When Sustainability Means Growth

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Some of B.C.'s most successful retail companies, such as London Drugs, have made sustainability part of their DNA.

From the U.K.'s Sustainable Brands conference, local retail analyst David Ian Gray shares his thoughts on pairing green with growth

Sustainable Growth is an oft-used phrase at DIG360. This is growth than can endure and build for the longer term, not simply short-term increases “bought” at the expense of the future health of the organization.
 
Notably, this is not intended to describe green or environmentally oriented growth. However, it is our belief that the issues tackled in the framework of sustainability and corporate social responsibility have great potential to contribute to Sustainable Growth, if not drive it in some circumstances.
 
Our retail clients expect us to act as catalysts to help drive innovative thought, helping refresh the business. Different drivers can trigger innovation. Yet almost always it requires a serious disruption from the outside. E-commerce, tablets and smartphones, and the related omni-channel tools and apps are forcing all retailers to rethink their business. Some are rising to the challenge in profound ways.  
 
Social and environmental sustainability innovations have the power to reshape retail business. In fact, just prior to 2008, grappling with the retail role in sustainability was near the top of most retail CEOs' lists. Leaders were emerging and we expected to see a jump across the chasm to the mainstream retail industry. 
 
Beyond some waste-reduction (and cost-saving) initiatives, this by and large failed to happen. Some have grabbed early, low-hanging fruit via efficiencies, but became reluctant to invest more. Western-nation retailers are in a no-growth economy with no proof that consumers will reward these environmental efforts with additional buying. 
 
Still, retail leaders in sustainability continue to put more distance between themselves and the pack. Perhaps no coincidence, it is often the best-performing retailers—the Ikeas, the Walmarts, the Starbuckses and B.C.-based leaders such as MEC, London Drugs and John Fluevog Shoes—that understand the value and long-term competitive advantage of investing in sustainability.  
 
All the while issues mount, such as the Bangladesh factory collapse. Regulations loom. Innovations have been persistently occurring elsewhere in the supply chain. While consumers may not be lifting sales in a way the advocates predicted, in a world of extreme choice, they most certainly will drop the clear laggards or bad performers. And we do see talent opting to join the organizations whose values align and who are aspiring to tackle important problems.
 
Certainly CSR has retained the power to transform retail. Perhaps the role of retail requires some rethinking. As the glue between the consumer and the supply chain, the retailer is less the innovator and more the nimble and effective adopter and adapter. 
 
This week I will be attending the London, U.K., version of the impressive Sustainable Brands conference series. Senior speakers from Coca Cola, Unilver, Starbucks, Marks and Spencer, and Adidas will present on a range of topics across sustainable product design and delivery, brand strategy and enabling business culture shift. 
 
 

David Ian Gray is the owner and principal of DIG360 Consulting Ltd., a Vancouver-based retail strategy firm.



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