The Hidden Price of Climate Change for the Retail Industry

Sustainability is a growing concern for the retail C-suite

The retail industry has always been extremely intense, especially with fashion brands constantly competing against one another to attract consumers. Case in point: Black Friday, the day after Thanksgiving, is one of the biggest days for the industry, where brands nationwide try to offer deals that customers can’t resist.

This informal shopping holiday is so huge that people willingly wait hours outside stores just to shop, which is why Patagonia shocked everyone when they published an ad saying, “Don’t Buy This Jacket” during Black Friday back in 2011. The outdoor clothing brand released this to help the environment since the displayed jacket’s production was bad for it, and climate change was becoming a hot topic during that time.

Fast-forward to today, it seems that Patagonia was right on the money with their ad, as the fashion industry has become increasingly detrimental to the environment. In fact, the UN Climate Change agency reports that greenhouse gas emissions from textile and apparel production are expected to grow more than 60% by 2030.

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As one of the biggest groups contributing to climate change, it’s crucial to examine how the retail industry is negatively affecting the earth, and also how the environmental changes are influencing the industry in turn.

The Retail Industry’s Impact on the Environment

To stay alive in the fierce retail industry, fashion brands continually churn out new clothing collections every season. Another way to bring in more customers to buy their goods is by producing items that fit the latest fashion trends. These efforts create a consumer culture of buying more clothes and wearing them less whenever there’s a new clothing craze.

Unfortunately, producing more apparel means that factories result in polluting the environment. This is because the majority of them use coal-based energy to manufacture them, which then enables carbon dioxide—the primary greenhouse gas—to be emitted into the atmosphere. And to add insult to injury, retailers are also very protective of their clothing, so much so that fashion brands like Burberry and Nike have burned their unsold merchandise for the sake of exclusivity.

Another harrowing consequence the environment faces because of this constant mass production of apparel is that people end up throwing away their clothes. Indeed, research from the Environmental Protection Agency have found that Americans dispose of 70 pounds of clothing every year, where 85% of all textiles arrive at toxic landfills that have adverse effects both on the environment and our health. What’s more, much of the clothing that’s thrown away is made up of manmade fibers, which are difficult to disintegrate like nylon and plastic.

The Cost of Climate Change on the Industry

As LPM Senior Writer Garett Seivold stated in an article about crisis management, retailers must prepare themselves for a stormy future of dramatic weather events in the country. It can no longer be business as usual, as the climate crisis is a wake-up call for them to change their business practices due to the predicated costs their businesses will have to pay for.

Seivold shared that scientists from the US Climate Change Science Program forecast that the country will experience more intense storms and hurricanes, stronger wind speeds, and more events of extreme heat in the coming years. These changing weather patterns can severely impact the way fashion brands operate.

First, the inevitable presence of extremely bad weather can destroy company property and its assets. Supply chains are expected to perform poorly as well, as the changing weather patterns can halt the production and distribution of their goods at any time. It also poses a risk to people who not only work on-site, but store employees and executives as well, since an unstable landscape will likely results in huge sales loses.

In fact, retailers are already paying the price for these environmental changes. In 2016, the giant fast fashion brand H&M reported a decline in sales for their winter line, since the unusually warm fall weather that time wasn’t reasonable for customers to purchase garments from the collection. Even department store giant Macy’s closed 36 stores, and laid off 4,500 employees, as they attributed an 80% decline in revenue to the poor sales of their winter items.

What’s in Store for the Future of Retail?

Fortunately, many retailers are receiving the message that they need to turn to sustainable business practices to help both the environment and their business. When Burberry received backlash for their burning method, the luxury fashion house quickly announced that they would stop this practice. And in a bigger effort to curb climate change, 32 big fashion brands—including Burberry, H&M, and Nike—made a pact with the G7 to achieve the goal of zero greenhouse gas emissions by 2050.

However, more emphasis must be placed on the leaders in the retail industry, as they are at the forefront of incorporating social responsibility into their businesses. There’s a new breed of leaders who are responding to the rising climate crisis with Maryville University’s industry outlook for business graduates pointing out that 3.6 million executives across America retired in 2017 making room for new leadership and new ideas about how to do business.

This is most evident in the prominence of the role of chief sustainability officers (CSO) in retail, as Kering’s CSO Marie-Claire Daveu is a member of the luxury group’s 13-person executive committee. The addition of such an impressive new CSO role can help prevent incorporating sustainability as an afterthought. Instead, newer and newer businesses will have this integrated into their system.

What’s more, retailers need to pay close attention to the preferences of the future main consumer group—the millennial generation. A survey conducted by Nielsen has found that 73% of millennials will happily shell out on sustainable goods, which indicates how not only do millennials support sustainability, but would prefer it over cheaper products as well. This desire for sustainable fashion goes to show that taking action to remedy retail’s emissions and wastage problem should be more than just sustainability PR, as it could very well spell survival.

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