Food Grocery Retail Industry ESG Thematic Report,

Food Grocery Retail Industry ESG Thematic Report, 2023

Compliance, ESG Challenges & Framework, ESG Trends

  • Published Date: Oct, 2022
  • Report ID: Astra-100119
  • Format: Electronic (PDF)
  • Number of Pages: 68

Environmental, Social, and Governance (ESG) in Food Grocery Retail Industry

In recent years, ESG has become mainstream due to its importance within the investment community. It helps stakeholders understand how an organization manages risks and opportunities related to sustainability.

Several companies in food grocery retail have started their sustainability efforts with a range of initiatives spanning decarbonization, packaging, assortment, and social responsibility. There are five important ways grocery retailers can become more sustainable, outlined by the Food Industry Association (FMI), which emphasizes reducing food waste. These are through increasing surplus donations, developing composting strategies, standardizing date labels, creating a waste-prevention cultures, and reducing waste within organizations.

The ESG Reporting Standard addresses topics relevant to food grocery retail including risk management and governance, GHG emissions, diversity, equity, and inclusion (DEI), occupational health and safety, sustainable supply chains and sourcing, and food safety.

ESG Trends

There are numerous environmental issues associated with the food industry, including deforestation, land use change, water waste, and excess fertilizer runoff. In addition, agricultural, shipping, and food processing and storage all contribute to greenhouse gas emissions. During the surge of Covid-19, retailing businesses also moved to online transactions. These prompted retailers to integrate ESG (environmental, social, and governance) data to implement sustainable practices within their operations.

In retail, margins are low, daily challenges are urgent, and supply chains are complex. While sustainability and climate change are long-term challenges, retailers are focusing on near-term, urgent issues, leaving sustainability in the backseat. Even the most committed player in food grocery retail struggle to make a significant positive impact. However, many industry leaders in the market have announced plans to contribute to a more sustainable economy. One of them is introducing plant-based products, which are appearing in supermarket shelves every day, making affordable, healthy, and sustainable food available to everyone. This is a part of their commitment to support healthy eating.

A Hong Kong-based food retailer recently announced its 2030 Sustainability Vision, which focuses on reducing energy use, greenhouse gas emissions, and plastic usage. Community is the fourth field the retailer is working on. In addition to raising awareness and creating open collaboration, green classrooms will provide customers with sustainable product choices to facilitate open collaboration. It is widely believed that sustainability will be a competitive advantage in the future for grocery retailers around the world. According to a survey by Oliver Wyman 43% of the top 50 grocery retailers have established sustainability functions, and 14% have Chief Sustainability Officers. In food grocery retail, sustainability is a key priority for 82% of CEOs.

Food grocery retailers are adopting circular economy (resale), which is a great way to reduce environmental impact while capturing a financial benefit, ethical sourcing, managing the supply chain, transparency in labelling.

Growth Of The Food Grocery Retail Market

As of 2022, the global food grocery retail market is valued at USD 11,324.4 billion and is expected to grow at a compound annual growth rate (CAGR) of 3.0%. In addition to increased grocery expenditures induced by COVID-19 lockdown, higher online grocery sales volumes, and consumer polarization, the growth is primarily attributed to these factors. As a result of the pandemic, consumers became polarized where some were ready to pay for premium-priced products. The food & grocery retail sector has been altered by the COVID-19 pandemic.

In alignment to ESG factors, a grocery shopper's top concern are environmental and social issues. Their top environmental goals are reducing greenhouse gas emissions and conserving raw materials. In retail, social risk is mainly influenced by the perception, preferences, and demographics of customers. Price transparency and fairness for suppliers and customers can lead to immediate adverse political reactions.

Key Companies in this theme

    • Walmart

    • Costco Wholesale Corp

    • 7-ELEVEN, Inc

    • Inc

    • The Kroger Co.

Scope of the Food Grocery Retail Industry ESG Thematic Report: 

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of Food Grocery Retail Industry ESG Thematic Report:

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the Food Grocery RetailSector, globally

    • Key insights into Infrastructure developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the Food Grocery Retaili ndustry

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment

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