Consumer-Oriented Strategies for Sustainable Retail

The project will examine efforts made by the retail industry to introduce consumer-oriented strategies that do not solely focus on financial profits but also promote environmentally sustainable consumption. 

The term “consumption-based emissions” allocates a product’s total climate impact from its production and transport to the end user. Sweden’s per capita consumer-based emissions are high in international comparison, with 60% of them generated by private consumption.

Sustainable private consumption is critical to meeting the goals of the Paris Climate Agreement. Setting consumption-based emission targets highlights the decisions that create demand, and not least how consumers contribute to the green transition via their choices and purchases.

From a systemic viewpoint, the retail industry plays a key role in shaping emissions trends resulting from private consumption. For instance, the proportion of emissions from foodstuffs has increased since the 1990s. Food now accounts for almost 30 percent of consumer-based emissions.

The main driver of this increase is the import of products from countries that are far away and/or have inferior production conditions compared to Sweden. Aside from groceries, the retail sector also includes other product categories with an appreciable climate impact, such as clothes and shoes, beauty products and electronics.

Yet the retail industry’s contribution to the green transition is seldom discussed. With annual sales of SEK 2,5 trillion, retail accounts for approximately 11 percent of Swedish GDP. A key characteristic of the sector is that only a small proportion of the climate emissions generated occur within the sector itself. This proportion is even lower in e-commerce. Most emissions occur outside trade operations themselves, i.e. at other stages of the value chain, particularly in product manufacturing and consumption.

In day-to-day trade operations – such as procurement decisions, product range, store design, communication, segmentation and pricing – retailers have a significant impact on what households’ consumption, which in turn influences Sweden’s overall sustainability goals and climate footprint.

An increasing number of retailers are adopting sustainability targets that focus on consumption-based emissions, rather than merely limiting the emissions generated by their own operations. For example, large retail chains have set a target to reduce the climate impact of customer purchases by 50% by 2030. A paradigm shift of this kind challenges long-standing industry norms.

The researchers will conduct a systematic literature review, along with interviews and surveys, to analyze how retail company management makes strategic market decisions to influence private consumption toward a sustainable climate transition. They will also examine how this shift impacts established relationships and processes within the sector.

The project findings will be valuable for retailers facing increasing internal and external pressure to contribute to a sustainable society, suppliers adapting to future industry shifts, and policy makers aiming to facilitate the transition to more sustainable consumption.