Sustainable Sourcing for Retailers - An overview from BRC

‘Retailers can't work in isolation’. (Sue Fairley, New Look, Head of Sourcing, Sustainability & Quality)

It is important for food producers throughout the supply chain to be aware of the key issues that retailers will wish to be implementing in relation to ensuring the BRC pledge for net zero by 2040.

In the lead up to COP26, the scope of emissions and sustainable sourcing are examined at the start of the British Retail Consortium (BRC) Climate Action Week series of webinars.  Climate Action Roadmap (brc.org.uk)   This underlined the importance of stitching data together and keeping priorities clear for business retailers. 

At the heart of the de-carbonisation effort to combat climate change is the need to efficiently measure and track greenhouse gas (GHG) emissions. To help delineate direct and indirect emission sources, improve transparency, and provide utility for different types of organisations and different types of climate policies and business goals, three “scopes” (scope 1, scope 2, and scope 3) are defined for GHG accounting and reporting purposes.

Scope 1, 2 and 3 can be defined in terms of three categories of emissions;

Scope 1 - This one covers the Green House Gas (GHG) emissions that a company makes directly — for example while running its boilers and vehicles.

Scope 2- These are the emissions it makes indirectly – like when the electricity or energy it buys for heating and cooling buildings, is being produced on its behalf.

Scope 3 - This is the most wide-ranging category into which go all the emissions associated, not with the company itself, but that the organisation is indirectly responsible for, up and down its value chain. For example, from buying products from its suppliers, and from its products when customers use them.

For many businesses, Scope 3 emissions account for the vast majority of their carbon footprint (Deloittes put this at over 70%  Explained: What are Scopes 1, 2 and 3 | Deloitte UK BRC estimated 80-90% of activity being in scope 3.)

If any sustainability claims on reduction of carbon and emissions are made and businesses adopting best practice then they will need to commit to tackling Scope 3 emissions.

Reporting on scope 3: how this is currently calculated and reported is inconsistent.  There are key questions on deciding on the metrics, how these are calculated but also how initiatives to reduce this may actually be measured.  The latest BRC survey however reported only 6% of respondent retailers were calculating the benefits /impact of initiatives to reduce the scope 3 emissions.  The breadth of retail can exacerbate this problem with the range of small, medium, large, some vertically integrated businesses means it can be very hard to consistently address this.

The overall advice from this first seminar from IBM and New Look sustainability experts were:

• ‘Keep it Simple’ – ie identify priorities.  Retailers should focus on the ‘big handles’ they will be driving downstream to the consumers. They will need to define the end to end value view ie how this cascades down and rolls up, and to communicate their requirements in a consistent way to suppliers. Overall they will need to simplify the framework in order to make an impact on the big ticket items they as a business are consuming in the supply chain. ‘Identify where your influence is. Work in areas where you will have the busiest impact’ ie Ikea and selling furniture concentrate on trees, New look concentrate on textiles.
   
• Identify pockets of good within the business, there is likely to be a lot of data that is not stitched together ie corporate social responsibility data etc. Blockchain can also help support this stitching together and not having suppliers duplicate the effort. 
   
• The ability to trace data and report on it means there can be an overall vision.  It was stated that some companies have driven hard on this agenda.  Unilever is highlighted as driving sustainability in all of its' activities; carbon, water, fair wages, deforestation etc therefore creating a framework and process that understands the flow of data for all product lines and its’ implications.  Similarly, other retailers were highlighted, whereby they seek to evidence their sustainable action by putting the power of sustainable choices within the hands of consumers.  This is particularly relevant for fresh food products ie sustainability; particular products such as salmon, cheese, organic chicken, where the consumer makes a conscious choice at the till, were referenced here. 
   
• Bringing information together throughout the supply chain will involve two aspects: 1. Information reporting; and 2. Supply chain provenance.  It was stated that if food safety can be traced from ‘farm to fork’ then there should be no reason why any other element cannot be similarly monitored, be it carbon or water etc.  All ingredients can be traced and then all elements collated to provide the carbon footprint.

The next BRC webinar looked at data and collection to enable organisations to understand their emissions, develop effective sustainability strategies, predict consumer demand and embed sustainable practices.  The update from speakers from Google stressed the growing importance of sustainability for consumers and that 70% wished brands to have beliefs allied to their own.  Right now consumers are searching how to make more sustainable choices.

However, 'sustainability' was not just around climate change and emissions for consumers. Significant trends included fresh seasonal produce, veganism, country of origin and responsible sourcing.  The 'made where'? search is up 1000% in the last 18 months on Google. 

It was maintained that, for retailers, putting even discrete 'hot spot' data into a framework and understanding the guidance around it meant that retailers can begin the process with small steps to ensure a move in the right direction.  This will additionally support supply chain transparency, business continuity, real-time demand, reduction of waste and improve efficiency of operations.

BRC Guidance will be published 9^th December 2021.