Retailers may not be as green as they say they are, a report by the University of Western Ontario says.
While consumers can find sustainable products, such as fair trade chocolate, organic clothing and LED Christmas lights in stores, retailers could be doing more to “green their operations,” the report says.
“I think a lot of the whole sustainability movement has been focused on the dirty industries and … retailers often fly below the radar. They’re just the provider of the goods. The emphasis is on the product, rather than the firm that’s providing it,” said Tima Bansal, director of university’s centre for building sustainable value.
Called Dreaming of A Green Christmas? Sustainability and the Retail Sector, the report finds retailers could improve in three distinct areas.
- They have been slow to adopt sustainable products, due to lack of third party certification.
- They have adopted broad but weak social and environmental supply chain standards that are poorly monitored.
- Retail employees lack job security, and workplace diversity and discrimination practices often fall short of the retailer’s stated policies.
Noting that shoppers spent $34.5 billion on goods and services last December, the report concludes consumers have good reason to ask questions.
Written by two doctoral candidates at the university’s Ivey School of Business, the report is based on data supplied by Jantzi Sustainalytics, a Toronto-based firm that advises institutional investors on responsible investing practices.
“Retailers are at the end of a very long chain of people that touch the products consumers buy,” said Brent McKnight, one of the authors of the report. “The standards of people working within these organizations and the kinds of environment or even social practices, the pollution, the quality of the products used, can be difficult to understand.”
Some retailers are taking important steps in the right direction, the report said, but too often the focus on easy, cost-saving initiatives like reducing packaging or replacing lightbulbs without doing the harder work, the report said.
“The best improvement is to purchase locally. It keeps employment local, profits local, it keeps the environmental footprint down,” Bansal said.
The report did not rate specific retailers’ performance.
“Canadian retailers are providing a lot more environmentally friendly products than we used to ever see on the shelves, and I think that’s a good story. I think we’re also seeing more organic products, a little bit more fair trade products and locally sourced products,” said Heather Lang, research director, North America, for Jantzi Sustainalytics.
However, verifying certain claims remains difficult, Lang said.
“What does it mean if a product is green? What does it mean if a product is environmentally friendly. To what extent are retailers taking a role in distinguishing the real sustainable products from those we’re not sure about,” Lang said.
“We track fair trade. A company is either certified fair trade or not. There’s no way to get around it. Around organics, certification isn’t perfect. When it comes to green and environmentally-friendly labels this is where things get a little bit fuzzier,” Lang added.
Wal-Mart is headed in the right direction with its supplier scorecard, which rates suppliers on how well they meet Wal-Mart’s sustainability goals, Lang noted.
However, the retailer didn’t make Jantzi’s annual list of the 50 most ethical companies in Canada last June because of the way it has handled some labour issues, Lang said.