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Introduction

The IADS interviewed Scot Case, the Vice President of Corporate Social Responsibility and Sustainability at the National Retail Federation (NRF), who has been in the sustainability space since the mid-1990s. From his experience, sustainability is the intersection of three key aspects: business, environmental, and social issues.

Early on in our conversation, Scot shared that the sustainability space is constantly evolving. While in the 90s, the main focus regarding sustainability topics was around recycling, today the focus has shifted towards human rights and climate change issues. Nevertheless, it is worth noting that all of these topics are related in some way, it just depends on what is seen as important and to which player. It is much like an iceberg, only a piece of the issue is unveiled, the part that is being centred on by businesses or consumers, but not the much larger contributing factors that remain unseen or below the surface. A retailer, an individual, or a consumer will focus on one aspect of sustainability and not realise that all issues are intertwined and connected to a challenge that is much bigger than meets the eye.

Retail at the centre of sustainability

IADS - You made it clear at the 2022 Retail’s Big Show in New York that the word ‘sustainability’ is diluted. How do you personally define sustainability when applied to a retail business?

Scot Case - When we started this initiative at the National Retail Federation, the first key issue was to decide what an industry-wide definition looks like. After lots of conversations with retailers, we boiled it down to a simplified definition. Sustainability is creating net positive environmental, social, and community benefits. This net positive concept is similar to how one measures whether a business is profitable or not.  At the end of the year, some parts of your business are making money, some parts are kind of breaking even, and some parts are losing a little bit of money. That's what sustainability looks like as well. Some aspects of the business are clearly generating all sorts of benefits and profitability. Other times there will be some costs from an environmental or social impact. But overall profitability is necessary to be able to fund the sustainability projects and initiatives that contribute to making the world a better place.

When companies start to consider sustainability as part of their business, they might only see it as a cost, but rather they should consider it as an investment. At one time retailers probably saw cash registers as a cost, but in the end, such initiatives are contributing to the longevity of the business and sustainability should be seen as the same. Retailers that consider sustainability as an investment are the ones that are prospering. The challenge is that this is a long-term investment, but some of the most significant players in the sustainability space started their journey 15 to 20 years ago, and now the rest of the industry is struggling to catch up.

IADS - You once said that “retail is at the centre of sustainability”. Can you elaborate on this opportunity and influence that retailers have in this space?

SC - Retail is not just the centre of sustainability, retail is the centre of the universe. Sustainability is just embedded in the space. A retailer's ultimate job is to find the best products to meet the needs of the consumer. Consumers want more sustainable products now that they understand that every single purchase has hidden human health, environmental and social impacts. Retailers are best positioned to understand where the best products are, what the hidden human health, environmental, and social impacts are, and then share that information with the consumer. Retailers have access to all the information and ultimately that's what retail is all about. Sustainability is just an additional layer of the story and an additional layer of information.

Advice to retailers: beginners to advanced

IADS - For retailers that have just started investing in sustainability initiatives, what do you believe is the most important area for them to focus on first?

SC- Albert Einstein suggested that you spend 90% of your time defining the challenge. You can achieve this by asking the right questions to figure out what information your consumers are seeking so that you as the retailer are asking the right questions of your suppliers. The reality is that not everyone has the answers yet, and that's okay! The main thing is to be honest and transparent. It is okay to include consumers in the sustainability journey by sharing that the business is attempting to trace the entire carbon footprint of everything sold or trying to trace the origins of all the cotton used, and the challenges that the company is facing to reveal such information. It is important to show that you are committed to making this kind of information available so consumers can make better and more informed decisions. That is an honest story that consumers tend to respond to. Don’t let perfection get in the way of getting started, no retailer started perfectly out of the gate. The history of retail is a history of failing, learning, and doing it again.

IADS - For retailers that have been working hard on their sustainability journey for years and feel like they are no longer playing defence when it comes to CSR topics, where can they go next to be leaders in the space?

SC - I think that even the largest players have realised there are limits to what they can accomplish on their own and that's why, at the National Retail Federation and at IADS, retailers are learning that maybe they should be collaborating on some of these things. Some of these issues pop up in pre-competitive spaces, so there are opportunities for the industry to be sending clear signals deep into supply chains, to consumers, and to regulators to understand what can be accomplished currently, what areas need attention, and where working together is necessary. I think the largest players have learned to collaborate to make sure we have the best sustainability metrics and standards for sustainable fashion, sustainable electronics, or sustainable luxury products. Collaboration is the fastest way to solve problems in the space.

Sustainable department stores

IADS - In your opinion, what does the sustainable department store of the future look like to you? How does it operate? Will it sell ‘new’ products or only offer circularly produced products? How will it achieve profitability?

SC - I think when you design sustainable retail and the department store of the future, you start immediately with your own operations. The focus is on creating a maximum benefit meaning reducing your energy use, going to a hundred percent carbon-free energy and carbon-free logistics. It is important to make sure it's embedded at the core of the business and what you directly control. The next phase is having very effective programs to work with suppliers so that suppliers clearly understand your definitions of sustainability, the metrics that you're using, how you're evaluating their products and their sustainability performance, not just how they're making those products.

Another piece is communicating really effectively with the consumer. Consumers have multiple definitions of sustainability. So it is the retailer's job to understand that and to be able to match what they have available for sale to influence consumer decisions towards sustainability. Retailers are exploring business models, such as rental, that reduce all of the environmental and social impacts of making a garment, while allowing the retailer to sell the same product multiple times.

The future of sustainability in retail

IADS - What are some trends or technologies that could empower sustainable retailers? What companies or solutions should retailers be looking to invest in? (RFID, connected garments, product passports, resale marketplaces, …)

SC - I think you've just named a couple of them. So a lot of these are blockchain-based. The ability to track with blockchain where the cotton from a shirt came from, where the factory was, what kind of dyes were used, who sold it, or when the item was returned or recycled is the key to success in sustainability. Any of these technologies that are collecting, validating, verifying, aggregating sustainability data are going to be really important for moving into the future.

We are also looking at the redesign of supply chains to meet the needs of those consumers, fascinated with the circular economy. Therefore reverse logistics gets very fascinating because it is no longer only about how to make sure these products that the consumer bought and no longer wants and needs doesn't end up in a landfill or in some foreign country being burned. It is about the ability to track, measure, quantify, aggregate and then make good use of that information.

Is there anything else that you would like to share with our members about projects that you are working on, advice you can offer, or opportunities in the space that we have not covered yet?

SC - I actually have a request for retailers all around the world to be sharing their sustainability stories with the rest of the industry. These really are, in many ways, pre-competitive concepts. So I encourage IADS members to share their sustainability opportunities, challenges, risks, headaches, and solutions. We're asking the same of our members so that we can build a global solution for the retail sector. As retail is the centre of commerce, I think there's a real opportunity for retailers to redefine what a sustainable future looks like.

Credits: IADS (Mary Jane Shea)