Supply Chain Sustainability

Daniel Ascher | Senior Consultant | Retail Reply, London, UK

Version 1.1 | June 2024

What does ESG legislation introduction mean for Retailers?

ESG (Environmental, Social & Governance) legislation is being introduced by many governments with impact for retailers globally, their supply chains and the people employed by all participant organisations.
The legislations have multiple objectives, the key points being:

• sustainable production,
• carbon emission reduction/net zero,
• protection of workers’ rights and the prevention of forced labour,
• enabling customers to make informed purchasing decisions to minimise pollution and maximise sustainability.

The legislation requires retailers to work with all tiers of their supply chains to verify compliance with due diligence.

The penalties for failure are both financially punitive - fines of 4% or more of global turnover^1,2 ,and operational – with possible confiscation of non-compliant products³.

Corporate Environment, Sustainability and Governance compliance is as significant for companies as GDPR compliance!

Each Retailer’s legal department will be identifying the legislation applicable to their organisation, and working with their colleagues in procurement, logistics and compliance teams to determine the processes and information required to be compliant.

The differing legislations impose requirements for information gathering, at all stages throughout the product lifecycle,

• from product development,
• through production,
• distribution through the supply chain,
• through sales operations and disposal.

The requirements for information create unique pressures on retailers that they haven’t encountered before.

Previously the different organisations participating in a supply chain might have exchanged limited sets of data through emails, shared spreadsheets and EDI. Data inconsistencies could be managed through operational processes.
The new legislation requirements are imposing the need for:

• consistent and traceable data, that will stand up to legal scrutiny,
• the ability to share specifications and compliance documentation,
• to manage the product throughout its lifecycle,
• share detailed information with customers, and 3rd parties involved in circularity, enabling, repair, re-use, and recycling.

This is leading to a totally new family of applications to help support the necessary processes and data sharing.



Retailers require skills that go beyond the standard buy, move, sell responsibilities that they are expert in.

Retail Reply’s Enterprise Architects have helped shape and implement strategic architectures to enable companies with multi-billion £ operations achieve compliance with legal requirements, while also enhancing business processes, increasing efficiency, and supporting creativity.

Well architected solutions supporting ESG compliance should not be an additional overhead, but enablers for efficient product development and retailing, providing benefit to retailers and their customers.

Retail Reply are uniquely placed to assist companies in responding to this challenge. Our consultants have considerable retail experience, working with many major retailers. Retail Reply has experts in Enterprise & Solution Architecture, Business Analysis and Customer Experience with the breadth of skills and capabilities to assist your organisation to meet your unique challenges through:

• assessing current coverage and gaps,
• assessing risks and prioritising actions required,
• shaping delivery planning to optimise compliance,
• delivery of value by your organisation and its network of suppliers and logistics partners.

Failure to comply with ESG Legislation may result in a fine of 4% of Global Turnover.

To know more about this topic or arrange an initial call with our experts,

• ¹UCPD – Unfair Commercial Practices Directive (Making generic, vague environmental claims, making environmental claims for the whole product when it really concerns only a certain aspect of the product, misuse of voluntary sustainability labels, etc.)
• ²LkSG (SCDDA) – Germany - Lieferkettensorgfaltspflichtengesetz, Supply Chain Due Diligence Act
• ³USA – UFLPA - Uyghur Forced Labor Prevention Act