Apparel Sourcing Intelligence - Worldwide

Is “Going Green” sustainable?

Sustainability may not be a commercially viable strategy for many retailers in a recession.

That seems to be the extraordinary implication of remarks made by leading environmentally-conscious retailers at a recent London conference.

Paul Monaghan, head of social goals and sustainability at Britain’s Co-op, a customer-owned retail group , argued that legislation was needed to encourage faster adoption of environmentally sustainable policies in retail chains. “When the 5% of ethical consumers that exist in the UK have saturated the take-up and it’s not going any further, that’s when legislation needs to be talked about – either the threat of it or the imposition of it,” said Monaghan at the Retail Week Conference 2009 in London on March 19.

Monaghan was not at all backtracking on the Co-op’s formidable commitments to environmentally responsible policies. But, with the experience of implementing a wide range of policies on everything from sourcing to energy management, Monaghan was arguing that these policies directly motivate a small minority of customers – and their total direct effect on the climate is slight. His concern was mostly political: to have any impact on climate change, he believed, governments needed to impose rules on society as a whole.

But speaking at the same conference, Richard Gillies, director of Marks & Spencer’s Plan A eco strategy, made a more commercial point. “”Legislation has to come up behind to level the playing field for those people who are doing it right. “There will always be somebody who is less scrupulous and looking to make a fast buck and will continue to cash in on the free resources, and therefore legislation has to come up behind.”

What both are conceding is that, for a mass retailer, thoroughgoing “green” policies may not make a great deal of immediate commercial sense in a recession. Customers may demand them – but most customers will still, they seem to be arguing, take their business elsewhere – to a less responsible retailer – if the other retailer is offering better choice, quality, value or convenience.

In naked, short-term, commercial terms, M&S and the Co-op are in what might be a rather vulnerable position on sustainability and green issues at present. Both are expected by their customers to be at the cutting-edge of social responsibility: both have over a century of unique relationships with their customers that are built on quite extraordinary expectations. Both are also among the first organisations activists contact with new ethical requirements and both are heavily staffed with managers sympathetic to ethical causes.

Both businesses are commercially vulnerable in a deep recession, and both are aware that their responsibility programmes come at a price. Sustainabilty isn’t a marketing gimmick a retailer can bolt on, or a quick bright idea you can run for a year then dump. It requires a complete commitment throughout the whole of a retailer’s operations. For an example of just how thorough – and therefore costly – this can be, look at the recent Sustainable Clothing Roadmap signed by M&S, together with UK competitors Tesco and Sainsbury.

Few retailers can just pick and choose on sustainability issues. Take a few ideas you can afford, and there are activist calls of “greenwash”: the recent opening of America’s Whole Foods Market in London, for example, has been seriously undermined – at a mind-boggling cost to WFM’s worldwide bottom line – by the complete disconnect between the company’s claims about organic food and an unbelievable irresponsibility in the energy and food it wastes, visibly and unapologetically.

It would be nice to pretend that ecological responsibility means lower costs. To a small degree, that’s true: but you don’t need to buy into a green agenda to turn lights off, keep travel down and re-use things rather than throw them away. In a recession, prudent retailers watch out for waste because they’re mean, not because they’re green. What worries the Co-op and M&S is that competitors are going, in this recession, to be every bit as sharp in keeping the lights down – but won’t have to carry the costs of thoroughly responsible policies that the Co-op and M&S do.

I put this point to my local sustainability guru yesterday. She agreed totally with the Co-op and M&S, and launched into a rant about how big businesses can’t go green by halves.

In a recent commentary, we took issue with an absurd idea being floated by some consultants that adopting green policies that “Early adopters will enjoy significant first mover advantage while laggards will have a tough time playing catch up.” The truth is that being a pioneer in anything is risky: most new ideas fail. Recessions can be a good time to take some risks – but innovating in green issues, as the Co-op and M&S are finding, is an expensive business that doesn’t bring short-term commercial benefits.

Personally, I doubt we’ll see M&S, Tesco or Wal-Mart reversing their sustainability policies much in this recession. But theirs is a positioning few other mass retailers will follow – and few brave pioneers will successfully emerge blazing a green trail until the global economy picks up. Saving their companies, not the planet, will be most retailers’ priority for the next few years.