Upstream Activities

Retailers can undertake possible environmentally focused change initiatives by examining their upstream activities in the product chain relating to what they choose to sell and how it is produced.

The overall aim of this group of activities is to reduce environmental impacts from the manufacturing of the products that the retailer offers. This can include requiring or assisting suppliers to reduce the environmental impacts of their activities and products; sourcing products with lower environmental impacts, both for sale and the retailer’s own use, or editing out products with high environmental impacts from their range.

Choice Editing

'Choice editing for sustainability' describes how retailers eliminate the option of buying products with a poor environmental or social record and is an increasingly important strategy among large retailers, although typically only on a small number of products.

Local and Seasonal Sourcing Initiatives (PDF, 88KB)

Retailers can actively edit choices by not stocking products that they consider to have an unacceptable environmental impact. This is also referred to as ‘editing out’ unsustainable options. Governments can edit citizens’ choices through laws, taxes, subsidies, voluntary bans, etc.

Read also case on Choice Editing: Siwa Outlets, Finland

Whilst retailers effectively edit consumer choice with every decision they make about what to sell, in the sustainability sense, choice editing relates to empowering the consumer with greater sustainable options in all price ranges. The goal is to shift consumer choice towards sustainable products, for example, reusable cloth bags instead of disposable plastic bags.

Read also case on Choice Editing: Dansk Supermarked, Denmark

Choice editing is an important mechanism for taking environmentally detrimental products off the market and for achieving overall environmental improvements. Fridges provide a good example of the effectiveness of choice editing, where it is now difficult to buy a unit that has a poor energy rating because retailers have chosen not to stock them.

Greening Suppliers

Greening suppliers through sustainable supply chain management refers to a company organising its suppliers with the aim of improving their environmental performance, leading to an enhanced environmental profile for the company’s own products and services.

Download full background paper on Greening Suppliers (PDF, 84KB)

Greening suppliers could involve establishing particular requirements, for example through the application of Codes of Conduct. Many larger Western European retailers, driven in part by stakeholder pressure have already developed a number of ways of greening their supply chains.

Read also case on Greening Suppliers: S-Group, Inex Partners, Finland

The three main approaches include: 1. Establishing requirements for suppliers to assess and improve their own environmental performance. 2. Assisting suppliers in 'greening' their operations. 3. Participating in collective action with suppliers, for example through farm assurances and pesticide reduction networks.

Read also case on Greening Suppliers: Kesko, K Group, Finland

Establishing clear green procurement guidelines in specifications for different types of products and production processes helps to green the supply chain upstream. Requiring suppliers to also green their supply chains or to have a Sustainability Code (or similar) also works towards greening upstream actors. Regularly auditing the suppliers’ environmental performance ensures that high environmental and sustainability standards continue to be met.

To further green their supply chains Nordic retailers can set targets for environmental improvements, e.g. reduce greenhouse gas emissions and waste or eliminate environmentally hazardous chemicals.

One barrier to greening supply chains are the extra costs that may arise in the short run from the need to develop additional systems to collect information about stakeholder expectations, to process the information and to develop and implement internal and external greening strategies and procedures.

Eco-Design of Own Brand Products

The eco-design of own brand products relates to working with suppliers on improving or developing new products and services that have lower environmental impacts throughout their lifecycle but provide the same service and level of quality as traditional products.

Download full background paper on Eco-Design of Own Brand Products (PDF, 76KB)

It is estimated that over 80 per cent of all product-related environmental impacts are determined during the design phase of a product. Against this background, eco-design aims to improve the environmental performance of products throughout their life-cycle via the systematic integration of environmental aspects at a very early stage in the product's design.

The eco-design of products may significantly reduce the environmental impacts of products by, for example, reducing the resources and energy used, reducing the content of harmful chemicals, through modular design and designs for recycling, etc.

Read also case on Eco-Design of Own Brand Products: Coop, Denmark

The eco-design of packaging can lead to reduced resource use, transport demand and reduced waste generation. Many large Western European retailers work on eco-design of their own-brand product’s packaging or on developing packaging guidelines for suppliers. A limited number of retailers have taken a further step and developed refill systems to reduce the packaging of individual products.

Retailers can also use what is called a "black-list" to forbid the use of certain substances in their products. This type of action could be called 'selective eco-design' because only one environmental issue is taken under consideration (most often the toxicity risk due to the use of hazardous substances).

Local and Seasonal Sourcing Initiatives

For certain product groups, such as fruits and vegetables, which typically have relatively low environmental impacts associated with outdoor production, transport plays a significant role in the overall environmental impact. Therefore sourcing food products locally can reduce transportation.

Download full background paper on Local and Seasonal Sourcing Initiatives (PDF, 84KB)

Food transport is a complex and important issue, with the overall transport of food increasing, leading to growing emissions. In response to increasing consumer demand for fresh, locally produced food and drink, many retailers source regional, local or seasonal products, where possible.

Read also case on Local and Seasonal Sourcing Initiatives: ICA, Sweden

The direct environmental, economic and social costs of food transport in the EU are estimated to be over £9 billion per year. However, transport represents only 11 per cent of life-cycle greenhouse gas emissions for food. In particular, the final delivery from producer to retailer represents only a small share. International goods and ingredients may sometimes be produced under less than optimal environmental standards, and few globally integrated retailers are in a position to maintain a close control of local supply chains.

Many large retailers source regional, local or seasonal products where possible, with a few of them also labelling the relevant products as locally or seasonally produced. Advantages of local sourcing initiatives are reduced environmental transportation impacts and the potential for job creation. Disadvantages are that in some cases it may be more sustainable to source food internationally and that for certain meat product groups, transport is not an environmental priority area.