ESG and Sustainability in Retail Marketing 101—Better from the Inside Out

It’s a post-pandemic world, and top of mind for both businesses and consumers is how daily actions influence our environment, our people, and our community.

It’s time to move beyond sustainability in retail. We find ourselves at a tipping point of purpose as we enter into an era in which environmental, social, and governance (ESG) factors must be integrated into the very fabric of how we operate.

Our customers and our peers observe the global retail industry’s collective response to climate change, social inequality, and calls for ethical corporate governance. As regulators increase the pressure—and Millennials and Gen Z vote with their dollars—putting ESG (and not just sustainability) at the forefront of your efforts not only makes a difference for our society but also makess smart business sense.

According to Nielsen, 75% of Millennials will change their buying habits in favor of environmentally-friendly products.”

Everything that we do and everything that we don’t do has a ripple effect.

Now is the time to gut-check your ESG and sustainability initiatives to show up and thrive. As a retailer, how can you help fortify your business for the future?

Start by assessing where you stand today, deciding what metrics matter to your organization, and then grow your efforts from the inside out.

ESG in retail 101: The basics

What is ESG?

ESG stands for environmental, social, and governance. Together, they're a framework for evaluating whether an organization’s operations and investments are sustainable and ethical. In addition to the environmental impact, it also considers the organization’s social impact to its employees, customers, communities; as well as its corporate governance practices.

How are ESG and sustainability different?

Sustainability is a key element within the broader ESG framework. Adapting the more comprehensive ESG model helps balance economic, social, and environmental factors to ensure long-term viability.

What does ESG mean for the retail industry?

ESG in the retail industry is increasingly critical as consumers demand sustainable and ethical practices. By adopting ESG practices, retailers can mitigate risks, enhance sustainability, and position themselves as responsible corporate citizens.

ESG in retail 101: Environmental impact

How can I reduce in-store marketing waste?

  • When it comes to in-store signage, reusable, biodegradable, and recyclable substrate options abound (get the free guide). What’s more, these greener materials are state of the art, which means you’ll never have to sacrifice quality when making sustainability a priority.
  • Store-profiling technology can ensure that every store location has exactly the materials it needs—nothing more, nothing less. Less waste of resources and money is a win-win solution.
  • When you’re done with your visual communication assets, consider tapping a recycled-for-you program to guide you to the best practices for recycling or reusing the materials.

What can I do to increase energy efficiency and decrease carbon emissions?

  • Look toward eco-friendly shipping solutions from strategically located US vendors to diminish your carbon footprint while cutting costs and time.
  • Consider installing LED lighting, which improves energy efficiency—combining beauty with practicality. This is on top of enabling your products to stand out in a more true-to-nature aesthetic.
  • Use AI-enabled monitoring of energy consumption is now readily accessible, and it can be your most valuable ally in assessing and self-correcting.

ESG in retail 101: Social considerations

How can I demonstrate our diversity and inclusion efforts within my retail store?

  • Promote and dedicate shelf space to consumer goods from underrepresented groups or minority-owned businesses. For example, Sephora was among the first to take the “15% Pledge,” which dedicates 15% of shelf space to Black-owned businesses.
  • Leverage in-store marketing to showcase your values. Select people to feature who are representative of your customer base as well as your employee population.

ESG in retail 101: Ideas around governance

What are some of the key components of effective governance practices for retailers?

  • Establishing a clear code of ethics and conduct helps to ensure that all employees understand the organization’s values, principles, and standards of behavior. Share this on your website so your customers understand what you are doing to promote ethical behavior within your store environment.
  • Take a responsible approach to supply chain management, and work with suppliers that are also on an ESG journey. Leveraging partnerships with organizations on the same or a similar mission can bolster your efforts.
  • Regularly report on your progress toward your ESG goals. Share updates on your website, social media, and as part of your in-store marketing. Encourage feedback from your customers on a regular basis.

ESG in retail 101: Bring it to life inside your brick-and-mortar store

What are some simple steps I can take today to support my brand’s ESG journey?

  • Planet-friendly printing has never been easier. In addition to using greener substrates for in-store marketing, consider Imagine uses soy- and vegetable-based inks, water-based adhesives, and water-miscible solvents that decrease reliance on petroleum products and toxic printing chemicals.
  • Flexibility, when thoughtfully designed into a store layout, enables you to seamlessly alter displays as often as you change inventory. This slashes waste while keeping your products center stage.
  • What about designing and outfitting? As we saw at CES and EuroShop, on-trend retailers are bringing the outside in with natural elements. Eco-friendly design principles increase the perception of value and quality and yield greater receptivity to prices. Incorporating greenery, wood, bamboo, fabric, or paper into a spacious showroom with earthy colors and attractive lighting creates a dramatic and impressive effect. When you work with an expert in value engineering, they can deliver the same or similar quality while staying on budget.
  • From your walls to your floors to your ceilings, recycled and upcycled materials can bring a fresh, modern-yet-warm feel to the shopping environment that uplifts buyers’ moods and compels them to linger.
  • Personal finances may be a primary influencer, but customers want to buy sustainable products that reflect their desire to make an impact with how they spend their dollars. Be your customers’ go-to guide by showing them path-to-purchase decisions that align with their sustainable practices and socially conscious aspirations.
  • Technology has the potential to be the single most critical accelerator of sustainability in retail by providing solutions that enable greener everyday processes. It also gives retailers the information they need to make better customer-centered decisions.

The bottom line? Big change is made up of many small changes.

If sustainability is the ask, ESG is the answer: to preserving the planet with purpose and to people-centered operational excellence. Start the journey today, and let the tenets of environmental, social, and corporate governance serve as a framework to let go of the status quo.

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