The food and drink industry is absolutely crucial to the battle to limit climate change. Data from Climate Action 100+, a group of investors worth $55 trillion, reveals the sector currently accounts for a third of global greenhouse gas emissions, mostly through its supply chains. The group says the industry must deliver an 85% cut in those emissions by 2050 if the United Nations is to hit its target of getting the world to net zero emissions by that date.

Retailers are going to have to step up. For one thing, they are a significant part of the problem. The Ratio Institute points to data suggesting the average grocery store emits 1,383 metric tonnes of carbon dioxide per year from energy consumption alone and another 1,556 metric tonnes of CO2 from leaked refrigerants—that’s the same emissions as 635 cars.

But even leaving aside the imperative to act, it is also in retailers’ interests to do. Not least, limiting energy consumption will reduce their costs. And building a brand associated with sustainability can generate huge value—the consultant group Accenture surveyed consumers in 22 countries around the world and found that more than half now want to do business with brands that source services and materials in highly ethical ways.

How retailers are responding

Retailers recognise what is at stake and are beginning to take action on climate change. One good example is the Race to Zero Breakthroughs Retail Campaign, launched in July by the U.S. giant Walmart, along with European partners including Kingfisher of the U.K., which owns thousands of home improvement stores, and Sweden’s Ikea Group. The campaign seeks to sign up retailers everywhere to commit to specific actions to limit climate change.

Walmart itself is something of a leader on sustainability, having signed up to climate change commitments early on in the debate about global warming; it has now promised to hit zero emissions from its global operations by 2040. That has encouraged other North American retailers to set their own targets and take positive action, particularly on issues such as food waste, excess packaging, and the supply chain. From Kroger stocking produce treated with innovative technologies to reduce perishability to Amazon investing in Rivian, which builds electric vehicles for the logistics industry, the industry is proceeding at pace.

Walmart'z goal to zero emissions
Walmart’s goal of zero emissions by 2040

European retailers are also moving quickly. The giant German retailer Schwarz Group, owner of retailers such as Lidl, has made huge investments in the circular economy, while Finnish grocer Kesko has promised to reach net-zero by 2030. In the Netherlands, department store group De Bijenkorf has made headlines with a series of commitments it has made as it joins the global Climate Pledge; by 2025, for example, all its materials will originate from certified sustainable sources.

In the U.K., meanwhile, the British Retail Consortium points out that the U.K.’s retailers have already reduced their emissions by 36% in absolute terms since 2005.  Now they are going further. Sainsbury’s says it will spend £1bn to become carbon neutral by 2040; Tesco has brought forward its net-zero carbon target to 2035, making investments in renewable energy plants as part of this push.

Similar work is taking place on the other side of the world too. ClimateWorks Australia reports that four in five retailers in the country have begun efforts to reduce emissions or have a stated commitment to do so. In New Zealand, the supermarket chain Countdown has promised to reach zero food waste to landfill from stores by 2025, and to reduce emissions by 63% by 2030.

How suppliers can play their part

For suppliers to the retail trade—whether domestic or international—the potential here is two-fold. First, they have their own opportunities to play their part in climate change, on challenges ranging from packaging to distribution. But they also have a big chance to work with retailers now looking for new partners as the climate change battle heats up.

For example, retailers are anxious to find new suppliers in product categories that reflect the changing times. Plant-based foods offer one such opportunity, with rising sales in markets around the world; in the U.S. alone, plant-based food sales were up 45% in 2020 according to the Plant Based Foods Association. The wellness sector offers further exciting possibilities—in the U.K., for instance, this sector is now growing at a rate of more than 6% a year and is expected to accelerate.

What is the Plant Based Foods Association?

Another rich seam to mine is the need for retailers to get to grips with their supply chains. With the sector under pressure to be much more transparent about its total emissions, from field to fork, suppliers that are able to help buyers improve traceability and visibility will be in a strong position.

Finally, while climate change mitigation may require retailers to source more products locally, particularly for bulk supplies currently racking up damaging air miles, this should not be seen as bad news for suppliers seeking to break into new export markets. Many retailers are now focusing on quality and authenticity as key attributes in their search for new products; they are prepared to look far and wide for such brands, even if staple goods may need to be sourced closer to home.

Moreover, consumers’ growing awareness of the world in which they live also makes for greater curiosity about what that world has to offer. In the U.K., for example, research suggests consumers have become far more adventurous in their eating habits since the COVID-19 pandemic, partly because they are eating at home more often and want to try new things. With similar trends reported worldwide, suppliers have a golden opportunity to help retailers sate such appetites.

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