The relationship between consumer and company is a delicate one. Not only are brands tasked with staying relevant, affordable and being everywhere their customer wants them to be — whether online, at their favorite outdoor mall or even Instagram — but as consumers get smarter and have more options to choose from every day, brands and retailers need to educate themselves and adapt to ensure a long-term and mutually beneficial relationship with the customer.
Growing demands by shareholders and consumers for more responsible and sustainable business practices have already reshaped the corporate environmental, social and governance (ESG) landscape, and consumers are more interested in shopping sustainable than ever, with 64% of Americans willing to pay more for sustainable products and 78% more likely to purchase a product that’s clearly labeled as environmentally friendly, according to data from GreenPrint.
However, the data also shows that consumers are confused about which products are actually sustainable or environmentally friendly. Twenty-six percent don’t even know how to identify them. This is partly due to greenwashing, whereby products are labeled with green-aware terms such as environmentally friendly, sustainable, and even carbon-neutral, when the supply chain and manufacturing process is anything but. Thanks to a lack of regulation, greenwashing is rampant in almost all consumer-facing industries, but consumers are pretty savvy these days, and are starting to see through it. Making the customer experience seem better than it is in the short term might seem like a smart business idea, but lying to customers won't do a brand any favors in the long-term. It will backfire and lead to greater mismatch between customer expectations and reality.
Not only are consumers catching up, but recent legislative moves to mandate due diligence in corporate sustainability, such as the directive from the European Commission, seek to compel businesses to proactively examine their supply chains and establish that they’re actually doing the right thing. (Or, realistically, not doing the wrong thing.)
Some might look at this growing consumer awareness or legislative measures as an obstacle to overcome. But decision-makers actually have plenty of opportunities to make small changes that compound to have a larger impact — both on the environment and their bottom line.
Implementing something as simple as changing the shipping boxes or containers allow brands and retailers to create awareness of their green efforts, and to establish to government bodies that they’re making accurate claims about the sustainability of their containers.
For supply chain leaders, the way to combat greenwashing and appeal to the consumer isn’t to overhaul the entirety of the company process, but to think more critically about what processes can stay, which can (and should) go, and which need to be highlighted to consumers more. For instance, people often have the notion that large ships and sea containers are a source of substantial air pollution. However, on a per-unit basis, shipping by sea turns out to be one of the most sustainable and least CO2-emission-heavy modes of transportation. The struggle lies in communicating that to the consumer.
Brands and retailers should be transparent and focus on educating their customers about the efforts they’re making to combat climate change, no matter how small. The smallest ones can yield the greatest results, including long-term customer loyalty. By communicating these efforts to the customer, whether through paid, earned or owned channels, brands can rise above the competition.
Ultimately, the goal of corporations in combatting greenwashing is to show the consumer, and soon legislators, that they’re making a considerable effort in the fight against climate change. They need to demonstrate that making a positive impact on the environment is more important than a positive impact on their revenue.
Ultimately, the power lies with the consumer. Public opinion will decide which changes are too big or too small, so it’s up to the leadership to think about which actions can be made in the supply chain to signal to customers that they don’t stand for greenwashing, and which small ones can make a large impact — to both the environment and the business.
Nina Marten is vice president, business infrastructure at Scalefast.
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