Ethical eCommerce refers to the responses to issues of marketing manipulation, greenwashing and unsustainable business practices, through positive change. Ethical commerce is a movement that puts people back at the heart of trading. Where businesses have lost their way in convincing any consumer to buy what they sell, regardless of need, ethical commerce considers the ‘who’ the ‘what’ and importantly the ‘why’ behind product sales. It aims to understand and cater to consumers by providing them with positive experiences that they remember, whilst being conscious of how business efficiency can be improved in a way that benefits the wider environment as well as the end consumer.

Research has shown that 70% of consumers want to consume more responsibly and 66% are willing to pay more for green products [1]. So as much as people do want to shop, they are increasingly interested in doing it in a way that minimises harmful impacts on the environment and other people. Sustainable, person-first and green business practices are three elements feeding into ethical commerce. Businesses operating in the eCommerce space can educate themselves and start making positive progress in this space by adopting the following practices.

 

Sustainable Commerce

Sustainable commerce is on the rise. Adopting practices that minimise harmful impacts on the environment can benefit businesses, as well as inject growth into your brand awareness. It’s also important to note that the trend toward more sustainable eCommerce is on the rise. How this is playing out in practice differs across companies – but it can involve redesigning business models, transportation, logistics and packaging.

Consumers are particularly interested in environmentally friendly shipping options. Shipping companies that are already excelling in this space include DHL GoGreen, DPD Total Zero and GLS Think Green. Sustainable and environmentally friendly packaging is also a major consumer trend, where the adage ‘reduce, reuse, recycle’ is central. The less packaging, the better. And yet, many eCommerce businesses still unnecessarily overpackage their shipped items – and do so with single-use plastics. Every piece of this packaging ends up in either a landfill waste site or worse, in waterways or other vital habitats.

 

People First, Not Profit First

Over half of consumers believe it’s the business’s responsibility to drive ethical business practice [2]. So, while one half drives the ethical trend, and the other half hangs back and waits for the revolution, eCommerce businesses flounder in indecision. The trick is for businesses to put the user – or the consumer – first. But beyond just the consumption of goods, are the wider network of people that eCommerce affects.

Factory workers in nearshore or offshore regions, often without safe working or fair pay policies to protect them in their crucial contribution to the end product purchase. In putting people first – both directly and indirectly – not only do decisions become more inherently ethical, but wider-reaching effects on sustainability and green business can also be seen. In the end, a focus on profit alone is simply not sustainable. Going back to the basics of business – starting with core values – and establishing business processes to ensure that these values are embodied in real decision making is vital to the evolution toward ethical eCommerce.

 

Green vs Greenwashing

Studies have shown that 40% of ‘green business’ claims are misleading [3]. Greenwashing is when false claims are made regarding their business practice being conducted ethically, or when claims lack the evidence to support them. Unfortunately, due to the increasing demand from consumers and the rising trend of ethical business practices, greenwashing is also becoming more common. So how do you recognise when green is greenwashing? A few red flags are vague statements around sustainability, without including specifics; relying on packaging strategies to give the impression of an ethical brand (e.g. blue and green colours, animal and environment graphics); relying on terms that lack legislative regulation (e.g. ‘natural’ processes).

Image Credit: akepa

One case and point is H&M, which in 2018 introduced a fair living wage policy for their employees in factories in Asia – but data shows that to this day the policy has not been realised [4]. So how do businesses make a start on the ethical path, whilst avoiding being caught up in greenwashing? First, a period of self-assessment is necessary before going out to the world with all guns blazing. Secondly, it’s important, to be honest. Small, iterative improvements are not only more feasible strategies for businesses to adopt, but they are more believable and relatable than overnight success stories.

 

Summary

Ethical eCommerce encompasses a range of business considerations: Sustainable business practices, that depend upon clear business values and decision making; a People-first policy, where people in both direct and indirect forms are supported, catered to and cared for instead of profit margins alone; Green business practices, whereby the actions, evidence and progress steps are transparently communicated to build trust, community and brand value. As much as the trend toward ethical commerce is on the rise, it is here to stay. But despite the ability to easily manipulate audiences into believing greenwashing tactics over past years, consumers are now becoming more clued-up to identifying who is genuine, and who is not. With planning, businesses need not make the hard choice between ethics and profit. The two can still go together if planning and implementation are well-considered and supported.

Ethical eCommerce is an investment in your business’s future, your employees’ future, and the future of the environment. No one expects an overnight success story. But they do expect genuine effort and steps to be taken in the right direction. It is also just as critical to talk about these efforts openly and honestly within and outside of your business.

 

Resources to Get You Started