How Retail Brands Can Overcome Their Sustainability Hurdles
We sat down with Justin Van Der Horn, Sustainability Strategy Consultant, VDH Sustainability, Formerly Global Sustainability at Tiffany & Co. to find out the key areas retail brands are struggling when implementing a new sustainability strategy.
In your experience, is there a particular area of retail or business operation that struggles the most when launching a sustainable strategy? Why do you think this is?
‘Business as usual’ is familiar and easy, but not always best. Sustainability helps a business innovate, prepare for the future, and improve value creation for all its stakeholders. This requires change—sometimes to systems and processes, sometimes to culture—and change of any type takes effort.
One function I see sustainability teams partnering with often to guide change is Finance. Finance is classically pressured to deliver lower costs and higher returns on short timescales. They also have processes and metrics that have been standardised and proven over decades, if not centuries.
Working with Finance to consider longer time horisons and benefits that aren’t readily converted to dollar values can be challenging, but building a mutual understanding can really unlock an organisations’ potential.
Thinking about retail specifically, there’s a tremendous opportunity for value creation through changes in the product value chain. The circular economy comes to mind. That is: how to transition from a take-make-waste extractive model to one that keeps products and materials in use and regenerates natural systems.
This calls on R&D departments to innovate designs and consider end-of-life treatment; Procurement to identify safe, low-impact raw materials to stay in circulation; Operations to account for take-back programs, repairs and deconstruction; and Sales and Marketing to consider new sales models and value propositions, for example. These can be big changes, but big changes are what we need!
A holistic sustainability strategy can challenge many areas of a business to shake up business as usual. But, changes made in line with your purpose and values can be powerful for creating value for your business and stakeholders today and into the future.
What advice can you give to those brands who are struggling to convince senior management to support a sustainability strategy as one of their key business goals?
Building senior buy-in can be complicated, but it’s critically important. There might be many reasons a leader or leadership team may not be initially supportive of a sustainability initiative. My simplified advice is to align sustainability with core strategy and business objectives to have the greatest potential for success.
CEOs, CFOs and other leaders are constantly juggling competing demands and trying to execute on their core strategy. Does your sustainability strategy help drive one of those core initiatives, or might it be easy to dismiss as a ‘nice to have’? How can you make the strategy relevant to each leader by understanding their goals, motivations and limitations?
Lead with a strong business case that’s tailored to your leaders’ drivers, whether those are reducing supply chain disruptions, improving operational efficiency, increasing employee engagement, capturing market share or one of the many other benefits of sustainability.
Also, tailor your message and remember that, often, the messenger is as important as the message. Which key stakeholders (internal or external) might your leaders relate to? Your CEO might be interested in what peers are leading the pack and where industry trends are heading. So, layer in competitive benchmarking and macro trends to make your case.
Your CFO may need to hear from shareholders on the growing importance of ESG (environmental, social and governance) in investment decisions. And, your CMO may need to understand customer demand, media coverage, and public opinion. Approach your case from different angles and remain focused on the strategy.
Finally, a good way to build momentum is to champion small wins and your internal partners. Find (or make) relatable and tangible examples of when your business benefitted from a project with sustainability attributes. Repeat those win-win examples over and over.
Also, find allies. Look a few levels down from your senior leaders. Partner with them to make progress. Give them credit and champion their successes. Over time, they may just be the ones to win over their senior managers for you and meanwhile, you’re making progress.
How do you think retail brands can work closely with local government to drive social change and make it easier for their consumers to shop sustainably?
I’m a firm believer in multi-stakeholder initiatives and public-private collaborations. Sustainability is a team effort that requires solutions from many perspectives. Working with the government will take a different shape for every company depending on where they are and how they operate.
First and foremost, it’s important to have your house in order to show that you’re operating to high standards. To me, that often means going beyond local regulatory requirements and demonstrating ambition and commitment. This helps to send a clear signal that you’re serious and credible when you do engage with local governments.
Second, engage policymakers from an authentic position and with a business message. Engage on the issues that are most relevant to your business, in the geographies you operate in, and with a message about how legal or regulatory improvements on sustainability are beneficial to your business, sector, customers or stakeholders.
Finally, it’s important to be clear and consistent in your messaging and advocacy. Consider, for example, if your company is part of industry associations that might be lobbying government on your behalf for policies that aren’t aligned with your values and objectives.
While you have a perspective that may be useful to government, remember too, that local governments often have resources you can benefit from. Many cities, for example, have programs or incentives for things like energy efficiency, building green, recycling and public transit.
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