Corporate environmental sustainability in the retail sector: Drivers, strategies and performance measurement

Retailers are increasingly required to decrease the internal and external environmental impacts of their operations. To achieve this they progressively adopt different corporate environmental sustainability (CES) actions and strategies. Understanding the motivations of retailers for adopting CES strategies (and the types of actions prioritized) is necessary for determining the possible environmental benefits. This literature review examines the key drivers for the adoption of CES strategies in the retail sector, as well as the most common strategies, and measures of progress. Our review suggests that the primary motivations for retailers to implement CES strategies are the expected economic benefits, mainly through cost-savings from reducing resource use. Thus strategies targeting the internal operations of retailers such as energy conservation and GHG emission reduction measures dominate the sustainability agenda of retailers. Decreasing and recycling packaging materials and food waste is also prioritized in some settings. Pressure from internal and external stakeholders will increasingly become a dominant driver of CES adoption as the impacts of retail products along their entire value chain become more prevalent among stakeholders. However, there is a lack of literature on stakeholder engagement initiatives for CES strategies in the retail sector, especially regarding customer-focused sustainability strategies. Furthermore, the opportunity to take advantage of green markets and expand consumer bases will be hard to resist for many retailers, especially in highly competitive markets. This combined with the increasing policy traction of the Sustainable Development Goals (SDGs), and especially SDG 12 on responsible consumption and production, can catalyse the proliferation of CES strategies in the retail sector. Companies will be expected to report on their sustainability progress, which will further motivate them to adopt fruitful strategies or risk reputational damage.