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feature environmental retailing

Green expectations

Retailers are uniquely consumer facing organisations and they have to meet consumers expectations with regards sustainability. Often consumers expect the companies they buy from to be even more green than themselves

he environment and green retailing has long been a buzz subject for retailers and a few years ago such green initiatives were all the rage. But as budgets have tightened there has been a hesitance to invest. But the planet remains under environmental strain meaning that choices by consumers about the products they buy, the way they buy them and the way the retailers source such products remains a requirement of retail businesses both to satisfy their own business targets but also that of their customers. Mike Capper, energy services manager at EDF Energy, says retailers face a tough challenge. Retailers are uniquely consumer facing organisations and they also have to meet consumers expectations with regards to sustainability and environmental responsibility. Often consumers expect the companies they buy from to be even more green than themselves, he says. Gary Hird, IT strategy manager at John Lewis Partnership, agrees that customers are demanding. Retailers now factor environmental considerations into their systems as a matter of course. Customers expect that we already take a responsible approach to the way we do business and we need to make sure we live up to those expectations, he says. The Carbon Trust has long worked within the retail sector but says there remain a number of opportunities for retailers to take advantage of. What we have found is that firstly in retail there are very attractive opportunities for becoming more efficient and saving energy. Some are non-capital intensive behavioural changes but for others we have also demonstrated

how businesses can invest in new technologies with some quite short payback schemes, says Myles McCarthy, managing director of Carbon Trust Implementation Services. He asks retailers to first look at their energy efficiency. Energy efficiency is a great way of businesses upgrading their sites and getting the added benefits that brings for free, he says. And he points out that while investment may be needed the money is already being spent through energy wastage. We have found one key barrier to people investing is finance, he says. As a result, in April, the body partnered with Siemens Financial Services to provide a commercial financing scheme for energy efficient equipment in a market the duo believe will be worth 360 million over the next three years in the retail sector alone. The scheme enables investment in technologies such as low energy lighting, energy efficient monitors or local carbon air conditioning or biomass heating. Any business is able to apply for new green growth finance from the scheme which is designed to match monthly payments with the equivalent savings from lower energy consumption. But equally he cites nervousness over the sector as a problem. There are other barriers such as awareness of the nature and scale of the opportunities and confidence in the business case and resources to go and find the right suppliers, he says. As a result The Carbon Trust also launched an implementation services business, headed by McCarthy, in October of this year. We want to raise the awareness with retailers and for them to be confident in what they are doing and do that by introducing them to a selection of our accredited suppliers who will then give them proposals, he says. Although a commission based business the idea is to allow retailers more confidence, particularly in markets such as refrigeration and lighting instore where huge technology advances are promising even larger savings but can seem daunting to retailers whose main focus is, after all, selling. WEMS internaional recently scooped the energy efficiency award at the Green Business Awards. It claims to be the only manufacturer and

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installer of wireless building energy management systems and has worked with the likes of Dunelm Mill and M&S to help reduce energy. It claims its product now saves retailers between 15 and 30 per cent of their energy costs by managing energy use across property estates and accessed via any standard internet browser. Ivan McKeever, director at WEMSinternational, says: Currently 80 per cent of all UK buildings have no energy management systems in place. Its essential that retailers strike a balance between creating optimum store conditions and carefully controlling energy usage across each location by accessing instant live reports on the estates performance, He says the system has a payback of less than 18 months. Peter Kelly, deputy finance director at Dunelm Mill says: Since 2010 we have introduced the WEMS systems into our new and refurbished stores and now we are retrofitting the rest of the estate, he says. LED lighting is also a key area for retailers to invest in. It is the fastest developing technology area we see in terms of energy efficiency and is also considered critical for retailers but as well as efficiency quality and maintenance requirements also need to be considered, says McCarthy. Nualight works with retailers to improve energy efficiency and product presentation instore through its LED lighting system and is being used by the likes of Tesco and Co-Operative in their refrigerated cases producing savings in energy savings in excess of 70 per cent. Nualight CEO Liam Kelly says: Over the last three years LED technology has doubled in brightness and halved in price. During that period, leading global food retailers including Walmart, Kroger and Supervalu in the US and Tesco, Migros and Coop in Europe have replaced fluorescent lighting with LED in their frozen food displays, yielding energy savings of up to 70 per cent. LED in frozen food cabinets is now the standard among all the major retailers in the UK and Switzerland, making these two countries the first in Europe to transition to energyefficient lighting, he says. Further benefits Edward Lees, product manager at Toshiba Lighting Systems UK, agrees there are big savings to be made: With lighting accounting for around 20 per cent of a retailers electricity costs switching to LED lighting can offer substantial savings to retailers both financial and environmental. LEDs last up to 17 times longer than halogen lamps in a typical retail environment and are far more energy efficient. Bluewater Shopping Centre installed Toshiba LED downlights for its walkways and will save 76,000 on its electricity costs and dramatically reduce its lamp maintenance costs, he says. And he points out further benefits too: The reduced heat emission further reduces retailers energy bills by wasting less energy on air conditioning. Retailers are focusing both on their stores and their supply chains. John Lewis has pledged to deliver an absolute reduction in its carbon emissions by 15 per cent by the end of its 2020/21 trading year based on a 2010/11

baseline and technology plays a major part in this. We use technology across our business when looking at reducing our environmental impact. In particularl technology has been vital in the monitoring and analysis of our environmental impact for instance in our energy usage and carbon emissions, says Hird. It recently opened its most carbon efficient shop to date at John Lewis Stratford City. A focus on design, and the addition of an advanced displacement ventilation system and the use of new reduced wattage lamps on the shopfloor has helped reduce the carbon footprint by 60 per cent. On refurbishmentsthe retailers recent revamp of its Cheadle store has set the benchmark for future redevelopments. Marks and Spencer is aiming to become the worlds most sustainable major retailer by 2015 and in June of this year revealed the most recent progress on the 180 commitment that forms Plan A with 95 commitments achieved and 77 online delivering more than 70 million in net benefit in 2010/2011. It also revealed that improving energy efficiency in its stores and distribution centres had saved it 13.5 million last year. We are using a range of technologies to monitor and control our energy usage. Examples include central management tools, PIR (Passive Infra Red) sensors and real time reporting available to stores and head office, says a spokesman for the retailer. Though the investment is substantial as M&S experience shows the payback is greater. It claims that the savings it has made have far outweighed the investments in such Plan A projects. Retailers are waking up to the importance of environmental retailing but perhaps not quickly enough. The more switched on retailers will look at every part of their businesses to see where they can save cash. For example at John Lewis simply raising the temperature to which it cools its data centre has made massive savings whilst a working with suppliers it was able to create a design layout which maximised cooling efficiency, according to Hird. On the road retailers are also saving cash too whether through better route planning, improved driver training or improved efficiency of lorries with M&S saving 2 million through less fuel and improving fuel efficiency on delivery fleets by more than 20 per cent since 2007. John Lewis has been using the Fleetboard management system for just over six months. This gives us detailed reporting on how the vehicle is driven throughout the day. We can view this reporting as soon as the vehicle returns to the depot, allowing us to give drivers detailed feedback about how they drive. Combined with an extensive driver training programme we have improved our MPG by 22 per cent saving costs as well as reducing our carbon footprint, says Hird. DCs, better route planning and combining stocks for online orders and branch replenishment is also helping retailers go greener. McCarthy says retailers must wake up to the savings that can be made. These are not nice to have projects these are very sensible, short payback investments that people are already paying for through waste.
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