Simon Sustainability Report 2021

SIMON SUSTAINABILITY REPORT 2021

WHEREYOUSHOPMATTERS A study conducted by Simon and Deloitte Consulting has shown physical shopping to be up to 60% more environmentally sustainable than digital shopping. The negative environmental impact consequences of digital shopping include increased returns, expedited shipping, and the additional packaging of e-commerce. The lower emissions associated with brick and mortar were driven by shoppers making a greater number of purchases per trip and combining their physical visits with other activities as part of their “trip chain.” Looking at all material, energy, and waste attributable to a product in its life cycle, the study shows that physical shopping is approximately three times more environmentally sustainable than just a couple of years ago due to changing consumer behaviors. Shopping digitally leads to five times more returns, which considerably increases environmental impact. Emissions from the creation of packaging for online orders are five times greater than they are for the packaging for physical shopping. RETURN-TO-STORE Returning goods purchased online back to the store instead of the distribution center reduces carbon emissions by an average of 40%, according to recent studies. When customers return goods directly to stores, one of two things

happens; either (i) the item is remerchandised by the retailer in-store; or (ii) the retailer consolidates the item with other returned goods and sends them back to the distribution center weekly. In the case of the former there is no additional packaging needed, nor are there any shipping costs. In the case of the latter, with the consolidation of the goods, less packaging is required and transport costs are reduced. Both of these return processes result in a significantly smaller impact on the environment than when individuals repackage the goods they are returning and leave them for an e-commerce employee to return to the distribution center. Encouraging customers to return-to-store also gives brands a better opportunity to save the sale or up-sell. Today 71% of shoppers make a purchase when they return-to-store, far higher than when returning by courier or U.S. mail. Only 7% of our top 100 brands emphasize or promote return-to-store for online retail returns. Brands have an opportunity to positively impact their bottom line and lower their carbon footprint by shifting from a passive return channel strategy to a more proactive one that encourages and incentivizes shoppers to bring returns to store. Simon intends to actively promote the return-to-store strategy with retailers and implement actions that help drive consumers to return their purchases to the stores.

LESS TRANSPORTATION

SUPPORTS LOCAL ECONOMY

MORE SOCIAL INTERACTION

LOWER CARBON FOOTPRINT

RETURN TO STORE

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ENVIRONMENT

CREATING SUSTAINABLE CENTERS

CUSTOMERS

COMMUNITIES

EMPLOYEES

APPENDIX