Concerns about the environment and sustainable economic growth make businesses around the world implement more and more eco-initiatives
In this article, Pay Space Magazine wants to tell you more about a sustainable economy and to give businesses a hint on how they can become eco-friendly and which benefits it can bring along. We have also collected some real-life business cases proving sustainability is a trend that is constantly gaining traction.
What is a sustainable economy?
Sustainable economic growth is among the hottest issues in modern economics.
Sustainable economy is founded on the economic development that aims to satisfy the needs of consumers in a way that sustains natural resources and the environment for future generations.
The key point of the whole subject of sustainability is that the economy cannot function separately from the environment. Hundreds of years of the immense exploitation of natural resources have resulted in ecological problems becoming more acute and severe than ever before. Moreover, it has led to inevitable climate change. That’s why it is crucial for businesses worldwide to develop environmental consciousness and implement as many eco-initiatives as possible.
Why is it important for the business to be sustainable?
As we’ve mentioned above, the main idea beyond a sustainable economy is attempting to save natural resources for future generations.
For business, being sustainable and eco-friendly means being socially responsible. It helps to achieve consumers’ loyalty, as eco-movement is booming and people are more likely to spend money with businesses that prioritize corporate social responsibility. It is no surprise that value-led companies are more attractive to consumers.
Moreover, nowadays sustainability is already one of the important elements in the purchase decision process. InRiver survey among UK consumers shows that:
- 62% of young consumers in the United Kingdom would reconsider buying if retailers better communicated about the environmental impact;
- 63% would stop using a brand if it was damaging to the environment;
- 69% want more detailed product information about sustainability and environmental impact;
- 60% would reconsider the number of orders they return if retailers were more transparent;
- 20% of consumers buy only sustainable products.
The study also points out which factors are considered to be the most important when making a purchase:
- price – 41%
- quality – 25%
- sustainable packaging – 6%
- materials – 6%
- ethical production – 5%
- carbon footprint of delivery – 4%
In addition, respondents named checkpoints, which help them to judge whether or not a product is sustainable. They include packaging materials (47%), product information (44%), retailer’s marketing campaign and advertising (25%), and influencers (17%).
Another study, conducted by Nielsen, revealed that 66% of consumers worldwide are willing to pay more for sustainable products. It proves that sustainability is a win-win combination for both the economy and the environment.
What are the top 3 eco trends for business?
Now that we know consumers expect businesses to become more and more sustainable, let’s get down to the top 3 key eco trends and examples showing them in action.
Businesses of all sizes and fields are increasingly trying to demonstrate their commitment to a sustainable economy. There are many practices allowing businesses to call themselves “green”, like waste reduction, increasing energy efficiency, offering reusable packaging, etc.
Examples & business cases:
- Fashion giant Zara announced it plans to sell only sustainable clothing by 2025.
- American company The Sustainable Suite Inc. launched, offering a sustainable alternative to traditional packaging materials. It says it aims to reduce the carbon footprint for retailers while helping to increase operational efficiency and decrease overall packaging costs. Google Express already offers the company’s products to retailers and brands on its shopping platform in the US. There are a few similar successful startups, like French Loop or Finnish RePack.
- Ride-sharing app Lyft became one of the world’s largest purchasers of carbon offsets and made all its rides carbon neutral. The company also works on expanding the number of electric vehicles on the road.
Reverse commerce, or just recommerce, means selling previously owned or used products, like electronics, clothes, books, etc., to companies or consumers willing to repair, if necessary, and reuse, recycle or resell them. To cut a long story short, ‘recommerce’ refers to the buying and selling of pre-owned goods.
Examples & business cases:
- Secondhand markets (including used cars) in Western countries sometimes account for as much as 10% of total GDP. The market is also booming in China, reaching $71.1 billion in 2017, with the number set to double by 2020. According to Nielson, monthly active users on recommerce platforms in China grew 46.4% in 2018, almost double the growth rate of the users in the overall e-commerce sector.
- Farfetch has introduced an initiative to give designer bags a second life. Customers can exchange their beloved handbags for credit they can use to fund future purchases on the online fashion store.
- H&M Group invested in Sellpy, an online platform for second-hand fashion. The Swedish fashion retail group has become a majority owner with an approximate 70% stake in the recommerce platform.
According to the Zero Waste International Alliance,
Zero Waste is the conservation of all resources by means of responsible production, consumption, reuse, and recovery of all products, packaging, and materials, without burning them, and without discharges to land, water, or air that threaten the environment or human health.
In other words, it is a practice aimed at waste prevention and reuse of all products.
Examples & business cases:
- Popular German fashion retailer Zalando launched a pilot with reusable packaging in Finland, Norway, Sweden, and Denmark. Ten thousand customers received their orders in reusable shipping bags, reducing packaging waste.
- Vancouver startup Tradle is a new baby-clothing rental business billed as a zero-waste solution to dressing fast-growing babies and toddlers. Parents can subscribe to the service for $90 a month, use the clothes as usual, returning them once their child has outgrown them. Then they will be rented out to another family.
- In June, the UK’s Good Club, which strives to become the world’s first zero-waste online supermarket, has successfully completed a crowdfunding campaign to raise £400,000. With the money, it plans to try out reusable product packaging.