Green Rankings 2012: Retailers

Some of the world’s largest retailers are addressing their environmental impacts by setting long-term quantitative targets and deadlines to reduce carbon emissions, as well as companywide programs to improve fuel efficiency of transportation and logistics. In response to growing consumer demand for sustainable products and services, retailers now offer an array of products with sustainable attributes, including organic, fair trade, and locally sourced products. Leading companies are integrating environmental criteria into their extensive supply chains, through green procurement programs, environmental data collection, and supplier scorecards.

Negative environmental impacts in a company’s supply chain can seriously affect its overall performance and reputation. Despite this risk, less than 20 percent of companies have a policy to incorporate even minimal environmental standards into procurement decisions.

Key Industry Impacts

• Water use, greenhouse-gas emissions, and general waste generation and disposal combined account for more than 88 percent of the total environmental footprint of Retailer companies.

• The industry accounts for 5 percent of all water use and 3 percent of the total greenhouse gas emissions of all the companies in the Green Rankings.

• About 2.5 percent of the total environmental impact of companies ranked comes from this industry.

Critical Issue Profile: Operational Energy Efficiency

The energy required to operate stores and transport goods constitutes the majority of Retailers’ carbon footprint. To reduce carbon emissions and increase energy efficiency, some retailers have successfully implemented building efficiency initiatives backed by LEED certifications and renewable energy investments. However, since stores are often leased, and thus subject to restrictions, “green building” initiatives are limited mainly to company-owned buildings. Some companies have also realized efficiency gains throughout their distribution networks. By shifting to hybrid and electric-transport vehicles, for example, a company can significantly reduce its fuel consumption and emissions. Despite well-established opportunities to reduce impact and realize efficiency gains, the industry as a whole has been slow to apply fixed emission and energy reduction targets throughout all operations.

Industry Ranking: How U.S. Retailers Stack Up