Leadership & Governance

  • Business Ethics
  • Competitive Behavior
  • Management of the Legal & Regulatory Environment
  • Critical Incident Risk Management
  • Systemic Risk Management
General Issue Category
(industry agnostic)

Disclosure Topics (industry specific) for:
Multiline and Specialty Retailers & Distributors

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Energy Management

Energy Management in Retail & Distribution

Companies in this industry require significant amounts of energy for their retail facilities and warehouses. Sustainability factors—such as the increasing number of GHG-emissions regulations, incentives for energy efficiency and renewable energy—are leading to price increases in conventional electricity sources while making alternative sources more cost-competitive. Fossil fuel-based energy production and consumption contribute to significant environmental impacts, including climate change and pollution. Decisions regarding energy sourcing and type, as well as the use of alternative energy, can create trade-offs related to the energy supply’s cost and reliability for operations. It is becoming increasingly important for companies to manage their overall energy efficiency, and their access to alternative energy sources. Efficiency in this area can have financial implications through direct cost savings, which are particularly beneficial in this low-margin industry.

Data Security

Data Security

Consumers trust retail companies with their financial and personal data every time they make a noncash transaction. Credit cards and debit cards have steadily eclipsed cash and checks as consumers’ preferred payment methods. In these noncash transactions, retailers build up a relationship of trust with consumers, assuring them of the safety of their personal information. Data breaches can occur both through breaches of the physical payment technology, called point-of-sales breaches, as well as through cyber attacks. As consumers become more educated about the threats of cybercrime, particularly in the wake of continued high-profile attacks, having a reputation as a secure company is increasingly important to maintain or gain market share. Retailers that prevent major data breaches can also avoid harming brand value and reduce liabilities.

Labor Practices

Labor Practices

Retail’s significance to the U.S. economy as a major employer means that it is also often at the center of public labor-practice discussions. This can have serious reputational implications for companies in the industry whose performance on labor relations is poor. The low-average wages in the industry, which help companies maintain low prices on products, may increase these labor-related risks. Since customers regularly interact directly with employees, companies can face a decrease in market share and revenue from negative consumer sentiment due to public disagreement between companies and their workers. Companies can enhance labor productivity and employee engagement by taking a long-term approach to managing workers in areas such as compensation and workers’ rights. In addition to mitigating risks, improvements in labor productivity can help strengthen a company’s reputation and reduce its cost of capital.

Employee Engagement, Diversity & Inclusion

Workforce Diversity & Inclusion

The Multiline and Specialty Retailers & Distributors industry is consumer-facing and relies on the ability to communicate effectively with customers during the sales process and adapt to changing consumer demands for products. As the populations of many developed markets undergo a massive demographic shift, including increases in minority populations, companies in this industry can benefit from ensuring that their company culture and hiring and promotion practices embrace the building of a diverse workforce at management- and junior-level positions. Retailers that respond to this demographic shift and employ staff who will be able to recognize the needs of diverse populations may be better able to capture demand from segments that have traditionally been overlooked, which can provide companies a competitive advantage. Furthermore, such companies may benefit from decreased legal and regulatory risks, as well as improved reputational value.

Product Design & Lifecycle Management

Product Sourcing, Packaging & Marketing

Companies in the Multiline and Specialty Retailers & Distributors industry sell a wide array of products including electronics, clothing, furnishings, and cosmetics, which all have varying environmental and social impacts throughout their lifecycles. The size and subsequent buying power of many companies in this industry allow them to work with their suppliers to source products and packaging with lower lifecycle environmental and social impacts. Companies that perform well in this regard may benefit from increased customer demand and improved margins. Taking a proactive approach to engaging suppliers, using certification standards, and reducing the environmental impacts of packaging are strategies commonly employed by companies in the industry.

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