Government regulation is needed to encourage businesses and consumers to act in a sustainable way, two of the UK’s leading retailers told an industry conference in London today (19 March).

Marks and Spencer and The Co-operative Group, two retailers that have pursued ambitious strategies to improve the impact of their businesses on the environment, both said government intervention was necessary to get industry and consumers thinking green.

Paul Monaghan, head of social goals and sustainability at the Co-op, insisted legislation had been the driver behind earlier attempts to clean up the impact of consumer behaviour on the environment, citing the move to ban lead in petrol.

Monaghan said regulation, or the threat of regulation, would help create a framework for sustainable industry and consumption and encourage shoppers less inclined to choose green products.

“At that point, when the 5% of ethical consumers that exist in the UK have saturated the take-up and it’s not going any further, that’s when legislation needs to be talked about – either the threat of it or the imposition of it,” Monaghan told the Retail Week Conference 2009 in London. “It’s the only thing that is going to make this work. Regulation is the start and finish of this debate.”

Richard Gillies, director of Marks and Spencer’s Plan A green strategy, agreed that regulation, or at least the threat of it, was needed to encourage businesses and consumers to act sustainably.

However, he cautioned that legislation needed to be crafted in collaboration with business and NGOs and not just by government or regulatory bodies.

“Legislation has to come up behind to level the playing field for those people who are doing it right. There will always be somebody who is less scrupulous and looking to make a fast buck and will continue to cash in on the free resources and therefore legislation has to come up behind,” Gillies said.

“The risk is, if [legislation] comes up front, ahead, too far, there’s always a risk you’ll legislate the wrong thing. But it, or the threat of regulation, has got to be there.”

The comments come from two UK retailers at the forefront of pursuing sustainable business policies. M&S has developed its Plan A strategy, which encompasses moves to reduce waste sent to landfill and the use of plastic bags.

The Co-op, the UK’s fifth-largest grocer, claims it has a “leading position in ethical trading” and last month launched a corporate rebranding focusing on its commitment to policies such as Fairtrade sourcing.

As the UK economy navigates recession, some industry watchers have questioned business commitment to sustainability and suggested investment in such policies could be trimmed.