For CEOs or founders of burgeoning e-commerce businesses, sustainability should not just be a passing thought – it should be integral to your company's ethos. This sentiment isn’t just coming from environmentalists but from your consumers too. A global survey by the Capgemini Research Institute revealed that 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact. This is even more prominent in the UK, where eco-conscious consumers are increasingly demanding sustainability from the businesses they buy from.
Why sustainability matters
Sustainability is not just an environmental necessity, but a business imperative. Embracing green practices can significantly impact your brand, operations, and financial bottom line.
Building a reputation for sustainability enhances your brand appeal to modern consumers who prefer to align themselves with environmentally responsible businesses. This is particularly true for younger audiences like millennials and Gen Z, who are leading the demand for sustainability.
Sustainable practices can also result in operational efficiency and cost savings, by promoting the economical use of resources, thereby reducing waste and saving money. And while sustainability should be pursued for its inherent value, it's worth noting that it can make your business more attractive to investors. According to the Global Sustainable Investment Alliance, sustainable investing assets have witnessed a growth of 34%, reaching $30.7 trillion in the past two years.
Ignoring sustainability, on the other hand, can risk regulatory penalties, competitive disadvantage, and reputational damage. Businesses that fail to align with the values of their increasingly eco-conscious customers risk losing them to competitors that do.
The investor perspective
It's worth noting that while sustainability should fundamentally be about making a positive impact, it also has financial benefits. Investors are increasingly considering sustainability as part of their decision-making processes. Funds like Mustard Seed MAZE and Bethnal Green Ventures, UK-based venture capital firms, have emerged, catering to this growing trend. Mustard Seed MAZE invests in "mission-driven founders at the seed stage", helping them create businesses that generate positive social or environmental impact. Bethnal Green Ventures focuses on early-stage start-ups that use technology to address societal and environmental challenges. Their approach underscores the shift in the venture capital landscape towards start-ups that not only have a strong financial proposition but also demonstrate a commitment to sustainability.
Investors are seeing the long-term value in businesses that consider the triple bottom line (profit, people, planet). However, the focus should not merely be on appealing to investors. Instead, sustainability should be an integral part of your e-commerce company's identity, driving all decision-making processes. This investor interest should be viewed as a by-product of adopting a sustainable business model rather than the main motivator.
Achieving sustainability in e-commerce: Practical steps
Sustainability is not a one-size-fits-all solution and demands a strategic blend of initiatives customised to your business needs, consumer expectations, and available resources.
Product life-cycle and sourcing: Begin by considering the environmental impact of your products. Could you extend their life cycle, offer repairs, or introduce a take-back scheme? You might also explore selling second-hand or refurbished products. Evaluate your supply chain from an ecological perspective. Source from suppliers who value ethical and sustainable practices. Implementing a supplier code of conduct can ensure they meet your sustainability standards.
Packaging solutions: Evaluate your packaging solutions. Are they minimal, reusable, recyclable, or compostable? Packaging innovation is an area that has seen considerable sustainable transformation, like Lush’s 'naked' packaging-free products.
Supply chain transparency: You can also explore using blockchain technology to increase supply chain transparency and traceability. This would not only ensure ethical sourcing but also resonate well with your informed consumers who prefer businesses that are transparent about their practices.
Energy consumption: Review your energy consumption. You could switch to renewable energy providers or invest in energy-efficient technologies.
Carbon offsetting: Lastly, engage in carbon offsetting. It involves compensating for your carbon emissions by investing in environmental projects like reforestation.
Case study: Patagonia
Outdoor apparel company Patagonia has established itself as a trailblazer in the sustainability realm. Their commitment to the "triple bottom line" is evident in their use of recycled materials, investments in renewable energy, and innovative marketing strategies. Patagonia's 'Worn Wear' initiative encourages customers to repair and recycle their clothing, reducing waste and fostering brand loyalty. By embracing sustainability throughout their supply chain and engaging customers in meaningful ways, Patagonia has demonstrated the positive impact of sustainable practices on brand reputation and market share.
Case study: Lush Cosmetics
Closer to home, the UK-based beauty brand Lush Cosmetics has been setting a benchmark in sustainability with their robust green practices. Their 'naked' packaging initiative, offering products without excessive packaging, has significantly reduced waste and resonated with environmentally conscious consumers. Lush sources ingredients ethically, often directly from growers, and places a strong emphasis on animal welfare and vegan products. Their dedication to transparency and environmental responsibility has cultivated brand loyalty and elevated their market presence. Lush serves as an inspiring example of how sustainability practices can drive customer engagement and business success in the e-commerce industry.
Case study: Wild
Another company making strides in the e-commerce sustainability space is Wild, a refillable deodorant brand. With a mission to shake up the single-use culture of the personal care industry, Wild offers customers an innovative refill system. The aluminium case is designed to be used forever, while the deodorant refills are biodegradable and delivered in compostable packaging. This approach not only reduces waste but also challenges the throw-away culture prevalent in the personal care industry.
Case study: Rab
Rab, a UK-based outdoor gear company, is setting a sustainability benchmark. Their repair service not only extends the life of their products, reducing waste, but also offers excellent customer service, enhancing consumer loyalty. Additionally, Rab's end-of-life programme encourages customers to return used products for recycling or donation, further reducing environmental impact. These initiatives underscore Rab's commitment to sustainability and customer service, bolstering their brand reputation. Rab serves as a compelling example of how sustainability and customer-centric services can drive success in the e-commerce industry.
Case study: Fussy
Fussy is another refillable deodorant company that is making waves. Like Wild, Fussy offers a refillable deodorant system, with the refills coming in compostable packaging. They also take sustainability a step further by planting a tree for every deodorant sold, working towards a more sustainable business model that leaves a positive impact on the planet.
Embracing the B-Corp model
E-commerce businesses seeking guidance on how to approach sustainability might consider the B Corporation (B Corp) certification. As a B Corp, businesses meet the highest standards of social and environmental performance. This certification assesses a company’s overall environmental impact, including its sourcing and manufacturing processes, its energy use, waste and pollution output, and the impact on the local community. It’s not just about meeting the requirements, the certification process itself provides a roadmap for sustainability, helping companies identify areas for improvement and promote continuous growth in their sustainability initiatives.
Sustainability in e-commerce is more than a market trend or a box-ticking exercise. It's an investment in the future of our planet and a powerful business strategy that aligns your company with customer values, bolsters brand reputation, and promises long-term profitability. Achieving it demands conscious efforts, strategic planning, and a commitment to continuous improvement. As you step onto the path of sustainability, remember that this journey is a rewarding one - for your business, your customers, and our planet.