A new study by Oliver Wyman and EuroCommerce has found that Scope 1 and 2 emissions account for just 2% of the total emissions output of the European retail and wholesale sector, which emits approximately 1.6 gigatonnes of CO2e per year.
The emissions output from the overall retail and wholesale value chain represents one-third of Europe’s carbon footprint, with only a minimal portion resulting from direct operations or energy consumption. In contrast, Scope 3 accounts for 98% of total sector emissions.
“The current variation of calculation standards for Scope 3 emissions is astonishing and calls for more standardisation on a European level and beyond,” said Rainer Münch, partner and head of retail and consumer goods, Europe, Oliver Wyman. “Our joint study also highlights opportunities for companies to evolve their ESG operating model to make their decarbonisation more effective. At the same time, achieving net zero will continue to depend on technology innovations and evolving consumer demand.”
The study, which focused on several subsectors of retail and wholesale – food and beverage; health and beauty; textile and apparel; and consumer electronics, home and DIY, analysed the carbon footprint of the European retail and wholesale value chains, and included contributions from more than 25 leading companies and business associations.
Intensifying Efforts
According to the report, many retailers and wholesalers have made significant progress in tracking and reducing emissions at the Scope 1 and 2 levels. However, the findings indicate a need to intensify efforts to achieve net zero across the industry.
Oliver Wyman and EuroCommerce have identified eight key success factors for accelerating the journey towards net zero:
- A harmonised methodology for calculating Scope 3 emissions
- Improved access to supply chain and consumption data
- A clear and reliable regulatory framework
- Rapid scaling of current decarbonisation measures
- Advancements in technology and infrastructure
- Increased consumer adoption of sustainable choices
- Sophisticated ESG company operating models
- Enhanced end-to-end collaboration
‘Opportunities and challenges’
“This study illustrates both the opportunities and the challenges for the European retailers and wholesalers in their efforts to reduce their carbon footprint,” commented Christel Delberghe, director general for EuroCommerce. “While the sector connects hundreds of thousands of local and global suppliers with several hundred million European consumers, only 2% of carbon emissions are within its direct control.
“This means that making any significant step-change in decarbonisation will require much more collaboration and common standards across the entire value chain. Dedicated approaches will be necessary for SMEs who lack the resources and capability that large companies enjoy.”
