- 15 February 2022
- Transport / Logistics Services
New research from Barclays Corporate Banking has shown that retailers have ended contracts worth €8.3bn with suppliers that didn’t achieve high enough ethical and sustainable standards in 2021.
The research commissioned by Barclays Corporate Banking involved 302 retailers and 2,002 customers. This showed amongst other things that more than 60% of younger shoppers will abandon their cart if they don’t show commitment to ethics and sustainability. This has been noted by businesses, and now 51% of decision makers in retail say that sustainability is more important than two years ago. Almost half said the same of ethical standards.
This has led 21% of retailers surveyed to stop buying inventory from suppliers that didn’t meet ethical and sustainable standards. On average those retailers terminated six contracts with an average of €354,430 per contract. This amounts to €8.3bn.
Among the reasons given for termination by retailers were the use of unsustainable materials (39%) and for working conditions (37%). Meanwhile 32% cut ties due to a lack of membership with a trade body that monitors ethical and sustainable standards.
“We are seeing a marked acceleration and shift among retailers towards prioritising sustainable and ethical standards in every part of their business operations. That is now starting to take its toll on retail suppliers with billions of pounds worth of contracts being cancelled every year”, said Karen Johnson, Head of Retail and Wholesale at Barclays Corporate Banking.
“It’s being driven by increasing consumer demand and will rise even further as Gen Z enter the workplace and begin to earn their own money. Retailers must continue to monitor and improve their ethical and sustainability standards if they are to appeal strongly to younger demographics.”