Making financial sense of sustainable visions

It costs nothing to turn off the lights. Yet Tesco estimates that, along with other small changes to staff routines, flicking off that switch could save £6m a year. Even for the UK’s largest retailer, this is not a trivial sum. But it might not be enough.

Retailers are facing rising energy prices, increases in other input costs due to the weak pound, and a squeeze on consumer spending. Taking further measures to cut energy consumption can be an effective way to maintain margins.

Energy and sustainability advisor Carbon Trust estimates that a 20% cut in retailers’ energy costs represents the same bottom-line benefit as a 5% increase in sales. Some retailers are eagerly pursuing these strategies to reduce consumption and are even investing significant sums to produce their own energy.

Ikea, for example, has already committed €2bn (£1.7bn) to sustainable energy. H&M Group says it will switch to 100% renewable electricity by 2030 – it has already achieved this in the UK and is 96% of the way there with it globally.

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