Big brand retailers dominated the podium at the Sustainability Leaders Summit held in Melbourne this month. Australia Post, eBay, The Iconic, Mecca, Optus, Officeworks, Telstra, and others proudly showcased their comprehensive approaches to embedding sustainability in their businesses through science, strategy, and storytelling.

As a discipline, sustainability is entering its coming-of-age or “bar mitzvah,” as one delegate put it. At what was perhaps Australia’s largest sustainability conference to date, the 500 registered attendees were united by the opportunity to learn from – and be inspired by – their peers in what is a comparatively new, rapidly evolving, and multi-faceted discipline.

Delegates were also motivated by the fact that, according to EY delegate Adam Carrell, “in the history of the planet, there has never been one truly sustainable company”. Let alone a retailer.

The overarching message heard by delegates was the importance of collaboration. The size and scale of the transformation needed is too significant for any organisation to do alone. There is incredible value in coming together to discuss how to address common challenges, pool resources, share learnings and accelerate collective action.

This underscores the value of these events and networks such as the UN Global Compact Network Australia (UNGCNA) which is the Australian arm of the world’s largest corporate sustainability initiative. As a newly appointed board member to the UNGCNA, I believe that there has never been a more important moment for businesses to be part of a community designed to empower them to act responsibly, set a positive example and create a sustainable future.

So, what is holding more retailers back?

Challenge 1: Where to begin?

Sustainability isn’t a matter of one size fits all – or even one industry fits all. It’s a matter of knowing your customer, knowing your suppliers (and their suppliers), and knowing your business, its people, and its appetite for change.

This desire to advance responsible business practices and the private sector’s contribution to sustainable development has been the sole purpose of the UN Global Compact since it was established in 2000. It guides over 17,000 companies across 160 countries to do business responsibly by aligning their strategies and operations with Ten Principles on human rights, labour, environment, and anti-corruption.

Adopting the UN Global Compact’s Ten Principles, while regularly assessing your stakeholders’ views of your business, and simultaneously understanding its impact on workers, customers, and the community, its governance practices, and its environmental performance and priorities can help focus your sustainability efforts. Organisations should consider stakeholders to include customers, team members, suppliers, peers, and even competitors.

Challenge 2: What to commit to?

Enthusiasm to set ambitious, impactful goals can sometimes overlook the science and the reality that may underpin their achievement, particularly in the Australian context.   

Two examples spring to mind. First, the rapid domestic growth in eCommerce and the unexpected collapse of the REDcycle soft plastic recycling scheme have seen packaging pique consumer consciousness as never before. But what is the best packaging type for eCommerce?

Packaging options need to be validated through a Life Cycle Assessment (LCA), ensuring a scientific approach to measure holistic impacts on the environment. Independent LCAs commissioned separately by Australia Post and NZ Post have drawn the same conclusions: packaging made from  80% recycled plastic content has a lower carbon footprint than cardboard or compostable packaging and is the best option for the environment.

Secondly, business commitments to achieving net zero by a particular date must start with a clear and credible baseline of your business’s emissions – including its Scope 3 or ‘supply chain’ emissions – and the strategy be informed by what’s technologically achievable in the markets you operate. For retailers in the Australian context, achieving a target of net zero by 2040 or sooner currently seems unrealistic. This is a position understood by the Australian Retailers Association which advocates and supports Australian retailers getting to net zero by 2050 at the latest. Commitments can always be strengthened if the market and technological improvements enable a faster transition.

Challenge 3: What to say… and what not to say?

Australian consumer interest in sustainability continues to grow, with increased demand for sustainable products and services. According to EY’s Future Consumer Index, 90% of Australians have changed their behaviours to live in a more sustainable way.

Consumer demand has prompted organisations to consider the environmental and sustainability claims that can be marketed to consumers. While some are communicating authentically about the sustainability of their products or services, others have exaggerated their environmental credentials or made statements that are simply not grounded in fact.

This month, the ACCC issued a report finding that in its 2022 internet sweep of environmental claims made by Australian businesses, the majority (57%) of claims assessed raised concerns. The key issues identified in the sweep included, but were not limited to, the use of vague phrases such as ‘green’, ‘kind to the planet’, and ‘eco-friendly’; a lack of substantiating information; and the use of absolute claims such as ‘100% plastic free’ which signals a very strong impression to consumers.

In particular, the ACCC noted the greatest proportion of concerning claims from 1) cosmetic and personal care; 2) textiles, garments, and shoes; and 3) food and beverage companies. At a time of rising consumer scepticism, the ACCC warned that misleading, meaningless, or unclear claims breach consumer trust and hurt confidence in both the claim itself and sustainability claims in general.

Many companies don’t set out to mislead consumers, but internal challenges contribute to the result, for example, a disconnect between sustainability and marketing teams, a lack of understanding about sustainability and how to convey claims honestly and meaningfully, or poor review and approval processes.

This reputational and regulatory risk should be noted by retailers but not lead to paralysis. A perhaps equally concerning alternative to greenwashing is ‘greywashing,’ a term that describes sustainability strategies and initiatives that are so dry, and over-engineered by the lawyers, that they fail to drive engagement or create meaningful change.

Business sustainability is a rapidly evolving space that may be new to some companies, but it’s something that cannot be achieved alone. By working together, we can help create a rising tide that lifts all the boats.

Organisations need to be open and willing to come together, learn and collaborate. That is why organisations like UN Global Compact have such an important role in Australia today. By providing an accessible platform for dialogue, learning, influence, and action, that is both practical and leading edge, organisations can come together to find solutions that help deliver better economic, social and environmental outcomes for themselves, the industry, and ultimately the world.

Susan Mizrahi is non-executive director of UN Global Compact Network Australia; chief sustainability officer for Australia Post and chair of the Australian Retailers Association Sustainability Advisory Group.