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Green growth

Written by Liz Morrell
11/01/2010

It's fair to say that, until recently, the retail sector had a pretty poor environmental reputation. Slowly but surely, however, things are changing with various retailers keen to boost their environmental credentials. Liz Morrell reports.

Good energy management has always made sense, but with the imminent Carbon Reduction Commitment retailers need to focus further on managing down their carbon emissions. "Retailers need to be putting in place an action plan now so they can be prepared for the first phase of reporting that the Carbon Reduction Commitment will bring in April 2010," says Harry Morrison, general manager at the Carbon Trust Standard. "There are financial, regulatory and reputational risks if retailers fail to take action. Heating, lighting, refrigeration and air conditioning are some of the key energy-guzzlers in a retail environment but through careful management, retailers can make a significant difference to their energy consumption levels and, in turn, their carbon emissions."

Technology has a big role to play, particularly in terms of collecting data on carbon emissions. "There is a mushrooming of different people wanting carbon emission data and for the guys in the middle without a system that's a nightmare. If you have a system, you press a button and it will suck out all the information," says Matthew de Villiers, chief executive at Greenstone Carbon.

Technology is also helping overcome staff overriding systems. "The key is how can technology overcome the frailties of the human?" says Richard Ellis, CSR director at Boots.

Many retailers already have energy management systems that centralise the management of energy in-store, creating a profile of normal usage that can be monitored remotely and create alerts when something unusual happens. "The maturity of the internet has given us enough internet addresses for every grain of sand so you can put intelligence into buildings," says George Bartley, managing director at workplace technology company, Building Sustainability. "You can now have all your information available via the internet so you can now manage your energy globally."

At John Lewis all stores have fully integrated building management systems. "The systems are 'locked down' on completion of commissioning to ensure that they are operating at their most efficient," says Steve Isaia, head of feasibility, development and engineering at John Lewis Partnership. "The settings can only be changed by contacting our data management centre and are monitored by the BMS bureau 24/7 who raise alarms when energy usage or other parameters are breached, ensuring swift action is taken to investigate the fault and prevent unnecessary use of energy."

All stores are also fitted with remote Automatic Meter Readings (AMRs) - which are being rolled out by a number of retailers - to ensure John Lewis receives immediate information on use of all utilities. "This information, reported against historical information of the average use of the store, allows the maintenance teams to assist the store teams to reduce energy usage," says Isaia.

"The energy usage of all properties in our estate is held in a single database, which provides us with the accurate information needed for both our CSR performance measures, and also our CRC application. The installation of AMRs, again provides us with data, and also allows us to declare this as an early action metric for CRC" he says.

"The challenge retailers have is to get all the data in from lots of disparate outlets. How do you analyse it, then how do you model it and set carbon budgets?" says Greenstone Carbon's de Villiers.

Tesco is working with CA on its carbon management and accounting. "They have been doing that for some time but it has been a horrendous job to collect the data which was typically in Excel and you couldn't guarantee the accuracy. We have created a capability that allows them to feed in their energy data and that allows them to factor in their emission factor. Multiplying your energy consumption by your emissions factor gives you your carbon footprint," says Colin Bannister, vice president of technical sales at CA.

The UK's largest retailers have ambitious targets to meet. Tesco hopes to halve emissions from existing buildings and new stores by 2020 against 2006 and be carbon neutral by 2050. In 2007, it launched a £100 million sustainable technology fund and spent £60 million in 2008.

"A lot of the reduction opportunities have come from energy efficiency. It's the low hanging fruit that a lot of companies think they are doing effectively but often are not," says Jem Porcaro, senior vice president of strategic development at carbon reduction specialist, Carbon Neutral.

"Energy efficiency is not the thing that people get excited about but it really does make a difference fast," says Felicia Jackson, author of the recently published book, Conquering Carbon. "There are very simple ways of doing things and the more energy you save, the more money you save."

Sainsbury's 2008/09 energy efficiency programme has resulted in an absolute reduction in carbon of 10,786 tonnes of CO2. At M&S the retailer is aiming to reduce its energy usage by 25 per cent and claims it has already improved efficiency by 10 per cent, while Tesco has halved its energy use per square foot since 2000.

Changing times

Big changes are being introduced in new environmental stores. Tesco opened its first in Cheetham Hill, Manchester in January 2009 and claims it will open a zero carbon store in Ramsey in Cambridgeshire by the end of this year. Boots is working on a low carbon store and M&S is to test new efficiency approaches in five energy stores.

Sainsbury's opened its flagship green store in Dartmouth in Devon in August 2008. It includes wind turbines from Quiet Revolution powering checkouts and a biomass boiler to provide heat and hot water. It says more than 80 per cent of the energy saving features from Dartmouth are replicated in new stores where possible, most recently in its Gloucester Quays store which opened in June 2009. That store also includes Kinetic Road plates in the car park which generate electricity to power the checkouts when shoppers drive over them.
November also saw the launch of a Sainsbury's environmentally friendly convenience store in Southgate in Bath where technology changes include increased use of LED lighting and a heat recovery system at the store entrance.

Various initiatives are being used by retailers in lighting and heating and ventilation. A number - such as Tesco - are looking at combined cooling, heating and power plants - to generate their own power. Solar thermal panels are also being introduced. Sainsbury's expects to heat up to 100 per cent of its hot water in its Gloucester store in the summer.

Greater control of heating and ventilation via technology controls is also cutting carbon. "That is about delivering heating and cooling when it is needed and at no other times," says Ken Carter, director of independent energy consultancy EcoInstruments and former head of energy at Tesco and Asda.

In lighting, dimmable systems are also increasing in popularity so that they can be turned down during brighter parts of the day or later at night. Motion sensor lights are also popular. "They are pretty much standard in office areas, loos and corridors on retailers that have done energy roll-outs," says Carter. "If they are not there then people are missing a pretty obvious trick."

Better fleet management in retailers' supply chains also helps retailers reduce carbon. At Sainsbury's, its Integrated Transport Management System has been implemented at 16 depots, allowing the retailer to update transport plans in real time and saving 0.5 million litres of fuel at four depots. Many retailers are also trialling alternative fuels.

For the supermarkets, however, the biggest savings are to be made in refrigeration which, in cases like Sainsbury's, accounts for up to 40 per cent of their emissions.

Retailers are moving from HFC as a coolant to CO2. M&S now has 13 stores running on CO2 and all new stores from 2010 will do the same. Sainsbury's will convert 135 stores by 2014 and the rest by 2030.

Remote monitoring of equipment and redirecting the heat produced by refrigeration for other uses will also save on carbon and money. Although these may be the big projects smaller wins can be made too. At M&S, the retailer has introduced solid ink technology from Xerox for its back office shelf edge labelling printers which cuts down on wastage. "Typical savings can be up to 50 per cent," says Nick Stainton, large enterprise marketing manager at Xerox.

There is much experimentation going on. "This is solved because you do 100 things differently - not that you do one thing differently," says Ellis. A device from PowerPerfector allows retailers to regulate incoming power supply to use the amount of electricity required and nothing more - solving the UK's problem of being overvoltaged. This not only brings cost savings because less power is used but also helps protect against spikes and is already being used by the likes of Tesco and Asda. "You can get 8 to 12 per cent of savings in the retail sector," says chief executive, Angus Robertson.

But there are more wins to be had and again technology will be vital. "Green growth requires a leap in technology to propel us from a high carbon economy to a low carbon economy," said Tesco boss, Sir Terry Leahy, recently.

Smaller retailers need to take note. "There is still a challenge for behaviour change," says Rob Gordon, head of environment at the BRC. "As much as it is obvious stuff it's not core business stuff. The retailer is not expert in energy management. There are worthwhile savings to be made but the time spent on managing your energy use is time not spent on exploiting other opportunities."

But this is blinkered thinking, according to Carter. "It has always made sound financial sense to get stuck into this from day one. Hanging around waiting for legislation is going to be painful if you are paying the electricity bill year-on-year. Every £1 saved on energy goes straight to profit, whereas every £1 spent on price goes to turnover not necessarily profit," says Carter.

But investing means just that, because payback times from technology can be lengthy. "The big thing is designing stores of the future and then rolling that out as standard. The on cost of that (the additional cost on a standard store) is around £3 million," says Carter. "At Tesco there are around 40 improvements on energy efficiency just on a standard store but to go the full hog with CHP, solar etc. With all these things the shopping list comes to a hell of a total," says Carter.


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