The Role of Corporate Social Responsibility in E-commerce
Apr 21 2021
Definitive corporate social responsibility programs are no longer an option for brands looking to compete in an increasingly saturated e-commerce landscape. CSR has evolved considerably over the past decade, and CSR has in some instances become a mandatory corporate activity, with many new laws and regulations requiring CSR programming. Gone are the days leveraging CSR as a marketing tactic when it has now become the bare minimum many consumers will accept.
Fortunately, being a responsible company pays. High-purpose companies whose business models call for sustained action on social issues (1) make more money (2) create more loyal customers and (3) have seen over twice the growth of low-purpose brands over the last decade.
Studies have shown that companies that fully integrate CSR into their operations can expect positive financial returns on their investments. Companies integrating CSR have shown to increase sales and prices, plus reduce employee turnover. Oftentimes, consumers will boycott companies whose practices don’t align with their values, or they react negatively to social and political issues. By developing a transparent and robust CSR program to promote values, companies can draw in new customers while maintaining existing ones.
Companies that are socially responsible are demonstrating their ethical practices in how they conduct business. Customers are very aware of local, national and global issues, and their buying decisions are influenced by said issues. The result is them buying more from companies that show concern and display positive actions over issues that resonate with customers.
This blog explores important considerations brands need to make when building CSR programming, particularly under the lens of e-commerce. For more background and tips on CSR strategy, check out P3 Media’s report, The Economic Case for Corporate Social Responsibility: What’s good for the world is good for business.
Why CSR matters for e-commerce
The retail industry experienced huge digital growth in 2020 due to COVID. E-commerce companies and brands flourished, but with this prosperity came the creation of a massive carbon footprint. Selling online is often less sustainable than buying local, leading to excessive waste from the packaging materials required to even send a small item to its new owner. To make matters worse, e-commerce blew up nearly overnight, which created supply chain and logistics constraints. Lost packages and complicated last-mile delivery routes were all too common while brands and delivery partners worked to efficiently (and safely) keep this crucial part of the world’s economy functioning properly.
Consumers and brands are increasingly taking note of online shopping’s impact on the planet. Brands that are leading the charge are generating incredible growth and returns. Everlane, Rothy’s, Patagonia, Reformation, Allbirds—these brands are not only showing they care, they are also telling your customers they should care too.
The success of these brands is creating a growing mass of consumers that are eco-conscious and use their wallets to reward overtly sustainable brands. The same consumers who consider a company’s ethical actions before purchasing from them are the same ones who spend almost $600 billion each year.
Merchants need not worry. You don’t have to overhaul your product line or business model to compete when it comes to sustainability. What matters most is keeping sustainability in mind when looking toward the future and developing new products, and communicating this with your customers. A Nielsen study found that products with sustainability claims on the packaging showed an average 2% increase in annual sales. Companies that promoted sustainability initiatives through marketing programs saw a 5% boost. For many small e-comm businesses they may be scared off by CSR and the lack of immediate financial return. However, when thinking long-term, if consumers invest in companies that care, they’ll shop with you over and over. CSR may not be an immediate boost to your next quarter’s sales, but it might produce a long-term sustainable ROI.
Getting started with corporate social responsibility
According to P3 Media, Anything you decide to do with CSR must consider four key principles:
(1) Alignment with values of your brand, customers, employees, and other stakeholders
(2) Visible, measurable commitments.
(3) Meaningful donations.
(4) Longevity. In other words, how long can your brand sustain these efforts? One-and-done announcements and projects just won’t cut it.
Sustainability is a pillar of CSR that brands can take action on now that also checks all of the above boxes. Given e-commerce’s negative environmental impact due to COVID and the renewed interest we’re seeing in climate change post-COVID, sustainability is particularly important for online and DTC brands to consider when developing their CSR strategy.
How EcoCart can help aid in boosting sustainability for e-commerce brands
Keeping the above CSR framework in mind, let’s take a look at how EcoCart fits into CSR initiatives for e-commerce brands.
Messaging with action. From a business perspective, taking action to help the planet won’t do a whole lot for your bottom line if your customers aren’t made aware of your projects and programming. It’s critical to communicate your commitment to the planet and back it up with the donations you and your customers make. Since adding EcoCart, brands have only received positive feedback from their customers.
Meaningful donations. When you partner with EcoCart, you can rest assured that the extra cents your customers pay to make their orders carbon neutral are going to heavily vetted, verified, certified carbon offsetting projects with an added layer of social good.
Only donate to projects that go through rigorous carbon offset laboratory and field testing. EcoCart only fund’s projects that are carefully vetted, ethically proven, and scientifically verified according to the world’s major carbon standards. The projects are also third-party verified with site visits by our trusted partners to ensure successful calculation of greenhouse gas reductions and management of funds.
The Cambodian Water Purification Project is a fan favorite among the EcoCart community. This initiative provides families in rural Cambodia with clean water filters that replace traditional methods of water purification via wood burning stoves. Not only do these water filters prevent net new emissions from entering the atmosphere, these communities have seen fewers instances of childhood cancer and respiratory disease since wood burning stoves are no longer being used in the home. This project is one of many EcoCart customers can support when adding the EcoCart plugin to their e-commerce store.
Sustainability for the long haul. CSR programs are less likely to resonate with your customers if they’re one-off donations or projects that don’t have longevity. EcoCart is easy to set up and maintain so brands can be confident that their sustainability efforts don’t get put on the back burner.
Visible and measurable. Numbers don’t lie, but not all CSR initiatives are easy to measure. As luck would have it, however, brands that add EcoCart to their stores see up to 25% increase in cart conversion (14% on average), demonstrating how a focus on sustainability drives revenue. When your customers see the carbon neutral ordering button in your store’s cart, they are immediately assured that your brand cares about the planet just as much as they do.
For more inspiration on how to think about CSR initiatives at your company, check out this corporate social responsibility report from our friends at P3 Media.