Since the first COP meeting was held in 1995, the annual United Nations summits have become something of a broken record.
Ongoing discussions and strategies between world leaders and scientists seem to occur on a loftier plane, and by the time proclaimed sustainable goals trickle down to business owners and retailers, the practical options appear limited to expensive investments and increased pressure on green key performance indicators.
This year’s COP28 summit, held in Dubai, United Arab Emirates (UAE), has been spotlighted as “the most important COP since the Paris Agreement in 2015” by Stockholm Environment Institute senior research fellow Richard Klein.
But given that the key “loss and damage fund” agreement from 2022’s COP27 has yet to be initiated and will be at the centre of further contested negotiations this year, it is understandable for business owners to feel ‘climate fatigue’ and reserve their focus for actionable and realistic strategies.
The absence of any retail industry-specific side events or major representatives speaking throughout COP28 is also glaring.
Despite these red flags, retailers can still take the summit as a renewed opportunity to look at new sustainable targets and be more active in communicating these to consumers.
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Retail industry insiders offer their predictions for COP28
CEO of business growth agency Heur, Chris Raven, highlights that depending on how COP28 progresses “There will be a conscious effort for retailers to obtain B Corp status and use this feat as a major part of their brand strategy.
“It is also interesting to see that large corporations are hiring sustainability directors and leaders that are specifically appointed to oversee efforts to be greener and most importantly, shouting about it.”
GlobalData (a leading data analytics company) retail analyst Neil Saunders believes that sustainable moves will be “incremental” in areas such as manufacturing or supply chains and only made in response to policy and regulatory changes.
Any potential agreements on energy transition targets and renewables are certain to impact supply chains and manufacturing. Saunders confirms that “Retailers have already invested a lot in this area but may be expected to invest even more.”
Near-sourcing may also become more popular for brands to narrativise and reach discerning consumers.
Meanwhile, if subsidies on fossil fuels are phased out, the use of fossil fuels would skyrocket for retailers and have an impact on supply chain costs. The ultimate impact is that policies could push up inflation.
“None of this will happen overnight, despite urgency from COP28, as many countries will not agree to extremely fast transitions,” adds Saunders.
Consumers and COP28
While COP28 presents murky waters for retailers, the consensus on whether the summit will influence consumer behaviour is clear.
“While consumers are interested and concerned about sustainability, there is still a very big gap between what consumers say they will do on the environment and their purchasing decisions,” says Saunders.
Raven agrees: “Ethically sourced products or ways of living are often more expensive and amid a cost-of-living crisis and inflation, consumers are forced to opt for products that don’t necessarily align with their ethical values.”
Consumers’ collective morale over individual responsibility for halting climate change may also be severely hampered by reports that COP28 host nation UAE has used the talks as an opportunity to strike oil and gas deals.
There still remains power in numbers however. Steve Philips, co-founder and CEO of AI-driven market research platform Zappi, points out that “Social issue-led boycotts have existed for a number of years, and we’re seeing consumers become increasingly willing to boycott brands that don’t align with their views.”
The biggest challenge for retailers from COP28
The awkward but undeniable truth of sustainability in business is that there is a high financial cost to going green. Then comes the question of who pays for the changes.
Saunders explains that “Retailers will be prepared to invest a certain amount, but there are limits. In theory, consumers should pay more for greener products, but they don’t want costs to go up – especially after a period of hefty inflation – and retailers don’t want to lose market share from increasing prices. No one has found a way to address this tension.”
Retailers who do cough up funds for sustainable progress will be rewarded from demographics such as Gen Z, who have ushered in eco-conscious shopping practices – a key example is current discussions online around ‘deinfluencing’.
These consumer-led movements are understandably more palatable for the public than tonally apocalyptic and jargon-heavy COP negotiations.
An unspoken question is whether the existence of the global retail industry in its current iteration – one of next-day delivery, outsourcing to developing nations, and disposable single-use products – can remain if climate goals are to be achieved.
If COP28 is successful, the modern age of over-consumption that has made the retail industry a behemoth of accessibility faces a sacrificial transformation.