Merriden Group plc is a United Kingdom clothing retailer operating 310 stores and an online channel, employing 6,800 people directly and sourcing from around 140 supplier factories in Bangladesh, Turkey, India and Portugal. The group places approximately 78 million garments a year. The author is Group Director of Sustainability, reporting to the Chief Executive and attending the board’s Audit and Risk Committee. Organisational detail is illustrative and anonymised.
Table of Contents
Introduction
Apparel retail concentrates almost every unresolved question in corporate responsibility into a single business model. The environmental impact sits overwhelmingly in a supply chain the retailer does not own, the labour risk sits with workers it does not employ, and the commercial model depends on volume and price points that make both harder to address. This assignment discusses organisational approaches to responsibility and sustainability, critically assesses what enables and obstructs them, presents the case for commitment, and sets out how that commitment should be led and sustained with stakeholders.
Learning Outcome 1: Understand corporate social responsibility and sustainability in organisational contexts
AC 1.1 Discuss organisational approaches to corporate social responsibility and sustainability
The compliance approach. The narrowest position treats responsibility as meeting legal obligation. For Merriden this covers modern slavery statement requirements under section 54 of the Modern Slavery Act 2015, the directors’ duty under section 172 of the Companies Act 2006 to have regard to employees, suppliers, community and environment, and reporting obligations. Discussing its limits, compliance is a floor rather than a strategy, and it is a moving floor: the Department for Business and Trade published UK Sustainability Reporting Standards S1 and S2 on 25 February 2026, based closely on the international baseline, initially for voluntary use with further consultation on scope and legal integration to follow (Department for Business and Trade, 2026).
The philanthropic and staged approach. Carroll’s much-used pyramid arranges responsibility in four layers, economic, legal, ethical and philanthropic, with each resting on the one beneath. Discussing its value, the model is intuitive and remains useful for separating what an organisation must do from what it chooses to do. Discussing its weakness, the hierarchy implies that ethical obligation is discretionary once economic and legal duties are met, which for a business whose supply chain carries forced labour risk is not a defensible ordering (Crane et al., 2024).
The integrated or strategic approach. Porter and Kramer’s argument for creating shared value holds that social and commercial value can be generated simultaneously by reconceiving products, redefining value chain productivity and building supportive local clusters. Discussing its application at Merriden, the reduction of water and chemical use in dyeing lowers both environmental impact and unit cost, which is a genuine shared value case. Discussing the critique, Crane and colleagues argue the concept is naive about the real trade-offs between social and economic outcomes, ignores the tensions compliance genuinely creates, and rests on a shallow conception of the corporation’s role (Crane et al., 2024). At Merriden the honest position is that paying a living wage in Bangladesh raises cost and does not pay for itself, and describing it as shared value would misrepresent the decision.
The circular and systems approach. Reframing the business model rather than mitigating its impacts, through durability, repair, resale and materials recovery. Discussing its significance for apparel specifically, the sector’s impact is driven by volume, and an approach that improves the footprint of each garment while volume rises does not reduce total impact. This is the approach with the greatest potential and the greatest conflict with the existing commercial model.
The reporting and disclosure approach. Discussing a route many organisations mistake for a strategy, adopting a reporting framework produces measurement and comparability but not change. Whittington et al. (2023) note that disclosure regimes shape what organisations attend to, which is a real effect, but attention is not action.
Discussing how approaches relate to organisational context. These are not free choices. A privately held business with patient ownership can adopt a circular model that a listed retailer answering to quarterly expectations cannot. A business whose impact sits in its own operations can act unilaterally, whereas one whose impact sits four tiers into a shared supply chain cannot resolve it alone. Merriden sits in the harder position on both counts, which is why its realistic approach combines integration into commercial decision making with sector-level collaboration, rather than selecting a single model from the literature and applying it.
AC 1.2 Critically assess enablers, constraints and barriers to corporate social responsibility and sustainability
Enablers. Regulatory requirement is the most reliable enabler because it removes the option of inaction and creates a level field between competitors. Investor and lender expectation follows, since access to capital increasingly depends on credible climate and human rights disclosure. Customer and employee expectation enables where it is genuine, and Merriden’s own research indicates responsibility ranks fourth among purchase drivers behind price, fit and style, which is a weaker enabler than sector rhetoric suggests. Board-level sponsorship enables, and the Financial Reporting Council’s Code expects boards to assess and monitor culture and to consider wider stakeholder interests (Financial Reporting Council, 2024). Cost reduction enables where impact and expense move together, as in energy, packaging and transport.
Critically assessing these, they are unevenly reliable. Those resting on external pressure hold only while the pressure holds, which is precisely the point the current regulatory position illustrates.
Constraints. Constraints limit what is achievable rather than preventing action. Commercial model constraint is the most fundamental at Merriden: price architecture and volume assumptions determine what the supply chain can be paid, and responsibility initiatives that do not touch the commercial model operate within a boundary the model has already set. Supply chain distance constrains, since the group has direct contractual relationship only with first-tier factories while much of the environmental and labour risk sits at second and third tier. Capital constraint limits investment in resale infrastructure and materials innovation. Competitive constraint operates where acting alone raises cost against competitors who do not, which is the collective action problem at the centre of sector-level responsibility.
Barriers. Barriers obstruct and can in principle be removed. Short-termism in reporting and incentive cycles is the most persistent, since responsibility investments pay back over periods longer than the executive incentive horizon. Data quality is a substantial barrier, as emissions in the value chain, which constitute the overwhelming majority of the group’s footprint, are estimated rather than measured. Organisational structure is a barrier where responsibility sits in a specialist function rather than in buying, where the decisions that determine impact are actually made. Capability is a barrier: most managers reach their role without preparation for this work (Chartered Management Institute, 2023). And internal scepticism, formed by previous initiatives announced and abandoned, obstructs credibly.
A critical assessment of the current position. The most instructive development is that the regulatory enabler has partially reversed. Directive (EU) 2026/470, the Omnibus I package published in the Official Journal on 26 February 2026 and in force from 18 March 2026, raised the scope threshold for the Corporate Sustainability Reporting Directive to companies with more than 1,000 employees and net turnover of at least €450 million, exempting a large majority of entities previously in scope, and raised the due diligence directive threshold to more than 5,000 employees and €1.5 billion turnover while removing the obligation to adopt a climate transition plan (European Union, 2026). Critically assessed, this exposes the fragility of any responsibility position built on compliance: an organisation that scaled its ambition to the regulatory requirement now has less requirement and no obvious reason to maintain the ambition. It also creates a strategic opening, since organisations that continue to report and act while others step back acquire a differentiation that was unavailable when everyone was compelled. The assessment for Merriden is that the enablers most likely to endure are commercial and reputational rather than regulatory, and the strategy should be built accordingly.
AC 1.3 Present a case for organisational commitment to corporate social responsibility and sustainability
The risk case. The strongest argument is exposure. Merriden’s supply chain carries forced labour and unsafe building risk, and a serious incident traced to a group supplier would produce customer, investor and retail partner consequences substantially exceeding the cost of prevention. Climate exposure is material and physical: cotton yields in principal sourcing regions are already affected by water stress, which is a supply security question before it is an environmental one.
The commercial case, presented honestly. The case is strongest where impact and cost move together. Energy, packaging, transport and materials waste all reduce cost when reduced. Resale and repair open a revenue stream from garments already sold. The case is weakest, and should be presented as weak, on supply chain labour standards, where a living wage raises unit cost with no offsetting return.
The evidence, critically presented. The relationship between responsibility performance and financial performance is frequently asserted more confidently than the evidence supports. Correlational studies are numerous, causation is not established, and reverse causation is plausible since profitable firms can afford better practice. Crane et al. (2024) caution against business cases that overstate the alignment between social and commercial outcomes, because the overstatement is eventually tested. A case presented to the board on cost avoidance, risk reduction and specific revenue opportunity will survive scrutiny; one resting on a claimed general performance premium will not.
The legitimacy and moral case. Section 172 of the Companies Act 2006 requires directors to have regard to the impact of operations on the community and environment, which places the question inside the statutory duty rather than outside it. Beyond compliance, the moral argument is that a business whose model depends on the labour of people earning below a living wage carries an obligation that does not disappear because those people are employed by a supplier. Presenting this alongside the commercial case matters: a case resting only on commercial return implies the commitment would be abandonable if the return disappeared, which employees and customers recognise.
The talent case. Recruitment and retention benefit where commitment is credible, and evidence links how people experience their organisation to commitment and discretionary effort (Barends, Rousseau and Janssen, 2023).
The strategic positioning case. A further argument has become available only recently. Where regulatory obligation applied to everyone, responsibility performance could not differentiate. With obligations now narrowed for a large part of the market, an organisation that maintains disclosure and standards holds a position competitors have vacated, which matters commercially with retail partners and institutional investors who continue to apply their own requirements irrespective of statutory scope.
The case as presented. Commitment is justified on grounds of material risk exposure, specific and identified commercial opportunity, statutory duty and moral obligation, with an explicit statement that not every element pays for itself and that the group is choosing to bear a net cost in some areas. That honesty is what makes the remainder believable.
Learning Outcome 2: Know how corporate social responsibility and sustainability is applied in an organisational setting
AC 2.1 Justify an approach to leading and implementing corporate social responsibility and sustainability in an organisational context
The approach proposed. Responsibility is integrated into the buying and commercial functions rather than delivered by a specialist team, governed through the Audit and Risk Committee, prioritised by double materiality assessment, and reported against the UK Sustainability Reporting Standards on a voluntary basis ahead of any mandatory requirement.
Justifying integration over specialism. The decisions determining Merriden’s impact are made by buyers selecting suppliers, agreeing prices and setting lead times. A sustainability function with influence but no authority over those decisions can report impact and cannot change it. Justifying the mechanism, buyer objectives and incentives are revised to include supplier standards and lead-time discipline alongside margin and speed, since Mullins (2022) observes that behaviour follows measurement rather than instruction.
Justifying governance placement. Locating oversight with the Audit and Risk Committee rather than a standalone sustainability committee treats the matter as risk rather than as reputation management, which reflects the case set out above and imports existing assurance discipline. The Financial Reporting Council’s Code expects boards to monitor culture and to have regard to wider stakeholder interests (Financial Reporting Council, 2024), and this placement operationalises that.
Justifying materiality-based prioritisation. A business of this size can pursue perhaps four issues seriously. Double materiality assessment, considering both impact on the world and financial effect on the business, identifies which. For Merriden this produces supply chain labour standards, value chain emissions, materials and water use in production, and product durability, and it excludes matters that generate more communication than impact.
Justifying voluntary early adoption of reporting standards. Given that the regulatory tide has partially receded, adopting the UK Sustainability Reporting Standards voluntarily is a deliberate choice (Department for Business and Trade, 2026). It is justified on three grounds: investor expectation persists regardless of statutory requirement; the discipline of preparing to a standard improves internal data quality, which is a barrier identified above; and early adoption is cheaper than late compliance when scope is eventually extended.
Justifying leadership behaviour. Northouse (2025) identifies visible role modelling as central to influence, and a commitment announced by the Chief Executive and then contradicted by a buying decision is worse than no announcement. The approach requires the executive to accept a specific decision that costs money, publicly, early, since that is the evidence on which internal credibility rests.
Justifying honesty over ambition. The approach commits to fewer targets, each evidenced, rather than a broader set that cannot be substantiated. This is justified by exposure: the Digital Markets, Competition and Consumers Act 2024 strengthened enforcement powers against misleading environmental claims, and an overstated claim now carries regulatory as well as reputational consequences.
AC 2.2 Propose a strategy to gain ongoing stakeholder commitment to corporate social responsibility and sustainability
Strategic intent. To convert responsibility from a corporate position into a set of commitments that stakeholders continue to hold Merriden to, and continue to participate in, over a period in which external pressure is uneven.
Suppliers. Commitment is secured by changing the commercial relationship rather than by auditing harder. The strategy commits to longer-term volume agreements with strategic suppliers, payment terms that do not push working capital onto the factory, and lead times that do not require unplanned overtime. Buchanan and Huczynski (2023) note that behaviour at an organisational boundary responds to the incentives the relationship creates rather than to the standards it states. Auditing continues as verification, not as the primary mechanism.
Investors. Structured engagement through voluntary reporting to the UK standards, an annual sustainability session ahead of the results cycle, and transparency about what has not been achieved. The strategy anticipates that some investors will deprioritise this as regulatory pressure eases, which makes the argument to them a risk argument rather than a values one.
Colleagues. Commitment is sustained where people can act rather than only hear. The strategy establishes decision authority within roles, sets objectives that include responsibility measures, and reports progress at store and function level rather than only at group level. Colleagues who see nothing change in their own work will conclude the commitment is external messaging.
Customers. The strategy avoids campaign-led claims in favour of product-level information, repair and resale services that are genuinely available, and pricing transparency on the small number of lines where a higher standard carries a higher price. Given the finding that responsibility ranks fourth among purchase drivers, the strategy does not assume customers will pay a premium and instead builds commitment through service and information.
Board and executive. Sustained commitment requires the matter to remain on the agenda when it is no longer topical. The strategy fixes a standing quarterly item at the Audit and Risk Committee, an annual board review of the materiality assessment, and inclusion of two responsibility measures in executive incentive arrangements, which is what converts stated priority into personal consequence.
Communities and civil society. Continued participation in sector-level collaboration on labour standards, on the grounds that the competitive constraint identified above is only resolvable collectively, and openness to external scrutiny including publication of the first-tier supplier list. Engagement with non-governmental organisations is structured as scheduled dialogue rather than as response to campaign, since an organisation that engages only when criticised teaches critics that criticism is the route to attention.
Anticipating disengagement. The strategy assumes commitment will be tested rather than sustained automatically. Three points of likely erosion are identified in advance: a trading downturn, when responsibility investment is the first discretionary spend examined; a change of executive sponsor, which historically ends initiatives regardless of their merit; and the continuing easing of regulatory pressure. The response to each is the same, namely that commitments are embedded in incentive arrangements, board reporting cycles and supplier contracts, so that withdrawal requires an explicit decision rather than occurring through inattention.
Sustaining the strategy. Whittington et al. (2023) observe that strategic commitments erode where they are not embedded in measurement and resource allocation. The strategy therefore reports against a small number of externally verifiable measures, states publicly what has not been delivered, and reviews the materiality assessment annually so that commitments reflect what matters rather than what was decided three years ago.
Conclusion
The discussion of approaches found compliance to be a moving floor rather than a strategy, Carroll’s hierarchy to be intuitive but wrongly ordered for a business carrying forced labour risk, and shared value to be genuine where impact and cost align and misleading where they do not. The critical assessment concluded that the enablers currently most emphasised are the least durable, a judgement the Omnibus rollback of European reporting and due diligence obligations makes concrete rather than hypothetical, and that the strategic opening now lies with organisations that maintain commitment as others step back.
The case for commitment was presented on risk exposure, identified commercial opportunity, statutory duty and moral obligation, with the deliberate inclusion of an admission that parts of it carry net cost, since a case claiming universal alignment between doing well and doing good does not survive board scrutiny. The approach justified integrates responsibility into buying rather than housing it in a specialist function, on the reasoning that impact is determined by decisions the specialist function does not make. The stakeholder strategy accordingly rests on changing commercial relationships rather than on communication, and on reporting what has not been achieved as the condition of being believed about what has.
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