Retailers who commit to net zero commitments are becoming increasingly attractive to consumers and investors.
Sustainable companies also find it easier to attract and retain talent.
So it’s no surprise that more and more retailers are taking a stance on sustainability.
In a 2020 study by KPMG, the number of retailers in the G250 (the top 250 Fortune Global 500 companies) reporting sustainability reached 100%, retailers in the N100 (100 largest companies in 41 countries studied) following in their footsteps. at 67%.
But climate change comes at a cost, and many retailers are unsure where and how to prioritize spending on sustainability initiatives.
With millions currently being allocated to sustainability efforts across the industry, can returns pave the way for more than just green investments and climate-positive progress or are retailers now facing to a new cost center in the foreseeable future?
Where Energy Management Comes In
While sustainable strategies encompass everything from recyclable packaging to eco-friendly logistics, tackling rising energy costs is the near-term goal for most retailers.
The average commercial electricity price (excluding CCL non-renewable levy) increased by 29% to 18.14p per kWh between Q1 2021 and Q1 2022.
This means that a single large store in four supermarkets incurs around £200,000 in energy bills a year.
And while refrigeration accounts for 40-50% of energy consumption in food retail, heating, ventilation and air conditioning are consistently among the top three most energy-intensive retail assets in grocery stores. household, fashion and other items.
“While sustainable strategies encompass everything from recyclable packaging to eco-friendly logistics, tackling rising energy costs is the near-term goal for most retailers”
With energy costs showing no signs of slowing and store emissions from asset electricity consumption cited as a key part of the Net Zero Scope 2 criteria, retailers investing in energy management technology energy to effectively control their consumption can take advantage of the direct correlation between reduced energy consumption and reduced carbon emissions.
Achieve valuable sustainability achievements and savings that have a positive impact on the environment and the bottom line still marginalized in an ongoing energy crisis.
DSR can support retail green agenda
The technology also helps take advantage of additional energy saving opportunities, including Demand Side Response (DSR), a balancing program that allows the national grid to successfully manage supply and demand to avoid breakdowns and other problems.
In the short term, participation in DSR reduces demand charges for retailers, a main component of the rates charged to customers, and decreases exposure to market prices, especially during peak periods.
It can help retailers use electricity more efficiently by optimizing usage, generation and storage.
To date, DSR programs have been proven to create a flexible system that can improve operational efficiency to reduce baseline consumption by up to 28%.
In the long term, it reduces total energy production and associated air emissions, enabling a sector responsible for over 25% of global emissions to begin reducing their contribution.
The role of intelligent automation
Whether retailers are focusing on ROI behind a net zero strategy, minimizing their carbon footprint to meet climate goals or both, smart automation is essential.
Current breakthroughs in IoT software and hardware solutions are helping retailers optimize energy efficiency and participate in DSR programs by automating reactive changes to connected assets in real time.
With technology reducing the need for human intervention, companies can overcome a key barrier that KPMG cited as a factor preventing sustainability change for 36% of retailers and 60% of grocers: time to do what is needed.
Turn sustainable choices into short and long term savings
By harnessing the latest technologies, retailers can realize immediate savings by reducing their energy consumption.
Less energy means less carbon emissions, making carbon neutral goals more achievable, return on investment more accessible, and investors, staff and customers happier.
Ian Lowry is Chief Operating Officer at LoweConex
With more than 10 years of strategic experience at the forefront of asset management systems development and global operations for retail equipment rental leader Lowe Corporation, Lowry has been a driving force for innovation . Now leading award-winning IoT software innovator LoweConex, there’s no more knowledgeable source for finding commercially viable climate technology solutions in an ever-changing environmental crisis.