Policy issues

Sustainability

In any store, the products in front of you have travelled on a complex journey - usually global - before meeting you. They also go on a complex journey after you've finished with them. Retailers, suppliers and consumers are all responsible for different parts of that journey.

Retailers have a unique position between the customer and the supplier. Our role is about helping both our customers make the right choices, and with our suppliers in understanding how to embed sustainability within the product. 

But it is not enough to simply communicate a product's sustainable credentials and assume there will be demand for it; price, durability, and ease of use are all equally important in the customer's buying decision. 

Voluntary and regulatory measures are an important part of embedding sustainable practices within a supply chain. EDRA's priorities in this area includes:

EU and Global Value Chains

Following discussions at G7 and EU level in 2015 and 2016, the 28 EU member state governments urged greater involvement by the private sector in promoting responsible business conduct in the supply chain. Governments see the value chain as occupying an important role in overcoming global inequality and made a clear statement that voluntary initiatives across different business sectors were to be encouraged. In response, EDRA, and our sister organisation, Fediyma, agreed to finalise a Code of Conduct on Sustainable Supply Chains in 2017.  

Conflict Minerals

The emerging agreement on the EU Conflict Minerals is an important step in addressing the unacceptable practice of the proceeds of extracting tin, tungsten, tantalum, gold and their ores being used to fund warfare. Although only of direct application to importers of these minerals, who will be required to carry out due diligence, there will also be expectations that manufacturers of final consumer products disclose details of products that might contain conflict minerals. EDRA supports this measure and will work with our supply chain to ensure there is a clear understanding that where these minerals are used in manufacture that the due diligence process is robust and transparent for the final consumer. 

Timber and illegal logging

The EU Timber Regulation is an important and necessary tool in combatting illegal logging. As changes are being considered to the regime, EDRA believes retailers and consumers would benefit from a wider, more consistent and understandable product scope, widening the uptake of public procurement, increasing transparency of industry timber sourcing, and providing incentives for operators sourcing legal and sustainable timber to drive the necessary change. Simply put, without proper enforcement, the Regulation will fall short of its aim of eliminating the sale of illegally harvested timber. It is therefore absolutely essential that a stronger and more robust enforcement takes place, commencing with the assurance that each EU member state has a workable enforcement body operating on its territory.

Chemicals

As businesses involved in the global manufacture, transportation and sale of goods, we take seriously our responsibility to manage the impact of chemicals on the environment and human health. Retailers understand the need to work with suppliers in targeting hazardous substances for phase out from supply chains and ensuring that substitutes exist to replace them over the long term.

We believe the most effective way of delivering change is through early dialogue with policymakers and suppliers, working together to make a transition in chemical use, in line with scientific evidence. 

 

Hazard versus Risk

EU policy strikes a balance between the extent to which regulatory control of chemical substances should be based on risk assessment or simply as a response to the presence of a hazard. In other words, is it better to assess the use of hazardous chemicals based on their properties or the risk of any harm they present. Industry has usually favoured the latter approach, as this allows for a more proportionate response to policymaking.

However, consumer understanding of the real risks posed by certain chemicals is not helped by scaremongering, which often overplays the impact of a single study rather than focusing on the majority of scientific research. Hazard assessment is only one step in the risk assessment process aimed at examining risks associated with actual or estimated exposures. We disagree with the approach that uses hazard alone as a basis for banning chemicals, as this can often lead to worse outcomes when tried and tested alternatives do not exist.

REACH

REACH makes it possible to use both hazard-based and risk-based approaches. Dangerous chemicals are bracketed as Substances of Very High Concern (SVHCs) due to their hazardous properties, they are then placed a Candidate List, and if no substitutes exist, can be authorised for a set time period, and for a specific use. That other territories such as South Korea and China aim to replicate REACH shows how influential the policy has proven.

The law establishes a duty to provide information on the presence of certain substances of high concern in consumer products, to ensure its safe use. To make our part of REACH work, retailers have made major investments in IT systems to build up product inventories, as well as mapping the supply chain, verifying that suppliers are registering ingredients, and providing information to consumers on request. As a sector, we believe, over time, REACH will encourage the use of substances in supply chains that provide the best protection of public health and the environment. But this will not happen tomorrow, and must be achieved in a proportionate manner based on actual risk, and not solely on hazard. Furthermore, regulators must be careful not to turn REACH into a massive administrative form filling exercise,  and focus on the real objective of ensuring safe use of chemicals.

EU Strategy for a Non Toxic Environment

The European Commission is working on a Non Toxic Environment strategy that aims to boost the use of sustainable substitutes. There are concerns that we are not completely aware of the full extent of the health and environmental implications from the combined effects of different chemicals, from nanomaterials or chemicals that interfere with the endocrine system. The Non Toxic Environment strategy is likely to focus on getting dangerous substances out of the production chain, limiting the presence of unintentionally produced hazardous substances, and providing better information on the formation, sources, emissions, and spread of the most significant hazardous substances.

Empowering Retail

Retailing has been a major beneficiary from the four freedoms (goods, capital, services, people) that underpin the European single market. This has brought massive choice to European consumers, which in turn has contributed to lower prices and greater innovation on the shelf. Protecting these fundamental freedoms and resisting the temptations to erect protectionist barriers within the EU is a vital part of allowing retailers to continue growing their offer and services to customers.

Fair charges for payment cards

After a ten year campaign by retailers all over Europe, the European Commission's antitrust authority ruled that from December 2015 retailers should not be charged more than 0.2% for debit card transactions and 0.3% for credit cards. This is a massive saving for all businesses who accept payment cards either face to face or online, and forces the international card schemes to operate in a transparent manner. Retailers need to remain vigilant however, and ensure their acquiring bank is passing on the benefits of the new rules in a clear way. 

Late Payments in commercial transactions

The Commission wishes to appraise the effectiveness of the 2011 legislation on late payments which sets out rules on business to business transactions. The main implication for home improvement is to oblige retailers to settle their supplier's invoices within 60 days unless agreed otherwise between both parties. EDRA's position is that any minimum harmonization of payment terms that does not take into account the nature of the product, its shelf life, its average rate of stock turn and the sector in which it is traded, is flawed. In the home improvement sector, the average stock turn across Europe is 120 days.

EDRA believes that any future review of the Directive needs to consider allowing greater flexibility for retailers with longer stock turns than the sector average. The retailer is in effect subsidising their supplier’s business for 60 days before a consumer makes a purchase. Of itself, this is damaging to the retailer’s ability to manage cash flow, a crucial function of the business.

Single Market in Services

The single market in services remains a work in progress for retailers and until EU member states remove all barriers to the cross border supply of services, the full potential of retail as a job creator will not be realised. European Member States have to deliver what they promise on the Single Market. Too often a new strategy agreed in Brussels is undermined by Member States not implementing it properly. The Single Market should allow consumers to buy the goods and services they want, freely and confidently across borders or at home, with no or only minimal restriction. Equally, targeting foreign retailers for spurious taxation claims as has recently been the case in Poland is unjust and EDRA fully supports action from the Commission to end these practices.