AI Could Accelerate Retail Industry’s Net Zero Goals

Accelerating their net zero ambitions has been high on retailers’ agenda for several years, with the sector calling itself one of the most ambitious when it comes to tackling climate change, but the reality is alarming. According to a Microsoft study, only 28% of UK retail organizations are currently on track to achieve net zero by 2050, in stark contrast to the national average of 41%.

About the Author

Ali Rezvan is retail director at Microsoft UK.

Additionally, with 74% of organizations across all industries describing a “one foot in, one foot out” approach to sustainability, where strong ambitions have yet to translate into meaningful action, retailers cannot afford to be left behind. Harnessing available technologies, such as data analytics and AI, to accurately record their progress is one of the fundamental steps to ensuring their continued success, in an increasingly competitive market.

Sustainable = relevant

Helping to protect the future of the planet is obviously the main reason to improve any company’s sustainability performance, but apart from that, retailers should consider strengthening their sustainability credentials as a way to stay competitive and relevant in a rapidly changing world. .

Several areas of the sector, including the fashion industry, have come under fire for unsustainable business practices in recent years, with recent research from Deloitte offering a taste of things to come. With one in three consumers saying they have stopped buying certain brands or products for ethical or sustainability reasons, retailers can no longer afford to ignore ongoing issues. Many brands have capitalized on this prospect, such as Levi’s with its ‘Buy Better’. Wear longer.’ initiative, which aims to help customers go green and forgo fast fashion.

From within the industry, too, comes the pressure to reform. According to Microsoft research, 70% of UK retail workers believe environmental sustainability should be a top priority for businesses over the next five years, while 47% would rather work for an employer who has a plan in place. of clear durability. But despite the clear mandate both within the sector and consumer pressure from outside, many companies are falling behind in executing on their sustainability strategies and only 21% of industry workers believe that their employer is currently implementing its sustainability plan effectively.

The merchant’s roadmap

The current picture is one of stalled action, with many companies falling behind in executing their sustainability strategies. For example, 40% of UK retailers have yet to implement environmental standards in their supply chain, while the same number (40%) admit to not considering the role and value of natural capital in planning and operations.

Yet amid these challenges, there have been encouraging decarbonisation trends within the sector – with the British Retail Consortium (BRC) reporting that its overall carbon footprint has improved with total emissions nearly halving since then. 2005.

The future roadmap is clear: reduce energy consumption, decarbonize the supply chain and in particular logistics, promote sustainable supply methods and encourage and facilitate greener consumption habits. All of this can be facilitated by innovative technology now available to retailers, such as cloud and data analytics, to make change happen, as quickly as it takes for the good of the climate – and their bottom line. We’ve seen how retailers pivoted at the height of the pandemic – capitalizing on digitizing their offerings for an e-commerce marketplace and investing in technology to enable their success, so businesses must now capitalize on their learnings from that time to drive change forward.

Using technology to achieve the Sustainable Development Goals

Knowing that retail leaders have set their targets either in line with the government’s net zero target for 2050, or even with the intention of exceeding it to reach net zero by 2035 (70%), businesses must now harness the power of technology and embrace digital disruption. to amplify and accelerate their sustainable development strategies. The appetite for increasingly sophisticated technology to reduce carbon emissions is there, with retail leaders keen to capitalize with greater use of robotic process automation (RPA, 56%), machine learning (54%) and ‘digital twin’ technologies (56%). percent) – a rapidly growing territory for the digital simulation of large-scale business processes and strategies, without the real-world waste.

Whether using the cloud and data, or advanced solutions such as AI, RPA, machine learning and digital twins, technology can accurately record the environmental footprint of a organization, while facilitating the changes needed to create a sustainable infrastructure. Whether supporting in-house skills development, mapping the risks and benefits of sustainable strategies and building a resilient supply chain, or enabling decarbonization by monitoring and measuring emissions, technology cloud helps companies take control of their environmental initiatives by offering complete, integrated solutions and automated insights.

It also makes it easier to accurately report to stakeholders and reduce resource use by aggregating sustainability data in actionable ways, integrating climate-conscious actions into their operations. In short, technology gives retailers the ability to complexly manage everything they now need to measure, in order to achieve their net zero goals.

Naturally, each organization will go at its own pace in deciding which steps to take and in what order, but whatever it decides to focus on first, it should mostly look beyond its own four walls. Through cross-industry collaboration, public-private partnerships and shared learnings, retailers can create lasting change at scale, driving action and accountability at the individual, company and community level. ecosystem.

In a world where retail is central to our daily lives, the sector has a fantastic opportunity to make a real difference on climate change. The passion for change and strategy is there, so with intention and collaboration, a cleaner, brighter future is within reach.

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