ESG is no longer a superficial PR exercise for retail companies. As regulatory expectations and consumer scrutiny intensify, sustainability is now firmly tied to governance, financial resilience and brand trust.
According to RiskSmart, in 2025, retail leaders face heightened accountability under evolving rules such as Provision 29 of the UK Corporate Governance Code, which legally reinforces the link between risk, sustainability and long-term value.
Retail organisations are operating in an environment where sustainability claims can no longer be broadcast without evidence. Boards must be able to demonstrate how ESG decisions are underpinned by measurable frameworks, supported by rigorous documentation, and tied to the company’s financial strategy. Failure to do so brings compliance risks that extend far beyond reputational embarrassment.
The introduction of Provision 29 has accelerated this shift. From 2025, companies must connect environmental, social and governance considerations directly to risk management and financial reporting. Board-level visibility is now a requirement, including proof of proactive measures to reduce emissions and other environmental impacts. Where information on these demands is unavailable, companies must note that further regulatory clarification may be pending.
Beyond the regulatory narrative, consumer behaviour has become one of the strongest catalysts driving ESG transformation in retail. Research suggests that younger generations, including Gen Z and Millennials, are willing to pay more for products that are ethically sourced, shipped and packaged with environmental impact in mind. However, these groups are also quick to turn on brands that overstate such commitments. The retail sector has already seen high-profile greenwashing scandals, leading to public backlash and regulatory intervention.
This represents a pivotal reality for retail companies: sustainability is not only a compliance obligation but a financial one. Greenwashing is increasingly treated as a form of misleading advertising, with investigations and penalties extending beyond the marketing department. Retail is particularly exposed because of its visible supply chains, footprint and customer expectations.
In this landscape, technology plays a critical role. Modern GRC platforms offer essential ESG support—tracking emissions and labour practices in real time, flagging compliance gaps before they become scandals, and helping teams produce reports tailored for regulators, Boards and investors. Rather than manual spreadsheets or outdated systems, these tools provide a live, strategic view of ESG performance.
RiskSmart is designed to support this approach, offering integrated governance, risk and compliance capabilities for organisations of all sizes. It enables retail companies to centralise ESG metrics, visualise performance indicators and manage regulatory responsibilities across diverse teams and operations.
RiskSmart head of customer success Emma Bamford said, “The great thing about RiskSmart is that we’re quite agnostic about how you can manage things in the platform, so whether you’re a huge organisation that has thousands of metrics you want to track, or a single SME managing this for your company that’s just getting started with tracking ESG outputs, you can document your objectives and your activities and set some really strong indicators around the performance, and how well you’re achieveing targets.”
As ESG becomes an integral part of retail risk strategy—impacting valuation, consumer sentiment and regulatory exposure—companies that invest in the right technology will be better positioned to adapt, protect their reputation and build long-term resilience.
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