It starts with raw sourcing, and it doesn’t end when the customer purchases the product. For example, what do consumers do with the packaging? If consumers return products, where do they end up?

The entire lifespan of the product and packaging itself has become increasingly relevant to retailers and consumers alike.

Increased visibility, especially real-time visibility, is a top concern for the retail industry in 2023.

The SEC’s corporate climate risk disclosure rule

In March 2022, the U.S. Securities and Exchange Commission (SEC) proposed a rule requiring all publicly traded companies to disclose materials emissions made by a company’s suppliers, detailed plans for meeting emissions offset pledges, and reliance on offsets.

While this rule is not currently in effect, it could require emissions data from Tier 1 and Tier 2, 3, 4 or 5 suppliers. This means that not only would retailers need to have accurate supplier information, but emissions information as well.

The Fashion Sustainability and Social Accountability Act

In January 2022, the New York State Senate unveiled an act requiring fashion retailers or manufacturers doing business in the state to conduct “good faith” supply chain mapping and disclose at least 50% of their suppliers across all tiers of production.

As of June 2022, only 21% of fashion firms currently name their suppliers publicly.

The act would also require these businesses to publicly set and track ESG targets, including employee wages, greenhouse gas emissions, and the use of recycled materials.

These proposals represent a growing push for retailers to verify ethical and sustainable labor practices across the board—and a need for them to pick up the pace.

Retailer net-zero emissions goals

Many retailers are chasing ambitious “net-zero” carbon emissions goals through lowering carbon emissions and buying offset credits by 2030, 2040 or 2050.

According to the Science-Based Targets initiative (SBTi), 45 major global retailers have committed to a net-zero target, up from just 13 in 2021.

Other retailers are focused on different sustainability targets, such as reducing greenhouse gas (GHG) emissions by a certain percentage within a set timeframe. Fifty-two retailers have committed to non-net-zero targets as of 2022, up from 40 in 2021.

However, only a small portion of retailers are on track to meet those goals. The rest are looking for tangible ways to make progress in the coming year.

Consumer demand for sustainable sourcing

Consumers are growing wary of “greenwashing,” a term for empty promises or green labels with no action behind them.

They want to know where products are coming from and how they can be reused or recycled to reduce waste.

Research shows that consumers do care about ethical sourcing and would even pay more for it.

In the next year, it’s time for companies to combine innovation, sustainability, and profit goals, starting with supply chain visibility and transparency with consumers.

Retailers will continue to make strides in supply chain visibility this year through technology and transparency alike.

While significant near-term production changes are overwhelming, efforts to analyze and disclose supply chain practices can make an arguably greater, and more immediate impact.

With growing regulatory and consumer concern toward reporting emissions, retailers are looking past their own ESGs and into their suppliers’ sustainability. Both blockchain and cryptocurrency technology are growing tools that can power end-to-end visibility, by allowing external parties, like vendors and suppliers, to plug in data.

“Blockchain is essentially a decentralized trust agent,” said Erid Haderaj, Product Manager at Publicis Sapient and Web3 consultant. “You can, in real time, track your data and ensure there’s no kind of misconduct or malicious actors, because once it’s on the blockchain, it can’t be tampered with.”

For example, in a grocery supply chain, farmers, shipping agents, packers and retailers could input quality product data into a cloud-based system, offering more protection over food perishability and helping avoid food waste.

While many people think that cryptocurrency needs a monetary value, it can also be used to tokenize physical products on the blockchain. Every single product moving through the supply chain could be attached to certain digital tokens.

“Retailers can create a digital twin of their inventory—or some type of API—that can grab product information and transfer it into a Web 3.0 environment,” said AJ Dalal, Managing Director, Data & Web3 Strategy at Publicis Sapient. “Using a cryptocurrency to tokenize and move things across the supply chain allows you to have real-time inventory updates.”

In the future, the supply chain verification process could become even more automatic—through geospatial information using satellite imagery of a particular deforestation area, or DNA in terms of the raw materials that are coming through, which would inform the digital token information.

Learn more about digitally enabled supply chains.

A key part of the end-to-end supply chain is what happens to the products when they’re sitting on shelves.

Retailers were weighed down by excess inventory in 2022 and are looking for permanent solutions to better forecast demand in 2023. Not only is food and other product waste unsustainable, but it’s also not profitable.

Artificial intelligence (AI) will be a crucial element of accurate demand forecasting for retailers in the future, and more and more retailers will begin to invest once they’ve implemented better tracking across the supply chain.

Walmart, for example, has invested in technology to automatically scan and count stock as soon as it arrives at consolidation centers.

“In the past, retailers had supply chain visibility from external vendors, purchase orders and more,” Pal said. “But if you only care about when things are landing, you only know if something is going to be delayed when it’s actually delayed. And by then, it’s too late.”

The sooner retailers invest in this technology, the better the algorithms will become for the future—and the more sustainable supply chains will become.

Learn more about Publicis Sapient’s supply chain control tower solution.