Retail companies with strong responsible forest products sourcing policies are seeing numerous tangible business benefits, demonstrating that sustainability makes business sense, according to a new WWF report.
Drawing from the experience of the forest product supply chains, the report supports a growing body of research attesting to the business benefits of taking action on sustainability in supply chains.
“Deforestation and forest degradation are one of the leading environmental challenges today, and we need concerted action from across sectors to tackle this issue,” said Alistair Monument, WWF Forest Practice Lead. “The number of deforestation-free commitments over the last few years are encouraging, but we need concrete action.
“Research overwhelmingly shows that retail chains are positioned to mobilize transformational impacts because of their leverage over product supply chains and influence on consumer choices,” Monument added. “We need retailers to take the lead and understand that sustainability is no longer a niche, but the norm.”
Companies surveyed for the WWF report cited a number of benefits of responsible sourcing. Over 80 per cent reported positive impacts on risk management and brand reputation; and over 60 per cent of retailers saw positive impacts on customer satisfaction and stakeholder engagement. More than 70 per cent of retailers claimed sustainability commitments had a positive impact on employee engagement, indicating potential gains from higher employee satisfaction and retention.
While more than half of the respondents perceived the cost of implementation as a barrier, in-depth interviews with some of the leading retailers indicates that the benefits overweight the costs in many instances. In the case of Migros, one of the largest retailers in Switzerland, sales of sustainable products increased by more than 30 per cent between 2012 and 2015, demonstrating clearly that customers expect to see responsibly produced products on the shelves. In the case of Bunnings, Australia’s largest home improvement retailer, supply chain risks were reduced as a result of a more stable, longer term relationship with fewer number of suppliers.
“Companies with genuinely responsible timber sourcing strategies – based on clear commitments and public reporting – have an opportunity to stand out from the crowd,” Monument said. “This is particularly important for retailers, who operate in a highly competitive public-facing space where maintaining a competitive edge and a positive reputation is crucial.”
The WWF study was based on a literature review, global survey of more than 50 retailers from 20 countries, and in-depth interviews with select retail leaders. The companies shared detailed information about their timber sourcing policies, and the perceived costs and benefits. Four company-specific case studies are featured in the report.
The report is part of WWF’s broader efforts to research and understand the business case for responsible forest management and trade. Released in August 2015, the first report in the series, Profitability and Sustainability in Responsible Forestry: Economic impacts of FSC certification on forest operators, found that tropical and small or medium producers, regardless of geography, can benefit significantly from attaining FSC certification.
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