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Sustainability in the retail and consumer goods industry

Your expert for questions

Harald Dutzler ist Ihr Experte zum Thema Nachhaltigkeit im Einzelhandel bei PwC Strategy&

Harald Dutzler
Partner at PwC Strategy&
Mobile: +43 66 4515-2904
Email

Ambitious, but no alternatives

The march towards greater sustainability doesn't end with the retail and consumer goods industry. If nothing else, consumers are driving this change by placing greater value on sustainable products. Retailers and manufacturers now have to align their business activities with these ambitions. The greatest challenge facing the industry is to promote sustainability while remaining competitive. Industry players have to ensure transparency along their entire supply chain and make sustainability a visible and measurable hallmark of their highly complex supplier and distribution networks. Our sustainability experts at PwC and Strategy& help retailers and manufacturers tackle this challenge.

Retailers and consumer goods companies are already working together closely to jointly implement sustainability strategies. For example, the Consumer Goods Forum, a global network that brings together the CEOs and senior management teams of over 400 retailers, manufacturers and service providers, has established a strategic organisation that focuses on sustainability, the environment and society. But this collaborative effort alone is not enough. Legislators are increasing pressure on companies to contractually enforce their social and environmental standards along the supply chain. In Germany, for instance, discussions are underway to introduce legislation governing supply chains.

"Consumers, governments and other stakeholders are demanding that retailers and consumer goods companies clearly define sustainability standards in their network. Going forward, companies in the industry will also be measured by the transparency and measurability of their sustainability initiatives."

Harald Dutzler, Sustainability expert for the retail and consumer goods industry at PwC Strategy&

Consumers are pushing sustainability

It is above all consumers who are pushing for the retail and consumer goods industry to become more sustainable: as far as online shopping is concerned, consumer awareness of and interest in sustainability and fair trade products has increased significantly over the past five years. For consumers, the effect they have on the country of production is also becoming increasingly transparent.

NGOs also play an important role in educating consumers: they shine a light on the working conditions in and the environmental impact the consumption of products such as chocolate, shirts or cosmetics have on the country in which the raw materials are sourced. Organisations such as the Roundtable on Sustainable Palm Oil (RSPO) and the Rainforest Alliance have successfully lobbied for improvements in production standards and fair trade.

Your situation

Focus on creating sustainable value

The pressure to increase sustainability is mounting: various stakeholders – from consumers to investors and suppliers – expect retailers and manufacturers to be guided by the principles of sustainability in their business activities. This applies to supply and distribution chains, production conditions and transparency. But how can companies meet all these demands? To create sustainable value, retailers and manufacturers of consumer goods should focus their efforts on four aspects:

  • Sustainability Strategy: An all-encompassing corporate sustainability strategy ensures the long-term success of a business. A sustainability strategy drives economic company goals, e.g. superior shareholder return, and creates value and purpose for society, company stakeholders and employees. Most importantly, a sustainability strategy catalyses innovation across the entire value chain evolving the business and corporate strategy.
  • Circular economy: The circular economy describes a comprehensive approach aimed at allowing companies to turn a profit while conserving our planet's resources. The focus is on developing, producing and consuming products more responsibly and sustainably. The aim is favour renewable raw materials and energy and to reduce and avoid production waste and by-products.
  • Sustainable supply chains: A company's responsibility extends far beyond its suppliers and customers. Therefore, it's important to introduce sustainability across a product's entire supply chain. A key feature of sustainable supply chains is that they integrate socially-acceptable, fair and ecologically-sensible standards at every level of the product life cycle, while taking into account the complexity of the global network. This also includes reducing waste along the supply chain to an absolute minimum. It is still all too common for companies to dispose of products because those articles do not meet the high quality standards or because there were changes in planning, logistics or production. Sustainable supply chains are supply chains where such waste is avoided to the greatest possible extent.
  • Transparency: Companies need to have a clear understanding of how their sustainability efforts affect their revenue, profits and brand equity. To do so, it is important that companies gain a complete understanding of the value chain by also considering targets and performance indicators above and beyond the purely financial KPIs. Transparently presenting the economic, ecological and social effects builds trust with the public and simultaneously secures earnings.

Our services

Implementing sustainability across the board for all stakeholders to see

The sustainability experts at PwC and Strategy& will work with you to implement sustainability throughout your entire company in a way that is easy to grasp for all stakeholders. Our focus rests on four key sustainability issues for the industry:

  • Sustainability Strategy: In order to develop a sustainability strategy it is crucial to identify the most relevant sustainability themes, set ambition levels and targets and centre the strategy around the organization's capabilities. Our unique Capability Driven Strategy (CDS) approach will assist you in identifying the sustainability themes most relevant to your clients. Collaboratively we will develop the differentiating capabilities, products and services required ensuring a coherent sustainability strategy addressing the relevant themes within your industry.
  • Circular economy: Devising a strategy centring on the circular economy will require reassessing one's own business model. Our experts will help you with this transformation process, which stretches from senior management to production, from suppliers to customers.
  • Sustainable supply chains: Only with a comprehensive approach will your company be able to meet the steadily growing demands of customers and suppliers along the entire supply chain. We'll help you to cover all key aspects along your supply chains: this includes identifying environment, social and governance (ESG) risks, defining sustainability requirements, developing skills and managing performance.

  • Transparency: Regardless of whether you're just beginning to develop your sustainability initiatives or if you're already a sustainability champion: you cannot effectively communicate the progress you've made without presenting your ESG footprint transparently. We'll help you present non-financial KPIs and precisely quantify the ecological and social impact of your company, thereby ensuring a high degree of transparency towards your stakeholders.

 

Our promise

Together we will map your path to a sustainable future

Make it real: We will breathe life into your sustainability strategy and will help you formulate a successful sustainability agenda for your company. The key to your success is our proven and unique all-in-one approach – from strategy to implementation.

Expertise and know-how: Looking for trustworthy partners and experts who have the relevant industry expertise as well as the technical and functional know-how that you need? Then you've come to the right place!

Collaboration: We see ourselves as pragmatic strategists who always roll up our sleeves to work closely with our clients with the singular goal of creating real added value together as a team.

Do the right thing for society: We are boldly shaping the future with you, our colleagues and society, always taking responsibility for our actions.

Further insights into the retail and consumer goods industry

How Generation Z thinks

PwC Study 2020: Part 3 of the PwC Europe Consumer Insights Series takes a closer look at 18- to 24-year-olds.

Learn more

Contact us

Dr. Christian Wulff

Dr. Christian Wulff

Partner, Retail & Consumer Leader, PwC Germany

Tel: +49 40 6378-1312

Harald Dutzler

Harald Dutzler

Partner, Strategy& Austria

Reinhard Vocke

Reinhard Vocke

Partner, Strategy& Germany

Hendrik Fink

Hendrik Fink

Partner, Head of Sustainability Services, PwC Germany

Tel: +49 89 5790-5535

Marc Hoogenberg

Marc Hoogenberg

Partner, Strategy& Netherlands

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