Sustainability can no longer sit in a separate ESG lane; it needs to be treated as a central operational and financial concern, retail leaders said at the World Retail Congress in Berlin. Executives speaking on a panel argued that climate impacts are already showing up in day-to-day business performance—tightening margins, disrupting supply networks and reshaping what long-term resilience looks like for both fashion and grocery.
The message from the stage was blunt: companies that still frame climate action as a compliance exercise are misreading the risk landscape. With climate-related volatility affecting costs and continuity of supply, sustainability has effectively become part of enterprise risk planning—what several speakers described as sustainability as financial risk, rather than a reputational add-on.
H&M CFO Adam Karlsson said investment choices increasingly need to weigh the price of delay as well as the cost of action, because climate risks are beginning to influence earnings quality, cash-flow stability and access to reliable supply. “It’s no longer about whether we should do it, it’s rather how we do it,” he said.
At Zalando, the sustainability case is being positioned not only as protection against downside, but as a lever for competitiveness—supporting growth, efficiency and customer relevance. Pascal Brun, VP of sustainability, suggested that simply preventing margin erosion is not enough to future-proof a business. “Keeping margins or preventing margin loss basically just keeps you in the business. But I think we all need more than that,” he said.
Speakers also stressed that many of retail’s biggest emissions sources and inefficiencies sit in shared upstream networks, which cannot be fixed by single companies acting alone. The panel called for more practical collaboration across common supply chains—moving from broad pledges to scalable joint programmes that can coordinate standards, investment and implementation.
Karlsson pointed to early progress in blended financing structures that bring together brand commitments, philanthropic capital and institutional funding to accelerate decarbonisation. He said a new H&M-led initiative involving seven brands had already “doubled the effectiveness” of its investment approach, signalling how pooled action can amplify results.
FMI’s chief collaboration and commercial officer Mark W. Baum also linked sustainability directly to core business outcomes, arguing that it now sits at the intersection of operations, finance and brand trust. “It’s become a business imperative, and it’s really directly tied to business performance, supply chain resilience, consumer trust, risk, financing,” he said.
Taken together, the panel’s argument was that retailers should plan and invest with sustainability as financial risk in mind—treating climate and resource pressures as material business variables that influence costs, continuity, competitiveness and access to capital, rather than as an isolated ESG reporting requirement.
