How retail brands leverage technology to complete ESG certifications and reporting

Updated: 
December 26, 2023
Article

Despite the challenges, the risks associated with not making a considerable effort far outweigh the initial difficulties of getting started.

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In today’s increasingly conscientious retail market landscape, a robust ESG strategy is a must for retail brands of all sizes. It’s required to attract responsible investors and capital, and with a surge in mandated disclosures around the world, adherence to ESG principles is becoming not just a choice but a regulatory requirement. 

This shift reflects the global push towards transparency and accountability, ensuring businesses are accountable for their impact on the environment and the communities they operate in. Businesses recognise the importance of transparency when approaching their environmental reporting. This involves guarding against greenwashing and ensuring responsible climate data disclosure, exemplifying the industry’s dedication to accountability and a sustainable future.

To steer clear of greenwashing and greenhushing, many retailers are looking at certifications like B Corporation and Climate Active to substantiate their commitment to genuine sustainability practices. Certifications like these give businesses confidence that their environmental and social efforts are credible but also impactful, traceable, and transparent. They also serve as tangible, external markers of a brand’s genuine commitment to positive impact, supporting its credibility and appeal to an increasingly discerning consumer base. 

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Before retailers consider these certifications, they need to start with the basics: how solid is their ESG strategy, how are their emissions being accounted for, and what actionable science-based targets can they set? The key to these goals is to have solid technology systems and rely on a carbon accounting platform to gather, manage, and report on emissions and other ESG data. 

Related reading: Everything you need to know about carbon accounting

The challenges of emissions accounting and potential risks

Measuring emissions in the retail sector presents many challenges rooted in the industry’s high volume and global supply chains. Scope 3 emissions—emissions connected to a company but outside of its direct control—make up most of retail emissions and can be particularly complicated to calculate accurately. Obtaining clean, accurate data from supply chain partners can be a significant hurdle, often requiring reliance on secondary information. 

Also, defining scope boundaries can be complicated—deciding which aspects of the supply chain to include can lead to potential underreporting or double counting. The lack of a standardised methodology further complicates the process, making it challenging to compare and validate emissions data across the industry.

It’s easy to see why many retailers give up on their scope 3 efforts: A 2022 CDP report shows that only 41% of companies reported emissions on at least one scope 3 category. This is in stark contrast with the fact that scope 3 remains the highest emissions category for most retail companies—leaving this information out means they are at risk of underreporting their climate impact. In today’s competitive market, transparency is paramount. Failing to address scope 3 emissions compromises environmental standing and risks strained partnerships, as retail buyers, investors, and customers increasingly demand this crucial data. Additionally, with new regulations, companies must act swiftly to report their scope 3 emissions or face legal consequences.

Pathways to credible carbon accounting and certifications

Despite the challenges of carbon accounting, the risks associated with not making a considerable effort far outweigh the initial difficulties of getting started. Perfection shouldn’t stand in the way of progress, and establishing a robust carbon accounting approach will lay the groundwork for managing emissions and climate-related risks, aligning with international standards like the ISSB or TCFD, reporting accurately and transparently, and attaining third-party certifications.

Certifications are important in establishing benchmarks for businesses prioritising decarbonisation matters and communicating these to the public.

B Lab is a nonprofit that certifies B corporations. B corporations are companies that demonstrate high social and environmental performance, have their governance structure accountable to all stakeholders, and transparently report their performance against B Lab’s standards. Companies must score 80 or more on the B Impact Assessment to gain a B corp certification. (FYI, Sustain.Life is a Certified B Corporation™.)

In Australia, a prominent sustainability certification programme is Climate Active. Climate Active is a partnership between the Australian Government and Australian businesses to drive voluntary climate action. To become Climate Active certified, businesses must have a defensible carbon neutrality claim by having a clearly calculated carbon footprint, reducing emissions where possible, and offsetting where necessary. 

One of the most comprehensive environmental, social, and governance impact reporting frameworks is the Global Reporting Initiative (GRI). The GRI standards are the most widely adopted ESG reporting framework on a global scale, effectively conveying a business’s dedication to sustainability progress to both consumers and stakeholders.

Aligning your sustainability reporting and emissions reduction progress with global third-party standards isn’t as complicated as you think if you are willing to take the first step in establishing a good carbon accounting system like Sustain.Life, to help you measure, manage, and report on your carbon footprint. 

Using a carbon accounting platform to measure emissions, report and set targets

Let’s look at the steps retail businesses take when using a decarbonisation platform like Sustain.Life. 

1. Measure 

You can start the emissions measurement process by overhauling all your available emissions. Getting as much supplier data as possible to get a detailed view of your scope 3 emissions is an important part of this. 

Sustain.Life simplifies the data collection process by not focussing on emissions scopes, instead using real-world and Green House Gas Protocol (GHGP) categories such as vehicles, waste, buildings, people, products, transport and distribution, purchases, and other emissions, that are easy to understand, even for non-experts. Simultaneously, our platform offers robust features that meet the expectations of experts in the field and provide a comprehensive tool for users across expertise levels. The platform then automatically allocates them to correct emissions scopes, in line with the GHGP, taking the guesswork out of the process and removing accidental double counting or undercounting. You can also record data on non-emissions-related categories like water, governance, and other social factors. 

You don’t have to manually input all data: Sustain.Life lets you integrate utility and other providers into the platform so that data gets automatically collected and recorded and gaps in data are identified and filled.

2. Manage and reduce emissions

Once you’ve established an emissions baseline, you can then set strategies for reducing emissions and set science-based targets. Sustain.Life helps you create a carbon reduction plan and see how it aligns with global frameworks. You can also set longer-term targets, e.g., a net-zero target, and then follow your progress.

Sustain.Life transforms complex emissions data into visual insights, simplifying the identification of emissions hotspots and uncovering opportunities for reduction. For example, pick supply chain partners based on your benchmarks or swap to renewable energy sources where possible to reduce your carbon footprint. 

The platform also allows you to work closely with your suppliers on a range of ESG factors, including ethical business, environmental stewardship, fair labour, human rights, and responsible purchasing.

To address emissions that are challenging to mitigate, consider implementing an offset strategy as part of your approach to attain carbon neutrality. This strategy involves compensating for unavoidable emissions by investing in projects that reduce or remove an equivalent amount of greenhouse gases from the atmosphere through carbon offsetting.

3. Report and align with frameworks and certifications

The final part of the process is reporting on your emissions. Sustain.Life allows you to produce a range of business reports that outline your emissions reduction progress and align it with chosen global frameworks, like TCFDCDP ,or GRI standards. You can visualise your emissions by location or emissions scope, and communicate to stakeholders, internal teams, and customers.

Reports help you prepare for third-party auditing and certifications, like the B Impact StatementTRUE Certification for Zero Waste, and Climate Active

As mandated climate disclosures become more common and consumers look for reliable and verifiable information on retail carbon reduction plans, having an established ESG reporting platform and audit-ready data and reports in place will put you ahead of the curve and steer you clear from vague climate claims and greenwashing traps.


Sources

1. CDP, “Scoping out: Tracking Nature Across the Supply Chain - Global Supply Chain Report 2022.” https://cdn.cdp.net/cdp-production/cms/reports/documents/000/006/918/original/CDP-Supply-Chain-Report-2022.pdf?1678870769 Accessed on December 26, 2023

2. B Corporation, “B Impact Assessment,” https://www.bcorporation.net/en-us/programs-and-tools/b-impact-assessment/ Accessed on December 26, 2023

3. Climate Active, “Technical Assessment for carbon neutrality certification,” https://www.climateactive.org.au/be-climate-active/tools-and-resources/technical-assessment-carbon-neutral-certification Accessed on December 26, 2023

Editorial statement
At Sustain.Life, our goal is to provide the most up-to-date, objective, and research-based information to help readers make informed decisions. Written by practitioners and experts, articles are grounded in research and experience-based practices. All information has been fact-checked and reviewed by our team of sustainability professionals to ensure content is accurate and aligns with current industry standards. Articles contain trusted third-party sources that are either directly linked to the text or listed at the bottom to take readers directly to the source.
Author
Jackson Burnie
Jackson Burnie is Sustain.Life’s director and country lead for APAC.
Reviewer
Joel Hanna
Joel Hanna is Sustain.Life’s customer success and enablement manager for APAC.
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The takeaway

Perfection shouldn’t stand in the way of progress—a robust carbon accounting approach will lay the groundwork for managing emissions and climate-related risks, aligning with international standards like the ISSB or TCFD, reporting accurately and transparently, and attaining third-party certifications.