How the World's Largest Retailers are Stocking Shelves with Green Goods

Although companies in general and retailers in particular are going green in droves, there is still a wide range in just how far those firms have incorporated green practices and products, and there remain many more companies that have yet to undertake any sustainability efforts.

A new report from Five Winds International -- the third in a series published by GreenBiz.com -- examines the activities of 25 of the world's largest and most high-profile retailers to determine if they are taking significant steps to increase the number of greener products on their shelves.

In looking at these companies' efforts for the report, "Stocking the Shelves with Green: Finding Opportunities in Retailers' Sustainability Programs," the authors found a number of trends in the greening of retail. In addition to huge purchasing power across all retail sectors now investing in greener goods, the report finds that sustainability efforts are becoming a required program rather than a competitive advantage.

"[Almost half of the retailer supply chain programs we investigated now evaluate a product's sustainability performance as part of a buying decision," Libby Bernick and Julia Guth, the report's authors, write, "which indicates that sustainability is no longer a voluntary partnership proposition but a growing retailer requirement. All retail categories have these purchasing decision programs, but grocery and home improvement stores in particular have the largest number and variety of sourcing programs involving a purchasing decision."

Although sustainability itself may not be a competitive advantage for retailers now, the research finds that transparency about those programs remains a way for firms to differentiate themselves from the competition.

"Whether it's divulging the pedigree of all raw materials used in a product or publicly disclosing the ingredients in a formulation on a company website, transparency is a growing trend with consumer package good sustainability," according to the report. "[T]ransparency has yet to become a widespread retailer requirement, and appears to be an area where consumer goods suppliers can still differentiate their brands because most retailers' programs remain focused on specific products -- most notably paper products and seafood."

In addition to outlining current and future trends in retail sustainability efforts, the report offers a three-step, practical approach for companies to get started with sustainability programs:

1. Understand the implications of sustainability issues for your business and product portfolio, and know the sustainability footprint across your product's life cycle.

2. Improve your performance by taking action to capture new market opportunities or lower your footprint.

3. Succeed in the marketplace by communicating your success and engaging with suppliers and customers.

"Stocking the Shelves with Green: Finding Opportunities in Retailers' Sustainability Programs" is the latest in a series of reports written by Five Winds International on retail and sustainability to be published by GreenBiz.com. The other reports in the series are: "Retail: A Pivot Point for Sustainability and "Retail: A Sustainability Benchmark. More information about Five Winds International's work on sustainability is online at FiveWinds.com.