Trends this Week: Retail Giants and Investors Talk Risk and Supply Chains

(Photo Credit: Michelle Ress, Flickr Creative Commons)

by | Oct 13, 2017

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(Photo Credit: Michelle Ress, Flickr Creative Commons)

Reflections from Jen

This week I saw a continuation of a couple of trends: courting investor interest and retailer/manufacturer sustainability initiatives.

Of course, retailers and manufacturers are always trumpeting their sustainability initiatives, especially because Millennials – the largest generation in US history and one whose buying power will soon surpass that of the generations before them – are particularly responsive to products that tell an environmentally-friendly story, and are willing to pay more for them. But this week, it struck me as particularly interesting, with two major -and competing – retailers coming out with big sustainability initiatives: Walmart is working with suppliers to move perishables through the supply chain more quickly, which will reduce spoilage and food waste while building trust with customers by ensuring better quality. And Target has vowed to source 100% sustainable cotton by 2020.

Others giants tooting their own sustainability horns this week included P&G, which announced a new product from its Beach Plastics program, and McCormick and Company, which announced its commitment to 100% sustainable sourcing of its spices and seasonings ingredients by 2025.

But another, perhaps more interesting, trend that has popped up several times in recent weeks is that of incorporating and exploring environmental risks and opportunities in order to attract investors. We’ve covered several reports on the topic in recent weeks (see here and here, for example) including two more this week.

The first, a report from S&P Global, found that nearly all (95%) of respondents plan to engage with companies they invest in about issues related to the Sustainable Development Goals (SDGs). Investors say their assessment of a company’s environmental, social and governance (ESG) profiles have evolved from a simple measure of corporate responsibility to a key driver of an investor’s decision-making.

Another report, this one from CDP, found that as investors increasingly encourage companies to provide information on environmental risk, the number of companies that are doing so is rising. In fact, almost 1,400 major multinational companies are using some kind of carbon price assumption to inform business decisions based on climate risk, compared to just 150 companies in 2014. That’s an eight-fold leap in just four years, according to CDP’s new research.

What does this mean? Well, it sounds to me like investors are saying, “There’s a lot of risk coming from climate change and environmental issues, and you need to be prepared.” And consumer-facing companies are yawning and saying, “Yes, yes, we know, and here’s what we’re doing about it. For us, it’s business as usual.”

So keep up the great “business as usual” sustainability issues, keep those investors informed — and keep me in the loop. As always, I want to know everything you’re doing in the sustainability/environmental management world, how it’s working, what isn’t working, and how you’re overcoming your challenges. Can’t wait to hear from you.

In the meantime, have a great weekend.


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