Retail contributes to human happiness and dignity. It's the mechanism society uses to distribute the right products and services to the right people.
This is why any ethical retail assessment has a positive start.
This is then balanced against the negative aspects of retail such as excessive consumerism and negative products.
How we assess retailers
To be investable, retailers must demonstrate genuine commitment and credible action to manage negative impacts on people, animals and the environment.
Products made available
Are the products negative or positive as defined by the Ethical Charter?
Sales, marketing & operations
Do they promote irresponsible consumption of negative products?
Do they show genuine commitment and action, to manage negative impact on people, planet and animals?
Selling things we don't like
Many retailers will sell things we may not like, from tobacco and alcohol to meat and products with excessive amounts of sugar. How do we think about this as part of our ethical assessments?
We start from the premise that to an extent, retailers provide a marketplace where producers can get their products to consumers and consumers can find the products they want. That is, they are product agnostic. However, we also recognise that while retailers are largely subject to supply and demand, they can also influence what consumers purchase. This informed the criteria we set in the framework for assessing retailers. We do care about what retailers sell, but it's not as simple as looking at revenue or sales volume of negative products.
Translating into the framework
We do care about what retailers sell, but it’s not as simple as just looking at revenue or sales volume.
Real world outcomes
Sales, marketing, operations and supply chains can have major real world outcomes. The larger the retailer, the larger the effect on these outcomes.
For example, retailers like Coles and Woolies are so large domestically that when they make a change, it can change the entire system – influencing diet transitions, climate, animal welfare, biodiversity and human rights.
We think they are genuinely trying to do the right thing and on balance are having a positive impact on the world.
update to framework
Approach to tobacco retailing
Recent change to frameworks mean that retailers of harmful products are now assessed under the retail framework.
The effect is that we will not rule out retailers for tobacco or alcohol revenue unless there is reason to believe
their revenue is materially higher than market (i.e. relative to other retailers in the same sector).
A tobacconist would be ruled out under the retail framework.
We assess Coles’ commitment and action to manage negative impacts on people, animals and the environment.
We assess Woolworths’ commitment and action to manage negative impacts on people, animals and the environment.
How we assess whether a company is having a positive impact and whether it is sufficiently managing any harmful impacts.