ESG in Retail
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September 24, 2025
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As consumer interest in sustainable products grows, ESG considerations are becoming critical for the retail sector. Shoppers increasingly prefer products that are sustainable and have a reduced environmental impact, making ESG practices not just an ethical priority but also a business imperative. At the same time, retailers must navigate the risk of greenwashing—misleading claims about sustainability—which can lead to significant legal and reputational consequences. All marketing and public communications must be substantiated by clear, verifiable data.
Beyond greenwashing, Australian retailers face a range of pressing challenges. Wage underpayments have emerged as a major issue, alongside growing cybersecurity threats and stringent data privacy laws that govern how customer information is collected and stored. Additionally, supply chain visibility remains a critical concern. Historically obscure supply chains are now under increasing scrutiny from both regulators and consumers, who demand greater transparency and accountability.
Changing regulatory requirements compound these challenges. Retailers must adapt to new obligations around modern slavery, climate reporting, and other compliance areas. To meet these demands, organisations need to act swiftly and strategically.
Here are FTI Consulting’s key recommendations for Australian retailers looking to align with ESG expectations:
- Gather Emissions Data: Start by collecting emissions data across your supply chain to identify areas for improvement.
- Reduce Emissions: Assess practical ways to lower your environmental impact and take action to implement these measures.
- Prioritise Key Areas: Focus on three or four ESG issues most material to your business and develop clear objectives for each.
- Strengthen Processes: Evaluate existing processes, identify gaps and implement systems to ensure compliance with evolving regulations.
In this video, our ESG expert, Izabela Szewczul emphasises the whole-of-organisation effort required to address ESG challenges in retail businesses. By proactively adapting to changing consumer behaviours, regulatory demands and industry expectations, Australian retailers can position themselves for long-term success in a competitive and conscientious market.
Click here, for more information on FTI Consulting’s ESG & Sustainability services and how we can help.
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Published
September 24, 2025
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