Corporate social responsibility (CSR) is a company’s integration of programs and practices that benefit society and the environment. The intention is two-fold: to produce positive outcomes as the result of their business strategies while increasing profits through efficiency and positive attention from consumers and high-value employees.
CSR within ecommerce is important for business and for the environment. In a world where decreasing greenhouse gas emissions remains at the forefront of climate goals, ecommerce businesses need to pay attention to their carbon footprints and constantly strive to shrink them. This will help achieve essential climate goals set forth by the Paris Agreement and other entities. The dangers of greenhouse gases are imminent; in the last decade, we have seen the five warmest years on record, and it’s predicted that unimpeded emissions will result in a devastating rise in global average temperature by the end of the century bringing with it increased forest fires and extreme weather events, rising sea levels, displacement, and much more.
Businesses play an important part in the fight against climate change. While all stakeholders—individuals, businesses, and governments—have their roles, companies are one of the leading producers of carbon emissions. Therefore, they have the greatest responsibility to reduce them. Sustainability in ecommerce will only become more important, and companies must make changes now to stay ahead of regulations and consumer demand.
So, what is the purpose of corporate social responsibility, and how can you implement it in your ecommerce business? Let’s take a look.
The evolution of CSR in ecommerce
Ecommerce is almost as old as the internet itself. It began gaining traction in 1991 when the National Science Foundation lifted restrictions on commercial use of the Internet, and the mid-90s saw an explosion of the first ecommerce platforms, like Amazon. Since then, the industry has exploded.
As with any novel industry, its pitfalls were quickly highlighted. The need for secure payments and data protection became a top concern, as well as excessive packaging used in deliveries. Unboxing videos, for example, encouraged companies to design beautiful branded packaging that looked fantastic on video, but that also exceeded the necessary packaging to keep products safe, resulting in more waste.
CSR itself is not a new concept; its origins can be traced to ancient Rome with the advent of asylums, hospitals, and orphanages. Over the ages, it grew to include safe working conditions, responsible wages, and impacts on local communities, all building up to modern CSR expectations. As ecommerce rose to prominence, it developed its own CSR policies, such as data protection and privacy.
Although ecommerce grew on its own as online marketplaces became commonplace, the COVID pandemic caused its popularity to skyrocket. Because the world was encouraged to stay home, people turned to online stores for groceries, clothes, and other shopping needs.
In 2020, 2 billion people made online purchases, and between 2021 and 2025, ecommerce is expected to grow by around $11 trillion. Such growth gains attention, and consumers now demand that ecommerce companies show responsibility to people and the planet. In a post-pandemic world, the importance of corporate social responsibility in online business is greater than ever before.
The value of CSR for ecommerce businesses
The benefits of corporate social responsibility are multitudinous. Although it may seem as though CSR costs money, and it often requires upfront funds, if implemented correctly, it should result in profit.
Studies show that the switch to sustainable practices could result in economic gains of $26 trillion by 2030. These financial gains can be achieved through energy efficiency, avoiding fines associated with environmental regulation, tax cuts, and more.
Furthermore, consumers seek out sustainable companies. According to the MIT Sloan Management Review, the primary reason why companies have adopted sustainability strategies is due to customer demand. The 2023 eCommerce Sustainability Report found that 89% of online shoppers want an eco-friendly option at checkout, and 87% list eco-friendly practices as their top concern. It’s clear that CSR initiatives can influence purchasing decisions within ecommerce.
Customers don’t just perceive CSR efforts in ecommerce positively—they demand it. The benefits of CSR for an ecommerce business include:
- An edge over competitors who do not have measurable CSR strategies.
- Improved brand image.
- Customer loyalty.
- Cost savings through efficiency.
- Avoidance of fees associated with environmental regulations.
- Attraction of high-value employees who hold CSR in top regard.
Implementing CSR in ecommerce
As with everything associated with sustainability and ethical business strategies, it’s not enough to make shallow commitments and call it a day. Modern consumers are savvy, and the expansion of digital presence through social media means that a single misstep can spell disaster. If consumers sense that your company is greenwashing, it can tarnish your reputation, sometimes irreparably.
Avoiding such catastrophes is a matter of implementation. You need to ensure that your CSR efforts are genuine, comprehensive, and transparent. Building a CSR strategy won’t happen overnight. Many companies might benefit from hiring a consultant or developing an entire team to achieve their efforts.
Here are some steps to implementing an impactful CSR strategy, no matter the size of your business:
- Develop a CSR strategy that aligns with your brand and target customers, taking into account your environmental impact, employee safety and happiness, customer privacy protection, community impact, and more. Don’t create it from scratch. Use trusted existing frameworks, like the Sustainable Development Goals, to determine your approach.
- Set measurable CSR goals. These should have clear targets with a timeline for achievement. The impact of your CSR efforts can be measured through ESG reports or third-party auditing.
- Include your employees in your efforts in order to build your initiatives into business operations. This allows them to implement strategies in their projects and day-to-day tasks so that goals are being pursued at all levels.
- Formulate your messaging to resonate with your customer base. While the marketing potential should not be your only reason for developing CSR strategies, it can be greatly beneficial to your brand. Don’t be afraid to showcase your efforts.
- Transparently communicate your goals and achievements, even if you fall short. Consumers appreciate honesty, and they will be much more forgiving if you explain why you were unable to hit your targets than if you try to hide your shortcomings.
- Avoid greenwashing by seeking third-party auditing and certification. This will reassure your company and your customers that your efforts are truly impactful. You should also ensure that any carbon credit or offsetting program, such as carbon offsetting services, hosts third-party certification, too.
Types of corporate social responsibility
There are a plethora of CSR approaches to pursue. Within ecommerce, a few key inclusions stand out.
- Ethical sourcing and procurement of products and materials
- Sustainable packaging and shipping
- Employee welfare and inclusive hiring practices
- Digital privacy and data security
- Accessibility and digital inclusion
- Quality carbon offset projects for impossible-to-abate emissions that support people and the planet
Challenges and future outlook
CSR in ecommerce isn’t easy, nor should it be. Comprehensive approaches require effort, and your company must take responsibility for its impact. Some of the greatest CSR challenges facing ecommerce companies are:
- Standing out from the competition. As CSR becomes the norm, you must brainstorm ways to go above and beyond the standard.
- Picking an impactful strategy that also resonates with your customers and employees. Your top CSR concerns should result in long-term impact while also satiating consumer demand and building a loyal employee base.
- Balancing cost and impact. Even though a major goal of CSR is eventual cost savings, initial investment into CSR projects is necessary. When developing a CSR strategy, you need to ensure that its goals will result in profit alongside a positive impact.
Importance of ecommerce businesses adopting strong CSR policies
CSR in ecommerce is essential for business and the planet. Profits are no longer the only consideration of business. We now follow the triple bottom line: people, planet, and profit.
EcoCart offers one way to implement carbon reduction within your CSR policies. Your customers can offset their carbon footprint on Shopify or other platforms by opting for carbon-neutral shipping. By doing this, they will be supporting carbon-offsetting projects all over the world. It offers one simple way to start implementing your CSR strategy today.
If your company is trying to get serious about sustainability our team can help, request a demo and get change started today.