Good afternoon I’m Ella Monaghan and I’ll be talking about reducing waste from the
retail industry. In the last 20 years companies have been subject to increasing environmental,
social and governance measures or ESG’s. Despite companies often experiencing higher costs when
implementing better ESG practices, they lead to higher ESG ratings which are strongly correlated
with improved long-term financial performance such as lower capital costs. Investors are therefore
increasingly relying on ESG data to decide which companies to invest in. The COVID-19 pandemic has
created huge amounts of global disruption, halting business operations and triggering a financial
crisis resulting in a period of risk aversion. Better ESG practices reduce risk within businesses
and therefore it is imperative for companies to adopt these practices,
as a result of the “build back better scheme” in response to COVID-19.
Boohoo has taken the retail industry by storm in the last year purchasing major retailer Debenhams,
however Boohoo have faced multiple ESG scandals since starting up, resulting in share prices
dropping significantly. According to “good on you” in 2020 boohoo's environmental rating is
“not good enough”. There are many examples of previous companies failing due to scandals,
such as Wirecard, and with sustainable investing becoming more prominent to avoid risk, especially
post pandemic, Boohoo need to adapt to reduce the possibility of scandals occurring. The retail
industry is creating huge amounts of clothing waste, resulting from shorter product life cycles
and aggressive pricing, leading to customers buying and disposing clothing more frequently.
More than half the discarded clothing in the UK was sent to landfill in 2019 according to circular
economy. This implies a significant element of this issue is a lack of widespread clothing
recycling sites, as well as a lack of consumer awareness with regards to existing schemes.
I propose that to tackle this Boohoo collaborates with Tesco, installing clothing collection points
at supermarket stores where customers can donate clothes to recycle and as a result
get vouchers for the supermarket. Boohoo should build on existing partnership with reGAIN
as this charity performs a similar scheme with existing clothing recycling infrastructure,
however suffers from a lack of awareness and store convenience, preventing it from reaching
its full potential. Simple scales will weigh the clothing customers have donated providing
different amounts of supermarket vouchers in return based on the weight of the clothing.
The use of scales to automate collection will reduce labour costs and vouchers will be given
through the existing reGAIN app to simultaneously reduce paper waste, raise brand awareness and
increase app users. Additionally the donated clothing that is suitable to sell will be
given to reGAIN charity stores to sell as part of their current business model, incentivizing
them to allow Boohoo to use some of the existing recycling facilities to save costs. Clothing
that cannot be resold can be reused in Boohoo's production of their new recycled clothing range.
Recycling clothing will reduce the amount of waste ending up into landfill creating more space
for more necessary waste, as well as reducing greenhouse gas emissions and energy consumption.
Supermarkets will benefit as customers will be attracted into their stores to donate clothing
as opposed to competitors, resulting in more customers shopping in there and generating
more revenue. Additionally the vouchers that are given to customers will further encourage spending
in stores. This is similar to the current food bank schemes that are already in place in Tesco
so can be modelled similarly. The benefit of using supermarkets is that they are more widespread
across the UK with Tesco owning 3968 big stores currently, enabling easier access for customers.
The clothing collection points can be used to market Boohoo and reGAIN, especially the new
Boohoo sustainable range, encouraging more responsible shopping habits in consumers.
Yhis will attract new customers and increase brand recognition.
Boohoo contributing to the reusing and recycling movement will help generate a circular economy,
which is essential to achieve sustainable cities and tackle climate change,
numbers 11 and 13 of the sustainable development goals respectively.
As a result ESG ratings will increase from “not good enough”, to attract investors boosting the
share price and increasing the ability to raise finance. This will increase efficiency
and decrease risk benefiting them in the high-risk aversion period post-pandemic. The UK government
have introduced a “build back better scheme” as a response to the pandemic which may attract
government funding to the responsible project. This scheme could be a significant contribution
to reducing waste which is a massive issue and it will benefit Boohoo's brand to instigate as it
will generate huge amounts of positive pressure and opinions about the company. Thank you.