Why retailers should "go green"

Multinational retailers have made public pledges to promote environmental stewardship by boosting energy efficiency, offering sustainable products, eliminating waste and reducing greenhouse gases. Retailers large and small are adding solar panels and wind turbines to their warehouses while expanding their range of sustainable products.

For retailers, "going green" means operating more efficiently, especially by controlling energy use. It also means sourcing products that are sustainable, thus giving shoppers the opportunity to support brands that they trust and about which they feel good.

It's worth the investment. Retailers that integrate customer-focused initiatives throughout their business have a greater number of loyal customers and outperform their competitors, according to an IBM study of 19,000 consumers.

There are many other reasons why retailers should consider increasing their focus on "going green."

Conserving energy makes dollars and sense. Some retailers are working to minimise the energy needed to heat, cool, light and operate the equipment in their stores and data centres. For example, UK Co-op launched a programme that lets point-of-sale devices sleep at night, reducing CO2 emissions by 722 tons and saving an estimated £120,000 (Bt6.3 million) per year.

Other retailers are supplementing power by using local generators, allowing them to switch away from the grid when it is under stress or power is more expensive.

Based upon a defined set of thresholds and dashboards, retailers can better manage their store environments and reduce energy consumption by up to 30 per cent.

Building a sustainable supply chain, companies see the link between a "greener" supply chain and improved efficiency and visibility; non-retailers are already reaping the benefits. To reduce their carbon footprint, suppliers are using bio-fuel, diesel and hybrid options to transport goods from warehouses to stores.

In addition to energy efficiency, a sustainable supply chain also links products to their point of origin, improves product quality by ensuring that shipping practices are monitored and facilitates efficient and speedy recalls.

Becoming more socially responsible, companies are under increasing pressure from governments, advocacy groups, investors, consumers and even prospective employees to make their operations, products and services more socially responsible.

The bottom line: Social responsibility and "going green" are not disconnected from building customer loyalty, improving revenue and managing costs. Retailers need to recognise social and environmental initiatives for what they are - doing business in a "smart" fashion.

Scott Russell is country manager for IBM Thailand's Global Business Services.