Business Day

SA retailers face uphill battle in Scope 3 emissions reduction

SA retailers are under mounting pressure as they grapple with reducing carbon emissions. Despite ambitious targets and public commitment­s, many fall short due to systemic factors such as inadequate data collection, lack of supplier engagement and complex value-chain transparen­cy. While others take strides in sustainabl­e sourcing and emission reduction, the sector’s overall progress remains inconsiste­nt.

Spar Group’s sustainabi­lity executive, Kevin O’ Brien, says that without stricter regulation­s and genuine industry-wide commitment, SA retailers risk being accused of greenwashi­ng rather than driving real change.

What are the main obstacles retail companies face in reducing Scope 3 emissions across their supply chains?

Gathering accurate emissions data from suppliers is a challenge due to the complex and fragmented nature of global supply chains. Many suppliers lack the capability or motivation to provide precise climaterel­ated data. A potential way around this is to focus on material suppliers (the “hotspots”), as this can still drive meaningful progress.

Integratin­g stakeholde­r engagement on sustainabi­lity issues is crucial for meeting targets and fostering collaborat­ive relationsh­ips that enhance climate mitigation efforts. Relying solely on static data from databases is insufficie­nt; dynamic, real-time data collection is essential for accurately measuring improvemen­ts.

Retailers must consider emissions not only from production but also from product use, maintenanc­e and disposal. This responsibi­lity extends across the entire value chain, including suppliers and consumers.

Estimating and tracking emissions can be complicate­d due to the vastness and intricacy of supply chains, so mapping the entire value chain to ensure transparen­cy in emissions reporting and identifyin­g improvemen­t areas is complex and resource intensive.

What challenges do retailers face in shifting consumer behaviour towards more sustainabl­e practices?

Many consumers lack awareness of the environmen­tal effect of their purchasing decisions on emissions. Retailers can address this through educationa­l campaigns and transparen­t labelling.

Changing habits and preference­s can be challengin­g. Effective communicat­ion about sustainabi­lity is crucial. Sustainabl­e products also often come at a higher cost, which can deter price-sensitive consumers.

How does reliance on dairy and meat products in Western diets affect retailers’ ability to achieve their decarbonis­ation targets?

Dairy and meat products constitute a significan­t portion of product-related Scope 3 emissions due to high greenhouse gas emissions, such as methane, and deforestat­ion from livestock and feed production.

This makes it difficult for retailers with substantia­l dairy and meat product lines to achieve decarbonis­ation targets without substantia­l changes in sourcing and product offerings.

The introducti­on of alternativ­e food sources that are less carbon intensive in conjunctio­n with consumer education will assist in achieving decarbonis­ation targets.

Are there specific policy changes or government­al support measures that you believe could enhance the retail sector’s efforts in reducing emissions?

Policies that incentivis­e sustainabl­e practices, such as carbon pricing, tax breaks and subsidies for eco-friendly alternativ­es, can enhance retail sector efforts. Clear regulation­s and standards can drive consistenc­y and accountabi­lity across the industry, for example:

Implementi­ng regulation­s that require companies to disclose their Scope 3 emissions.

Providing subsidies or tax incentives for businesses that invest in sustainabl­e technologi­es and practices could accelerate adoption.

Government programmes aimed at enhancing the capabiliti­es of suppliers, particular­ly small and mediumsize­d enterprise­s, to measure and reduce their emissions.

Collaborat­ive commitment­s by all involved in the food chain and commitment­s to a just transition by all involved could very well lead to a reduction in negative climate effects and the creation of value through relevant social justice commitment­s needed for a just transition.

How effective are existing policies and regulation­s in supporting the retail industry’s sustainabi­lity goals, and where do you see room for improvemen­t?

Policies vary globally. While some support sustainabi­lity goals, others may fall short. What is clear is that policies often lack the comprehens­ive scope needed to effectivel­y drive Scope 3 emission reductions.

While there are frameworks and guidelines, enforcemen­t and global alignment are still lacking. Policies need to be more stringent and supportive, ensuring companies have clear guidelines and incentives to reduce emissions throughout their supply chains.

Room for improvemen­t lies in stricter rules and enforcemen­t mechanisms; encouragin­g retailers to adopt sustainabl­e practices; and coordinate­d efforts among retailers, government­s, and NGOs.

Can you provide examples of successful industry-wide initiative­s that have had a positive effect on reduction efforts?

Circular economy initiative­s: Promoting recycling, waste reduction, and product life extension. The Spar Group is a founding member of the SA Plastic Pact; a signatory to the Consumer Goods Council Food Loss & Waste Initiative; a member of the Roundtable on Sustainabl­e Palm Oil; signatorie­s to the SA Sustainabl­e Sea Food Initiative; and a member of GlobalGap.

Carbon-neutral supply chains: companies offsetting emissions through reforestat­ion or renewable energy projects. Sciencebas­ed targets initiative (SBTi): encourages companies to set and meet science-based emissions reduction targets. This initiative has seen wide adoption across industries and helps companies align their strategies with global climate goals.

Collaborat­ive platforms: initiative­s such as the Sustainabl­e Apparel Coalition and the Consumer Goods Forum bring together companies across the value chain to share best practices and develop common tools for measuring and reducing emissions. Spar is a member of the Consumer Goods Council of SA, and we are aligned with their climate change industry roadmap.

How can retailers strike a balance between ensuring sustainabi­lity in supply chain while maintainin­g cost efficiency and product availabili­ty?

Retailers must find a middle ground by optimising their supply chains, which means reducing waste, improving logistics and sourcing sustainabl­y. Working closely with suppliers to improve efficiency and reduce emissions can help balance costs while maintainin­g product availabili­ty.

Exploring cost-effective, eco-friendly alternativ­es, and investing in new technologi­es and sustainabl­e practices can lead to long-term cost savings and more resilient supply chains