The State of Sustainability in Retail Australia

Ever since COVID hit in 2020, retailers have had to rejig the way they operate to accommodate changing consumer tastes and expectations when it comes to sustainability. There is a lot more demand for transparency, accountability, and corporate responsibility. According to Gumtree’s Circular Economy report 2021, 86% of consumers said sustainable practices inform their purchasing decisions when buying brand new. This is indicative of Gen Z and Millennials' purchasing behaviours, basing their decisions on the sustainability initiatives of a brand, from sourcing materials, to fair trade, and sustainable packaging. 
 

It’s never been more important to focus on eco-ethical practices in today’s climate to win consumers' loyalty and for our planet's wellbeing. This is also evident in the Sustainability Spotlight Report highlighting that 55% of Aussies say that they would return to a retailer that is sustainable or partakes in ethical practices. This was also substantiated by this year’s election results, with climate change being top of mind in the polls. 

Sustainability Sells

It’s no surprise that sustainability can be a huge selling point for a lot of retailers as indicated by a 71% increase in the search volume of sustainable goods throughout the COVID-19 pandemic. Consumers are willing to pay more if a product brands itself as ethically sourced and sustainable. As a result, we have seen Australian retailers such as Kmart Group, Ikea Australia and Officeworks take the pledge to reach net zero emissions by 2050. 

One concept we should all be conscious of is greenwashing,’ where a retailer can market themselves as environmentally conscious without having any real sustainability credentials. As sustainability is becoming more important to align with current consumer expectations, there is a fine line between legitimately achieving and then promoting sustainability and ethical achievements, and over exaggerating, or even misleading consumers. We have seen major retailers facing scrutiny for greenwashing, more notably ASOS and Boohoo, as they were labelling ranges of clothing as ethically sourced and sustainable without having proof that it was having a positive impact on the environment. Retailers must ensure every statement is accurate and can be verified with evidence. 

Who is doing sustainability well in Australia? 

There are incredible Aussie brands that have been built on the principle of sustainability, a great example is Zeroe, Australia's ethical, sustainable, eco-friendly footwear brand by Betts. They have started using innovative materials to create different lines of sustainable shoes. One of their lines is made with Bloom™, a protein-rich algae biomass to produce a sustainable compound used to make the shoe soles. It helps clean the air and reduce conventional plastics in shoes. All their packaging is made from recycled materials and is uncoated. Another great brand is Inika Organics, a natural and organic makeup, and skincare company. Their products are made with 100% natural ingredients which are almost completely free of synthetics. Everything they make is vegan and cruelty-free, and they have a handful of certifications such as PETA Animal Test-free, Plastic Neutral, ACO Cosmos Organic, and ACO Cosmos Natural. Who is Elijah is an independently owned fragrance house, on a mission to reduce its carbon footprint and source locally where possible. They are certified cruelty-free and vegan and have various initiatives to be more sustainable such as using FCS-certified and recycled cardboard in their packaging. removing magnetic lids to ensure their lids can be recycled and operate with small batch productions, avoiding mass production and the waste that comes along with it. 

Consumer behaviour indicates that sustainability has never been more important than right now. Retailers should take a step back and reevaluate their entire business operations to understand where they can be more socially responsible. It’s time to empower consumers and retailers to make a positive impact by implementing sustainable practices, end-to-end. Many retailers have made ambitious sustainability targets and it will be interesting to see how this will roll out in the coming years.