One of the first times I saw a retailer divert a consumer from using a single-use plastic bag was at a certain Swedish home goods store almost 15 years ago. It was charging a few cents to use a single-use plastic bag or selling the now globally recognized oversized blue and yellow reusable bag for under a dollar.
It’s amazing to think how ubiquitous reusable bag programs have become, alongside sustainable fixtures such as solar panels and energy-efficient lighting, in retailers’ efforts to appear more “green.” But the truth is these initiatives are just the tip of the iceberg when it comes to retailer sustainability. The majority of a retailer’s sustainability footprint comes from its supply chain — more than 95 percent of its footprint, according to Scot Case, vice president of sustainability for the National Retail Federation. So, if you want to make a significant impact, this is where to focus your efforts.
Retailers are reliant on their suppliers and partners to help them rethink their total supply chain footprint, because everyone plays a role in the flow of goods. This means it’s crucial to look at the big picture to understand where there’s opportunity for more sustainable practices. Zooming out, it’s clear that the current one-way flow of goods and packaging is preventing everyone from achieving sustainable breakthroughs, and materials with a one-use or finite lifecycle are producing significant waste.
To revolutionize this one-way system and level up sustainability in the supply chain, it’s time to shift to a regenerative perspective. This approach has led to an explosion of interest in the massive environmental benefits of a circular economy, where the resources used to manufacture and transport goods are selected with recyclability/reusability in mind. Instead of reaching a dead end at a landfill or being broken up and pumped into our atmosphere, resources simply reinsert in the supply chain all over again. By creating this regenerative loop, partners across the supply chain reduce their footprint and build a circular economy of the future.
Why is Circular an Imperative?
At a high level, the answer is “everyone expects more.” A recent survey conducted by the University of Pennsylvania found that two out of three consumers across generations are willing to spend more on sustainable products while two out of three retail executives believe they won’t. I often hear stories about millennials and Gen Z’s pushing for more sustainable products, but they’re far from alone — 90 percent of Gen X consumers are willing to pay an extra 10 percent, according to the report.
While retailers aim to meet and exceed customer expectations by stocking their shelves with sustainable products, they should also aim to improve sustainability behind the scenes through the manufacturing and delivery process. Industry leaders can take it a step further, transitioning from a sustainable supply chain to a regenerative one thus creating more environmental and social value than is consumed. This is where a circular mindset comes into play. We know that building a circular economy is the best path to enable a regenerative future, where there’s a net positive impact on all stakeholders.
Consider the pallets used to transport goods. A pallet lost or broken after a delivery means another one must be manufactured, consuming wood — a precious and expensive raw material that requires energy (carbon) to produce and deliver. Using pooled pallets and quickly returning a pallet to the appropriate place in the supply chain saves manufacturers time and money, reduces environmental impact, and creates more effective capacity in the whole supply network. Designing that pallet to remain strong for dozens of reuses further amplifies all these benefits.
In addition, the events of the last couple of years really drove home why we need to think circularly. In the early months of the pandemic, we saw some supply chains grind to a halt — outbreaks reduced output, and some manufacturers couldn’t afford to produce goods at pre-pandemic rates. Regenerative systems, circular by nature, offer manufacturers more resilient options to keep the supply chain moving without having to invest in net new resources.
How is the Industry Responding?
Walmart aims to be a leader in regenerative supply chains. The big-box retailer is committed to achieving zero emissions in its operations by 2040, and is engaging suppliers through Project Gigaton to reduce or avoid 1 billion tons of emissions from its supply chain by 2030. In addition, Target is making strides toward a sustainable future by planning for 100 percent of its private-label products to be designed for a circular future by 2040.
Retailers can also find support for their sustainability initiatives through industry trade groups. The Retail Industry Leaders Association (RILA)’s Climate Action Blueprint, released last year, is a great place to start. The blueprint, created in partnership with Schneider Electric and reviewed by the World Wildlife Fund, gives retailers a step-by-step plan for putting their sustainability goals into action. Similarly, the National Retail Federation (NRF) offers a tool kit of resources for retailers around sustainability strategies, frameworks and metrics. It’s important for retailers to understand this shift is worth making, and that they don’t have to transform alone.
Working Together to Complete the Circle
Regenerative supply chains are possible, and they will require new levels of collaboration globally and locally throughout the end-to-end supply chain. This next era of sustainability calls for retailers, suppliers and manufacturers to work together to build the circular economy of the future — one that’s regenerative. Communication and transparency will be key for collaboration and innovation, and by sharing the impact of our initiatives, we can continue to educate others on the importance of this collective effort. In fact, everyone wins when we work together to “close the loop” on circular supply chains — for our businesses, our customers, and our planet.
Jim Hartzfeld is the head of sustainability, North America for Brambles, a a supply chain logistics company operating in more than 60 countries, primarily through the CHEP brand.
View Original Article
