ESG isn’t just a warm, fuzzy PR exercise anymore.

With new regulations, like Provision 29 of the UK Corporate Governance Code, Boards of retail companies are now legally on the hook for risk-linked sustainability action. Meanwhile, amidst multiple greenwashing scandals, consumer trust is also fragile. This blog explores the growing ESG demands that retail companies face today and how the right GRC tool (governance, risk & compliance) can help you avoid becoming the next cautionary case study.  

 

The shifting regulatory environment 

The ecosystem of any retail space, just as with everything else on our planet, is highly receptive to change and the shifting tides of trends and culture. 

(Bonus points if you read this in Sir David Attenborough’s voice, a true sustainability legend.)  

And recently, a new evolving trend has been taking over: Boards across retail companies are now formally responsible for making sure their sustainability claims are tied to actual, measurable risk frameworks. 

Translation: you can’t just say you’re doing good things for the planet; you have to prove it, document it, and demonstrate a link to your company’s financial resilience. 

Driving the change: Provision 29 

The main driver for this shift is the introduction of Provision 29 of the UK Corporate Governance Code, which came into play in 2025. It introduced the demand for robust risk frameworks and to connect these practices to a company's wider risk and financial performance reports.  

To summarise some of the demands: 

• Companies must showcase robust risk frameworks and be able to connect financial goals with environmental, social and governance (ESG) risks.  
• Regulators now demand streamlined reporting to show Board-level visibility and involvement.  
• Companies now need to prove that they have proactive controls to reduce their carbon footprints.   

However, official regulatory demands aside, there are bigger things at play, also driving the shift. We can’t cover ESG for retail without discussing consumer demand, trust, and preferences. 

Consumers are choosing green 

As newer generations strive to save the planet from the impending doom of climate change, the plastic crisis and devastating deforestation, several studies show a strong correlation between choosing greener products (or simply, choosing companies that focus on lowering their carbon footprints) for younger generations.  

The Retail Bulletin also reports that consumers are more willing to pay higher prices for products that are sustainably produced, shipped and displayed. 88% of Gen Z and 86% of Millennials support this notion. 

Meanwhile, if they end up discovering that they’ve parted with more of their hard-earned cash to find that it was all a corporate ruse?  

(Virtual) pitchforks will be at the ready.  

The Wild West era of greenwashing is coming to an end

As we see more and more greenwashing scandals make their way into the papers, consumers flock to options they trust to give them greener products.   

Firstly, this trend exemplifies reputational risk and its close connection to your financial performance, resilience, and the future of your company.  

Secondly, whether it’s a global retailer, one of the many UK supermarkets or smaller boutique chains being called out in greenwashing scandals, the consequences aren’t just going to fall on your PR and Marketing department to do damage control anymore.  

It’s now a board-level problem. 

Basically, the era of sticking a leafy logo on your packaging and calling yourself green? It’s over.  

Why the retail sector can’t ignore this 

Retail has a particularly high exposure to ESG risk because it’s so visible. The supply chain is long, the footprint is significant, and your customers (especially if you cater to the younger generations with spending power) are some of the most environmentally opinionated shoppers out there. 
 
To summarise the take-home message:  

• Regulatory bodies are putting higher pressure on several sectors, retail included, to show more accountability and a better understanding of their emissions and environmental impacts, up to Board level.  
• Greenwashing doesn’t just get you called out. It gets you investigated. Regulatory bodies are starting to treat misleading eco-claims like false advertising.
• Consumers are tracking your every move. The Retail Bulletin reports that 88% of Gen Z and 86% of Millennials are willing to pay more for genuinely sustainable products.  
• ESG also impacts valuation. Investors now include ESG performance as a proxy for long-term resilience, and they’re not impressed by vague promises. 
  
  

Tech to the rescue 

Here’s the good news: technology can make this easier (and a lot less terrifying).  

Making the switch from manual methods, such as spreadsheets, or upgrading an old, clunky system to a modern one can help you gain an essential tool for your retail sustainability strategy.  

The right GRC platform should help you: 

• Track ESG metrics in real time across your supply chain, from CO₂ output to labour practices.
• Identify compliance gaps before they become front-page scandals.
• Easily generate board-ready reports that satisfy regulators and investors.  
• Help you link your ESG and sustainability efforts to the wider goals and resilience of your company.  
• Think of it like swapping your dusty filing cabinet for a live dashboard that not only tells you where you are, but warns you when you’re about to veer off course. 

How RiskSmart supports your ESG and sustainability demands 

RiskSmart is the GRC tool that focuses on simplifying governance, risk and compliance for regulated companies and organisations. The tool is built to manage all things risk, governance and compliance, and can be used to take a holistic and integrated approach to ESG management.  

The benefits of integrating your ESG with your wider risk and compliance management efforts are vast and numerous. Still, the key takeaway from our Head of Customer Success, Emma Bamford, is all about finding the tool that adapts to your ESG needs. 

"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."

Instead of burdening you with a clunky tool that you’ll only use 5% of, and having to wait months for simple configurations and changes to suit your framework, RiskSmart takes a new approach. 

It’s designed to give companies... 

• A complete overview and control of your governance, risk and compliance efforts – all in one place.  
• A user-friendly interface, built to guide and support people across your risk team and wider business.  
• A highly configurable, modular system where you pay only for the modules you use (and easily add on more as you grow).  
• Reporting tools that all users can manage. (This also gives you access to SmartWidgets, which enables you to draw in any data available in the platform, and easily visualise it.) 

... and so much more! If you’re wondering how RiskSmart can help your retail business, get in touch for a commitment-free demo today. 

 
Start small and start smart  

In 2025, ESG is no longer a box retail companies can tick.  
Sustainability can no longer be a mere marketing and PR ploy.  
It’s the playbook for staying in business. 

And the retailers who win? They’re not just compliant, they’re credible. 

You don’t need to overhaul your entire operation overnight, but you do need to start building the structures, policies, and adopting tech that prove your sustainability claims are more than marketing. 

As Anjali Choudry put it for a recent Forbes article on the matter of ESG: “At its core, sustainability is about managing today’s needs without borrowing from the future.”  

The ESG rulebook is constantly expanding – getting your tech solution in place early could make or break retail companies.