Brief Overview of SCP Policy Instruments Affecting Retailers

Various kinds of measures may be taken by governments to promote SCP.

Thematic Strategies, Programmes and Action Plans

These – also referred to as planning instruments – include strategic policy documents aimed at providing the overall framework for policy action to promote sustainable consumption and production.

Such policies often put forward a vision, strategic objectives, specific targets, concrete action as well as indicators for measuring progress. Examples include national sustainable consumption and production action plans and green public procurement strategies. The key relevance of such strategic policy documents for retailers could be launch of new relevant policy instruments or targets, which may create new markets for products and thus provide an important basis for strategic planning.

Regulatory Instruments and Standards

These include instruments such as product and substance bans, emission limits, production process standards, minimum product performance standards, mandatory environmental reporting for companies, mandatory green public procurement standards and building codes.

This type of instruments aims to determine which products, services, substances and production methods should be allowed and further establish specific requirements for actors. The application of SCP related regulation may be of high importance for retailers since they can determine requirements for location and operation of retail chains and could potentially destroy or create markets for products (e.g. bans of certain products will close markets but will often also create new markets).

Economic Instruments

These include instruments such as fees and charges, taxes and subsidies, cap and trade schemes, feed-in tariffs, tradable permits, deposit-refund systems, etc.
Economic instruments related to SCP can serve different aims including internalising external costs, reaching policy targets for pollution reductions, or promoting specific technologies and can significantly influence consumption and production, e.g. by increasing or reducing supply and/or demand for specific products.
Examples include energy taxes, water taxes, differentiated VAT and subsidies for development or feed-in tariffs for renewable energy installations. The use of economic instruments can greatly influence the market conditions for businesses, including retailers, by increasing or reducing supply and/or demand for specific products and services.

Information-Based Instruments

These include instruments such as labelling, consumer guidelines, consumer campaigns, websites and portals, education on SCP and training seminars for authorities and/or the private sector all aimed at raising awareness about SCP and enabling and encouraging consumers, producers and other actors to make sustainable decisions.
The impact of information-based instruments on retailers may be less direct. Yet, such instruments can be a key driver in expanding the markets for green products (e.g. organic products or eco-labelled products).

Voluntary Agreements

These are often developed through partnerships between government and business and are aimed at achieving environmental benefits in an efficient manner by involving business directly.

This category also includes stakeholder engagement in the broader sense. Examples include voluntary reporting initiatives, setting of voluntary targets for product improvements and emissions reductions, voluntary certification schemes, etc. Voluntary agreements can influence retailers either directly if they become involved in such initiatives or indirectly if their suppliers engage in such agreements.