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What will shape retail decarbonisation this decade?

Explore the forces shaping retail decarbonisation to 2030, from regulation and supply chains to data and climate risks, and how retailers can respond.

As 2030 draws ever closer, retailers are under pressure to turn their climate commitments into demonstrable progress. What are the forces shaping retail decarbonisation over the rest of the decade, and how can retailers respond?

There’s no question that tackling climate change is one of the biggest challenges facing businesses today. Retail has a significant part to play in this, and over the past decade many retailers have responded by setting ambitious targets to reduce their emissions.

For many, 2030 is an important milestone on the path towards net zero. As it gets closer, the focus is less on making commitments and more on turning them into scalable, auditable actions to reduce emissions. In our recent webinar with BRC, we explored the forces shaping retail decarbonisation over the rest of the decade, and how collaboration could help the industry respond.

A more challenging backdrop

Since many of the targets around decarbonisation were first set, the world has changed considerably. Global instability, supply chain disruption and rising costs have made reducing emissions more complicated, while tighter regulation and growing scrutiny of environmental claims are putting more pressure on retailers to demonstrate credible progress.

And these pressures are unlikely to disappear any time soon. Almost two-thirds (65%) of companies describe themselves as vulnerable or very vulnerable to future supply chain risks, while 71% of retail leaders say disruption is now a constant rather than something that happens occasionally.

From ambition to evidence-based delivery

Many organisations now have tools and processes in place to identify risks and understand where emissions sit, but the next hurdle is using that information to drive and demonstrate real reductions. Four system-wide forces are likely to influence how successfully retailers can do that:

Scope 3 is moving from largely voluntary disclosure towards greater accountability. Retailers are under growing pressure to understand emissions across their supply chains, back up the figures they report and provide clear evidence for any environmental claims, with greater regulatory and legal risks where such claims cannot be substantiated.

But regulation is starting to affect more than reporting. Carbon border measures and other climate-related trade rules mean emissions could influence the cost of bringing some goods into a market, with implications for sourcing decisions and supply chains.

Alongside this, retailers will need reliable Scope 3 data and documentation that can stand up to scrutiny, particularly when operating across markets with different requirements.

Global disruption can quickly change the supply chains retailers are trying to decarbonise. Conflict and trade disruption can force businesses to switch suppliers, materials or transport routes, changing their emissions footprint and making progress harder to track.

Financial pressures can limit suppliers' ability to invest in emissions reduction, while keeping goods moving during disruption may understandably take priority over lower-carbon options.

As supply chains change, retailers will need to understand what those changes mean for their Scope 3 emissions. Better visibility of the upstream supply chain can help retailers understand how sourcing decisions affect emissions and identify where investment could strengthen resilience.

Getting a reliable picture of Scope 3 emissions remains difficult when much of the data sits with suppliers whose ability to measure and report emissions can vary. Smaller suppliers in particular may lack the tools, skills or capacity to meet increasingly detailed reporting requirements.

Digital tools and AI can make it easier to collect and analyse this information, although their usefulness will depend on the quality of underlying data. Their own environmental footprint also needs to be considered as retailers become more reliant on cloud computing and AI and data centres. Investment in better data infrastructure and skills will therefore be an important part of making progress on Scope 3.

Retailers are increasingly having to manage the physical effects of climate change alongside reducing their own impact. Floods, storms, wildfires and drought can disrupt suppliers and logistics, forcing changes that can increase Scope 3 emissions.

Damage to stores, warehouses or supplier facilities can require carbon-intensive repairs and replacement, while hotter temperatures increase the energy needed to cool stores, distribution centres, data centres and other parts of the supply chain.

The financial impact matters as well. Suppliers facing higher energy bills, repairs or the cost of keeping their businesses running through disruption may have less capacity to invest in emissions reduction. Retailers will therefore increasingly need to consider climate adaptation and decarbonisation together, including how responding to physical climate risks can affect emissions.

Collaboration is key

Many of these challenges cannot be solved by retailers working alone. Scope 3 often involves the same suppliers working with multiple businesses, and different requests for information and reporting can create duplication and place additional burden on suppliers.

Greater industry alignment could create more consistent expectations, making it easier for suppliers to respond while improving the quality and comparability of the data retailers receive. Sharing learning could also help build capability across the supply chain, rather than leaving individual suppliers to work everything out for themselves.

What should retailers do now?

With so many immediate pressures to deal with, it is perhaps not surprising that some longer-term risks are slipping down retail leaders’ agendas. Those prioritising achieving net zero fell from 18% in 2025 to 13% in 2026, while measuring environmental impact and sustainability reporting both fell from 16% to 11%.

But these challenges haven't gone away. If anything, the picture is becoming more complicated as climate risks become more closely connected with supply chains, regulation and the wider resilience of the business. So where should retailers focus?

With 2030 getting closer, the challenge is to keep making progress even as other pressures compete for attention.

Contact our experts today if you would like to explore how your organisation can accelerate retail decarbonisation.

Report,Featured insight

What will shape retail decarbonisation this decade?

A more challenging backdrop

From ambition to evidence-based delivery

Collaboration is key

What should retailers do now?

Keep making progress

Strengthen the foundations

Work together

Consider the wider return

Our people

James William Crask

Ed Woolcock

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What will shape retail decarbonisation this decade?

A more challenging backdrop

From ambition to evidence-based delivery

Policy and regulation

Markets and supply chains

Data standards and infrastructure

Physical climate hazards

Collaboration is key

What should retailers do now?

Keep making progress

Strengthen the foundations

Work together

Consider the wider return

Our people

James William Crask

Ed Woolcock

Related insights

Marsh Retail Leaders Report 2026

Why psychosocial safety matters in retail

Building retail resilience: Why employee experience is a commercial strategy

2026 Insurance Market update for UK Retail, Leisure and Hospitality sectors