Getting the Right Change – retail strategy for Scotland

Chapter 5 - A Just Transition

5.1 Our Aim

To ensure a Just Transition for the retail sector, one that protects jobs and benefits the environment, our people and our economy whilst addressing the challenges around sustainable retail practices that contribute to reaching net zero emissions by 2045.

Just Transition is the route for us to achieve a net zero and climate-resilient economy in a way that delivers fairness and tackles inequality and injustice. Both the outcome – a fairer, greener future for all – and the process must be undertaken in partnership with those impacted by the transition to net zero.

5.2 Opportunity for Change

Reducing Scotland’s carbon footprint is vital to achieving our climate change targets and securing a Just Transition to a net zero economy. It is also necessary for Scotland’s material footprint to be reduced. At present, Scotland’s annual raw materials consumption is 18.4 tonnes per person, 38% higher than the global average of 3.3 tonnes per person and more than twice the 8 tonnes per person per year many experts suggest is sustainable. Adopting more circular practices will drive down the consumption of new materials in Scotland.

Leadership is required across all of Scotland to ensure we can achieve our ambitious targets to reach net zero by 2045. Retailers have an essential role to play: building secure local supply chains, adopting circular practices, improving sustainable operations and considering how customers travel to stores, all offer the opportunity to dramatically reduce our carbon footprint and deliver significant local economic surplus to our communities. Altering the range of retail products and services on offer can also help the sector address some of the wider challenges it faces. For example, increasing repair and reuse options can attract people into physical stores and develop higher-skilled jobs within the sector.

A circular economy could reduce annual global greenhouse gas emissions from key industry materials by 40% or 3.7 billion tonnes in 2050. The key approaches include: designing out waste, reusing products and components, and recirculating materials. The global economy is presently only 8.6% circular so retail and other business sectors can and should play a key role in developing and supporting new circular business models and products that can support the delivery of international climate agreements, including the Glasgow Climate Pact agreed at COP26.

Many retailers are already working on decarbonisation of their supply chains, setting their own targets of net zero emissions and encouraging consumers to lead lower carbon lifestyles. This strategy sets out how government can work collectively through a Just Transition plan to achieve our shared net zero goals and ensure the future success of the retail sector in Scotland.

Locavore – Building a food system that is better for the local economy, the environment and its surrounding communities

Established in 2011, Locavore has set out to build a better, more sustainable alternative to the current food system – one that works in favour of people and communities. The company grows and sells organic produce, using minimum packaging and paying all employees a fair wage. It also works with businesses that share its values.

Locavore has reduced its retail packaging and food waste through innovative means that address the global plastic pandemic and ensure that as little waste is generated as possible. The Locavore veg box packing and delivery system is also based around waste avoidance – admin systems avoid ordering produce the business won’t be able to use and excess produce is used elsewhere in Locavore or sent to charity partners. The company is continually looking at ways to reduce avoidable waste coming in to the shop and, where it does, to find ways it can be reused or recycled. Landfill is always the last option.

The model Locavore has developed shows what is possible when building social and environmental considerations into the design of a business from the beginning. Locavore has helped to reduce CO₂e embodied in packaging and food, or is released when food breaks down in landfill. It has also made itself more price competitive and efficient by taking out the cost of packaging, not paying for waste disposal, and making what it has useful and valuable. Locavore has recently launched its Bigger Plan https://glasgowlocavore.org/bigger-plan/, setting the course for the next two years. Plans include building a network of 10 Locavore shops; increasing capacity to deliver 22,500 veg boxes per month; and building the necessary infrastructure to enable it to work in an efficient and sustainable way whilst becoming a carbon negative business.

Reducing our reliance on private car use and promoting sustainable travel can significantly improve the places we live in and our quality of life while meeting the significant demands of reaching a net zero economy by 2045. The benefits for communities which are less dominated by cars are well known. Reducing car use can have economic benefits at a local level, with research showing that investment in public realm improvements, including those to encourage walking, wheeling and cycling, can deliver significant benefits to businesses, and strong evidence that people walking spend more than people arriving by car.^[14]

5.3 What We’re Doing

A Just Transition will have to encompass many different actions across all of retail, in all parts of Scotland, to meet our goal of a net zero sector. We know that action to introduce more circular ways of retailing have already begun to emerge across the sector. Alongside the traditional work of charity shops, large retailers such as IKEA have introduced schemes to return used products that can be re-sold in-store. This is an excellent example of a significant platform being used to introduce circular working to the consumer while still providing the retailer with revenue. Adopting this kind of model across large retailers will be crucial to achieving the net zero ambitions of Scotland’s economy.

The Climate Change Plan update included a commitment to reduce car kilometres travelled by 20% by 2030. Our National Transport Strategy (NTS2) already outlines the need to reduce travel by unsustainable modes. Transport accounts for a quarter of Scotland’s greenhouse gas emissions, with cars making up almost 40% of transport emissions. The predominance of private car use – particularly single-occupancy journeys – cannot therefore be overlooked, which is why this policy outcome is pivotal. More broadly NTS2 is also underpinned by a priority on reducing inequalities through providing fair, easy and affordable access to the services we need.

Retailers can play their part through helping employees and customers to live low carbon lifestyles. With such a large workforce, the retail sector can make a huge impact through operational practices and employee engagement as well as through encouraging a shift in customer behaviour. This strategy sets us on the path to engage critically on the function and contributions of retail in our communities, building on the work already begun to build a Scotland that is fairer and greener for all.

We have:

• increased the charge for single-use carrier bags to 10p
• announced our intention to introduce market restrictions on certain single-use plastics. This is an important step forward in tackling our throwaway culture and the shift towards a circular economy in Scotland
• created legislation for the UK’s first Deposit Return Scheme to be introduced in Scotland. A deposit of 20p will be charged on all drink containers between 50ml and 3l that are made of glass, metal or PET plastic. It will be implemented in full from 16 August 2023
• commenced work on a new approach to packaging, extended producer responsibility to channel funding from producers to local authorities for effective and efficient recycling services
• started to review producer responsibility systems and consider what other products could have producer responsibility applied
• confirmed plans to launch a public consultation in May 2022 on a Circular Economy Bill as well as new measures to achieve Scotland’s 2025 waste and recycling targets - which could include a ban on the destruction of unsold, durable goods
• announced plans for a £2 million Textile Innovation Fund, to support businesses to address issues associated with textile waste and throwaway culture
• strengthened support, in the draft NPF4, for development in town and city centres and neighbourhoods that will help us transition away from car-dependent developments and towards those that enable walking, cycling, wheeling and public transport accessibility

David Lonsdale, Director of the Scottish Retail Consortium – Helping the retail industry to become net zero by 2040

“Helping customers to live lower carbon lifestyles and make more environmentally conscious choices when shopping is essential if the retail industry is to reach its goal of being net zero by 2040. Retailers are already making strides towards the net zero target, from offering food refill zones and reusable coffee cups, to fashion items made from recycled or more sustainably sourced materials, to installing recycling collection facilities in stores for clothing at the end of its life. The speed of change in retail remains breakneck, but it is essential that retailers continue to respond to customer demands for more ethical and sustainable goods.

“Eighteen months ago, retailers came together under the banner of the retail consortium’s ‘Climate Action Roadmap’ with the aim of making the industry and its supply chains carbon neutral by 2040.

“Today, 80 leading retail brands – including schuh, Scotmid and TK Maxx – have committed collectively to putting climate action at the heart of their decision-making and have started out on the journey to achieving it. As the industry’s trade body, the Scottish Retail Consortium has spent the past year ensuring these firms have the tools they need to do this.

“A taskforce was set up to drive progress and benchmarking performance against the highest standards; detailed guidance was published for retailers on achieving net-zero vehicle logistics and on helping customers to live low-carbon lifestyles; and workshops were held to offer practical assistance on sustainable sourcing, green data and technology, and decarbonising store estates.

“Retail is taking its responsibilities towards net zero seriously. Even before the industry roadmap, it was active in reducing the environmental impact of its own operations and supporting improvements in the supply chain and with customers. Examples include eliminating microplastics, cutting water usage, removing packaging, refitting stores to be more energy efficient, and working to implement a deposit return system for drinks containers. In 2021, it was reported that retailers have already cut greenhouse gas emissions by 49% since 2005. Retailers see themselves as part of the solution and are determined to bring about the zero-carbon future we all need.”

5.4 What We Will Do

Through the Just Transition plan for retail, addressing the challenges around sustainable retail practices will be a complex task, and will have to have an all-encompassing view on the issues involved. It will be developed through the Industry Leadership Group, bringing the expertise of those already doing the relevant work in the sector to the table.

To ensure future success, retail businesses need to commit to:

• discouraging car use as much as possible, in support of our commitment to a 20% reduction in car kms travelled by 2030
• using available resources so as to reduce the environmental impact of stores, operations and products
• considering incentives for customers to return used products for repair, refurbishment or resale
• considering leasing products such as white goods, televisions and tools
• looking at options for reducing packaging, offering refills and providing packaging recycling facilities
• reducing waste within operations and throughout the supply chain
• implementing actions of the forthcoming Deposit Return Scheme and Restricting Food Promotions Bills

We will:

• through the ILG, develop a Just Transition Plan for Retail to ensure a transition to an environmentally and socially sustainable sector in the economy of the future. This will include:
  • facilitating workshops and roundtable discussions to bring industry representatives together to develop methods of working more sustainably and meet net zero targets
  • encouraging retailers to sign up to the UN’s Race to Zero commitments – including minimising waste in packaging, reducing carbon throughout supply chains and removing energy inefficiencies wherever possible
  • promoting actions that retailers and their supply chain operators can take to reduce carbon consumption and environmental impacts
  • working with retail businesses on projects to encourage repair, resale or refilling of goods in stores and throughout operations
  • working with retailers to encourage customers and staff to use accessible and inclusive active travel and public transport for journeys to retail which will support our commitment to a 20% reduction in car kms travelled by 2030
  • supporting the retail sector as it shifts its vehicle fleet to zero emission vehicles
  • taking into account relevant recommendations and commitments arising from Scotland’s Climate Assembly.