Understanding Sustainability across the Supply Chain in Retail

Every Retailer needs a ‘Green’ Room - Today’s Consumer

As awareness of the devastating effects of climate change grows, more and more people are looking for ways to reduce their impact on the environment.

The National Retail Federation found that 77% of consumers want sustainable brands and most are willing to change their shopping behaviours to get them. In another survey by McKinsey & Company, it’s been reported that 66% of all respondents, as well as 75% of millennial respondents, say that they consider sustainability when they make a purchase.

Consumers, especially the millennials and Gen- Zs, are conscious of what they purchase and appear open to buying used goods which they see as a more sustainable option compared to buying brand new items. The global market for eco-friendly products is booming, with some estimates suggesting it could reach $79.65 billion by 2030.

Nearly 1 in 3 consumers claimed to have stopped purchasing certain brands or products because they had ethical or sustainability related concerns about them.

The increasing cost of new items is also causing consumers to turn toward purchasing pre-owned goods, which can be obtained at a lower price. Deloitte Global's 2022 Holiday Retail Survey found that 32% of US-based consumers were planning to buy resale items in the holiday season, as a cost-saving measure. Among the categories preferred for purchasing pre-owned goods, clothing topped the list (51%), followed by the toys and hobbies category (40%).

Today’s affluent consumers are more conscious than ever about the ecological footprint of their purchases, expecting brands to align with their values.

Is Sustainability the New Luxury?

The very essence of luxury—once defined by exclusivity, craftsmanship, and premium pricing—is now being redefined by sustainability and the circular economy. This shift marks a fundamental evolution in the industry, where prestige is no longer measured solely by rarity and refinement but also by ethical responsibility and environmental impact.

According to Deloitte’s 2023 CxO Sustainability Report, 73% of consumer industry executives have increased investments in sustainability over the last year, reflecting the growing urgency of these initiatives. This commitment includes using recycled and ethically sourced materials, implementing renewable energy in manufacturing, and minimising waste across the supply chain. Transparency has become critical, as consumers demand to know the origins of the products they buy.

Executives recognise that sustainability isn’t just a compliance requirement but a brand differentiator. Deloitte’s report found that 59% of CxOs in consumer industries believe their sustainability efforts have positively impacted their brand reputation, a notable increase from 50% the previous year.

Some brands are taking sustainability a step further by integrating circular economy principles into their business models. Lululemon, for instance, reinvests 100% of its resale profits—or 2% of its revenue, whichever is higher—into its sustainability initiatives. This self-sustaining model allows the brand to fund its environmental commitments while extending the lifespan of its products.

Luxury and sustainability are no longer at odds; instead, they are becoming deeply intertwined. As consumer expectations continue to shift, luxury brands must recognize that true exclusivity in the future will be defined not just by craftsmanship, but by conscious, responsible innovation.

Sustainable supply chain: From Field to Wardrobe

A retail product may carry a single brand’s logo, but behind that sleek packaging lies a labyrinth of subcontractors, suppliers, brokers, and logistics vendors working tirelessly to get it on the shelf.

Untangling which isn’t just a logistical challenge—it’s an environmental one.

Research shows that retail supply chains contribute to a staggering 25% of global greenhouse gas (GHG) emissions. If that number doesn’t make retailers sit up and rethink their operations, nothing will. The pressure is mounting to embed sustainability into supply chain strategies, focusing on traceability, reducing waste, and minimizing carbon footprints.

The Hidden Cost of Consumption

Consider these sobering statistics:

• The fashion industry alone is responsible for over 10% of annual global carbon emissions.
• With around 56 million tons of clothing being bought each year, the fashion industry is estimated to generate 92 million tons of textile waste annually. Moreover, the synthetic fibers which are used in 72% of all clothing take up to 200 years to decompose.
• Only 9% of plastic produced each year actually gets recycled. The rest? Landfills and oceans.
• A jaw-dropping 40% of all food produced in the U.S. is never eaten.
• More than 82.2 million tonnes of packaging waste is discarded yearly.
• It takes 998 gallons of water to make just one pair of jeans—a fashion statement with a hefty environmental price tag.

Overproduction has long haunted the retail industry. A more sustainable approach? Producing on demand.

‍Brands are leading the way with a made-to-order model, ensuring inventory is aligned with actual demand. It’s a win-win: less waste, more profit, and a solid excuse to tell customers, “Good things come to those who wait.

”Rethinking sourcing and production is another key step toward sustainability. By prioritizing local suppliers and manufacturers, retailers can slash transportation-related emissions, support local economies, and reduce reliance on global supply chains that can collapse at the first sign of disruption.

Take Burberry, for example. Their heritage trench coats are crafted at a carbon-neutral facility in the UK using certified, traceable cotton. Luxury, but make it conscious.

Even manufacturers are stepping up their sustainability game. Energy-efficient machinery, AI-driven inventory management, and waste reduction strategies are now essential tools in the modern supply chain. Some are even integrating bioplastics, circular production models, and renewable energy solutions to minimize environmental impact.

‍If supply chain sustainability were a race, some brands would be breaking records—others would still be stretching at the starting line. In 2022, the Carbon Disclosure Project (CDP) listed 272 companies, including L'Oréal and Unilever, on their A-List for environmental efforts.

But as e-commerce continues its meteoric rise, so does the need for sustainable logistics and fulfillment centers. Dark stores—brick-and-mortar retail spaces repurposed into fulfillment hubs. These reduce the carbon footprint of last-mile deliveries and eliminate the need for new, resource-intensive construction projects.

‍The future of retail isn’t just about selling more—it’s about selling smarter, greener, and with a conscience.

‍Pre-Owned & Pre-Loved Luxury

A key emerging trend in retail is the expansion into the second-hand market. Luxury brands are either launching their own resale platforms or collaborating with existing ones to capitalize on this growing sector. In addition, many are offering repair and restoration services to extend product lifespans, reinforcing sustainability while fostering brand loyalty.

‍Give a girl the right bags & shoes, even if they’re pre-loved, and she’ll take over the world!

‍Beyond resale, luxury brands are also embracing rental services, enabling customers to access high-end products at a fraction of the cost. This model appeals to consumers seeking premium experiences without the long-term commitment or environmental impact of ownership.

Looking ahead, future retail models—especially for major brands—will integrate mainline, outlet, and resale channels. With sustainability becoming a key consumer expectation, brands have a strong incentive to manage their own resale platforms, ensuring quality control and a seamless customer experience.

Built to Last - Greener Offline Stores

A report from Business for Social Responsibility has found that sustainable design in retail, otherwise referred to as “green retail spaces,” are becoming the new norm, and brands that have developed experiential spaces often have more success with green marketing strategies.

‍From energy-efficient lighting to recyclable displays, incorporating sustainable design elements requires careful planning and investment. However, this can be achieved through wise decision-making and commitment. When added up together, all these little things, such as electronic shelf labels, LED lights, green cleaning products, integrating biophilic design elements, exploring reusable structures and more, can create a big impact on the environment, while enhancing the store’s sensory experience and reinforcing the brand’s commitment to sustainability.

Globally, brands are achieving more sustainable stores that echo a careful balance of creativity, innovation, and strategic planning.

LA-based fashion brand Reformation sells clothes that are both covetable and eco-conscious + they’re making an impact with their sustainable stores which are Green Business certified, meaning they implement strategies to save energy, improve water efficiency and reduce CO2 emissions. This involves incorporating materials like LED fixtures, rammed earth and recycled fabric insulation in its buildings, and offsetting its construction footprint and electricity usage.

Another phenomenal example is luxury fashion brand Self-Portrait's store in London with mirrored surfaces and Cornish clay walls, designed by Founder and Creative Director, Han Chong in collaboration with New York-based architect, Andreas Kostopoulos.

Recently, Spanish design studio, Nagami Tropi completed a shop interior for sustainable clothing brand Ecoalf near Madrid, that’s 3D printed from recycled plastic.

‍In F&B, Starbucks has already rolled out over 6,000 greener stores worldwide as part of an ongoing effort to reduce 50% carbon emissions, water usage, and landfill waste by 2030.

While Nina+Co beautifully used salvaged materials and biotexties for Big Beauty’s first store in London, with an aim to reduce waste in the beauty industry, change consumer behavior as well as inspire them.

In India, Apple's store Mumbai is designed to be carbon neutral, generating its own solar energy and sourcing electricity from renewable sources. It features sustainable design elements, such as energy-efficient lighting and ventilation systems, and a rainwater harvesting system.

Fabindia also is using eco-friendly materials such as organic cotton and natural dyes, sourcing products from local artisans, and operating environmentally friendly stores with energy-efficient lighting and ventilation systems.

In the grocery space, bigbasket, one of the largest grocery store chains, has implemented sustainability practices such as using electric delivery vehicles and biodegradable packaging while sourcing products directly from farmers to reduce carbon emissions.

Just like second-hand is experiencing a renaissance, so too are rental business models. In fashion, services like Rent The Runway, an online rental for clothes and accessories that includes luxury items, are meeting consumer hunger for newness without causing the same damage as fast fashion – prioritizing experiences over ownership and making luxury more accessible to different kinds of consumers. Other businesses like IKEA are exploring rental models as part of their goal to improve circularity with their products and appeal to more environmentally conscious consumers.

‍And it’s not what’s inside the store…it’s also how products travel outside the realms of the physical stores.

‍While stepping away from the quick delivery race is challenging for retailers, progress toward sustainability is still possible. Amazon, known for its same-day Prime delivery, now transports most of its inventory without relying on air freight and has committed to making 50% of its deliveries "net zero carbon" by 2040.

Similarly, British luxury department store Harrods is cutting emissions by switching its delivery fleet from diesel-powered vehicles to hydrogenated vegetable oil (HVO).

‍Small steps, big changes? It’s all about choices.

‍Ins & Outs for 2025: Accountability & Greenwashing Respectively

For retailers, embedding ESG into operations isn’t just a feel-good initiative in 2025—it’s a business imperative.

But with greenwashing under constant scrutiny, sustainability claims that don’t hold up to reality can do more harm than good.

‍With 88% of Gen-Z shoppers now distrusting brands’ environmental, social, and governance (ESG) claims, according to McKinsey, it’s clear the approach to greenwashing has shifted. Many consumers would even boycott businesses that fail to act on climate change.

H&M, for instance, was sued in 2022 for leading customers to believe their ‘conscious’ line of clothing was more environmentally responsible. The lawsuit alleged that the brand’s claims violated consumer protection laws as most garments were still manufactured from polyester or recycled plastic, which is bad for the environment.

Amazon also came under fire in 2022 over allegations of ‘greenwashing on a grotesque scale’ for its Amazon Aware range. While the collection allegedly consisted of eco-friendly products, many were wrapped in single-use plastic and shipped to shoppers 5,000 miles away.

‍The risks of greenwashing go far beyond consumer distrust. In some cases, misleading sustainability claims can trigger legal consequences. The Federal Trade Commission (FTC) in the U.S. enforces "Green Guides" to prevent deceptive environmental marketing, and violations can result in hefty fines and lawsuits.

‍Beyond legal trouble, the rise of social media means that brands can be publicly exposed for greenwashing in real time. In today’s hyper-transparent world, where sustainability and reputation go hand in hand, the cost of misleading claims can be far greater than the price of doing sustainability right in the first place.

‍Decoding Retail: Your Insider Glossary

'Recommerce'
‍Also known as “reverse commerce” or “re-commerce,” this model involves buying and selling pre-owned, refurbished, or returned products through both online and offline channels.

As a key part of the circular economy, recommerce extends product lifecycles, minimizes waste, and promotes reuse.

Platforms like eBay and craigslist pioneered online secondhand shopping in 1995, paving the way for newer marketplaces like ThredUp, Poshmark, Vestiaire Collective, Luxepolis, Ziniosa, The Luxury Pop and The RealReal in fashion and Decluttr, Back Market in the electronics space, which emerged less than two decades later.

Thank you for your time! Reading is always a good idea.