SUSTAINABILITYX Following a new roadmap

Moves towards circularity continue to show the necessity for partnerships and collaborative working, especially across supply chains, according to the SustainabilityX 2024 report.

Sustainability needs to be embedded across the entire organisation, requiring everyone from the board down to embrace and take responsibility, not just for climate change but also for business change. Since the move to becoming a more sustainable business is not the premise of just one person or department, it isn’t feasible for companies to work in isolation. 

The circular economy requires collaboration
Finland’s attempt to transition to a circular economy shows the importance of collaboration and how government, cities and businesses have to work together if an entire country is to transition to a new model. The process of moving Finland from its 2016 ambitions to today’s achievements has been underpinned by clear SBTs, the importance of which cannot be understated.

These same principles apply to businesses. Brands are working with suppliers to improve their sustainability, while platforms including THG, Net-a-Porter and Zalando are helping the brands they sell. As an example, the number of brands selling on Zalando that have set SBTs increased by 8.3 percentage points in 2023. At the same time, it is scaling its own private label assortment designed for circularity while also collaborating with fashion brands in the Circular Design Consortium. But are large brands going far enough and moving fast enough? What lessons can be learned from those smaller, more agile companies that were set up to be circular from day one? 

Thinking in new ways
There’s no denying that circularity is the future of retail, but new ways of thinking and working can be a challenge for many stakeholders used to the ‘take, make, waste’ world of retail. “We’ve been successful in doing what we know how to do. What the new world demands, in my view, is doing something very differently,” says Christopher Davis, former International Sustainability, Activism & Communications Director, The Body Shop.

Two-thirds of business leaders agree with him, saying that “the relentless pursuit of growth is incompatible with addressing the climate and ecological crisis.” 57% say that sustainability is not compatible with unfettered consumerism, while 38% acknowledge we are likely to enter an era of no growth at some point due to the need for humanity to stay within planetary boundaries. 

This requires a ‘no waste’ approach to retail. “There’s no such thing as waste in the circular economy,” says Davis. “Everything has value, everything is re-used. It’s the only way. The world will have to go down this path because there’s not enough stuff left not to.” 

Invest in waste recycling and elimination
The sale of pre-loved fashion aside, recycling is becoming common in the retail industry as waste directives take effect and EPR looms ever closer. 26% of the RetailX UK Top500 has a recycling scheme, up by 3pp over the last year. Consumer electronics retailer Currys carried out 1.3mn repairs in its 2022/23 financial year, with 18,000 items available for re-use and 103,000 tonnes of electronics collected for recycling or re-use.

With retailer AO.com operating its own recycling and refurbishment centre that processes items from across the industry, is this a new revenue source for other retailers? Or, with one fibre-to-fibre reprocessor going out of business this year, is investment lacking in this sector? What is one company’s waste could be part of a new product. 

The infrastructure to turn consumer and business waste into new materials is still nascent but is developing at a fast pace. Less than 1% of textile waste is re-worked to become new fibres able to re-enter the clothing supply chain. Responsibility for waste through EPR requirements will increase the amount collected, but how are retailers working towards the 2025 deadline and planning to use subsequent recycled materials? 

It may be that demand for some materials outstrips supply in the future. By 2030, demand for recycled plastic is set to reach 90mn tons per year but supply is expected to reach 60mn tons, according to McKinsey. Does this show an industry looking at circularity in the wrong way?

Recycling, repair and rental services are becoming more common
The UK retail industry is moving in a positive direction in terms of the services offered in order to extend the life of products or gather back items when they are no longer wanted by customers. Overall, the number of retailers offering recycling and repair services increased between February 2023 and 2024, according to RetailX research.

Some 26% of the brands and retailers that make up the RetailX UK Top500 will take back products for recycling – 3pp higher than in February 2023. With the established nature of the WEEE Directive, it’s unsurprising that consumer electronics and homeware retailers are the most likely to highlight recycling on their consumer-facing ecommerce sites. 37% of consumer electronics and 36% of homeware retailers in the Top500 ranking highlight this. 

Additionally, one-third of sports & leisure retailers and 24% of fashion companies offer a recycling or take-back service. Almost as many offer a repair service. This has increased by 3pp over the 12 months to become a service offered by 21% of the retailers measured. 

Rental provides a secondary revenue stream for retailers as well as a useful service for consumers who may previously have bought and used an item once before discarding it. 11% of retailers incorporate a rental service as part of their ecommerce offering, a rise of 2pp in the last year. Sports & leisure retailers are leading the way with Decathlon, for instance, launching its rental scheme UK-wide in 2023.

Download the full report, which was introduced at RetailX Event’s Spring Festival, for a look at how forward-thinking boardrooms are embracing sustainability, shaping positive business models, and earning consumer trust in an era of greenwashing scepticism.

To further illustrate the findings of the report we include 4 company profiles – Avon, Emma Bridgewater, Reformation and Reskinned – with interviews of senior figures within the businesses discussing the sustainability journey.

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