How Can 175-year-old Luxury Retailer Harrods Hit Net Zero?

Harrods
Harrods has published its first Environmental, Social and Governance Report as it sets down a framework to decarbonise its buildings and operations

Luxury retailer Harrods has published its first ESG Report, which sets out how a company with a 175-year history can navigate a pathway to net zero.

The business, owned by the Qatari Investment Authority, has 11 million visitors per year to its Knightsbridge store, more than 5,000 employees and 300 departments.

The report talks about Harrods’ long history and its Victorian-era department store, adding a warning about the environment: “For Harrods to continue operating for another 175 years, we need to play our part.”

Managing Director Michael Ward says: “While Harrods has witnessed unprecedented change over the first 175 years of its history, we are facing an even more rapidly changing future.

“We recognise that it is only by putting the sustainability of our business, our supply chain and the planet at the forefront of our business that we can ensure the continuing high standards we have always stood for and that our customers have always expected.”

The report tells how the ESG strategy has three pillars – business, products and people.

Harrods

The Business Pillar

The report says Harrods re-baselined its decarbonisation targets from 2019 to 2022 as its focus on improving its data collection over the past year “created the opportunity to provide a more accurate starting point for our targets going forward”.

It adds: “The focus in 2023 has been on improving efficiencies and driving down energy consumption across the Harrods estate through installing on-site renewables in our distribution centre, transitioning our fleet and establishing wider plans to source renewable electricity for the business.”

Harrods has introduced circularity initiatives, focusing on improving data to drive down waste and continuing to improve packaging credentials.

That report goes on: "We also mapped our Scope 3 emissions for the first time, which will allow us to engage with suppliers on their own decarbonisation plans and begin to work collaboratively towards shared goals.”

Harrods' ESG targets

The products pillar

The products pillar has seen the Harrods team working to develop and further embed responsible sourcing practices across its own products and categories.

The Harrods in-house brand line is due to relaunch in 2024, with “sustainability principles embedded in all new products”.

Among a number of product circularity initiatives, Harrods Tailors offers restoration and rental options in store, giving customers more sustainable options.

The people pillar

The report says: “Harrods’ people pillar has focused on collecting data to support better insights into our colleague community, developing stronger culture and learning programmes, as well as launching new Belonging Networks to support a more inclusive culture."

Harrods

Scope 1 & 2

The company warns: “For Harrods to continue operating for another 175 years, we need to play our part.”

One of the results is an exacting target of reducing absolute Scope 1 and 2 greenhouse gas emissions by 90% by 2030 against a 2022 baseline.

The report says: “We plan to meet this aim through a combination of responsible energy procurement, moving away from sources such as gas, and increasing efficiency at our Thames Valley Distribution Centre, Knightsbridge store and Trevor Square locations.”

Harrods (Photo: Getty Images)

Past, present and future

There is clear acknowledgement in the report of the difficulty of achieving net zero in a historic building.

It says: “Working within a 175-year-old Grade II-listed building can present a unique set of challenges for driving efficiency.

“We seek to balance a respect for history with the innovation that has brought us to our 175th year.”

It adds: “We have seen a substantial decrease in consumption at our Knightsbridge store (10% in our gas consumption and 2% in our electricity consumption), driven by initiatives such as upgrading our boilers and moving to LED and light-sensor-based lighting systems for the shop floor, external façade and adjoining offices.”

At the same time, 80% of lights in the main store are LED.

Across its wider estate, Harrods has moved its fleet to electric and biofuel sources, while in 2023 it installed solar panels to generate on-site renewable energy at its Thames Valley Distribution Centre.

It says: “The PV array – made up of approximately 5,000 cells – will provide nearly 1.4 million kWhrs of annual output offsetting more than 1.1 million Kwhrs. This is 41% of the site’s annual power requirement.”

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More from the MD

Michael says: “I am proud to present Harrods’ inaugural ESG report, outlining the steps we are taking as a business to ensure we operate as a sustainable and conscientious luxury retailer.

“While this is our first external report, we have been on this journey for a number of years.”

In 2020, Harrods launched the Harrods Path, its “commitment to make responsible decisions for both people and the planet in every part of our business”.

Michael says: “Over the past few years we have significantly invested in the future of the store and the sustainability of this development has been a key consideration, from reconfiguring our iconic façade lighting to the transition to our electric and HVO delivery fleet and elimination of plastic from across our outbound packaging and retail carrier bags.

“Looking to the year ahead, we have further exciting projects aligned with our five key pillars: from introducing new charity partners, volunteering and fundraising initiatives to Scope 3 mapping and transitioning to renewable energy, as well as a relaunch of our Harrods own-brand ranges and products, built from the beginning with sustainable considerations at its heart.”

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