Zalando Details ESG Hits and Misses in 2023 Sustainability Report

Kate Nishimura
·5 min read

Zalando’s “do.MORE” sustainability framework, launched in 2019, is coming to a close—and the Berlin-based e-tailer owns that it missed some of its goals.

The company this week released its 2023 Sustainability Progress Report, detailing the strides it’s made in curbing emissions and upskilling staff in sustainable processes. But the group admits it has a long way to go in promoting circularity across its product lines and adopting a more sustainable assortment.

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Made up of six targets to be achieved by 2023 or 2025, the do.MORE roadmap includes goals surrounding greenhouse gas (GHG) emissions reductions, minimizing waste, sustainable product lines, circularity, supply chain ethics and education. “Our journey toward meeting the do.MORE goals has been both intense and insightful,” Zalando co-CEO David Schneider wrote. “Yet we did not fully meet our targets, many of which were due to be met by the end of 2023.”

Among the company’s most notable misses was its 2023 goal of seeing 25 percent of its Gross Merchandise Volume generated with more sustainable products made using preferred materials and processes, like recycled, organic and natural fabrics. To date, Zalando claims just 10.5 percent of its assortment fits that bill.

What’s more, the number of products with sustainable attributes dropped from 180,000 to 108,000 between 2022 and 2023. Last year, 43 percent of Zalando shoppers bought one or more items with a sustainability-related attribute, down from 54 percent the year prior. The group said the decrease was attributable to changes in the way it collected sustainability data.

The group is also far behind schedule when it comes to promoting a circular economy for its products. Zalando said it has extended the life of about 6.3 million products, reaching about 12 percent of its 2023 goal. Incorporating lower-impact materials, promoting reuse and repair, minimizing waste and building out recycling infrastructure are key to “creating a more sustainable future for fashion,” the company said.

“But despite increasing regulatory support, brand commitments to sustainability, and shifting consumer behavior around these kinds of efforts, they still aren’t being undertaken at the scale necessary to mitigate global challenges like climate change and resource scarcity,” it added.

It has also struggled to break up with single-use plastics. Zalando set the ambitious target of using zero grams of single-use plastic packaging per item shipped to customers by 2023, but currently, it’s averaging about 7.4 grams.

Zalando is well on its way to hitting some of its bigger targets, however. In 2019, it set the goal of slashing Scope 1 and Scope 2 emissions by 80 percent by 2025, and it has already achieved 78 percent, more than a year ahead of schedule. It surpassed its goal of reducing emissions from its private-label products by 40 percent in the same time frame, cutting its output by 43 percent in 2023.

Zalando also aims to see 90 percent of its supply chain partners set science-based targets (SBTs) related to emissions reduction by 2025. Currently, more than 64 percent have done so, meaning that the retailer has hit 72 percent of its goal. It also focused heavily on educational opportunities for its global staff, from promoting innovation to training in new technologies. Since 2020, the group has seen 9,925 individuals partake in such training, nearly meeting its 10,000-person goal.

According to Schneider, the do.MORE framework provided a roadmap for the first phase of the company’s sustainability journey. “Along the way, we learned a great deal about ourselves, our business, and our path forward, becoming more adept at identifying risks, opportunities, and potential pitfalls,” he said. Throughout some of those trials, the Zalando team “recognized that we can make the greatest impact by going deeper into a few focused areas rather than spreading ourselves too thin across too many.”

“We learned that sustainability shouldn’t be the focus of a single team but rather permeate all parts of our business,” he added. “And we found that we were most successful when we worked together with partners to tackle these complex challenges.”

Moving forward, the executive said the company is intent on embedding sustainability strategy into its overall operations. “This will serve to integrate sustainability throughout the business, enabling every employee, team, and business function to play a meaningful part in our collective sustainability ambitions, as well as to signal that our commitment to sustainability is core to our ambitions,” he said.

The report said that failing to meet targets is something Zalando must “acknowledge and take responsibility for” while noting that the overall outlooks for fashion and sustainability have evolved greatly since 2019. New legal frameworks in Europe, along with shifts in consumer consciousness and scientific perspectives, will inform the group’s forthcoming environmental and social commitments.

Change is already underway at the firm as it makes moves to keep up with budding regulation. In February, Zalando engaged in a dialogue with European consumer authorities about utilizing “misleading” or “unjustified” symbols and terms to denote sustainable products. Consumers will no longer be able to use “sustainability” as a search term on the site, and will instead need to filter products based on specific characteristics like material makeup. The group must also replace icons of leaves or trees with clear, concrete descriptors about specific items, like a percentage figure showing how much recycled material it contains, for example.

“Moving forward, we aim to ensure our strategy is resilient, capable of swift adaptation and evolution, and continuously informed by real-time industry shifts and business impacts,” Zalando wrote this week.