UK retailers risk missing 2040 net-zero target without government action, BRC warns
UK retailers are unlikely to meet their 2040 net-zero target unless the government steps in, according to a new five-year progress report from the British Retail Consortium (BRC). The finding comes despite clear improvements in store and warehouse emissions.
The report, UK Retail’s Road to Net Zero, shows that more than 93 percent of retail emissions now sit in Scope 3. These emissions come mainly from overseas manufacturing, freight, product use and disposal areas where retailers have limited control and weak data visibility.
The BRC points to several barriers slowing progress. Reporting systems remain fragmented, logistics costs are rising, and access to low-carbon infrastructure is limited. As a result, progress across the wider value chain has lagged far behind improvements in direct operations.
To address this, the consortium is calling for coordinated action between retailers, suppliers and the UK government. Its proposed solution centers on a shared plan that standardizes data reporting, pools finance for low-carbon infrastructure, and embeds climate requirements into supplier contracts and programs. The BRC plans to convene partners and track progress annually, but says meaningful change will depend on government backing and enforceable accountability.
“It’s time for the UK retail industry to step up to radical industry collaboration in reducing emissions embedded in complex global supply chains and UK consumers homes,” said Helen Dickinson, chief executive of the BRC. “Progress relies on influencing suppliers, logistics partners and consumer behavior, making collaboration across the entire value chain from sourcing to delivery critical for both in-store and online retail.”
The Climate Action Roadmap was launched in 2020, setting a sector-wide goal to reach net zero by 2040—ten years earlier than the UK’s national target. The roadmap positions retailers as key players in cutting emissions both upstream and downstream.
Five years on, the ambition remains, but the context has shifted.
“Five years on, this ambition has not changed but the business context has,” Dickinson wrote in the report’s foreword. “Since 2020, net zero has been buffeted by strong political, regulatory and financial headwinds. What was once a shared ambition is now debated in political, policy and regulatory arenas—creating uncertainty for businesses and consumers alike.”
The review combines updated emissions baselines with a check on progress toward 2025 milestones. The updated footprint shows most emissions come from product manufacturing, use and disposal rather than physical retail spaces. The new baseline appears 11 percent higher than in 2019, which the BRC says reflects improved data coverage rather than an actual rise in emissions.
The milestone assessment tells a tougher story. While some companies have made progress, reductions across the value chain remain limited. The report highlights ongoing structural issues, including policy uncertainty, fragmented global supply chains, cost pressures and gaps in available technology.
“The impacts of successive Budgets has placed further financial strain on the industry, and within this context the business case for decarbonization has been increasingly pitted as counter to growth,” Dickinson said. “But in contrast, what has become increasingly clear is the reality of the climate emergency: it is no longer tomorrow’s problem; it is here today, disrupting supply chains, driving shortages, increasing costs for households and threatening the long-term stability and resilience of UK retail.”
Two subsectors account for more than three-quarters of total emissions: food retail at 61 percent and online retail at 16 percent.
Retailers have moved fastest in areas they directly control. These include energy upgrades, operational efficiency and alignment with emerging regulations such as the Corporate Sustainability Reporting Directive and the EU Deforestation Regulation. Progress tied to suppliers, logistics partners, consumers or government policy has been far more uneven.
Supplier data remains the largest gap. Member surveys repeatedly cite supply-chain complexity, unclear policy signals and financial pressure as major obstacles to investing in low-carbon solutions.
“Retailers have demonstrated positive progress in decarbonizing their direct operations, yet the lack of measurable reduction across the value chain must serve as a reality check for the industry,” Dickinson said. “Our call to action is clear: to move from collective ambition to action, radical collaboration across the retail industry must start now.”
There are signs of movement in logistics reporting. Around 80 percent of logistics providers now share emissions data, up from 50 percent last year. The BRC says this suggests reporting standards are starting to take hold, even though coverage and consistency still vary.
Some retailers are showing what is possible. Ikea uses the Global Logistics Emissions Council framework to standardize emissions reporting across transport modes, relying on primary data rather than generic estimates. The BRC estimates this approach has helped cut Ikea’s relative transport emissions by 26 percent since the 2017 financial year.
Others are piloting supplier-focused programs. Superdry has supported around 40,000 cotton farmers and secured organic cotton supply for its entire annual requirement. The John Lewis Partnership is funding factory efficiency and water-use projects in Indian textile hubs in collaboration with WWF India.
Sector-wide platforms such as the Fashion Pact and Make It Zero aim to align expectations and practices, but adoption remains uneven. The BRC says these pilots show that targeted investment can deliver results, though broader participation and clearer policy direction will be essential.
“Without a step change approach to collaboration in driving radical change across retail’s vast, complex global value chains, we won’t tackle more than 90 percent of UK retail emission,” Dickinson said. “Net zero is not just a climate goal, but a strategic opportunity.”
