Consumer-oriented strategies for sustainable trade

How do retailers design strategies that not only focus on financial profit margins, but also help us make more sustainable choices? This is a question that researchers from Jönköping International Business School (JIBS) at Jönköping University (JU) together with researchers from Umeå University will investigate in a new study.

The concept of “consumption-based emissions” allocates a product's total climate impact from manufacturing and transport to the end user. Sweden's consumption-based emissions are high in an international comparison and 60 per cent of these are generated by private consumption.

“Although we in Sweden have been good at reducing emissions made within the country's borders, our consumption per capita is high. We buy a lot of goods that are transported long distances from countries with poorer production conditions. Therefore, our consumption contributes to global emissions,” says Mart Ots, Associate Professor of Business Administration at JIBS.

Retailers influence what households consume

The retail sector plays an important role in what we choose to consume. Despite this, the role of retail in society's climate transition is rarely discussed. With an annual turnover of SEK 2,500 billion, retail accounts for 11 per cent of Sweden's GDP.

In their daily activities, such as purchasing decisions, product range planning, store design, communication, segmentation and pricing, Swedish retail chains in areas such as food, fashion and electronics have great potential to influence what households buy.

“Retailers have many tools to influence us consumers. The question is how they want to use these tools,” says Mart Ots.

In a new study, JIBS and Umeå University have received SEK 6 million from the Wallenberg Foundation to investigate how retailers make strategic decisions to promote sustainable consumption and how this affects processes in retail.

“In general, I believe that Swedish retailers are keen to work towards a more sustainable society, but there are many uncertainties about how much to leave to consumers to choose for themselves and how much retailers should actively encourage more sustainable choices. Right now, it is clear that reductions in consumption-based emissions are slower than many had hoped,” says Mart Ots.

Private consumption matters

It is hoped that the research results will be relevant to businesses, suppliers and regulators who want to contribute to a sustainable society. Sustainable private consumption is central to achieving the goals of the Paris Agreement and the 2030 Agenda.

“Over the next five years, there is much to be done in terms of reducing climate impact. There are ambitious targets to reduce emissions both in Sweden and in the EU. Everyone must contribute to this, and trade has an important role to play,” says Mart Ots.