When Doing Good is Good Business
Judging by the effort businesses are pouring into environmental and socially conscious initiatives, one would think consumers were militant about buying eco-friendly goods. Sure, consumers care, but they’re actually more concerned with factors like fit and price. So why are companies embarking on these programs? Because at the end of the day, those who aren’t responsible risk customer wrath for violating their trust.
"Consumers want to trust that the brands they purchase and the retailers that sell those brands are doing the right thing. That trust is broken when, for example, environmental or ethical sourcing issues are revealed...Consumer trust is vital to growth and long-term success, so getting ahead of these concerns is simply a good business practice."
CEO, The Sustainability Consortium
At Hanes Brands, Matt Hall, chief communications officer, says today’s consumers have an expectation that the companies behind the brands they shop are ethical.
“If they discover that you are not ethical or responsible in your business practices, they will stop patronizing your brands and products,” he explains. “That’s why we believe that the best way to run our business is with a commitment to sustainability. We believe every product we sell benefits from the sustainable business practices that we follow, whether a product is marketed as ‘green,’ ‘sustainable,’ or otherwise.”
Walmart maintains its sustainability initiatives help both people and the environment. It worked with The Sustainability Consortium to create its Sustainability Index. The data produces a scorecard for buyers that determines the most eco-friendly products based on independent scientific guidelines.
“What we love about the index is it creates a race to the top,” said Laura Phillips, senior vice president, omnichannel assortments, at the company’s recent Sustainability Milestone Meeting. “When [suppliers] improve their products, we’re excited about it, our customers are excited about it and we sell more.”
However, the consumer’s eco conscience is rather obscured by other concerns. More than 9 in 10 say factors like fit (98%), comfort (97%), quality (95%), price (95%), and durability (93%) are important in their apparel purchase decisions, according to the Cotton Incorporated 2014 Environment Survey. That compares to 50% who put weight on environmental friendliness.
As it stands, just 38% of all consumers say they put an effort into finding environmentally friendly apparel for themselves, Environment Survey statistics show. However, nearly 7 of 10 (69%) would be bothered if they found out an item they purchased was not so. Further, 39% would hold the manufacturer responsible.
That’s why it makes sense for companies to get out in front of these concerns, says Sheila Bonini, CEO of The Sustainability Consortium (TSC). Cotton Incorporated, Hanes Brands and Walmart are all TSC members.
“Consumers want to trust that the brands they purchase and the retailers that sell those brands are doing the right thing. That trust is broken when, for example, environmental or ethical sourcing issues are revealed,” Bonini states. “Consumer trust is vital to growth and long-term success, so getting ahead of these concerns is simply a good business practice.”
Bonini says the key to getting in front of these concerns is understanding and addressing environmental and social issues in the supply chain, where many of the important sustainability risks lie.
“TSC tools and services help suppliers, manufacturers and retailers identify key issues, wherever they occur in the supply chain, and work to address them and improve the sustainability of the products they develop, manufacture and sell,” she says.
When it comes to their top environmental and social issues, consumers are most concerned with increasing prices at retail (86%), according to the 2014 Environment Survey. That’s followed by food contamination (84%), air quality (82%), water quality/scarcity (80%), and child labor practices (79%).
Meanwhile, when it comes to terms that are influential to their apparel purchases, the claim of 100% cotton tops the list at 77%, followed by Made in the USA (68%), natural (61%), and sustainable (57%), according to the 2014 Environment Survey.
Cotton Incorporated developed tools that help apparel brands that are concerned with environmental accountability. Its Life Cycle Inventory is a collection of data sets that quantify energy, water, raw material requirements, air emissions, waterborne effluents, solid wastes and other environmental releases that occur throughout the life cycle of a product, process or activity. Its Life Cycle Assessment is an objective process to evaluate the potential environmental burdens associated with the entire life cycle of a specific product, process, or activity. Looking forward, there will be an update that will explore consumer usage globally in 2015.
Hall says all of Hanes Brands’ cotton-based products, no matter where they’re made in the world, benefit from the company’s practice of buying cotton grown in the southeast United States, where water irrigation is not required and the most advanced environmental agronomic practices in the world are used.
“We call our corporate social responsibility program Hanes for Good, and it is based on a number of pillars, including energy management and environmental stewardship, global ethics standards for employees, supplier standards and compliance programs for vendors and other partners, and Green for Good employee volunteerism.”
Likewise, Walmart’s Sustainability Index has meant that the store’s buyers work on sustainability initiatives with suppliers so customers didn’t have to. It recently launched its online Sustainability Leaders Store in an effort to help customers identify brands and suppliers that are leading in sustainability. It showcases suppliers helping to lead the charge on social and eco initiatives. It is aided by third-party validation via information provided by the Sustainability Consortium, which states how the various categories were evaluated. The TSC does not rank or rate companies or products.
“Our mission is to improve the sustainability of consumer products,” Bonini says. “TSC metrics address key sustainability issues across the entire product lifecycle. These metrics are aimed at the top of the supply chain – the retailer or purchasing agency – to ensure that the right questions are asked at the top and then cascade down through supply chains, to drive the changes in behavior and practice that will improve the sustainability of consumer products.”