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How a 20% cut in energy can equal a 5% sales increase for retailers

05 December 2018

The global apparel sector has come under particular scrutiny for its environmental impact, especially in the UK where the Environmental Audit Committee called out the top UK fashion brands to report on their environmental and social impact, whilst the Stacey Dooley documented investigated the hidden costs of fast fashion.

The apparel industry is responsible for a complex array of effects across the value chain, from agricultural impacts (for natural fibre production) and chemical polymerisation (for synthetic fibre production), to the pollution impacts of dyeing and finishing, and the labour and ethics issues of garment production. The industry’s high-profile environmental and social impacts in countries of production are understandably a focus for action.

Why energy measures can deliver against environment targets

Closer to home, energy efficiency and energy generation solutions offer retailers and brands comparatively simple opportunities to deliver against environmental targets whilst reducing costs.


“A 20% cut in energy costs can represent the same bottom line benefit as a 5% increase in sales.”

Carbon Trust, Retail Energy Management – the new profit centre for retail businesses


It's thought as much as £4.1 billion worth of savings could be made collectively by UK retailers if the industry used 25% less energy by 2050. Such savings will be well received in a bricks-and-mortar retail landscape which continues to struggle financially.

Energy efficiency is not only cost saving, but since recent warnings from the UN Intergovernmental Panel on Climate Change (IPCC) predicting only 12 years to act to keep warming to a maximum of 1.5oC, it’s an important part of mitigating climate risk – particularly as some anticipate the industry to be hit with strict emission and energy targets in the wake of the report.

Launch of the Fashion Industry Charter for Climate Action

The launch of the Fashion Industry Charter for Climate Actiona partnership of global brands and the UN Framework Convention on Climate Change (UNFCCC), at the United Nations COP24 meeting in Poland, is an important milestone for the sector’s response to climate change.

Commitments of the Charter members are said to include "30 per cent greenhouse gas emission reductions in scope 1, 2 and 3 of the GHG protocol standard by 2030 against a baseline of no earlier than 2015," according Ecotextile News.

How to reduce energy impacts throughout your supply chain

Energy should be effectively managed throughout your supply chain (scope 1, 2, and 3), but starting where you have most influence is sensible. This also means your experiences of the benefits can be communicated to your supply chain to encourage engagement.

Retail apparel energy shopping centreRetailers who want to reduce their energy impacts should firstly understand their current energy consumption by reviewing store and warehouse energy profiles. Using this information, Anthesis conduct analysis to identify energy intensive equipment or poor management and are able to develop an implementation strategy that prioritises solutions that are the easiest to implement and have the most significant impact.

For retailers it’s often simple energy management techniques and energy efficient solutions, such as optimising building management systems and low energy lighting (e.g. LEDs), which can be implemented easily and have an impact on energy savings and carbon, particularly in warehouses and distribution centres.

“On a recent site visit to a distribution centre of a high street clothing retailer, we found a number of solutions which together had the potential to cut energy costs by £177k per year on implementation, and payback the capital expenditure required in under 5 years. These also offered a 71% carbon reduction. Addressing lighting alone offered a payback of less than 2 years, with a cost savings of £45k per year.”

Mark Hawker, Anthesis Chief Engineer

Anthesis works with a number of retailers in reducing their energy consumption and carbon emissions, from energy management solutions and energy and carbon compliance support, through to installation of generation technologies.

3 Simple Steps Sustainability Managers can take to reduce the energy impact of their own operations

  1. Discuss energy efficiency with the person responsible for your organisation’s energy consumption – often the Energy Manager or Operations Manager, and together gain a clear picture of how energy performance could be optimised. Our Energy in Retail Guide can provide a useful starting point.
  2.  
  3. Together, consider how your energy performance across stores and warehouses could be optimised and the opportunities for savings. If you need help to assess store performance or advice on the potential for savings across your portfolio, feel free to contact our Energy Team.
  4.  
  5. Profile the potential savings, prioritise actions to achieve the most impact for the smallest investment and consider how your plan can link into wider environmental targets, programmes and initiatives. Often, demonstrating cost savings through energy-focused projects can build momentum for further sustainability initiatives.

To discuss energy efficiency and management throughout your retail operations, please contact our team on the form below. You can also download your free guide - Energy Services for the Retail Sector - to take a closer look at what's involved. 

 

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