encourage employees to take collective responsibility for sustainability, as well as preparing for potential risk areas, will be invaluable in the long term. 

What action should you consider? 

  1. Educate your workforce on climate change so that every employee can make environmentally responsible choices, both at work and in their personal lives. Collective action can deliver meaningful results more swiftly and can help boost morale and workplace positivity. 

  2. Formalise your climate-related expectations of staff by embedding sustainability into job descriptions and competencies. You may even consider going a step further by adopting aspirational clauses in contracts of employment to impose a positive obligation on employees to take environmentally friendly decisions. Examples include requiring employees to spend time volunteering on sustainability projects, and offering paid sabbaticals where the leave is spent on climate change initiatives. 

  3. Assess the sustainability of home working and consider implementing seasonal hybrid working to mitigate the negative carbon impact of working from home, for example where more energy is required to heat individual homes in the winter versus heating one office. 

  4. Reinvent your reward package to incentivise greener behaviours, for example by:

    • rewarding sustainable ways of commuting, such as offering season ticket loans for public transport or access to bikes at a reduced cost
    • celebrating and praising teams and individuals for their sustainability initiatives, and
    • inviting ideas for green projects and providing funding for the winning submission.
  5. Be aware that an employee's climate-related beliefs may be protected by discrimination legislation. Case law has established that an asserted belief "that mankind is heading towards catastrophic climate change and we are under a moral duty to act to mitigate" may constitute a philosophical belief (Grainger plc and others v Nicholson EAT/0219/09). It is therefore imperative that employees are respectful of each other's views on climate change and that your DEI and anti-bullying and harassment policies account for this. 

  6. Bear in mind that a failure to comply with a legal obligation, for example by greenwashing and misleading consumers about your environmental claims, is more likely to be called out by workers, as opposed to consumers, and may amount to a protected disclosure for whistleblowing purposes. 

  7. Note that the whistleblowing legislation lists environmental damage as one of the breaches that a worker can blow the whistle on and there is, as yet, no statutory threshold to determine what type or level of environmental damage will qualify. For example, arguably, a retailer's failure to provide adequate recycling facilities could qualify. Retailers will therefore need to keep a close eye on how the case law develops in this area.

  8. Be alive to the increasing risk of industrial action, where employees may strike in response to the employer's position on the environment, although for such action to be lawful it must meet the specific criterial laid down in s.244

Statistics

Net Zero ambitions:

UK retail industry ambition to reach Net Zero by 2040, with stores and warehouses powered by net zero electricity by 2030. Source: BRC

Eco-anxiety amongst Gen Z:

Global survey found that 50% of respondents aged between 16 and 25 were "very or extremely worried" about climate change, while 84% were "at lease moderately worried". Source: The Lancet Planetary Health, Vol 5, Issue 12, Dec 2021

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