SANJEEV RAGHUBIR: Retailers have no choice but to sell green
The effects of climate change on the retail sector are widespread — and that includes its customers
The much anticipated and recently Intergovernmental Panel on Climate Change (IPCC) report presents a concerning summary of the current and future state of the climate. The IPCC report must serve to inform world leaders as they continue deliberations this week at COP26 in Glasgow to craft a plan to mitigate and adapt to a changing climate, fairly and equitably.
The report includes regional fact sheets with expected climate changes based on global warming of at least 2°C by the mid-21st century. Predictions for Southern Africa include decreases in mean rainfall, increases in heavy rainfall and flooding events and increased droughts, fire conditions and tropical cyclones.
Alarmingly, we are seeing many of these predicted impacts in Southern Africa already. The Eastern Cape has been struggling with drought for the past five years, and the frequency and intensity of cyclones affecting parts of Mozambique and Mpumalanga has increased.
The effects of climate change on the retail sector are quite widespread. Suppliers and supply chains are affected by the availability and sourcing of key commodities due to climate-induced effects on the agricultural sector. Adverse weather conditions threaten manufacturing facilities and logistics networks, presenting challenges to the quality, price and availability of goods.
There are also direct impacts on retailers. Flooding and intense storms will place stress on retailing infrastructure and logistics, resulting in increased operational and insurance costs. Consumer awareness of environmental and climate-related matters is also increasing. Research commissioned by Mastercard and published in April, found that 75% of SA respondents think it’s now more important than ever for businesses and brands to do more for the environment. Companies not acting on environmental and climate change issues will be exposed to reputational risks.
Consumers are also looking more at climate-friendly products, including energy-efficient appliances, recycled packaging and vegan products. Interestingly, a 2020 Uber Eats survey reported that SA ranks among the top five countries for the most-ordered vegan dishes.
The retailing sector also contributes to climate change. There are greenhouse gasses released across the retail value chain — from upstream activities such as agriculture, manufacturing, warehousing and transportation, to the energy needed to operate stores. Downstream emissions come from waste dumped in landfills and customers using electricity to prepare food, and power appliances bought at retailers.
Mitigating climate risks
Climate-related risks are concerning for the Shoprite Group. Our ambition is to be the most affordable, accessible and innovative retailer on the continent, and climate change makes that difficult. We saw this earlier in the year with the impact of cyclone Eloise on tomato availability and pricing. This is just one example — the frequency of such instances is increasing.
As the largest grocery retailer on the continent the Shoprite places significant focus on its climate-change strategy as it affects its direct operations, its supply chain, and the communities in which it operates. The group’s strategy includes mitigation of and adaptation to a changing climate.
In terms of mitigation, the group has committed to an ambitious science-based greenhouse gas emission reduction target, aiming for a net-zero greenhouse gas emissions by 2050. This will be achieved by increasing energy efficiency throughout the retail, warehousing and logistics operations and using more renewable energy.
Notably, Shoprite’s renewable energy consumption increased more than threefold in the last financial year, and 25% of its electricity consumption is already contractually committed to renewable sources over the next seven years. Additional measures include reducing food waste and increasing recycling. While ambitious targets and commitments are necessary, meaningful plans and actions are critical.
The group already offers customers a range of climate friendly products. Over the past year, there has been an 18% increase in the sales of plant-based food products, with about a 10% increase in the number of products offered in the stores.
In terms of adaptation, Shoprite is strengthening the resilience and adaptive capacity of its operations through several initiatives, including installing backup water supply so that it can operate during water shortages, and engaging with its supply chain to ensure affordable products are accessible to its customers all the time.
Past events have shown that low-income communities and households will face the most harm from droughts, flooding and fires due to climate change. The group’s Act for Change programmes are aimed at strengthening the resilience of these communities through support for more than 150 community food gardens and 3,000 household gardens, and a fleet of 26 mobile soup kitchens.
While some progress has been made nationally and globally, decarbonisation must be accelerated; now more than ever government, business, and civil society must work together to address the pending climate disaster. Bold ambitions are required, and so is decisive and meaningful action.
• Raghubir is Shoprite group sustainability manager.
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