Circular Economy and Retail: What’s the next step forward?

Following the launch of the 4C Retail & Consumer practice, we held a roundtable discussion with some of our sector specialists to discuss the latest industry trends and challenges. The focus of discussion for this time was “The implication of recent UK circular economy trends on the Retail sector”.

Following the UK’s pledge to achieve net zero by 2050, we have seen the development of more stringent government regulations and organisational initiatives within the Retail & Consumer sector. One recent publication that has been particularly relevant to fashion and second-hand retailers is the British Retail Consortium’s guideline on how to align with circular economy principles, while introducing a stricter quality check on pre-loved items being sold. Another recent development is the UK’s extended producer responsibility legislation coming live for a phased implementation in 2024.

The new legislation dictates that businesses placing certain types of products on the market, such as waste, electronics and packaging will now be required to internalise the full costs associated with the product lifecycle, with the aim to push businesses to switch to more sustainable operation and recyclable packaging materials. Although at first glance, it may seem more relevant to manufacturers and producers, it certainly does have a downstream ripple effect on the retail industry.

Developing sustainable retail has not always been easy. We asked ourselves, what kind of challenges could retail businesses encounter during the transition to Net Zero? To start with, the lack of consensus and transparency around standards to measure organisations’ sustainability achievement has given leeway for rampant greenwashing; the lack of historical data also hinders businesses’ confidence in how investment in sustainability today can orchestrate material value generation in the future. Lastly, retail businesses wishing to invest in sustainability are often overwhelmed due to limited expertise and a lack of full visibility on the fast-changing regulatory landscape and shifting consumer preferences.

With the circular economy rapidly expanding and stronger top-down regulatory enforcement coming in place, we face a crossroads today where retail businesses need to be both prepared against challenges as well as sizing the opportunities to stay ahead of the game. Here at 4C, we help clients mitigate supply chain risks by bridging your organisation with more accountable suppliers; our advanced carbon tool, 4Carbon, can provide your organisation with better visibility on the scope 3 carbon emissions of your entire value chain, and our expert team are here to help you to transform your business, supporting you to develop and tailor your roadmap to achieve Net Zero targets.

To find out how we can help you and your organisation navigate the transition towards Net Zero and gain visibility on recent regulatory changes, please contact Andrew Davidson (Head of Retail), Tanya Popeau (Head of Sustainability) or Gavin Bowen-Ashwin (Head of Retail & Consumer) at 4C Associates.

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