Retail, leisure and hospitality: Five ways you can manage climate and sustainability risks now

Climate change and the increasing volatility of severe weather events like storms, floods and heatwaves impact retailers through store closures, supply chain disruption and unpredictable product demand for retail, leisure and hospitality goods and services.

Retailers alone lose around $1 trillion every year due to weather-related disruptions globally, according to research featured in a National Retail Federation white paper.

Alongside this, climate and sustainability regulations are evolving globally, creating what can feel like onerous data-gathering and reporting obligations.

So, how can your retail, leisure or hospitality business manage the risks, make the most of the opportunities while meeting disclosure and reporting requirements? In this insight, our industry specialists take a closer look at industry-specific risk drivers before offering five ways you can manage them effectively and efficiently.

Understanding climate and sustainability risks for retail, leisure and hospitality

According to WTW’s Global Retail Risk Outlook, 55% of respondents of the total 700 from the retail industry overall said no retail business can afford to ignore issues such as climate change and pollution. This figure rose to 63% for health and beauty business respondents.

With growing public awareness and tightening regulation, retailers are under pressure to address challenges such as emissions in the supply chain, which account for more than 75% of total emissions, according to a 2024 report from the MIT Center for Transportation & Logistics and the Council of Supply Chain Management Professionals.

The annual carbon footprint of the hospitality industry, meanwhile, is estimated at 3% of global carbon emissions in 2022, according to the United Nations World Tourism Organisation (UNWTO). One-third of these emissions are produced by hotel operations, while broader tourism activities account for approximately 8% of emissions.

Energy-intensive operations, such as those in restaurants, cafes, bars and visitor attractions, exacerbate environmental impacts through high electricity usage, water consumption and waste generation. Transportation, both for guests and employees, adds to the carbon footprint and also makes the sector vulnerable to stricter emissions regulations.

So, how can your business manage the many risk areas more effectively?

Discover more effective and efficient ways for your retail, leisure and hospitality business to protect your people and operations. Get in touch with our industry specialists.