Climate change and department stores #483


Now that the more elementary steps have been taken, the growing accountability to more parties, the increasing complexity of the topic and the remaining questions to solve force retailers to learn how to navigate the

Climate change became very tangible this summer. Actively taking the right measures to reduce their footprint is no longer a question of choice for retailers, but speed of execution. This is not simple: now that Corporate Social Responsibility (CSR) became intertwined with the financial requirements embedded in the Environmental, Social and Governance metrics (ESG), strategies are becoming increasingly complex to design and execute. In addition, reducing emissions turns into a headache now that the easier steps were already taken in the past years. The upside is that this situation creates a perfect context for a more open dialogue with and between every retailers’ stakeholders, both for transparency reasons and financial attractivity. IADS recently took stock of its members’ initiatives when it came to addressing these topics.

Initially, Corporate Social Responsibility (CSR) was the framework for retailers’ first actions. When investors began to require trackable metrics, Environmental, Social and Governance (ESG) emerged with a financial standpoint to make business efforts measurable and provide quantitative results. These measurements are now also demanded by other stakeholders (employees and customers). However, ESG does not replace CSR: the latter, less measurable, continues to coexist as it can be used to build ESG measurable strategies, and adds value in the eyes of consumers.

As a result, for now, CSR and ESG represent the two sides of a necessity companies must deal with: CSR guides ESG strategy, and ESG measures the efficiency of CSR goals. Depending on how advanced they are, retailers are pursuing intertwined actions in both areas, but the challenge is to define a relevant long-term strategy in order to cope with many issues, for example, Scope 3 emissions and the associated regulations, social concerns, and governance.

In defining the adequate CSR strategy, retailers have to learn how to run fast, but one step at a time.

Knowing where to start is hard, and all IADS members agreed that top-down decision-making and execution cannot work for CSR: the most crucial (and delicate!) pre-requisite is to involve all stakeholders into defining and prioritizing CSR actions. The success of a strategy depends on the adherence of the whole company, from sales floor, distribution centres, to top management and investors, not an easy feat in complex organisations such as department stores. Endurance and persuasive power are therefore necessary: CSR requires all departments to be aligned and teams to be upskilled.

Read the full press release on IADS