At the NRF Supply Chain 360 conference and expo, you can explore the modes and methods needed to build a stronger, more sustainable supply chain and ensure resiliency in challenging times. Learn more about the conference, held June 20-21, 2022, in Cleveland, here.
As consumers grow ever more interested in supporting brands with values that align with their own, companies are realizing the importance and impact of sustainability initiatives. Scot Case, NRF’s vice president of CSR and sustainability, helps the retail industry accelerate and scale its sustainability-focused impacts.
Case has nearly 30 years’ experience consulting with retailers and suppliers — and loves to talk about all things sustainability — so on this Earth Day we thought we’d ask him a few questions about his favorite topic.
Before we talk about your insane enthusiasm for all things sustainability, let’s start with a basic question. What is sustainability?
You’re not going to like this answer because the answer depends on who is defining it. Remember that every retailer exists to meet the needs of the consumer. The challenge for retailers is that every consumer has a slightly different understanding of sustainability.
Some focus on climate change, others on packaging issues, hazardous ingredients, factory workers, diversity issues, recycling, community impacts or other related sustainability aspects. Investors, like consumers, focus on a variety of sustainability issues.
With consumers and investors all over the map about what’s most important to them, retailers are building sustainability solutions to meet the needs of their consumers and their investors while also considering broader, global impacts.
With 4.2 million retailers in the United States, that’s a lot of different definitions of sustainability.
Well, then how does NRF define sustainability?
After talking with our members, which range from Main Street retailers to large global retailers — and from retailers that are new to sustainability and those that have focused on it for decades — NRF’s definition for sustainability is intentionally simple: Sustainability for the retail community is about creating net positive environmental, social and community benefits.
How does one know if they are creating net positive benefits?
The same way businesses know if they’re making a net profit. To measure profit, a business looks at all its expenses and all its revenues. If the net revenue exceeds net expenses, it’s profitable.
It’s the same concept in sustainability with consumers, investors and retailers measuring costs, known as externalities, that were not historically considered. A factory belching pollution, for example, might be lowering its operating costs while increasing costs on the rest of society. That’s no longer acceptable.
People now realize that every single purchase and every single business decision has hidden human health, environmental and social impacts. Every decision has global ripple effects. When I purchase any product, I’m sending signals into the economy about how products should be made, what they should be made from, what factory conditions are acceptable and how much pollution, including global warming emissions, is acceptable.
Every one of those decisions has both positive and negative impacts. The goal of sustainability is to ensure that the positive impacts are significantly larger than the negative impacts. Sustainability-focused retailers are trying to maximize both profits and positive impacts.
How does one measure those impacts?
Excellent question! It’s difficult — and this type of impact accounting is still evolving.
Join the NRF Sustainability Council and gain the opportunity to discuss best sustainability practices with retailers.
Sustainability accounting traces back at least to the 1990s when a sustainability consultant created an ecological footprint to quantify environmental impacts. More recently, the book “Net Positive” expands the ideas to include environmental, social and community impacts.
It’s now possible to calculate the carbon footprint of a product. It requires tracing a product throughout its supply chain and adding up every contribution to climate change from the mining and transportation of raw materials, the energy used by the factory, the impacts of getting the product to the consumer and even the impacts from the consumer using and ultimately disposing of the product.
That sounds complicated. Are consumers really paying attention to this stuff?
Surveys show that more than 70 percent of consumers say they care. There’s also data showing that when consumers are presented with sustainability information about, say the carbon footprint of a product or information about organic or recycled content or energy or water efficiency, they’re more likely to choose the more sustainable option.
To learn more about retailers’ sustainability initiatives, visit NRF’s sustainability headquarters.
That’s why, for example, you see more products claiming to be made from certified organic ingredients or that the packaging is compostable or recyclable.
What’s more important for retailers, however, is that consumers — especially the youngest, Generation Z consumers — are expecting that retailers and brands can provide sustainability information about the products they sell. The challenge is that retailers and their suppliers are still building the systems to make that information available.
Final question. You’re clearly very passionate about retail sustainability. What drives that passion?
I was an asthmatic child and spent nights in the hospital struggling to breathe. When I was in third grade, back in the 1970s, my teacher put a white sock on the muffler of her car to teach us about air pollution. This was before catalytic converters, so that white sock turned black from the car’s exhaust very quickly.
When I realized that my difficulty breathing was connected to the cars that we drive, I wanted to know why anyone would ever design or buy a car that made people sick. I began asking a lot of questions about business, environmental and social issues, and I’ve just never stopped asking those kinds of questions.
I guess I learned at a very early age that every business decision has real-world impacts.