Sustainability is opportunity for differentiation in convenience and forecourt retail

11/10/21: Global Convenience Store Focus

Convenience stores and forecourt retailers should seize on sustainability initiatives as a means for differentiating their businesses while also having a positive impact on the environment. And they should start small but expand as they meet with success. That’s according to Lars Kvale, VP of sustainability solutions at GreenPrint, the global environmental technology company, whose programmes help companies meet sustainability goals while increasing brand value and customer loyalty.

As companies start to formulate their ESG strategies and get to grips with what sustainability means for their businesses, one thing is unequivocal: it matters.

To paraphrase Benjamin Franklin “nothing is certain except for death and taxes and climate change”.

“Climate change will touch every single business,” states Kvale, who also heads up GreenPrint’s Labs division, which is focused on research into the future of ESG strategies for businesses. But while climate change’s impacts may most likely result in new regulatory measures in traditional industries such as oil, gas and utilities; in the convenience store and forecourt arena it’s unlikely regulation will be the main change to business.

Instead, businesses will be impacted by the changes in consumer behaviour and the actions taken by partners, investors and other stakeholders, due to climate change.

The challenge for convenience stores and forecourt retailers is to understand the impacts on their businesses eg greenhouse gas emissions, plastic waste, energy and water usage from an environmental standpoint and the steps and actions they can take that will have a positive impact on the environment, locally and externally.

Sounds straightforward but, as Kvale points out, c-stores and forecourt retailers do not have 100% control over the primary impacts on their businesses.

“In a convenience store, for example, 95% of their greenhouse gas emissions are likely to come from the products on the shelves but they have little control over how they are packaged”.

Similarly, on a forecourt, the gasoline is having the same significant greenhouse gas emissions’ impact but the retailer has not chosen what car people choose to buy, they are just servicing the consumer.

“Convenience retailers and forecourts are not influencing the primary impacts on their stores. The challenge therefore is to understand the impacts, and where retailers sit in the chain, and the things they can do that are uniquely focused on their business. The end goal is that a client enhances their specific brand and services by showing consumers that what they are doing is having a positive environmental impact.”

But consumer messaging isn’t the only type of communications convenience and forecourt retailers should consider. Increasingly GreenPrint is leaving its clients with valuable communications they can share with their investors and stakeholders.

“Communications have a dual purpose – they tie sustainability closer to the brand but are also shown to those people who are more interested in the detail.”

Assessing a retailer’s carbon footprint is relatively straightforward process. However, the challenge lies in assessing what’s upstream and downstream from a business – what happens to products that come into store and when they leave.

And, it’s becoming increasingly important that companies are viewed as businesses that are trying to do something around sustainability in this area.

“If you look at any of the large Fortune 500 companies that are consumer facing, they are focusing on the inputs of their products and asking their upstream suppliers about their emissions and impacts. The major grocery chains are asking the same questions and there will be a gradual transition with more of those sustainable products going into store.”

The Business of Sustainability

Convenience and forecourt retailers should take note as consumers will increasingly vote with their feet on the topic of sustainability.

GreenPrint’s Business of Sustainability Index, published in March 2021, found more than three quarters (77%) of Americans were concerned about the environmental impact of their products with a similar number (73%) stating they use a product’s environmental friendliness as a factor in their purchasing decision. Further, nearly two thirds (64%) said they are willing to pay more for sustainable products, rising to 75% of Millennials.

“The Index shows that younger people are more concerned but sustainability initiatives will influence the consumer’s choice of store provided there’s not a significant price impact and there’s authenticity behind it.”

The consumer isn’t the only person convenience and forecourt retailers should be seeking to please, however. From a background in renewable energy, Kvale has first hand experience of the sustainability investments made by the likes of Apple and Google in large solar farms and wind farms.

Yes, the investments helped offset their carbon footprints but there was another key rationale behind their moves: when they are looking to recruit people, it was really important to demonstrate that they are taking action on climate change, Kvale says.

Similarly, when convenience and forecourt businesses are competing for the best talent, their actions around sustainability are a key factor in how they are viewed. They will also need to keep employees engaged, if they want to keep them.

Maxol; a client of GreenPrint is a business that drives engagement around sustainability throughout its entire organisation.

“If you don’t have engagement throughout the company, it’s hard to make things happen – Maxol is backed from the very top and there is full engagement.”

The key is to take action that’s real and has a significant impact. “We’ve no interest in taking on a sustainability initiative that drives somebody out of business or is not working. The messaging must be simple and the price point kept in a boundary so that from a consumer standpoint it is not viewed as significant but is viewed as significant what the company is doing.”

Offset projects

Convenience and forecourt retailer carbon offset projects, like the ones delivered by GreenPrint globally, can be a mix of local and further afield initiatives.

Kvale urges retailers to consider supporting projects that are near to where they are located and are meaningful such as restoring forests or wetlands.

However, in the same way that retailers have products on their shelves that have come from further away, they can also support projects in more faraway regions.

In one of GreenPrint’s use cases, a relatively large US company with a number of land holdings adjacent to its business locations is repurposing the land by tree planting, helping to remove carbon dioxide from the atmosphere. Employees and local communities have got involved showing that such initiatives provide opportunities for positive impact.

“The accounting exercise of showing their greenhouse emissions and reductions and certified offsets is what we do for them. From a consumer standpoint, it’s more important to do things locally and have those local projects in place.”

GreenPrint Labs

GreenPrint Labs was launched in May 2021, when Kvale joined the company, with a remit to deliver comprehensive ESG strategies including scope 1, 2 and 3 greenhouse gas (GHG) inventory assessments, product-level and multi-SKU lifecycle assessments (LCAs), sustainability reporting, expanded environmental project creation and development, and sustainability strategy recommendations to businesses. GreenPrint Labs is also an innovation incubator for the development of future ESG solutions.

While GreenPrint’s business had traditionally been focused on the convenience store, forecourt and fleet cards sectors, these businesses have progressed on their journey and are looking to do more. At the same time, companies in different sectors including communications and packaged goods are seeking solutions. Hence Labs.

Kvale cites another use case with a fish oil company client, Carlson Labs, which is supporting a project in the Mediterranean to remove plastics from the sea.

Carlson Labs supports a project to remove plastics from the Mediterranean Sea.

“We don’t have alternatives to plastic right now, although some projects are underway to find a different source and make it easier to recycle or decompose. In the meantime what we can do is to take plastics out of the ocean.”

Kvale reports on two Greek entrepreneurs who are paying fisherman to remove the plastic they accidentally catch at sea and bring it back to shore rather than return to the ocean, where it is then up-cycled.

“We support those activities with the fish oil company, so there’s a link” and relaying those kind of stories and actions via social media can have a very big impact.

But there’s a long way to go yet. Kvale reckons plastic is five to 10 years behind the carbon market in terms of reductions or having certification processes in place.

That aspect is key. “Validation is vital. It’s important that a business can point to its reduction achievements and if people want to dig into it, they can see that they are certified. It matters that they can trust the claims, which is why EY attest to all the things we do.”

GreenPrint and Kvale concede that sustainability may not always be a top business priority, especially in current times. However, most convenience and forecourt retailers are now tackling sustainability issues and beginning to understand what it means for their businesses and adapt.

“The way we run programmes is not about regulatory compliance or to increase the price of a product but to integrate sustainability into the way clients do business and it’s different for every business.”

“It’s about stitching this together in a way that makes sense with successful initiatives and it’s a journey. We aren’t just focusing on short term projects and there is a lot of innovation. The solutions today are very different to what we could provide 12 months ago,” he says.