Supply and demand

Secretary of State, Margaret Beckett, explains why retailers should get involved with greening their supply chain

Last year's Johannesburg Summit re-emphasised the importance of business' role in creating a better quality of life for everyone, now and for future generations.

As the key interface between producers and consumers, the retail sector has a pivotal role to play in this move towards the wider goal of sustainability.

The key sustainability issues for retailers are also priorities for this government. The retail industry is one of the largest and most fiercely competitive in the UK. This means retailers are under increasing pressure to use resources more efficiently, minimise the amount of waste they produce and water they consume, and improve their energy efficiency.

Supply chain management

While individual companies can do much to address their environmental impact, much more can be realised by working in partnership with suppliers.

In sectors such as farming it is essential that the whole supply chain works together on this agenda - something that was highlighted in the government's Strategy for Sustainable Food and Farming, published in December.

That is why I was very pleased to have been involved with the recent launch of the Retail Supply Chain Partnership Forum, which is being jointly run by Envirowise, Action Energy and the British Retail Consortium.

The Forum builds on the success of a pilot initiative last year, which proved that by working in partnership with suppliers, companies can generate financial and environmental savings across the supply chain.

The pilot forum helped the 120 companies involved identify potential cost savings in excess of £1.9m. It also highlighted that an effective supply chain partnership can provide a key forum for companies to discuss common issues such as monitoring and targeting key impacts, and developing effective environmental management through formal systems such as ISO 14001 and EMAS.

This in turn can act as a driver for behavioural change within organisations, helping to integrate resource efficiency and waste minimisation into their business strategies.

Working together

But perhaps more importantly, the pilot Supply Chain Partnership Forum provides practical examples of what can be achieved when businesses begin to tackle key sustainability issues such as resource efficiency and waste minimisation.

For example, the need to develop more sustainable patterns of consumption and production was one of the key messages to emerge from Johannesburg.

The Forum provides a good illustration of what can be achieved, with the 120 companies involved in the pilot identifying total resource efficiency savings of over £700,000 per year.

Waste is another priority for action. The government's latest Annual Report on Sustainable Development, launched at the end of February, illustrates that the volume of waste we produce annually is continuing to rise.

The Forum identified a number of opportunities for reduction of the levels of packaging and general waste entering the waste stream. This will be important given the proposed increases to the Landfill Tax and the expected increases in targets for recovery and recycling of packaging waste under revisions to the Packaging Directive, currently being discussed in Brussels.

The Energy White Paper highlights that we need all the benefits that energy efficiency and renewable energy can deliver if we are to meet our climate change commitments. The Forum, with assistance from Action Energy, identified energy efficiency savings of over £130,000 through use of low-cost technologies and best practice.

The use of supply chain partnerships can also have a significant impact on water use. The pilot forum identified cost savings of over £400,000 using simple, low-cost and even no-cost water minimisation measures.

Also, to encourage environmentally friendly investment through the tax system, the Chancellor intends to announce the introduction of enhanced capital allowances for investment in sustainable water use and pollution prevention technologies. Retailers also need to include sustainability in their decision-making processes. By doing this, companies can help increase the availability of greener goods and provide confidence in the market for their development.

It is also important to provide customers with reliable information on products' environmental impacts. This is supported by the government's Green Claims Code, which provides best practice guidance for making product claims. The forum provides an excellent example of what can be achieved when government and business work together.



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