Julian Walker-Palin - What motivates retailers to become more sustainable?
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This document summarizes Julian Walker-Palin's experience and expertise in corporate sustainability. It outlines his leadership roles in sustainability at ASDA and Tesco over 17 years. In 2014, he started ETANTE to help businesses unlock competitive advantage and mitigate risks through sustainability. The document then discusses several trends impacting retailers, including new markets, product development needs, power shifts to producers, and new competitors. It also notes the business case for sustainability given factors like climate change impacts, resource constraints, and evolving consumer and community expectations. Overall, the document positions corporate sustainability strategy and expertise as increasingly important for business success.
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Julian Walker-Palin - What motivates retailers to become more sustainable?
- 1. Sustainable Best Practice Exchange 2016 Retailers’ motivations on sustainability 14 | 04 | 16
- 2. Solid retail expertise ASDA: 7 yrs - Head of Corporate Sustainability ➔ Created and ran Sustainability Department ➔ Wrote and managed Asda’s strategy and policies ➔ Responsible for external engagement – governments, NGOs, media ➔ Responsible for internal alignment – Board to stores across 180,000+ Co-opted to support Walmart activity ➔ Created and co-directed the Global NGO Management Network ➔ Wrote policy and delivered global sustainable palm oil procurement ➔ Subject matter lead on timber & wood fibre sustainability ➔ Embedded into US Team on regular basis Tesco: 10 yrs - Head of Regional Corporate Affairs ➔ Led Tesco’s local engagement across a third of the UK ➔ Responsible for all local stakeholders – MPs, Councils, other traders ➔ Media spokesman on local issues
- 3. I set up ETANTE ETANTE set up in 2014 with clear aims & principles ➔ Deliver value through sustainability ➔ Unlock competitive advantage ➔ Mitigate future risks to operating model ➔ World class communications & engagement ➔ Unique position having ‘been there and done it’ in-house ➔ Support FMCG brands, retail, food service, government, academia, finance & certification
- 4. New markets • Emerging markets needs • Westernised diets growing • £45m gov funds to encourage exports • More lucrative than UK / EU? New Product Development • War on sugar • C-stores growth in fresh • Use of certification by Discounters • On-line packaging needs More power to producers • Grocery Code Adjudicator • Consolidation = more power • New contractual terms likely • Greater competition for security of supply New marketplace • ALDI larger than Waitrose • Discounters = 10% • Discounters growing fastest • Pound shops expansion • C-stores now ‘destination’ shops New ways to shop • Omni-channel growth • Smaller baskets prevalent • Top up shops normalised • Click & collect common New Challengers • Collection when it suits you • Amazon Fresh & Google Express • New concept stores Retail is changing & fast
- 5. Sustainable development case is made In UK by 2080 4° higher summer temps 1/4 less rainfall 1 metre higher sea level By 20203 need 50% more food & energy 30% more fresh water ~8.3 billion people Will hit profits Higher agri-chemical prices Water reflect real cost Soil health! Costly mitigation
- 6. Retailers have serious strategies 5 key priorities • Reduce direct emissions by 50% by 2020 • 75% reduction in fleet emissions by 2020 • Reduce water usage • Support supply chain to reduce emissions • ZWTL & prioritise food waste reduction 20x20 • Reduce direct emissions by 30% by 2020 • Use 100% natural refrigerants by 2030 • Fewer, Fuller vehicles • 20% renewables by 2020 • Maintain 50% water reductions • Source 35 key raw materials sustainably 7 key priorities • Supplier engagement – SSE • Communities – the modern-day hub • Food waste – all food should be eaten! • Climate resilience - adaptation • Carrier bags – supporting charities • Energy – efficiency & renewables • Farming – resilience & British 6 key priorities • Reduce direct emissions by 30% by 2020 • Lower fleet emissions YOY • Increase renewables – PV & PPAs • 20% water reduction by 2020 • Support supply chain efficiencies • Zero waste to landfill (ZWTL)
- 7. What about consumers? 1. They do care & this concern is increasing 2. They will not / cannot pay more for green products 3. Visible waste in the home drives them crazy! 4. Their loyalty is driven by CSR activity – if price, quality & convenience are the same 5. Supportive initiatives can drive sales Customers care about green • ~ 80% in 2012/13 • > 90% today Sustainabilit y is a rising topic • ~3% in 2011 rank ‘a lot’ • >11% today rank ‘a lot’ Provenance ranks highly • 77% question food sources & sustainabili ty Sustainabilit y drives buying • >70% make this claim (all things price & quality Food waste • >90% waste food and so money • ~85% want retailer’s help Info above based on Asda Green Britain Index 2015
- 8. External factors cannot be ignored WRAP’s Food Futures lays out the challenge & need to act (video): https://youtu.be/mPUjBZppC38
- 9. External factors cannot be ignored WRAP’s Food Futures lays out the challenge & need to act (video):
- 10. Sustainability supports success 1. Things just got real! Climate change is affecting ability to source & operate 2. Being left behind is no option Cost to operate is directly linked to level of sustainability 3. Loyalty & trust ride on this Consumers care and make increasing demands 4. Communities really count You have to earn loyalty and community support 5. Externalities are biting Valuing natural capital is essential to building a resilient business