British retailers are taking drastic measures against suppliers who don’t show sustainable action according to a new report.
In the last year, retailers across the country have cancelled contracts worth £7.1 billion with their suppliers if sustainable and ethic standards aren’t met.
That’s the key finding from a Barclays Corporate Banking study, which has also found 79% of retailers think long-term improvement to sustainable and ethical credentials is more important than overcoming short-term supply chain disruption.
Use of sustainable materials, unfair working hours and lack of monitoring on sustainable progress were cited as the three main factors for supply deals getting chopped.
More than 300 retail decision makers were involved in the study, with more than half of those stating sustainability is more important now than it was two years ago.
On average, it found that retail companies with more than 10 staff are investing more than £500,000 each year on improving their carbon footprints.
In the last 12 months, retailers spent £179 million on joining trade bodies that monitor a supplier’s sustainability levels.
Karen Johnson, Barclays Corporate Banking, said: “We are seeing a marked acceleration and shift among retailers towards prioritising sustainable and ethical standards in every part of their business operations. That is now starting to take its toll on retail suppliers with billions of pounds worth of contracts being cancelled every year.
“It’s being driven by increasing consumer demand and will rise even further as Gen Z enter the workplace and begin to earn their own money. Retailers must continue to monitor and improve their ethical and sustainability standards if they are to appeal strongly to younger demographics.”