How to manage the details of impact retail to serve your greater vision How can impact retailers afford to incorporate global supply chains, sustainable packaging, and corporate social responsibility in ways that help their businesses grow while reflecting their ethical standards? The answer: when it comes to competitive edge, new studies from NYU’s Center for Sustainable Business show that sustainability is king. The real question, then, is how to build—or shift—your e-commerce business to embrace the socially-conscious and environmentally-friendly practices that will position you for growth and success in the years to come. The Foundation: An Ethical Supply Chain As impact retail takes hold, companies embracing ethical practices attract more customers—and are also subject to greater scrutiny. Consumers are more attentive to the sourcing and labor that bring products to their doors. Maintaining an ethical supply chain is key. Two major concerns in this area are employing fair labor practices and the ethical sourcing of raw materials to protect natural resources. Transparency throughout global supply chains can seem daunting but is possible.
Environmental sustainability is no longer just a corporate social responsibility (CSR) issue—it’s a business imperative. Opportunities and risks related to the environment now challenge the strategies and operating models of organizations across all sectors and functions. In fact, environmental strategy choices, as a subset of a broader sustainability agenda, increasingly define a company’s prospects in today’s competitive marketplace. According to the World Economic Forum’s Global Risk Report 2020, the top five business risks were linked to environmental challenges, including extreme weather and climate action failure. So it’s no surprise that investors and financial managers are increasingly incorporating sustainability criteria in their investment decisions. In early 2020, Blackrock, the largest money manager in the world, announced “that sustainability should be our new standard for investing.” Customers and employees have also become much more environmentally conscious. A recent study by IBM found that nearly 80 percent of consumers indicate sustainability is important to them and 60 percent are willing to change their shopping habits to reduce environmental impact.
As social and environmental awareness grows, consumers and businesses increasingly value ethical practices. In fact, according to the 2018 Conscious Consumer Spending Index, 59% of people buy goods or services from companies they consider socially responsible. 32% of Americans plan to spend even more in the coming years with companies that align with their social values. Customers are embracing ethical eCommerce, from online stores that are selling products fair-trade, to online businesses that give back to their communities in some way. Shoppers are also experiencing growing concerns about the environmental impacts of their purchasing choices. They increasingly seek out commerce sites that clearly outline their eco-friendly efforts, offer high quality, sustainable products, and embrace manufacturing processes that minimize their environmental footprint. In particular, online fashion trends are leaning into “reuse, re-wear, recycle,” styles, with many retailers offering discounts for returning old garments, and resale sites like Poshmark and thredUP catering almost exclusively to reselling clothing.