Coles - The Sustainability Claims Versus The Reality
A sustainability analysis of Coles’ footprint and its potential impact.
From reducing its carbon footprint and diverting food waste from landfill to sustainable packaging options, let’s look at Coles’ bold ambition to be Australia's most sustainable supermarket.
Written by Victoria Kent, Senior Investment Specialist
When one of the nation’s biggest retailers launches a new marketing campaign, it can be hard to ignore. Coles’ new sustainability reboot got our attention, and while we maintain a healthy degree of scepticism over greenwashing risk, we are hugely optimistic. Why? Because of its Coles’ footprint and its potential impact.
Coles is massive, however, you slice it; its physical footprint (2,500 stores), revenue $20.4 billion for first half of 2021, weekly customer transactions (21 million), all huge. So we feel that any move towards making Coles greener is a great thing for Australia and Australians.
Source: Coles Group
Back in March this year Coles launched its new sustainability campaign to become "Australia's most sustainable supermarket”. You may have seen/heard the slogans of the two pillars of the campaign, “Together to Zero” (zero emissions, zero waste and zero hunger.) and “Better Together”.
This includes a goal to reach net zero emissions by 2050, sourcing 100% renewable electricity by the end of financial year 2025 and reducing greenhouse gas emissions from its value chain;
Sustainability analysis of Coles
It just so happens that we have a tool to measure Coles’ contribution to the Sustainable Development Goals (SDGs), thanks to our partners at Sustainable Platform. We ran Coles' data for the last 3 years to see where their impact was, both good and bad, and how they were trending.
With a net SDG score of 62 Coles is currently a net contributor to the SDGs (source: Sustainable Platform analysis 28/8/21). Coles’ primary contribution to sustainable development is not unexpectedly from its provision of food needs which contributes the most to targets within SDG 2: Zero Hunger.
In terms of the 'bad' exposure that detracts from the SDGs, Coles no longer has direct fuel revenue, but a commission from Viva Energy for the fuel they sell at Coles Express service stations. Aside from this, their other controversial industries exposure is through liquor sales. Personally, I won’t begrudge them that.
In terms of its climate alignment, as far as we can discern, it has zero coal and gas exposure, but its mix of fossil fuels used for electricity and in general operating expenses are concernedly aligned to a scenario of a >4°C temperature increase above pre-industrial levels by 2100. So it's a very good thing that they have committed to net zero by 2050, as far away as that may seem.
To reduce it's carbon footprint Coles has plans to divert food waste from landfill (primarily through it's partnership with Secondbite and Foodbank), as well as focus on sustainable packaging options. Their first move back in July was to eliminate sales of single-use plastic tableware including cups, plates, bowls, straws and cutlery in any of its stores. They claim this move will divert 1.5 million kilograms worth of single-use plastic from landfill each year.
The Coles Group Sustainability Strategy is aligned with and supports the achievement of nine of the Sustainable Development Goals including zero hunger, good health and well-being, gender equality, decent work and economic growth, reduced inequalities, responsible consumption and production, climate action, life below water and life on land.
Sustainable Platform is a sustainability information service only to institutional investors, and doesn’t provide general or personal financial advice.