Innovation in the UK Retail Sector - Nesta

Recommendation 3:
Promote innovation in sustainability.
Innovation in the UK Retail Sector
Desired outcomes: The reduction of risk for retailers innovating in sustainability through the application of
a meaningful sustainability framework, hard measures of performance against this
framework, and prioritisation of funding support and advice to the retail sector to
stimulate appropriate innovation.
Background: A small number of very large retailers, together with a number of smaller speciality
businesses with strong ethical values, have developed relatively clear strategies in
relation to sustainability which have resulted in innovative products, processes as well
as wider, more intangible innovation. However, the remainder of the sector struggles to
come to terms with the challenge largely because of the cacophony of conflicting
advice and guidance from a wide variety of sources.
Evidence: The lack of widespread retail support for the work of organisations as varied as the
Carbon Trust and the Resource Efficiency KTN, alongside disjointed, often populist
(and potentially ineffective) innovation in sustainability.
Analysis: Eight specific measures which might act as stimuli for innovation in sustainability have
been identified by the sector:
• Support mechanisms
3.1 VAT reductions to stimulate green product innovation
(work at the European level required to reduce VAT in relation to such
products as energy efficient light bulbs & DIY materials)
3.2 Business rate relief on energy efficient buildings
(There is disagreement on the extent to which rates relief might stimulate
innovation. This should be further investigated for retailers in the context of
the business requirement to display Energy Performance Certificates)
3.3 Encourage development of shared waste facilities by SMEs
(Most attention has focused on the largest retail firms. Innovative solutions are
required to ensure higher recycling rates amongst the UK’s 167,000 smaller
retail enterprises)
• Reduction of barriers
3.4 Faster and easier planning regimes for sustainable technologies relevant to
retailing
(for example, the need to distinguish between applications for microwind
projects and large scale wind turbine schemes)
3.5 Foster a standards-based framework to manage sustainability and reduce
uncertainty and risk
(for example, in relation to accounting standards)
3.6 Work towards identifying sustainability metrics and require retailers to publicly
report on their achievement of these
(for example within Social Responsibility paragraphs of annual reports)
• Foster skills
3.7 Build environmental awareness amongst retail staff
(through incentivising or providing appropriate training and development)
3.8 Low carbon technology skills to support growth in retail initiatives
(for example, increasing the number of trained technicians available to work
on low-carbon technology projects)
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