Retail and fashion leaders struggle on sustainability

22 Aug 2019

Retail and fashion leaders struggle on sustainability

Three-quarters of bosses say regulation will be needed to deliver a real step-change.

Four out of ten top executives at leading retail and fashion companies say commercial pressures, notably to grow sales and maintain keen prices, are the biggest single obstacle to their businesses becoming more sustainable. Most believe more regulation is needed. 

Despite this, 70% of the same C-suite leaders said that a more sustainable approach was either “mission-critical” or a key objective for their companies. When asked about the issue by Odgers Berndtson, just under a third (32%) said the main driver was company ethos, but the largest group (39%) cited changing consumer expectations.

The findings from Odgers Berndtson’s leadership poll, conducted in July, reveal that a very high number of senior executives working in the fashion and retail sectors are struggling to deliver greater sustainability. Whilst almost all (94%) say their companies have a strategy and policies in place, most (75%) think a real step change will only be achieved with greater regulation.

“Senior executives don’t need convincing about the importance of embracing sustainability, but it is difficult and counter-intuitive to implement initiatives which negatively impact profit, even in the short term.”

When asked about the most significant gaps in their company’s approach to sustainability, leaders are divided. Lack of leadership from the very top (20%) and a piecemeal approach (27%) emerged as key issues, but the largest number, 29%, said the main problem is that sustainability goals are currently not included in the objectives of every team and department.

“Companies don’t routinely include sustainability as a measure of success for all senior executives, instead, they're relying on a few named individuals and departments, in many cases, this results in confusion over who is really accountable, puts individual performance indicators at odds with company sustainability initiatives, and ultimately slows overall progress.” 

Around three-quarters of respondents were senior executive level and above and most said that a more sustainable approach was normally or usually a board-level issue in their companies. However, there was far less clarity over who takes ultimate responsibility and reporting lines.

“Consumer expectations are changing but tough commercial realities are not,” said Jane Dessar, Head of the Retail and Consumer Practice at Odgers Berndtson. “Consumers are shifting towards contributing to a better world, but the question is how many will change their spending and shopping habits. Companies will do what they can, but are conflicted over how best to proceed without putting profitability at risk.”