Companies are rolling out more sustainability initiatives than ever, with mixed results

The insight: Nearly six in ten (58%) of global executives say their company has exaggerated its sustainability efforts, per a survey by The Harris Poll and Google Cloud. But that hasn’t stopped a wave of retailers and restaurants from rolling out a slew of sustainability initiatives ahead of Earth Day.

A closer look: Generally speaking, sustainability initiatives in the retail and restaurant industries focus on three main categories:

Sustainable materials. Fashion brands as well as CPG and food companies are looking to use more recycled materials, while cutting back on plastic and other petrochemical-based resources.

• For example, Zara recently unveiled a line of women’s clothing made from textile waste, while lululemon athletica is now selling shirts partly made with nylon derived from plant-based sources.
• Tyson Foods partnered with Amcor to develop more sustainable packaging that requires fewer non-renewable resources to produce, and is more easily recyclable.
• And brands from Adore Me to Timberland to Loro Piana have invested in supply chain transparency tools to track textiles throughout their lifecycle, accurately measure their environmental impact, and reduce waste.

Sustainable store design. More companies are looking for ways to reduce their stores’ carbon footprints.

• Lowe’s is installing rooftop solar panels at 174 stores as part of its drive to become carbon neutral by 2050.
• Fast-food chains including Chipotle, Wendy’s, and McDonald’s are implementing a number of initiatives, from all-electric store designs to ramping up use of renewable energy sources, to reduce emissions.

Circularity. Many retailers are looking to showcase their environmental commitment by launching resale programs, or "circular" collections meant to extend a product’s lifecycle.

• H&M and American Eagle are two recent entrants to the resale space, joining the likes of J.Crew, lululemon, and Rent the Runway.
• Primark and Coach rolled out circular product lines featuring items designed to be reused or recycled, reducing their environmental impact.

But do they make a difference? While fashion brands are using more “preferred materials” (that is, materials with less environmental impact), emissions continue to grow due to overall volume growth, per Textile Exchange’s most recent benchmark report.

• That finding highlights the underlying tension in any sustainability effort, as companies have to reconcile their desire to grow with the reality that the most effective way of cutting emissions is through less consumption.
• Other sustainability initiatives, such as resale programs or circular collections, could be seen as efforts by retailers to showcase their eco credentials without having to alter their sourcing or manufacturing practices. That’s especially true for fast-fashion companies like H&M and Primark, whose entire business models rely on constant consumption.
• Only 36% of companies have a measurement process in place for determining how well their sustainability efforts are performing, per The Harris Poll and Google Cloud, underscoring how far removed these initiatives can be from business’ broader strategic objectives.

The big takeaway: Sustainability initiatives are no longer the easy reputation boost they once were, as consumers and governments get savvier about identifying and punishing greenwashing. With the EU and US looking to crack down on misleading environmental claims, companies have to make good on their promises, or else face strict fines and potential consumer backlash.

Go further: Check out our Spotlight report on Fashion and Sustainability.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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