Scots retailers becoming more ethical as one in five cancels contracts

One in five retailers in Scotland has cancelled contracts with suppliers across the last 12 months who do not meet stringent ethical and sustainable standards, new research suggests.

A report by Barclays Corporate Banking shows that the pandemic and an increasing focus on environmental, social and corporate governance (ESG) issues are shifting business priorities.

The bank’s study of more than 300 “retail decision makers” reveals that, in Scotland, 51 per cent say sustainability is more important now than it was two years ago and 49 per cent say the same about ethical standards.

Additionally, 83 per cent of retailers in Scotland think that a long-term strategy to improve their ethical and sustainable credentials is more important than overcoming short-term supply chain disruption.

Younger consumers are leading the demand, according to the Barclays report. Two thirds of 16-24-year-olds would stop shopping with their favourite retailer due to ethical concerns.

The most common reasons for cancelling contracts with suppliers were use of unsustainable materials (39 per cent of those quizzed), unfair working hours (37 per cent) and lack of membership to a trade body that monitors ethical and sustainable standards (32 per cent).

Across the UK, the average is six contracts cancelled per retailer, with an average value of £306,000 per contract. Cumulatively, £7.1 billion worth of contracts have been cancelled across the industry over the last 12 months, the research notes.

Euan Murray, relationship director and retail sector expert at Barclays Corporate Banking, Scotland, said: “The impact of COP26 in Glasgow and the need for all businesses to become more sustainable is now starting to hit home amongst retailers.

“We are seeing a marked acceleration and shift among retailers in Scotland towards prioritising sustainable and ethical standards in every part of their business operations.”

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