ESG (Environmental, Social, and Governance) in Retail and Apparel – Thematic Research

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Sustainability has morphed into an umbrella term for environmental, social, and governance (ESG) issues. The movement continues to gain momentum as consumers, governments, regulators, and the media turn the spotlight on corporations and demand action. Social inequality, corruption, tax avoidance, and a lack of action on climate change are all issues that companies must now address head-on, in full public view.

As the world begins to recover from the COVID-19 pandemic, several retail companies are trying to ensure that the future of global recovery is green. More than ever before, retailers are findings new approaches to future-proof their business while reducing their carbon footprint. The emergence of ecommerce platforms has created new opportunities, and COVID-19 has not only accelerated the online shift but also increased the importance of sustainability.

Investing in sustainable practices not only helps retailers fight climate change but also allows them to cut costs in the long run. For example, by reducing single-use packaging, retailers can also lower costs.

What are the main trends shaping the ESG theme in retail & apparel industry?

Technological trends

Artificial intelligence and internet of things (IoT) are few of the key technology trends impacting the ESG theme in retail and apparel. Refrigeration uses the most energy in a supermarket, accounting for up to 60% of the total electricity consumed annually. Thanks to advancements in technology, the amount of energy use in refrigeration is falling. Vehicles are responsible for the most emissions in processing online orders hence the delivery companies are shifting towards electric vehicles.

Macroeconomic trends

COVID-19 has increased health and safety risks for staff and consumers, particularly in brick-and-mortar stores. Following the easing of national lockdowns, companies have had to develop contingency plans to minimize risks of infection. Retailers have increased traceability and implemented tougher hygiene practices, heightening their standard health and safety protocols.

Ethical consumerism is also a growing trend to which retail and apparel companies must cater. Many supermarkets even prioritize renewable energy sources, particularly solar energy, as it is the world’s most freely available energy resource.

What are the ESG challenges in retail & apparel industry?

Environmental challenges

Environmental performance measures how corporate activity contributes to climate change, pollution, biodiversity, and the depletion of the world’s natural resources. 

Social challenges

Social performance assesses a company’s engagement with its workers, customers, suppliers, and the local community. The effects of corporate actions on society are only now being fully realized. Companies can have a significant negative impact on society, sometimes without the knowledge of anyone in the business. 

Governance challenges

Governance assesses how a company’s internal controls are used to inform business decisions, comply with the law, and meet moral obligations to all stakeholders. All retailers need to have a streamlined governance framework to maintain their brand image and integrity in a competitive market.

Which are the leading companies focusing on ESG theme in retail and apparel sector?

Leading retailers and apparel companies focused on ESG include Carrefour, CK Hutchinson, H&M, IKEA, Levis, Lidl, REWE, Tesco, and Woolworths.

Market report scope

Key Players Carrefour, CK Hutchinson, H&M, IKEA, Levis, Lidl, REWE, Tesco, and Woolworths


  • GlobalData provides insight into the theme of ESG within the retail and apparel sector. The report provides an overview of what the ESG is, what factors make up each element of E S and G, why it is important to the retail and apparel industry and why it needs to become a core focus for retail and apparel operators going forward. The report outlines the operators that are market leaders and laggards within ESG and the key trends impacting the theme; and provides an ESG timeline highlighting important moments so far and gives insight into where operators rank in terms of their ESG in a scorecard format.

Reasons to Buy

  • Gain a better understanding of the ESG theme and how it’s shaping the retail and apparel markets.
  • Understand what elements constitute each pillar of E, S and G.
  • Better understand the key trends, including technology and macroeconomic trends, impacting the ESG theme, so you can shape your long-term strategy.
  • Discover how key operators are engaging with the ESG theme, providing greater clarity on the actions of competitors.
  • Learn about the different challenges facing each pillar of ESG in the retail market.

Aldi Nord
Alidi Süd
Bed Bath & Beyond
Brands Fashion
British American Tobacco
CK Hutchinson
Denim Tears
DM - Drogerie Markt
Food Lion
Home Depot
Hugo Boss
Intelligent Label Solutions
Louis Vuitton
Marks & Spencer
Pyer Moss
Sports Direct
Takko Fashion
Vestiare Collective

Table of Contents

Executive Summary

GlobalData’s ESG framework


The ESG action feedback loop

ESG challenges in retail

Case studies

ESG timeline


Sector scorecard


Further reading

| Our thematic research methodology

| About GlobalData

| Contact Us

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