The retail industry stands at a pivotal moment in its sustainability journey. With 85% of surveyed executives reporting higher investments in sustainability programs, according to Deloitte’s 2024 CxO Sustainability Report, retailers are moving beyond token environmental gestures toward meaningful operational changes. 

From reimagining supply chains to embracing digital transformation, the industry is discovering that environmental responsibility and business success can go hand in hand. This shift isn't just about meeting regulations or appeasing stakeholders — it's about fundamentally rethinking how retail can thrive in a world where sustainability has become a business imperative.

Read on as we explore how retailers are transforming their operations through supply chain optimization, reselling initiatives, regulatory compliance and digital innovation. 

Today’s retail sustainability landscape

Retailers have seen rapid shifts in consumer preferences, regulatory requirements and industry standards around sustainability. Deloitte’s report offers a useful window into the mindset of executives who are steering these shifts. The report surveyed over 2,100 global leaders and found that a majority now expect climate change to significantly affect their business strategies in the next three years. Many are pursuing sustainability measures in response to rising stakeholder pressure, new policies and evolving market demands.

Deloitte’s research indicates a notable increase in spending on sustainability programs. The vast majority (85%) of respondents report higher investments in sustainability over the past year. This upswing suggests that more leaders see a direct relationship between business resilience and climate action. In retail, these moves appear in the form of greener packaging, reduced energy use in storefronts and warehouses, and expanded product lines that meet lower-emission criteria. Executives are looking for ways to optimize operations, drive innovation and connect with consumers who express growing interest in environmentally responsible choices.

The Deloitte study also points to several factors that either accelerate or slow down sustainability progress. On one hand, the rapid expansion of clean energy and new climate-friendly technologies creates opportunities for retailers to differentiate themselves. On the other hand, complex supply chains and uneven political support make long-term planning more difficult. This balancing act requires retailers to reimagine their business models. Some have begun to treat sustainability as a business engine that lowers risk and improves customer loyalty. Others still view it as a set of incremental changes for compliance and public image.

Existing sustainability challenges 

Retailers who aim to anchor their strategy on climate action often face a range of challenges. One involves supply chain transparency. Many retail businesses rely on global networks of suppliers with varied environmental standards, data systems and resource footprints. Tracing the origin of goods and measuring emissions at each stage can seem daunting. Without clear visibility into carbon impacts, retailers find it hard to identify the most effective interventions or hold partners accountable. However, larger brands are starting to work with suppliers to embed sustainability criteria in contracts, track metrics more precisely and reduce waste across the value chain.

Another challenge revolves around cost pressures. Energy-efficient equipment, low-impact materials and logistics upgrades carry initial expenses. Smaller retailers sometimes struggle to justify these upfront costs when profit margins are narrow. Yet, those who proceed see financial benefits in the form of reduced waste, lower utility bills and a stronger brand reputation. Many executives in the Deloitte report note that revenue and sustainability can move in tandem. For instance, a store that replaces single-use packaging with reusable alternatives can cut costs over time while appealing to eco-conscious shoppers.

Regulatory environments also add complexity. Different regions adopt varied emissions rules, reporting mandates and incentives for green investments. Retailers operating across state or national lines must keep track of multiple frameworks. A company that fails to comply risks fines, reputational damage or supply disruptions. On the flip side, those that meet or exceed standards may gain access to incentives, rebates or more favorable lending terms. This patchwork of regulations can drive innovation but demands consistent monitoring and agile responses.

Digital transformation is another piece of the puzzle — a challenge with a world of upside. Retailers rely on data to forecast sales, manage inventory and understand consumer behavior. They can apply the same digital tools to measure sustainability performance, automate reporting, and anticipate risks tied to climate impacts. Real-time dashboards, AI-driven analytics and connected devices help retailers spot inefficiencies and set improvement targets. In some cases, companies share this data with consumers to reinforce transparency around products and practices.

Deloitte’s 2024 report suggests that retailers who bring sustainability into core operations stand to gain revenue opportunities, stronger stakeholder trust and better long-term risk management. The sector’s supply chains, store operations and customer engagement channels carry untapped potential for climate action. As more retailers move beyond small steps and adopt bigger commitments, the collective impact on the environment and on business performance may become a significant force in the global marketplace.