What: Global retailers are integrating sustainability across their entire value chain as consumer expectations shift towards environmental responsibility.

Why it is important: The trend reflects a critical transformation in consumer behaviour, with over 60% of consumers seeking to positively impact the environment despite price constraints.

The retail industry is witnessing a fundamental transformation as sustainability becomes intrinsically linked to innovation and product development. Recent data shows that 47% of global companies now ensure sustainability features are incorporated in new product launches, reflecting a significant shift in business priorities. This evolution extends beyond mere environmental compliance, encompassing the entire supply chain from sourcing to retail operations.

However, the industry faces a notable challenge as 40% of consumers cite high prices as a barrier to sustainable purchasing, leading retailers to focus on pragmatic approaches that balance environmental responsibility with affordability. The trend is particularly evident in product development, where companies are using life cycle assessment frameworks to optimise every step of the supply chain. This comprehensive approach to sustainability is driving innovation while addressing both environmental concerns and consumer expectations, creating a new paradigm in retail operations.

IADS Notes: As observed in January 2025, major retailers like IKEA are investing significantly in recycling infrastructure, demonstrating the industry's commitment to circular economy principles. This trend gained momentum in May 2024, when Macy's launched its USD 5 billion sustainability initiative, focusing on sustainable products and supply chain optimization. By September 2024, Bain & Company's research revealed that 60% of consumers showed increased concern about climate change compared to previous years, while Selfridges' expansion of circular retail services in October 2024 highlighted the growing importance of sustainable business models in traditional retail.

Sustainability is a baseline for innovation