A hot topic at NRF 2020 in January, sustainability may be the most fashionable retail business trend going—at least prior to the coronavirus crisis. It’s driven by the realization that companies can’t simply squeeze profits from the public and take from their customers. They must also give back to ensure a healthy environment and customer base is around to support sales a decade from now. It has also become a public relations prerequisite. Retailers are expected to be profit-driven, certainly, but they must also be perceived as community-minded.
Maintaining a positive brand image has always been vital to a retailer. What has changed is how easily it is for people to weigh in on matters that can impact it. Customers post bad reviews and swap stories of being mistreated. They post incriminating pictures or videos to boost the odds their smackdown goes viral. Employee message boards provide easy intel on whether a company is a good place to work or has a toxic environment. Environmental and social activists—as well as trolls—lie ready to pounce. Stores’ community relations, charitable giving, and environmental behavior are under constant scrutiny. Today, more than ever before, activities related to sustainability impact customers’ shopping choices.
Retailers are their reputations. But what exactly is sustainability in a retail context? And security? What can the industry do to support it—and how can LP teams fit in?
In a way, sustainability is a form of risk management. It’s an effort to prevent potential downsides from undercutting positive business performance, which is kind of at the heart of LP’s primary mission: to make sure that as retailers boost sales and grow profits, they aren’t being undercut by losses. A clear, direct line does not exist between the two, however. So given its growing importance to retail CEOs, issues at the intersection of sustainability and security are worth examining.
A Big Push
More than ever, retail organizations are trying to develop a reputation for sustainability. The idea is simple: if a company takes a shortsighted, exploitative approach to the environment, labor, and social issues, they will only be profitable in the short term. To ensure a healthy business environment is in place ten, twenty, or fifty years down the road, any company—retailers included—needs to act responsibly in these areas now. In short, sustainability recognizes how important it is for corporations to promote a physical and social environment that will continue to support their business functions.
Sustainability has gone from obscure theory to the corporate ideal. Leaders from some of the world’s biggest companies identify corporate sustainability as a more important measure of corporate success than stock market performance, market share, and corporate governance. Statements like “sustainable development” and “good corporate citizenship” now litter annual reports and corporate websites. Many companies publish dedicated reports annually under the sustainability banner: “an environmental, social, and governance report,” “a corporate responsibility report,” or something similar. Activists may argue that more companies talk-the-talk than walk-the-walk when it comes to sustainability, but there is no disputing that most companies are now sensitive to the issue, with the issue gaining particular momentum among customer-facing retail organizations.
Starbucks is an example. The coffee giant announced in January ambitious new sustainability goals, aiming to be “resource positive” in areas including carbon emissions, waste, and water. In his announcement, CEO Kevin Johnson explained the reason behind it, which is largely an argument for sustainability itself. “By embracing a longer-term economic, equitable, and planetary value proposition for our company, we will create greater value for all stakeholders,” he said.
At NRF 2020 Vision: Retail’s Big Show, multiple retail representatives promoted their companies environmental bona fides, with top executives from Patagonia, Lush, The Body Shop, and Williams-Sonoma all promising to build on prior sustainability efforts. Beauty retailers are part of the green rush, with Detox Market debuting a plan to plant 2.5 million trees in the next five years and develop sustainability standards for brand partners.
But even as retailers promise sustainability, its importance to consumers could also be one of retail’s biggest obstacles. Fast fashion, for example, has been the subject of public protests for its perceived harm to the environment. And in a survey of UK consumers in January by GlobalData, 48.9 percent said the reason they plan to buy less in the year ahead is a conscious decision to have less of an environmental impact. “The shift away from spending on nonessential retail products is set to continue…especially as sustainability concerns seep into their consciences,” commented Sofie Willmott, lead retail analyst at GlobalData.
Last month, Nike’s new CEO John Donahoe acknowledged in a CNBC interview that “the consumer increasingly cares about sustainability,” and that fact will drive company strategy moving forward.
For retailers to overcome concerns of sustainability-minded consumers, Willmott suggested stores may need to devise schemes like offering a discount when shoppers bring back empty containers or perhaps even offer a version of climate credits to offset their purchases. “A brand’s positive environmental stance must be communicated through aspects that customers can interact with,” advised Willmott.
RILA has taken on the issue of what sustainability means in a retail context: “Sustainability means creating financial value while protecting the environment and generating social value, both within operations and along supply chains.” Some of retail’s impact on the environment and society are direct, but many more are sprinkled across its operations. “Consequently, retailers’ sustainability programs vary widely, from a focus on energy efficiency in direct operations, to informing customer choices, to targeting global issues deep in the supply chain, such as deforestation,” notes the RILA Issue Brief: Sustainability in Retail.
It takes work. Retailers must set goals, engage leadership, connect disparate sustainability activities, and tell their stories through multiple channels, says RILA. But it’s worth it. “It creates innovation, opens new markets, reduces business risks, and enhances brand reputation—all of which build resiliency,” notes the association.
Companies began to report their impact on society and the environment under pressure from calls for greater transparency, but they now use these reports to polish their images and showcase their efforts to be good corporate citizens. Companies tout environmental activities, community involvement, workforce and supplier diversity, and improving safety records; yet, in an era where both the public and shareholders want assurance that private companies take security seriously, it remains uncommon that companies communicate security as a core corporate value.
To be sure, compared to a decade ago, security activities are more likely to be represented in sustainability or corporate responsibility reports, especially data security, but the connection remains weakly drawn. A more fully realized appreciation for security in a sustainability context would certainly benefit LP teams’ operations. When security is formally embedded in the effort to publicly communicate good corporate citizenship, it becomes harder for companies to back away from the security mission when priorities shift or sales slip.
It’s true that corporate security does not easily fit into the sustainability or social responsibility framework. Companies can use injury and illness rates to describe a commitment to safety and health; describe improvements in wages, benefits, and working conditions to show concern for workers; tally emissions and offsets to demonstrate environmental sensitivity; and reveal corporate donations to prove they’re committed to communities in which they operate. It’s not as easy to share proof of a commitment to security without divulging data or security controls that companies would rather keep private.
So how might LP and security fit into retail sustainability efforts? First, LP may need to play a little defense, as the question is not only what LP can add to sustainability efforts, but also how might a retailer’s sustainability commitments negatively impact LP’s operational missions?
Some environmentally conscious retail practices, for example, such as more friendly packaging or refill stations, can make product easier to steal. And dimming exterior building lights to save energy limits their security surveillance and deterrence value. Because a natural antagonism can exist—and demand that LP offer a dissenting view on select sustainability initiatives—it’s important for LP to work in concert with sustainability teams and have early input into proposed projects and goal setting. Perhaps a retailer can forgo heat-sealed, “clam-shell” plastic packaging on some product lines, but LP could provide input on which products are not a good candidate for more environmentally friendly options from a theft prevention standpoint.
The push for sustainability provides another reason why security leaders need to position security to be a key stakeholder in the design phase of new stores, office buildings, or distribution centers. Planning should outline security principles, recognize sustainability goals, and find the common ground between them. For example, for those charged with store security, the “right” amount of lighting must be sufficiently bright to provide security even on the darkest night. To green designers, however, the “right” amount of light is as little as necessary in order to save energy. But sometimes both goals can be satisfied in different types of organizational building design. (See the accompanying sidebar for select possibilities.)
LP should also be aware of its potential impact on retail reputations. It’s infrequent, but on those occasions when LP activities are in the news, it’s often cast in a negative light. Currently, for example, workers from multiple retailers are trying to win class action claims for unpaid time spent in security checks post-shift, including H&M, Eddie Bauer, and Apple. Racial discrimination in store surveillance or shoplifting stops and claims of mishandling sensitive internal investigations can also get widespread pick-up in a media landscape increasingly driven by what people are talking about on social media. While LP can’t shy away from its duties out of fear of public backlash, the impact of its activities on retail brands is a legitimate consideration. Small mistakes that previously went unnoticed are now amplified, raising the bar for LP in areas such as candidate selection and agent training, partnering with outside security firms, and conducting investigations.
Next, because LP activities can be the source of negative publicity, teams might choose to aggressively investigate those opportunities where security and good corporate citizenship converge. The most obvious example, one in which LP teams frequently shine, is through volunteering and other charitable efforts. Loss prevention teams have helped build houses with Habitat for Humanity and participated in efforts to set a Guinness World Record for the number of bagged lunches prepared in one hour. Rob Holm, director of global security, safety, and intelligence at McDonald’s Corporation notes that his team regularly serves meals for families at Ronald McDonald Houses.
At Retail Business Services, the asset protection team gives back to communities on a regular basis, “particularly in the area of hunger relief, a passion of the retail grocery brands our team supports,” explained Joe Darnell, manager of asset protection services. Most recently, AP associates volunteered at a food bank as part of a company-wide day of volunteerism in honor of Dr. Martin Luther King Jr. They regularly prepare lunches for community members at North Carolina soup kitchens and recently shifted from exchanging gifts among team members at the holidays to using those funds to purchase items to donate to a local shelter. “The feedback from our associates after shopping for the shelter has been very positive, indicating it was a rewarding experience, and they look forward to this activity every year,” said Darnell. Supporting community members in need is also a focus for Kroger’s AP team, which raises funds throughout the year to give back during the holiday season. See “A Kroger Christmas: One AP Team’s Community Outreach Effort.”
LP teams don’t organize volunteer efforts to burnish their or their company’s reputations, but sharing those activities with a company’s sustainability department can help it to paint a complete picture of the company’s role in the communities they operate. As noted, RILA identifies storytelling and “connecting pockets of sustainability activity” as two keys for a retailer to develop a successful sustainability program.
LP teams also benefit communities through their expertise in identifying and addressing fraud, which may not cause store losses but adversely impact customers. Several LP pros we interviewed noted that their organized retail crime (ORC) units are increasingly providing victim-assisted fraud services, such as an employee being defrauded or a customer or guest falling victim to impersonation scams, like IRS scams where elderly shoppers will come into the store thinking they have to pay the IRS in the form of a gift card. Helping these customers falls squarely within community assistance, a bedrock of sustainability.
Joe Darnell shared that back in early 2019 many elderly customers were falling victim to a gift card scam in which they were being enticed to purchase gift cards, would later share the gift card information over the phone, and then see the value of the gift cards erased. The company’s ORC investigators regularly undergo training to understand such schemes and to be able to help local authorities. “As a result of these trainings, we estimated a reduction of $3.6 million in consumer fraud and a reduction of over $5,500 in customer losses,” said Darnell.
Retailers need to extend that attitude to online victims as well, suggest analysts from CyberInt in the company’s Annual Threat Landscape Report for 2020. They insist that retailers’ concern with security should progress beyond their own infrastructure and employees to include protection of the company brand and its customers. Specifically, the report advises retailers to guard against allowing its customers to be targeted in phishing campaigns that misappropriate their brand to lure victims into surrendering personal and financial data. Again, while retailers may not suffer direct losses from such schemes, they do pay substantially in the long run.
Addressing the needs of victims when writing security plans is another way LP can help their organizations help employees. For example, by providing employee victims of domestic abuse with obtaining court orders or providing home security advice or assistance.
“You have to begin with the education piece. You want to do everything you can to get the word out to staff that you want to help victims [of intimate partner violence],” according to Dr. Ron Wallace, a criminal justice professor for American Public University System who has studied intimate partner violence’s intersection with the workplace. “Include the topic during new employee orientation. Send an email out to all staff. Hang a poster in the breakroom; make it the subject during team meetings or in periodic meetings with staff. It’s important to use multiple channels in providing information and to conduct repeated outreach,” he advised.
When Body Shop first tackled the issue many years ago, it did so by kicking off a “Shatter the Silence” program to reach out to employees. The program included posting information about domestic violence along with crisis numbers inside bathroom stalls and hiring expert trainers to provide each employee with two hours of education on domestic violence, including the “power cycle” that characterizes it. Limited Brands has participated in corporate alliances to promote workplace strategies to combat domestic violence, including policies, training, and victim assistance.
Addressing trauma assistance in crisis response plans, such as in the event of an active shooter, robbery, or assault, is another way security and sustainability intertwine. Making it part of the program enables an organization to respond to traumatic security incidents in a systematic manner, provides an opportunity for employees to share their experiences with their peers, and helps organizations identify those employees that need additional help.
“Good crisis planning isn’t only about how to react to a violent incident but also how to reconstitute from a violent incident and to get back to business,” explained Anthony Mangeri, a first responder with thirty years of experience and a leader in the public safety community, in an LP Magazine interview on how retailers can improve their response to workplace violence. Post-incident procedures, including medical follow-up and the availability of counseling and referral, are important elements of a response plan, he said.
This relates directly to the issue of sustainability. Companies that fail to effectively respond to incidents of workplace violence only serve to deepen the impact of the event and dampen the effectiveness of future security awareness programs. If employees believe that a retailer’s response to security incidents is insufficient, they are less likely to believe that the program truly has their best interest at heart.
Being of service to communities in times of crisis is another way LP departments participate in activities that fall under sustainability’s umbrella. As described in LP Magazine’s coverage of major storm events, LP is often at the center of community crisis responses, helping stores serve as staging grounds for relief efforts, distributing critical supplies, or serving as safety refuges for displaced individuals. Brinker International, which owns the Chili’s restaurant chain among others, gladly accepts the role it can play in a crisis as a food provider. “In every event, we accept an obligation to employees, the community, and first responders,” said Bill Heine, chief security officer. His team, which is responsible for all business continuity and crisis management, holds pre-storm conversations with vendors to stock restaurants with groceries in the event it becomes necessary “to be there to feed employees and families and first responders.”
Recent storm events have put retailers unique logistics expertise on full display. They have repeatedly mobilized truckloads of water, groceries, consumables, and pharmacy supplies to various communities in need, demonstrating how valuable they can be in disaster relief efforts. As we noted after Hurricane Harvey, media coverage has shown that retailers’ quick response and helpful community involvement can be a significant source of positive brand advertising and create a lasting bond with members of the public. Surveys have shown that 88 percent of the public hold a more favorable impression of companies that provide aid during and after a major natural disaster.
Some industry leaders would like LP to take on more responsibility, including Ben Dugan, CFI, current president of the Coalition of Law Enforcement and Retail (CLEAR) and a manager of ORC and corporate investigations at CVS Health. In outlining goals in a CLEAR newsletter in 2019, as he assumed the role of president, Dugan pressed for enhancing coordination among law enforcement and LP to better assist communities in times of crisis. “There is so much more to our professions than the enforcement of laws. We each have an opportunity for great partnerships to further engage the communities in which we serve. One such example is coming together during natural disasters to help one another with various needs such as food, water, shelter, and medications,” he wrote. “My vision goes far beyond just investigations and into aiding the communities where our police officers serve and the retailers do business.”
CLEAR’s future may include acting as a conduit for establishing better ties in this area, so law enforcement and retailers might work more effectively together to assist the public during crisis events, as well as working collaboratively to address violence-related mass events. What was initially a vision to form partnerships to fight organized retail crime is expanding to forge great partnerships to better serve communities, according to Mitzi Perry, a retired investigator at the St. Petersburg Police Department and a CLEAR board member.
As store emergency and logistics programs have matured, retailers are now more capable of supplying assistance than ever before—allowing action to match the desire to get communities back on their feet. Because LP teams already have established partnerships with emergency responders, they are well positioned to take a leadership role in serving in this critical community assistance capacity.
Store security technology—mass communications, video surveillance, and so on—provides another avenue for LP teams to serve the public good, especially as integration gets easier. For example, retailers in one European shopping district used their technology to combat rowdy behavior upsetting residents. Through use of audio analytics, lights would increase brightness when escalating voice levels were detected. Doing so helped to modulate behavior, improve residents’ sense of well-being, and restored the shopping area’s reputation as a safe place to go at night, explained Ken Mills, general manager of IoT, surveillance, and security at Dell, at a security conference panel last year. Of course, retailers must provide support cognizant of the possibility that too much surveillance assistance to law enforcement may appear as an invasion of consumer privacy.
Stores can also provide direct support to people in need, something that has been reported in promotions of retailers’ sustainability activities for decades. Among the first was 7-Eleven in Japan, which described back in 2004 the security department’s participation in a law enforcement program to establish convenience stores as “safety stations” for the community, under which they cooperated in crime prevention patrols, assisted with locating missing persons, and offered a safe place of refuge for those in need.
Stores continue to participate in such programs, helping people in need and deriving positive public relations from them. McDonald’s restaurants, for example, participates in the National Safe Place program, through which libraries, schools, fire stations, and other locations are designated as safe places for runaways, abuse victims, homeless people, and others in need. On Christmas Eve, training provided under that program to employees at a Stockton, California, McDonald’s resulted in a highly publicized, feel-good holiday news story of a woman who mouthed the words “help me” to a crew member. The crew member helped the woman escape from her abuser by delaying the pair’s food order and holding up the drive-thru to give law enforcement time to arrive and arrest the man. “Now that woman is safe thanks to the swift action of those McDonald’s employees,” an ABC news reporter concluded. “It was such an exciting and proud moment for us to know what we’re doing is working and that our employees are comfortable handling things like that,” added the franchise owner-operator.
Sustainability in International Operations
To foster sustainable security, companies need to consider the long-term implications of short-term security decisions. Sometimes the best short-term security solution may not be in the best long-term interest of a company’s security reputation.
The issue of sustainability in security is particularly relevant to international retail operations, especially those operating in politically and socially volatile environments. In this context, experts note that a sustainable approach to security involves engaging the local constituencies that influence security. By pursuing strategies in which a retailer’s security and the security of the surrounding communities are mutually reinforcing, the security of the retail organization becomes sustainable.
A robust approach involves the constituencies that are essential to sustainable security: employees and contractors; public security forces, both local and national; and local communities. Sustainable security takes a broader and longer-term view of threats and builds alliances to develop a more secure environment for everyone in the region. For example, local communities often pose the greatest threat to operation in remote areas overseas, but if those communities perceive that they benefit when the company is more secure, then local stakeholders cease to be a security liability and instead become an ally, note sustainability experts.
Sustainable security is a model that relies on bridges rather than fences. By engaging a community—rather than retreating from it—companies may be able to reduce future incidents of sabotage, theft, and protest. If community members perceive an alignment between their security and that of a major retail organization, it enjoys a “social fence” that is far more valuable than any physical fence, say experts.
Unfortunately, there is no one model to follow. How a retailer can—or should—engage a particular community in building a more secure environment will differ from country to country and region to region.
Practically speaking, actions that support sustainable security might include retraining security personnel and/or developing a clear understanding with security contractors on permissible and impermissible conduct. A retailer operating in a foreign country where the use of extreme force is common may need to take actions with respect to local security personnel to ensure that officers react in proportion to the threat and in line with its ethical standards.
The use of trained security personnel can help prevent reputational and litigation risks that arise from inappropriate actions or approaches not condoned by the organization, and it is also recognized by the Global Reporting Initiative as an indicator of a company’s sustainability profile. Specifically, it suggests that companies measure and report the percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations and to report whether training requirements also apply to third-party organizations providing security personnel.
Other sustainable security activities might include:
- Reviewing all local security contractors to ensure a record clean of excess force and abuse claims.
- Requiring all contractors, both security and otherwise, to adhere to the company’s own internal security procedures. Organizations must also resist entering into relationships with unscrupulous entities to improve near-term security as such ties ultimately raise the risk exposure by linking the store to groups over which it cannot exert any control. Such arrangements are always unsustainable, say experts.
- Providing a safe and confidential method for individuals to report violations of security procedures. Companies also need to investigate any complaints made against staff or contractors.
- Opening communication with those who have grievances with the company. Community activists are far more likely to hold protests or attempt to shut down a store if they see no other way to express themselves. Companies that engage in discussions with the community and employ conflict resolution specialists may be able to explain their actions to the community and create a level of understanding that leads to dialogue when conflicts arise rather than security events.
- Providing awareness training to traveling employees. American Eagle’s (AE) model training program has been profiled previously in LP Magazine. The loss prevention, safety, and security team regularly assesses the risk of international travel and the program has, over time, built out to include risk ratings for travel locations; a traveler tracking system; pre-trip assessments, training, and awareness briefings; a travel safety website; and emergency response procedures in the event a traveling worker runs into trouble. Security training also alerts AE workers to cultural differences that may have ramifications on their safety, including attitudes toward the LGBTQ community and wearing overt religious symbols.
- Strategically using your sway with public authorities. If an international retailer plays a significant role in the local economy, it may have some influence with public security forces. This may provide an opportunity to advocate for a more moderate security response in regions controlled by heavy-handed public security forces or advocating for additional security in communities where the lack of public security poses a risk for the company. For sustainable security to thrive, companies should engage in regular dialogue with public security forces about the protection of the firm’s assets and personnel, as well as those of the surrounding community, say experts.
Security in Sustainability Reports
Unfortunately, as noted earlier, the many good works of LP departments and ways in which their security efforts underpin sustainability efforts are not always captured in retailers’ external promotions of sustainable activities. The extent to which showcased security could be used to polish their images and demonstrate good corporate citizenship is not fully realized. Public-private initiatives to promote supply chain security, for example, are often left out of sustainability reports. The value of robust physical store security to communities, by providing them safe places to shop, is rarely a link reports make. Still, security does get a few mentions. Here are some of the ways in which major retail corporations addressed select security issues in their latest corporate responsibility reports.
- Walmart’s identifies the physical safety and security of its work premises and freedom from workplace abuse as key aspects of its dedication to human rights. Investigations into grievances is also included as a salient human rights issue. The work of its Emergency Operations Center is also highlighted, which is used “to identify, assess, triage, and respond to natural disasters, including epidemiological issues and security events that affect Walmart operations, associates, and the communities [they] serve.”
- Target’s current focus is on “six goals where [they] believe [they] can have the greatest impact,” including helping to forge sustainable cities and communities by making them inclusive, safe, and resilient. Training is also highlighted. “All team members also participate in a formal performance review process once a year and receive annual training on critical issues, such as safety and security, compliance, ethics and integrity, and information security.” Under its “2018 Selected Trainings and Learning Opportunities,” the company lists “information security and awareness: 83,850 hours” and “security at Target: 3,380 hours.” Safety and security are also recognized under the company’s effort to retain talent and ensure privacy and data protection: “As part of that investment, we have built a security program that adapts to today’s evolving threats to create the most secure shopping experience for our guests, both in stores and online.”
- Kohl’s promotes joining the Supplier Compliance Audit Network (SCAN). “SCAN will provide invaluable assistance in helping to standardize supply chain security audits to prevent multiple audits being conducted over the same facility,” according to its report.
- Best Buy’s report pays significant attention to its data privacy efforts, including recognizing the risks from IoT devices. “We are working to establish a customer baseline of expectations in the area of security and privacy with respect to IoT devices.” Its work to promote supply chain sustainability is also highlighted though risk assessments and other efforts “to ensure [suppliers] meet [their] expectations for safe workplaces where workers are treated fairly and safely.”
- H&M Group directly references its global security policy: “It is our responsibility to make sure our customers and colleagues feel safe. We conduct an annual store audit consisting of safety, loss prevention, and information security.” As a goal, it mentions that it is working with HR to increase safety and security awareness through training and under “Key Facts & Figures” notes: “After completing 9,715 safety and security audits in our stores, we reached a worldwide compliance level of 85 percent.”