// UK retailers cancel £7.1bn in contracts in the last year
// Focus on Environment, Sustainability and Governance (ESG) is shifting business priorities
New research has shown that UK retailers have cancelled £7.1 billion in contracts in the last year with suppliers that don’t meet the criteria for their ethical and sustainable standards.
Barclays Corporate Banking – Reshaping retail report shows that the pandemic and an increasing focus on Environment, Sustainability and Governance (ESG) are shifting business priorities.
In a study of more than 300 retail decision makers, 51% said sustainability is more important now than it was two years ago and 49% said the same about ethical standards.
Additionally, 79% retailers think that a long-term strategy to improve their ethical and sustainable credentials is more important than overcoming short-term supply chain disruption.
On average, retail businesses with more than 10 staff are investing £504,000 per year to improve their own footprints.
However, the imperative to be more sustainable and ethical is now being felt financially across the supply chain.
At least 21% that Barclays surveyed have cut ties with suppliers in the last year because they’re not meeting required standards.
Among this group, the average is six contracts cancelled per retailer, with an average value of £306,000 per contract. The most common reasons for cancelling contracts with suppliers were:
1. Use of unsustainable materials (39%)
2. Unfair working hours (37%)
3. Lack of membership to trade body that monitors ethical and sustainable standards (32%)
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