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Retail Group's First Sustainability Report Puts Green Lens on Industry

Target aims to achieve Energy Star certification for at least 75 percent of its sites by 2015. The Home Depot's work to shrink its environmental footprint includes using local materials, native plants and building controls at stores. Lowe's is working with the carriers that transport its goods to be smarter about fuel efficiency.

The initiatives are a sampling of the environmental efforts detailed by the Retail Industry Leaders Association in its first report on sustainability practices among some of the largest retail companies in the United States.

RILA's 2012 Retail Sustainability Report, released this morning, offers an interesting look at the evolving philosophy on sustainability within an industry that has the largest energy bills and the second largest amount of greenhouse gas emissions in the commercial sector of the U.S. economy, according to the Environmental Protection Agency.

"This puts the first stake in the ground for us on sustainability," said Adam Siegel, RILA's vice president for sustainability and retail operations, of his organization's report. "It's a start. This is meant to open a dialogue and highlight good work in the industry. We also want to be frank about the challenges."

Many of the challenges are rooted in the fact that the retail industry relies on so many internal and external stakeholders -- landlords, manufacturers, suppliers, transport companies, local governments, employees, customers, the communities surrounding stores and social and environmental advocates.

Retailers need to work well with all of them to succeed in terms of business and sustainability. Increasingly, according to the report, retailers are recognizing that need and acting upon it. The industry also is beginning to realize that sustainability and business success are entwined.

RILA's report drew from 30 corporate sustainability reports and in-depth interviews with representatives for 20 firms including grocers such as Safeway and Whole Foods, department stores like J.C Penney and Sears, apparel companies Gap and VF Corporation, and DIY and big box retailers.

The report identified four key trends and found that leading retailers are:

1. Working with stakeholders across sectors to achieve sustainability goals.
2. Turning from sustainability as a cost and risk reduction measure to an opportunity for business growth.
3. Developing systems for continuous improvement by pulling together controls, measurement and management tools and IT systems.
4. Fostering transparency in operations and in the supply chain.

The report also offered four predictions on the growth of sustainability within the industry and said that in five to 10 years:

1. Sustainability will become integrated into the business.
2.The drive to manage supply chain impacts will transform retailer-supplier relationships.
3. Industry collaboration will become the standard.
4. Business models will evolve as consumption habits change.

Customer expectations for corporate social responsibility also will push retailers accelerate their efforts.

"While the business case for sustainability is clear, retailers also increasingly understand that the customer of tomorrow will demand more information about the environmental and social impact of the products they buy," Bonnie Nixon, the executive director for The Sustainability Consortium, said in comments included in the report.

The report is available at The group is also conducting a Tweet chat on the subject at 12 p.m. EST today.

RILA counts more than 200 retail companies, product manufacturers and service suppliers among its members. They represent some $1.5 trillion in annual sales and more than 100,000 stores.

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