Corporate social responsibility and sustainability: How to save the earth
Today corporate social responsibility must include sustainability. Discover examples, definitions, and how to attain sustainable commerce.
As the saying goes, the cheaper the better. Today, though, that old priority on price has given way to sustainability and circular commerce. Consumers are looking for retailers with sustainable products and practices, from manufacturing and packaging to how they handle returns and extend product life.
Forest fires, heavy rains, record heat – climate change is becoming nearly impossible to deny. No wonder more and more consumers are rethinking their current consumption patterns.
According to recent surveys, the focus of their purchasing decisions is increasingly shifting toward environmental friendliness and social responsibility. For example, the Capgemini Research Institute found that nearly 80% of 7,500 consumers surveyed now prefer to shop in a responsible, environmentally friendly way.
More than one in two consumers (53%) are willing to switch to lesser-known brands, as long as they are more sustainable. Nearly as many (52%) feel greater emotional ties to products or organizations they perceive to be sustainable, according to the research report. And 72% are concerned about their environmental footprint.
Circular commerce: How retail must evolve
This shows how important the issue is for retailers, especially since consumers want to actively support the circular economy as well as sustainable value-adding processes.
What does this mean in concrete terms? First, the lifecycle of sold products must be made more sustainable through recycling, reduction of packaging waste, and efficient logistics processes.
Secondly, the consistent use of renewable energies, for example, contributes to a resource-efficient business orientation that in turn reduces the carbon footprint and contributes to the decarbonization of the economy.
PwC expert Hendrik Fink is convinced circular commerce is here to stay.
“The circular economy will become the new normal. Companies that succeed at reinventing themselves and establishing innovative business models based on the circular economy will be the winners of tomorrow,” he said.
Sustainability boosts customer loyalty, bottom line
Ultimately, it’s not only the environment and the climate that benefit from the circular commerce trend. Customer relationships also get a boost.
The Capgemini study found that 77% of companies believe that sustainability results in more customer loyalty, while 63% say it increases brand revenue. This makes it even more important for retailers to start focusing on their ecological footprint.
Sustainability in fashion: Industry teeters on ethical catwalk
Sustainability and fashion appear to be on opposing catwalks destined for collision. Fashion is a $2.5 trillion industry, producing 10% of global carbon emissions, 20% of global wastewater, and vast biodiversity loss. Consumers are demanding change, forcing sustainability in fashion as a requirement, not a trend.
- Levi’s Buy Better, Wear Longer campaign, which counters the fast fashion throw-away model
- Online marketplaces for second-hand fashion, including ThredUp, Poshmark and RealReal
- Allbirds has built an extremely loyal customer base for its footwear made from natural materials
- Canadian grocer IGA Extra Famille Duchemin grows their own organic fruit and vegetables on the roof of their store, saving the supermarket energy, cooling, and delivery costs while consumers know exactly where their produce comes from.
Circular economy examples: Brands changing the game
Circular economy examples: Learn the brands that are leading the way to a more sustainable future, and how they're doing it.
Green power marketplace brings climate solutions together
To give small and midsize retailers and other businesses access to green power and support circular commerce, startup DIGITAL Renewables (DR) launched a green power marketplace. The online marketplace will bring renewable energy producers, consumers, and climate solutions together more quickly and more easily in the future.
The demand is there, says Lukas Liebler, DR co-founder and managing director.
“On one hand, there is growing demand for green energy on the business side, while on the other hand there is a major transformation under way on the producer side — the number of large power plants continues to shrink, to the benefit of smaller green electricity producers,” he says.
In addition, the startup wants to use the DR Marketplace to issue micro CO2 certificates in the future, which can be offered and purchased with just a few clicks.
How exactly does this work? Why will circular commerce become increasingly important to the retail trade in future? I discuss these questions and more with Lukas and the K5 managing director and moderator Sven Rittau in this episode of the K5 Commerce Cast powered by SAP, which is available here.