Sector Name: Retail Trade
SIC Code: 44-45
Major Players in the Retail Trade Industry
- Walmart
- VF Corporation
- Kohl’s
- McDonald’s
- Starbucks
- VF Corporation
- Procter & Gamble
Major Issues Affecting the Industry
The retail industry is responsible for the largest energy bills and is the second largest emitter of greenhouse gases within the commercial sector of the United States.
Supplier sustainability surveys/questionnaires are being utilized by major companies like Walmart in order to get a better understanding of their supply chain. This additional disclosure drives the need for transparent operations.
Some retailers are aspiring towards producing zero waste, an initiative that would require a radical change in operations and a deep overhaul of their entire supply chain. Materials that enter a retail store must either be sold, reused, or recycled. This goal is inhibited by its complexity and lack of nationwide infrastructure.
The role of manufacturers; manufacturers are usually the most significant source of impact in a product’s lifecycle. Retailers depend on manufacturers to measure and decrease their environmental impacts (energy, water waste, etc.), address and resolve human rights issues, and engage their own subcontractors to operate more sustainably.
Retailers have been pushing their suppliers to reduce the amount of packaging and recover distribution parking. Reducing the amount of packaging decreases transportation costs, waste, emissions, and material use. Packaging is involved in all stages of the product life-cycle, requiring major collaboration throughout the supply chain.
Key Requirements
- Dun & Bradstreet listing to be able to raise the needed capital to supply their purchases, have substantial insurance, conduct business electronically, adhere to labor law and product safety compliance, and meet delivery and lead time deadlines.
- Retailers are increasingly requiring their manufacturers to sign Codes of Conduct related to labor, health, safety, and environmental standards. Gap Inc. uses their Code of Vendor Conduct to focus on health and labor standards, and ON Semiconductor has asked their key suppliers to sign a written commitment to comply with the Electronic Industry Citizenship Coalition Code.
- Retailers are also using restricted substances lists to make sure that their products to do not include chemicals of concern. NIKE’s Sustainable Chemistry Guidance is used to confirm that their products observe strict global legislation, reduce or eliminate targeted substances, and helps enable product innovation.
Key Certifications
- Global Aquaculture Alliance’s Best Aquaculture Practices (BAP), used by Kroger.
- Forest Stewardship Council. Purchasers of FSC-certified wood include Home Depot, Lowe’s, Pottery Barn, and Crate & Barrel.
Getting Started
Develop operational plans to address the environmental impacts of your operations, including measurement, assessment, and reporting of energy use, water use, greenhouse gas emissions, recycling rates, waste.
Going Further
Collaborate and/or join collaborative working groups, including the Sustainability Consortium, the Sustainable Apparel Coalition, and the Global Social Compliance Program, to develop comprehensive and consistent industry standards and best practices.
Carefully consider the environmental impacts of a new retail building. Try to minimize them by selecting brownfield sites, consider sustainability criteria during the design and construction phase, increase the ability of alternative transportation to stores, and increase smart landscaping.
Advanced Steps
The Retail Industry Leaders Association’s Retail Sustainability Initiative (RSI) holds an annual conference attended by more than 400 sustainability and compliance professionals from across the retail industry to discuss best practices, build collaborations, and identify future trends.
Best Practices
Largest single host of solar electricity production in the United States with 78 solar power systems.
Set a goal to remove 20 million metric tons of greenhouse gas emissions from their supply chain by 2015 by determining “hot spots” in their supply chain, collaborating with nonprofits and consultants, and by educating merchants about their goals.
Gap Inc.
Established an energy plan to gain buy-in throughout the organization, communicate long-term goals, and be held publically accountable, which resulted in a 20% reduction in greenhouse gas emissions between 2003 and 2008.
PetSmart
Formed a strategic employee engagement program that has increased awareness of sustainable cafeteria options, helps employees find alternative modes of transportation to work, holds employee engagement events, and facilitates a forum for employees to talk about green issues.
Since partnering with EPA’s SmartWay program in 2005, they have reduced 560 million miles of travel from their truck fleet, translating to a diesel fuel savings of more than 100 million gallons.
Redeveloped its packaging by using un-bleached paper carry-out bags, coffee filters, Big Mac wrappers, and napkins. Also switched from polystyrene foam boxes to paper-based wrappers for its sandwich packaging.
Best Buy’s Buy Back Program buys back products from the customer to reduce e-waste.
Key Resources
U.S. EPA’s Green Power Partnership
Provides information on how to purchase green power and highlights the top 20 largest retail purchasers of green power.
Walmart’s Supplier Energy Efficiency Program (SEEP)
Provides assistance and financing to Walmart’s suppliers to retrofit plants to decrease energy use.
Sustainable Packaging Coalition
An industry working group that provides sustainable packaging information and sustainable packaging indicators and metrics.
Key Words:
Incentives for retail sustainability
Joint retail initiatives
Product lifecycle
Supplier sustainability
Sustainable product development
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