Climate transition offers wholesalers new business opportunities

According to an analysis by ING Research, the wholesale sector has less ambitious CO2 reduction targets than the retail sector. On average, wholesale companies aim to reduce their own Scope 1 and 2 CO2 emissions by 48% by 2030. Many of these companies are not yet sufficiently aware of the opportunities the climate transition offers them thanks to their strategic position in the chain.

All too often, wholesale companies implement sustainability measures only because of regulations and if it pays off whereas the climate transition actually offers them new opportunities, ING Research reports. As a distributor in the chain, they can offer new services that unburden companies in the chain and help them on their way to becoming more sustainable.

Given the international environment in which the wholesale sector operates, ensuring a level playing field in Europe is a key condition for the sustainability transition to be successful. According to ING Research, the introduction of European sustainable reporting rules (CSRD) is the first important contribution to this.

Target: 48% CO2 reduction by 2030

An ING Research survey of 25 Dutch wholesale companies shows that only half of the companies surveyed have published concrete climate goals. These companies aim to reduce their Scope 1 and 2 CO2 emissions by 48% by 2030. This is lower than the 55% CO2 reduction target set by the EU.

Moreover, it is also lower than in the retail sector, where the target of the 40 largest Dutch retail formulas is also to reduce direct CO2 emissions by 55%. According to ING Research, this shows that the closer the product in the chain gets to the consumer the more important sustainability becomes. This means companies in B2C are generally already further ahead in terms of sustainability than companies in B2B.

Stronger position in the chain

‘Wholesale companies still have a lot of work to do on climate transition to meet the targets set by the EU. Yet sustainability also offers wholesale companies new opportunities. Thanks to their position as distributors in the chain, they can offer new services that unburden companies and help them on their way to becoming more sustainable,’ says Dirk Mulder, Sector Banker Retail & Trade at ING.

‘This could be offering maintenance of equipment for a longer lifespan, developing a more sustainable product line, or providing sustainability advice. It means they can deliver more added value and thus strengthen their position in the chain. However, the analysis shows that they are not yet sufficiently aware of this and therefore not really doing it.’

Energy-saving measures implemented first

Dutch companies are the first to implement mainly low-threshold sustainability measures with a short payback period, according to a recent ING survey on the sustainability of Dutch companies. Wholesale companies are no exception.

Energy-saving measures include switching to green energy, installing solar panels, heating with air conditioners instead of heating systems, and installing meters to monitor energy consumption. Waste reduction and plastic conservation are other sustainable as well as cost-saving measures.

Efficiency often takes precedence over sustainability

The subsequent steps towards sustainability are more complicated and also often require substantial long-term investments. Consequently, only a few companies are employing drastic measures such as switching to a more sustainable production process, discontinuing unsustainable activities, or parting with unsustainable suppliers. Nevertheless, price and return are often decisive factors for many companies in making sustainable investments.

Need for subsidies and a level playing field

Many wholesale companies only implement sustainability measures if they actually pay off. Not all companies in the chain are willing to pay more for a more sustainable variant. In many sectors, it is still all about the lowest price. In order to make the sustainability transition a success, companies feel there is a particular need for a stimulating subsidy policy. However, in practice, imposing levies often works better to achieve set goals.

In addition, uniform legislation in Europe should ensure a level playing field, especially given the international nature of the wholesale supply chain. In this respect, ING Research says the introduction of CSRD is a good start to get companies moving and ensure a level playing field.