Odgers Berndtson’s leadership poll, conducted in July, reveals that a very high number of senior executives working in the fashion and retail sectors are struggling to deliver greater sustainability. Whilst almost all (94 per cent) say their companies have a strategy and policies in place, most (75 per cent) think a real step change will only be achieved with greater regulation.
Four out of ten top executives at leading retail and fashion companies say commercial pressures, notably to grow sales and maintain keen prices, are the biggest single obstacle to their businesses becoming more sustainable. Most believe more regulation is needed. Despite this, 70 per cent of the same C-suite leaders said that a more sustainable approach was either “mission critical” or a key objective for their companies. When asked about the issue just under a third (32 per cent) said the main driver was company ethos, but the largest group (39 per cent) cited changing consumer expectations.
“Senior executives don’t need convincing about the importance of embracing sustainability, but it is difficult and counter-intuitive to implement initiatives which negatively impact profit, even in the short term,” said Catherine Broome, head of fashion and luxury at Odgers Berndtson.
When asked about the most significant gaps in their company’s approach to sustainability, leaders are divided. Lack of leadership from the very top (20 per cent) and a piecemeal approach (27 per cent) emerged as key issues, but the largest number, 29 per cent, said the main problem is that sustainability goals are currently not included in the objectives of every team and department.
“Companies don’t routinely include sustainability as a measure of success for all senior executives, instead relying on a few named individuals and departments,” Ms Broome observed. “In many cases this results in confusion over who is really accountable, puts individual performance indicators at odds with company sustainability initiatives, and ultimately slows overall progress.”
Around three-quarters of respondents were senior executive level and above and most said that a more sustainable approach was normally or usually a board-level issue in their companies. However, there was far less clarity over who takes ultimate responsibility and reporting lines.
“Consumer expectations are changing but tough commercial realities are not,” said Jane Dessar, managing partner of the retail and consumer practice at Odgers Berndtson. “Consumers are shifting towards contributing to a better world, but the question is how many will change their spending and shopping habits. Companies will do what they can, but are conflicted over how best to proceed without putting profitability at risk.”