In 2025 we face a shifting political landscape and swaying board-level opinions about ESG and how important meeting ESG goals in retail is for economic growth.
However, given that legislation in the UK and EU is only going in one direction, i.e. towards transparent supply chains with ethical and sustainable design and manufacture at the heart, it's fundamentally important to achieve ESG goals in retail in 2025.
What ESG goals are retailers focusing on in 2025?
Broadly speaking, we expect retailers to be focused on ESG goals that deliver legislative compliance first and foremost, with practical commercial benefits as quickly as possible. Retailers should be targeting areas like:
- improving visibility and governance of their supply chains,
- establishing product sustainability credentials,
- waste reduction and recycling,
- making improvements to water stewardship and energy use,
- reducing scope 3 emissions in the supply chain,
- and supporting green claims with evidence.
This may well build on work started earlier this decade, adding incremental improvements to previous ESG targets, such as increased percentage of sustainable fabric in the supply chain, or better reporting on supplier compliance in areas of concern, such as ethical workforce standards.
Quicklinks to key sections:
What is ESG and how does it apply in retail?
Why ESG goals are important for retailers
6 Examples of ESG goals in retail
What is ESG and how does it apply in retail?
ESG refers to the three key areas that define a retail company’s sustainability and ethical impact:
- Environmental: How a business minimises its ecological footprint across the supply chain and its operation, including efforts to combat climate change, reduce waste and conserve natural resources.
- Social: The company’s impact on employees, communities, and customers, including labour practices, diversity, equity and inclusion (DEI), and community engagement.
- Governance: The standards and processes for accountability, transparency and ethical decision-making within the organisation.
Why is ESG especially important in retail?
Retailers manage complex supply chains that contribute significantly to environmental challenges, including carbon emissions and waste. Additionally, concerns over human rights abuses and poor working conditions within these supply chains make social responsibility a key ESG consideration. Furthermore, retailers must meet constantly evolving legislative requirements which are designed to hold companies accountable for ESG issues. Consumers are also making increased demands for transparency in these areas.
Implementing strong ESG practices has numerous benefits. They include attracting new customers and building consumer trust, attracting employees, better relationships with suppliers, cost savings and increased long-term profitability.
These benefits are backed up by robust evidence. In fact, a study by McKinsey and NielsenIQ found that products making environmental, social, and governance-related claims experienced faster growth than products that did not.
What are ESG goals?
ESG goals are specific, measurable objectives that retail companies can set to improve their environmental, social and governance performance. These goals should align with wider corporate sustainability strategies.
Broadly speaking, ESG goals aim to:
- Enhance social responsibility by improving labour practices, fostering inclusivity and supporting local communities.
- Strengthen governance by ensuring transparency, ethical practices and compliance with regulations.
- Reduce environmental impact by cutting emissions, conserving resources and promoting renewable energy.
What are some example ESG goals for retail businesses in 2025?
1. Ensure legislative compliance
One of the most pressing issues for retailers is meeting increased demands from new and emerging legislation. For example, the EU’s Digital Product Passport (DPP) will become mandatory for textile products by 2027, requiring each item sold in the EU to include a basic DPP. To ensure compliance, retailers must begin preparing now if they haven’t already.
SMART goal example
By December 2025, the company will ensure that key data on material composition, sustainability credentials, and end-of-life disposal is ready for inclusion on a basic product passport prototype in compliance with expected EU Regulations.
2. Reduce scope 3 carbon emissions
Addressing scope 3 emissions is important for retailers as they typically are responsible for 80-90% of all business’s carbon emissions.
SMART goal example
By 31st December 2025, reduce Scope 3 carbon emissions from purchased goods and transportation by 15% (compared to 2024 levels) by partnering with at least 60% of key suppliers to set science-based targets and adopt lower-emission logistics. This will be achieved by tactics such as partnering with suppliers to retro-fit factory buildings with energy-saving equipment and installing additional solar panels for electricity production.
3. Address risk mitigation
In 2025, retailers are facing increasing risks across the board. They include environmental risks such as potential natural disasters caused by climate change and social risks regarding the labour workforce.
There’s also regulatory risk to be considered such as that caused by greenwashing claims. For example, The EU’s ban on generic environmental claims (2026) means retailers should set clear goals to substantiate sustainability claims or risk fines and reputational damage.
SMART goal example
By December 2025, ensure full compliance with the EU’s greenwashing ban by auditing all sustainability claims and removing or substantiating any generic environmental statements across marketing materials.
4. Ensure compliance with ethical labour standards
Risks of child labor, unsafe working conditions, and unfair wages in global supply chains require strong due diligence and monitoring by retailers. Failure to ensure this can incur extreme reputational damage so transparency in supply chains is essential.
SMART goal example
By December 2025, conduct human rights due diligence on 100% of Tier 1 and Tier 2 suppliers, ensuring compliance with ethical labour standards. Partner with key suppliers to implement fair wage policies and improve working conditions, with independent audits conducted annually.
5. Transition to lower impact materials
Transitioning to lower-impact materials should be a key ESG goal for retailers as it helps reduce environmental harm, improve supply chain sustainability, and meet growing consumer demand for eco-friendly products. Conventional materials often contribute to deforestation, water pollution, and high carbon emissions, whereas alternatives like organic cotton, recycled, or responsibly certified materials minimise these impacts.
SMART goal example
By December 2025, source at least 35% of key products from lower-impact materials, such as organic, recycled, or responsibly certified alternatives. Partner with suppliers to ensure full traceability and certification for sustainable materials, with progress reviewed quarterly.
6. Improve collaboration with suppliers
Collaboration with suppliers is a prerequisite for achieving most other ESG goals including the previous four goals in this list, which makes it one of the most important ESG goals for retailers.
SMART goal example
By December 2025, establish sustainability partnerships with at least 75% of key suppliers to drive improvements in carbon reduction, ethical labor practices, and resource efficiency. Implement a supplier engagement program, including quarterly training sessions and annual performance reviews to track progress on ESG goals.
5 Steps to Achieving Your ESG Goals and How Segura Can Help
1. Invest in Technology and Innovation
Technology is a cornerstone of effective ESG implementation. For retailers, investing in robust supply chain management platforms like Segura is crucial. Segura offers a comprehensive suite of features designed to provide the transparency, traceability, and compliance monitoring necessary to achieve your ESG objectives. It streamlines data collection, automates reporting, and facilitates collaboration, making it easier to manage complex supply chains and track progress towards your goals.
2. Assess Your Current Position
Before setting targets, you need a clear understanding of your current ESG performance. A comprehensive assessment will identify your strengths and areas for improvement. This involves evaluating your environmental impact, social practices, and governance structures.
Using software like Segura's compliance manager simplifies this process. By onboarding your suppliers onto the platform, Segura enables businesses to monitor whether their suppliers are adhering to legal, sustainability, and ethical standards, such as fair labour practices or environmental regulations.
Segura provides a centralised hub for data collection and analysis, enabling you to identify potential risks and opportunities for improvement.
3. Set Clear, Measurable Goals
Once you understand your current position and have the technology in place, define clear, measurable ESG goals. Use frameworks like SMART (Specific, Measurable, Achievable, Relevant, Time-bound) to ensure clarity and accountability.
Align your 2025 goals with your overall business strategy and prioritise those areas where you can make the biggest impact.
Explore Segura’s case study with one of their clients, TFG London. It’s a great example of how Segura’s platforms can be used to set ESG goals in line with business objectives and sustainability strategy.
4. Communicate with Stakeholders
Engaging employees, suppliers, and customers in your ESG journey is essential. Transparent communication builds trust and encourages collective action. Share your ESG goals, progress, and challenges openly. Solicit feedback and involve stakeholders in the process. This especially requires buy-in from your supplier network. (We talk a bit about how suppliers can the rough end of the stick and why shared data collection points would really help them in this article: Supply Chain Compliance - Why we need shared industry data standards.)
Segura's platform facilitates data sharing with suppliers, fostering a shared commitment to ethical practices and sustainable operations. One of its benefits is that we see about 35% crossover of suppliers between our clients, and more as time goes on, so more suppliers are already familiar with our format as each new client onboards them onto the system.
By providing access to relevant information, you can strengthen supplier relationships and work collaboratively towards achieving your ESG objectives. Furthermore, the data collected through Segura can be used to create transparent ESG reports for customers and other stakeholders.
5. Monitor and Report Progress
Regularly track your progress against your goals. Publish transparent ESG reports to showcase achievements and address any gaps. Reporting builds credibility and allows for continuous improvement. This data-driven approach enables you to adapt your strategies and ensure you are on track to meet your 2025 targets.
Segura simplifies monitoring and reporting by supporting clients with automated data collection, analysis, and reporting. You can generate customised reports to track progress against key metrics, identify trends, and demonstrate the impact of your ESG initiatives. This data can be used to communicate with stakeholders, attract investors, and enhance your brand reputation.
In summary
Setting specific, measurable, attainable, realistic and timely ESG goals is essential to make progress. With SMART targets you can build out a tactical plan of how you're going to achieve ESG goals in 2025, and likely you will need a supply chain transparency and traceability solution at the core to drive the data capture, reporting and compliance measures.
If you’d like to have a free exploratory call, get in touch with us today: info@segura.co.uk
