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Green Retailing Governance Report - Global Retail Chains Lack Green Commitment

Strategic Planning and Executive Management Involvement Needed in Green Efforts


How are retail industry companies doing with their green efforts? According to a report released in December 2008, not very well. “The Corporate Governance and Climate Change: Consumer and Technology Companies” report rated 31 companies with retail operations around the world and found that most of those companies were not taking much initiative nor putting much effort into their green retailing practices.

The study was commissioned by Ceres, a Boston-based coalition of investors, environmental groups and other public interest organizations. The companies that Ceres chose for the report were rated based on a “Climate Change Governance Framework” that categorizes green retailing governance into five areas:

38%  Strategic planning and performance
20%  Management execution
16%  Emissions accounting
14%  Public disclosure
12%  Board of Director oversight

The philosophy behind this framework is that if green retailing is not systematically planned, executed, and managed like every other aspect of a retail operation, then “green” will be just a passing fad, not a real and sustainable business practice.

Based on a 100-point scale, this green governance study revealed that the best green retailing efforts were coming from UK-based Tesco, with a score of 78. In sharp contrast, the lowest score was assigned to U.S.-based Abercrombie and Fitch, which was assigned a score of zero points. At least the Abercrombie organization is not trying to do any greenwashing. They just don’t seem to be playing the green game at all - at least not yet.

What follows is a list of the companies with retail operations that were studied, assessed, scored and ranked in this green corporate governance report. The number in the left column indicates how many points were assigned to the company’s green efforts, based on the criteria of the “Climate Change Governance Framework” above.

“The Corporate Governance and Climate Change: Consumer and Technology Companies” Report on Green Efforts of Top Global Retailers:

78%  Tesco

77%  Dell

71%  Nike

69%  Wal-Mart

54%  H&M

52%  Starbucks

52%  Carrefour

48%  Safeway

43%  Staples

37%  Target

36%  Best Buy

34%  The Gap

28%  Adidas

28%  Apple

27%  Whole Foods

27%  Avon

26%  McDonald's

25%  Limited Brands

24%  Estee Lauder

23%  Kroger

21%  Walgreen

17%  Lowe's

15%  Home Depot

14%  Costco

12%  CVS Caremark

10%  Bed Bath & Beyond

 8%  Darden Restaurants

 8%  YUM Brands

 6%  Burger King Holdings

 4%  Tim Horton's

 0%  Abercrombie & Fitch

Even though the scores are low, in researching this report, Ceres and its research partners RiskMetrics Group did identify a number of green retailing best practices that were in place with many of these global retail chains. It is expected that these best practices will be adapted and adopted by other organizations as consumer demand for environmental accountability grows.

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  9. Green Retailing Governance Report - Global Retail Chains Lack Strategic Planning and Executive Management Commitment

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