Is Landmark Group ‘Fit for Green’?

Almost 70% of MENA-based organisations claim to have bold sustainability ambitions with clear targets, indicates a Bain & Company report undertaken in collaboration with the World Governments Summit 2024. However, only 3% are on track to achieve their sustainability goals.

To understand the ground realities from a retail perspective, we spoke with Rajesh Garg, Chief Financial Officer for regional retail conglomerate Landmark Group who spearheads the Group’s ESG initiatives.

The obvious starting point: how far is Landmark Group from its net zero goal?

“Not just us, but the world (retail and other industries) is far from this goal. We have started our journey, and have made huge progress, but it’s still a very long road. Our goal is to achieve net-zero emissions across Scope 1, 2 and 3 between 2040 and 2050. That said, a lot of things need to align – from availability of circular materials to a shift in the mindset of people in the value chain – for the ecosystem to become truly sustainable. We are in a good place right now, and I must add that we are seeing a Cambrian explosion of innovation and R&D on green materials,” Garg shared.

Landmark Group’s ESG milestones at a glance

• 14% of its UAE Scope 1 & 2 needs met by solar energy.
• First private sector company to sign a bilateral sustainability-linked loan.
• First retailer outside the US/UK/Europe to be a part of Better Cotton’s Buyer Investor Committee.
• Building a robust Responsible Sourcing Programme.
• Developed Fit for Green, GenAI guided project management app to measure carbon footprint.
• Set up a pilot apparel reuse & recycling plant in DWC to close the loop on textile waste.
• Early adopter of biofuels in its regional trucking operations.
• Launched ‘take back’ programmes across its brands including Home Box, Home Centre, Centrepoint and Splash.

Monitor I Measure I Manage: The path to circularity

A shift in mindset to operate in a manner that’s good for the planet is becoming more and more visible. Yet, the circularity journey is fraught with challenges. A reason why some global conglomerates have had to re-adjust their circularity goals. Alarmingly, the NewClimate Institute’s Corporate Climate Responsibility Monitor 2024 has raised red flags about many global brands’ commitments and integrity towards achieving their net-zero targets.

It, thus, becomes crucial to audit processes to measure progress. Garg has been quite vocal about the fact that “it’s difficult to manage what’s not being measured.” One of the reasons why Landmark Group has made significant strides in this regard.

“We have created an end-to-end, bottoms-up, by material, carbon accounting model to understand our carbon emissions. Taking a step further, we have now developed our own learning and Generative Artificial Intelligence (GenAI) guided project management app ‘Fit for Green’. The app encourages employees to measure and reduce carbon footprint at individual, business unit and the Group levels through multiple initiatives and projects,” Garg elaborated.

Further, from the current global alphabet soup of sustainability reporting, Landmark Group has adopted GRI (Global Reporting Initiative) and SBTi (Science Based Targets initiative). In addition, Landmark Group has also formed meaningful partnerships with regional environmental authorities to collaboratively drive sustainability initiatives and pledges. Some of these initiatives include:

• Signing the Integrated Textile Circularity Initiative with Tadweer (Abu Dhabi Waste Management Company)
• Signing the UAE Alliance for Climate Action (UACA), spearheaded by Emirates Nature-WWF, including signing UACA’s Road 2.0 initiative – transport decarbonisation
• Building partnership with the Saudi Fashion Commission.

Moreover, Landmark Group is building a robust Responsible Sourcing Programme to increase suppliers’ transparency, tracking and thereby elevating their collective ESG journey.  

“We are working with globally leading third-party ESG, sustainability and supply chain audit methodologies and programme – which involves 3,102 auditors, 1,819 inspectors, 792 ESG experts and 135 trainers – to build our Responsible Sourcing Programme. All our big brands have signed up for this joint task. They are conducting risk assessments and putting in tools to manage over 10,000 suppliers, thereby ensuring holistic upstream governance, increasing supplier transparency and tracking their ESG programmes. Our goal is to enable and assist our supplier network to become ESG compliant and transform their operations from raw materials, packing materials, manufacturing and conversion processes to shipping,” Garg explained.

What’s happening at the brand level?

A recent YouGov survey indicates that 52% of the UAE and KSA consumers try to buy only from companies that are socially and environmentally responsible. “I think there will come a time when consumers will not buy products that are not sustainably made,” Garg observed.

Some of Landmark Group brands have been ahead of the curve in this context. A good example is the Group’s high street fashion brand Splash that has been on a sustainable roadmap since 2016 – much before sustainability assumed a critical role in how brands operate. Currently, 90% products at Splash are sustainably made. Its denims consume 85% less water than regular denims, with recycled water covering most of the production cycle. The brand has successfully managed to divert 6,500+ garments, collected from customers, from the landfill.

Other brands under its fashion category, such as Centrepoint, Max and Show Mart, have also made significant strides. “Shoe Mart is transitioning from traditional materials to sustainable alternatives. Not just products, but everything around it such as using cardboard hangers, recycled polyester fillings in handbags, recycled cotton laces, DMF-free vegan leather, recycled packaging and much more,” Garg pointed out.

Back in 2022, Garg had said home is an area that the Group will investigate in terms of ESG commitments. Staying true to his words, home is indeed a category that has come a long way regarding ESG achievements. Home Centre and Home Box have embraced the Group’s sustainability framework. They have started introducing products made from recycled fibre, renewable materials, Forest Stewardship Council certified labels and reduction in packaging, among others.

From cradle to gate to grave

However, it’s no longer enough for brands to operate sustainably. They must also support consumers to become more mindful about, especially about waste management towards the end of the lifecycle of a product through take back schemes, among other things.

“We have taken a bottoms-up approach to understand our impact footprint, looking at what happens to the products from the time they are produced all the way to how the customer uses it, for how long and then what do they do with it. So, we did a soft launch of a take back programme in apparel. Bearing in mind regulations and legal restrictions, we are going emirate by emirate,” Garg revealed.

Currently, Centrepoint and Max stores in Dubai and Abu Dhabi have a take back capability. In fact, Landmark Group is building a facility for apparel recycling in Dubai World Central (DWC). Home Centre has started a take back scheme whereby old furniture, based on usage and condition, are responsibly refurbished and sold to people, or the materials are harvested and placed back into the supply chain for other uses.

“The idea is to respect old goods, which were produced with a lot of effort, instead of trashing them in the landfill,” Garg emphasised.

In a consumption-based economy, incentivising becomes important to encourage people to bring back their old goods for recycling or refill initiatives as opposed to trashing them. In this regard, Max incentivises consumers for bringing back products for recycling. Another noticeable behaviour when it comes to conscious consumption is an average consumer’s price sensitivity. Therein the question whether sustainable is also affordable choice becomes important. The bigger question being – are business models at odds with sustainability.

“The reality is a lot of waste is being generated, a lot of energy being consumed. There is lack of understanding and estimation of the problem and its impact. Most businesses understand Scope 1 and 2 but not Scope 3, in our case which is around 90%. We have to look at our upstream suppliers and Scope 3 to become more environmentally conscious and adopt more sustainable practices with minimal impact to cost, especially because we have value brands. We are working to change things without impacting the economics of the business,” Garg shared.

The world needs to take a holistic view of sustainability, taking into consideration all Sustainable Development Goals (SDGs) rather than shifting the problem somewhere else, he added. After all, sustainability is an integral part of the business model; it can no longer be treated as an external factor.

Towards 2025 and beyond

Looking ahead, what are those big goals that Landmark Group aims to achieve?

“Starting with materials, the biggest one we source is cotton and we have been pioneering the shift in the region towards Better Cotton Initiative (BCI). We are the first from the region – outside the UK, Europe and the US – to sit on the Advisory Board of BCI. Our ambitious target for 2025 is to source most of our cotton from BCI. At the brand level, each brand has their own goals and KPIs on responsible sourcing and transitioning to net zero. They have started deploying core teams responsible for everything from buying to product to design,” Garg stated.

For supply chain, we want to transition to 100% recycled and home compostable plastic in supplier packaging, cutting freight emissions, repurposing cartons for e-commerce packaging. We are aiming for a reduction in road transport emissions by 2025. For instance, we are early adopters of biofuels in our regional trucking operations and actively collaborating with shipping companies to embrace cleaner fuels as they become available. By 2024, the aim is for our big shipping lines to transition a big chunk, if not 100% of their ships to green ships.

Notably, in the UAE 14% of Landmark Group’s energy needs are met by renewable sources, which is the permissible limit going by the current regulations. “If we are allowed more, we can double it tomorrow,” Garg stressed.

If you had a magic wand…

In summation, asked about a change that he would like to achieve overnight, if he had a magic wand, Garg said, “We are in the business of designing and creating products, which are brought into the region and sold here. Given what we now know about our carbon footprint and its impact on the planet, if I had a magic wand, I would like to source and manufacture all our products sustainably using net zero processes.”

A zero-based mindset needs to be nurtured, he added. “We have to be curious enough to go deeper into whatever we are doing, always taking a bottoms-up approach, becoming more efficient and greener in the process.”

Pick up the August edition of IMAGES RetailME Magazine to read our Annual ESG Report featuring initiatives and efforts by regional and international brands from the world of retail.