Asian Retail Goes Green: Actionable Sustainability Trends Beyond Greenwashing

Sustainability has emerged as a CEO-level agenda for Asian retailers. With climate change a pressing reality and conscious consumerism on the rise, brands must urgently adapt if they want to resonate with younger generations' values.

The “Good for Me, Good for the Planet” trend that gained momentum during the pandemic is the new value system for consumer decision-making, particularly amongst millennials and Gen Z, who are at the forefront of conscious consumerism, seeking more transparency across the whole product lifecycle—from how and where the products are made to who the stakeholders are across the value chain.

Asian retailers are already taking steps, but it's crucial to move beyond superficial "greenwashing" and embrace genuine, actionable sustainability practices. This means more than just launching a few eco-friendly products or making vague promises. It requires a holistic approach considering the entire product lifecycle, from sourcing and manufacturing to packaging and disposal.

The challenges, however, are real: complex supply chains, fragmented data, and the need to balance sustainability with digital transformation and profitability. However, the rewards are significant: enhanced brand reputation, increased customer loyalty, regulatory compliance, and even cost savings through resource optimisation.

This article dives deep into the actionable sustainability trends emerging in the Asian retail landscape, showcasing how brands are turning challenges into opportunities and driving real change. From cutting carbon footprints and reducing waste to embracing circular business models and promoting supply chain transparency, Asian retailers are proving that sustainability isn't just good for the planet—it's good for business.

Trends Shaping a Greener Retail Landscape

The Asian retail market is witnessing a growing wave of sustainability initiatives driven by consumer demand and regulatory pressures. Here are the five big trends/initiatives being adopted by Asian retailers to help them go beyond greenwashing and achieve tangible results.

1. Cutting Carbon- From Renewable Energy to Green IT

Asian retailers are making significant strides in reducing their carbon footprint by investing in energy-efficient technologies and renewable energy sources like solar and wind power for their retail operations. Additionally, adopting green building principles for new stores and renovations, such as energy-efficient design, water conservation measures, and the use of sustainable materials, is becoming common.

For instance, Japan’s biggest retail group by sales, Aeon, which accounts for 1% of the country’s electricity consumption, is in the process of transitioning to 100% renewable energy for its 160-plus malls in the country. It wants to achieve net zero emissions from store operations by FY2040. Meanwhile, Samsung is developing innovative, cutting-edge carbon capture and clean air technologies to be installed in its manufacturing facilities. This proactive approach tackles emissions at the source, setting a new standard for environmental responsibility.

Green logistics is another area gaining traction. Asian retailers are adopting fuel-efficient or electric vehicles for transportation and deliveries, optimising routes to reduce mileage and investing in energy-efficient warehousing equipment.

For their IT Infrastructure, a key contributor to emissions, retailers are increasingly opting for cloud migration and partnering with technology companies that prioritise greener technologies to minimise the environmental impact of their digital operations.

While Asian retailers share many sustainability strategies with their global counterparts, it is the rapid adoption of innovative technologies that sets them apart in their efforts to reduce carbon footprints. The region's tech-savvy culture and willingness to experiment are accelerating progress toward a low-carbon future

2. Innovating for Zero Waste

Asia generates over 40% of the world's municipal solid waste, with a significant portion stemming from the retail sector. This includes packaging, unsold or expired products, damaged goods, customer returns, and operational waste. The consequences are dire: a significant increase in carbon footprints, loss of biodiversity, and pollution.

Having more supply than required is often the biggest cause of waste, which can make a huge impact. However, accurate demand forecasting, inventory optimisation, and more efficient in-store execution remain the key challenges for retailers in streamlining the supply and demand equation which is often the biggest cause of waste. It requires relevant data and insights to manufacture products as per customers’ preferences, in the right quantities and just in time.

A multifaceted approach is the need of the hour, and we are now seeing Asian retailers adopt a combination of technology, data-driven strategies for inventory optimization, and innovation solutions around eco-friendly packaging and recycling. For example, Alibaba’s grocery chain Freshippo's demand forecasting and inventory optimization are driven by customer demand. It utilises sales data to predict regional consumption habits and determine the next day's inventory for each store. This demand-oriented approach allows them to avoid overstocking and shortages, ensuring they can meet customer needs effectively.

Similarly, Thailand’s largest supermarket chain, Central Food Group, has implemented an AI-based system to identify products nearing their expiration date to minimise food waste. It strategically prices these products with discounts of 20% to 40% while determining the best recycling channel for unused products.

While progress is being made, the journey to zero waste is ongoing. By taking a multi-prong approach to combating waste, leveraging technology, data, and local solutions, and collaborating with stakeholders, Asian retailers are transforming waste reduction from a challenge into a competitive advantage.

3. Transparency and Traceability: Building Trust and Accountability

Asian retailers are increasingly recognising the value of transparency and traceability in their supply chains for several reasons.

While there is a growing segment of consumers demanding ethically sourced and sustainable products, stricter regulations requiring companies to disclose information about their suppliers, working conditions and their environmental impact is forcing the retailers to take a closer look at their supply chains and ensure compliance. On top of that, transparency and traceability have become differentiators for retailers in managing their reputation, attracting new customers, and even commanding premium prices.

Indonesian viscose rayon producer APR is a glowing example of responsible sourcing and supply chain digitisation. The company produces viscose rayon, a natural alternative to petroleum-based synthetic fabrics, from 100% wood cellulose. To ensure it sources wood fibre only from sustainably managed plantations and forests, APR has made its viscose supply chain traceable. The company has implemented a blockchain-based platform, Follow Our Fibre, to track its products from seedling to shipment. Data is captured automatically at each stage of the value chain using integrated tracking programmes. Consumers can scan a QR code on the product to see where that bale was produced, where its source material came from and how it was shipped.

There are many more Asian companies like APR that are leveraging technology to better track the origin of materials and monitor supply chain activities. Blockchain, AI, and other digital tools are crucial in these efforts. They allow retailers to track products in real time, monitor supplier compliance, and identify potential risks in their supply chains. While meeting regulatory requirements is essential, leading retailers are going beyond compliance to gain a competitive edge. The trend is likely to continue as consumers and governments demand greater accountability and sustainability from businesses.

4. Sustainable Product Innovation- Rethinking Design & Materials.

Asian retailers are actively incorporating sustainability into their product development process. This shift goes beyond simply creating eco-friendly lines; it involves a fundamental rethinking of design, materials, and manufacturing processes.

Many are investing in research and development to create products with sustainable materials, such as organic cotton or recycled plastics and implement eco-friendly manufacturing processes. This not only reduces the environmental impact of production but also appeals to a growing consumer base that values eco-consciousness. For instance, Kuala Lumpur-based Terrae sells activewear made from fabric that it creates by recycling used plastic bottles, discarded fishing nets from the ocean, fabric scraps and leftover fabrics, showcasing the potential of innovative materials to transform the industry.

Durability & energy efficiency are getting a lot of attention, with some brands looking to make products which are built to last- reducing the need for fewer replacements. Additionally, they prioritise energy-efficient designs to minimise the environmental impact of product use. For example, Samsung is developing low-power technologies for its consumer electronics products which will lower power consumption by about 30% by 2030 compared to products with the same specifications in 2019.

Parallelly, a lot of Asian brands are rethinking packaging designs, opting for recyclable, reusable or biodegradable materials to minimise waste and pollution. For example, the Vietnamese healthy snack brand Lecka is the first Asian firm to use bio-based, home-compostable packaging.

Asian retailers’ strategic move towards sustainable product innovation not only addresses environmental concerns but also attracts a growing segment of consumers who value eco-consciousness. By investing in new materials, technologies, and design principles, Asian retailers are not only reducing their environmental impact but also creating a competitive advantage in a rapidly evolving market.

5. Embracing Circularity: A New Business Paradigm

To embrace sustainability, many Asian retailers are transitioning towards a circular economy framework. Contrary to the traditional "take-make-dispose" model, the focus is now shifted to production and consumption in a manner that prioritises waste reduction and keeps products and materials in use for as long as possible.

A growing number of Asian brands are finding innovative ways to give new life to waste materials. This includes upcycling clothing, creating accessories from discarded fabrics, and repurposing packaging materials for new uses. ew-age Asian brands like Vietnam’s The Vandal and Ugly Born, Hong Kong-based Redress, Japan’s Relier81, and India’s Doodlage are just a few of many who are creating sustainable products from waste materials, contributing to the growing trend of upcycling & repurposing in Asia.

At the same time, brands are exploring new business models that extend the lifespan of products. This includes rental services, repair programs, and take-back initiatives, offering consumers alternatives to ownership. For example, Singapore-based startup Style Theory offers luxury dresses and branded bags for rent. With customers paying for the use rather than ownership, these products can be used for longer, ultimately reducing waste.

Japanese retailer Uniqlo is a prime example of a brand that has successfully integrated circularity into its business model. Uniqlo’s “Life Wear” concept is based on designing and producing products that are durable and can be reused or recycled. It runs a host of sustainability initiatives, including donating second-hand clothes collected from its customers to refugees, using recycled materials for new products, and repairing and upcycling products for its customers at its Re. Uniqlo studios. These efforts have not only reduced Uniqlo's environmental impact but also resonated with consumers, reinforcing the brand's commitment to sustainability.

The circular economy represents a win-win for both businesses and the environment. By incorporating circularity in business with initiatives like sustainable product lines and repair and recycling services, many Asian brands have been able to appeal to environmentally conscious consumers creating new revenue streams while contributing to a more sustainable business.

Sustainability As The CEO Level Agenda

Sustainability has moved to the forefront of the CEO agenda, becoming a core business imperative rather than a niche concern. With the growing influence of conscious consumerism, customers are increasingly choosing brands that align with their values, and investors are prioritising Environmental, Social, and Governance (ESG) factors in their investment decisions. CEOs who embrace sustainability not only contribute to the planet and society but also position their companies for sustained growth and future success.

However, implementing a comprehensive sustainability strategy is more than just aligning initiatives under Corporate Social Responsibility (CSR) activities. It demands a significant investment of effort, time, and money. Retailers need to set clear, measurable sustainability goals, track progress, and communicate transparently with stakeholders. Achieving this requires a data-driven approach, involving the collection and analysis of ESG data across all levels of the supply chain. Building a comprehensive data strategy becomes crucial for retailers to effectively incorporate sustainability and achieve tangible, quantifiable impact.

However, adopting a data-backed sustainability strategy is a significant challenge. Asian retailers often have complex and fragmented supply chains, making it difficult to trace products' environmental and social impacts throughout their lifecycle.

While retailers generate vast amounts of data across their operations, the lack of standardised metrics and suitable digital tools hinders the accessibility and integration of this data. Additionally, the quality and accuracy of sustainability data can vary significantly, and integrating it with existing enterprise systems can be technically demanding and costly.

By leveraging data analytics and associated technologies, retailers can gain valuable insights into their sustainability impact, identify areas for improvement, and drive meaningful change toward a more sustainable future.

How To Embrace It?

Retailers can look at sustainability from two lenses—operational and digital. Operational sustainability is about using technology to improve operational efficiencies, thereby reducing your carbon footprint. Meanwhile, digital sustainability aims to reduce the impact of IT operations and lower your associated emissions.

Be it operational or digital sustainability, retailers require data-driven approaches to make informed decisions, improve their environmental and social performance, meet consumer expectations, and comply with evolving regulations. Here are five strategies for retailers to begin their sustainability journey.

1. Build A Strong Data Foundation

Build a strong data platform based on which you can quantify and measure your sustainability goals. This system of insight can also help reduce waste by driving operational efficiencies. Leveraging the collated data, begin with a sustainability audit. Assess your current energy consumption, waste generation, water usage, supply chain practices, etc., to identify areas where you can improve your environmental and social impact.

This audit can serve as a baseline to set tangible sustainability goals. Define specific, time-bound targets for reducing emissions, waste, and water consumption, in alignment with international frameworks like the Sustainable Development Goals (SDGs) or Science Based Targets Initiative (SBTi).

Establishing clear metrics to assess your environmental footprints and social contributions is equally important. This will help track the progress of your sustainability initiatives regularly.

2. Energy-smart, Supply Chain-Savvy, and Zero-Waste

To cut down your emissions, invest in energy-efficient retail and tech infrastructure. Transition to renewable energy sources and energy-efficient buildings to curtail carbon footprints from operations. Similarly, partner with tech companies that can help you set up greener IT infrastructure to reduce your digital carbon footprint.

Optimise delivery routes using smart analytics while adopting greener transportation methods. Utilising digital tools to track and trace products throughout the supply chain can improve transparency and accountability.

You can reduce waste with sustainable packaging materials and recycling programs while partnering with waste management companies for proper disposal and recycling. In addition, efficient waste management practices can lead to substantial cost savings for brands with reduced disposal fees, lower energy consumption, and optimised inventory management.

3. Make Sustainability A Board-Level Agenda

Sustainability requires a cultural shift within organisations. Integrating sustainability into operations, culture, and incentives should now become an imperative for retailers.

Communication across your stakeholders to promote participation is the key. Educate and create awareness, both internally for your employees and externally for customers, helping them to make the right product choices in addition to encouraging (rewarding) them to participate in recycling programs.

4. Partner With Right Stakeholders

Prioritise partnering with suppliers that adhere to eco-friendly sourcing, manufacturing, and transporting while adopting fair labour practices. Work closely with them to iron out any environmental and social issues and ensure ethical and sustainable practices throughout your supply chain.

You can also collaborate with other retailers, suppliers, not-for-profit organisations and government agencies to share knowledge and best practices on sustainability.

5. Community Development

Connect with local communities to address environmental concerns and support sustainable development projects. Invest in philanthropic initiatives and social programs to build strong relationships with stakeholders and create a positive impact on society.

For instance, Fast Retailing, the parent company of Uniqlo, offers humanitarian aid for refugees and children, provides second-hand clothing to the needy, runs educational programs and supports employment in developing countries like Bangladesh.

Promoting social causes and community development can significantly bolster your sustainability agenda, help you create localised solutions, and drive consumer engagement.

By considering sustainability as a growth driver rather than a CSR obligation, retailers can take these actionable steps to contribute to a more sustainable future. Embracing sustainability will enhance brand reputation, increase customer loyalty, and reduce costs through resource optimisation. By tapping the demand for eco-friendly products and evolving with changing consumer value, retailers can drive future sales and secure a leading position in the sustainable retail landscape.