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30 RETAIL & RESTAURANT FACILITY BUSINESS JUNE 2024 2024 GOLDBOOK www.RetailRestaurantFB.com From the energy-intensive de- mands of brick-and-mortar stores to the packaging and transporta- tion waste associated with e-com- merce, the emissions produced by the retail industry are vast. In response, consumers are demand- ing more sustainable business practices from the industry and governments across the globe are imposing regulations that will re- quire more transparency and ac- countability from all sectors. Since consumers and govern- ments alike want to see a more sustainable retail industry, organi- zations must prioritize sustainable business practices to remain com- petitive, future-proof their assets and avoid risks associated with non-compliance. While there's no one-size-fi ts-all solution to steer the industry in the right direction, there are a variety of ways to make signifi cant progress toward global carbon reduction and ultimately a sustainable future. THE BENEFITS OF PRIORITIZING SUSTAINABILITY The road to sustainability is complex, especially as retail orga- nizations must balance the cost of sustainable business practices with the demand for convenience from consumers including fast shipping and inexpensive goods and services. However, there are meaningful business benefi ts to prioritizing sustainability and implementing environmentally friendly practices. Governments across the globe have already introduced plans to mitigate climate change, with some mandating carbon-neutrality by 2050. Most recently, in the Unit- ed States, the SEC issued its fi nal ruling on climate reporting for public companies in March 2024. As of early April, implementation of the ruling was paused pending the results of ongoing legal chal- lenges, but in its current format the ruling will require public com- panies to provide climate-related disclosures, including Scope 1 emissions (direct emissions from owned or controlled sources, such as fuel combustion in boilers, fur- naces, vehicles) and Scope 2 emis- sions (indirect emissions resulting from the purchase and use of elec- tricity, heat, steam and cooling) in their annual reports and registra- tion statements for the year ending December 31, 2025. Although the fi nal rule omitted Scope 3 emis- sions (all other indirect emissions that are a consequence of an or- ganization's activities but are not directly owned or controlled by the company), organizations should still consider including them in re- porting as they typically make up the majority of an organization's footprint and other regulations, like California's SB253, require Scope 3 disclosure. The United States is not alone in its efforts. The European Union, China, Australia, Canada and more have adopted sustainability regulations. As these regulations are passed and fi nalized, retailers will have no choice but to respond and complete sustainability disclo- sures. Preparing for these regula- tions as soon as possible is crucial, as gathering data and establishing processes is an intricate undertak- ing that requires a signifi cant time investment. The desire to positively im- pact the environment and climate change is another pressing concern across all sectors. Climate change presents a myriad of threats to the retail industry, ranging from po- tential weather-related harm to as- sets, disruptions in supply chains and more. This in turn has fi nan- cial implications for retailers as the cost of insurance, maintenance and repair costs increases with the uptick in natural disasters (hur- ricanes, fl ooding, landslides, etc.). Prioritizing sustainability now to ensure readiness will prove far more effective than scrambling to react to crises as they unfold. Lastly, the retail store or e-com- merce experience is an extension of a retailer's brand and today's consumers seek brands who are transparent and making a posi- tive impact on the environment. In fact, consumer research suggests that shoppers are willing to pay a premium for environmentally friendly products, sometimes as high as 60%. Businesses that are found to be non-compliant, or even just falling behind competitors, are at a disadvantage when it comes to customer loyalty and brand reputation. Even if there is uncer- tainty around consumers' willing- ness to pay for sustainable goods, an emerging view expects that the transition to a low-carbon economy will create new value pools. The de- mand for low-emissions products and services will continue to grow. While a signifi cant undertaking, implementing an effective sustain- ability strategy can reduce busi- ness' carbon footprint, promote so- cial responsibility, aid in preparing for rigorous mandates in climate reporting and allow the industry to contribute to a more sustainable future. GETTING STARTED: IT'S ALL IN THE DATA The adjustments necessary to implement an effective sustain- ability strategy will vary among sectors, but to identify a plan that will align with business goals and result in fi nancial success, every organization must start with data. Right away, decision-makers should either look at the data they currently have or begin tracking emissions data to gauge their base- line. This will allow organizations to identify where there is opportu- nity for immediate improvement and where resources should be al- located for future enhancements. The quality of data is crucial. Trustworthy emissions calcula- tions are a prerequisite to effective carbon reduction initiatives. Re- tailers should use science-backed carbon accounting following the GHG Protocol to calculate their full emissions, which provides a foundation for effective carbon management. Incomplete or inac- curate data can result in ineffec- tive actions and hinder progress in carbon reporting and reduction sustainability Sustainable RETAIL The business case for prioritizing environmental responsibility. BY ANDY ANDERSON Chief Sustainability Offi cer, EVP, Energy & Sustainability Solutions, Tango W hile the retail industry plays an indispensable role in our society, bringing valuable — and often essential — prod- ucts and services to consumers, and serving as a major source of employment and economic growth, it also takes a signifi cant toll on the environment. In fact, the industry accounts for rough- ly 25% of global emissions, with much of these emissions oc- curring in the retail value chain.

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