When a consumer buys goods online, the main factors influencing the total carbon emissions are last-mile delivery and packaging, which are more difficult to measure (Cheris, et al., 2017). The rise of affordable fast fashion means consumers now buy more clothes, but use them for less time than ever before (McKinsey & Global Fashion Agenda, 2020; Rajesh, 2021). Only a minority of consumers are willing to pay more for sustainable products, approximately 31 percent of Gen-Z and just 12 percent of baby boomers (BOF, 2020a).
The e-commerce channel, on average, tends to produce more emissions per item for three reasons: e-commerce requires additional packaging, customers purchase fewer items per online transaction, and multi-item orders often result in multiple deliveries. The emissions of two items shipped separately are 35% higher than if the items shipped together (Cheris, et al., 2017). E-commerce has transformed customer expectations about the breadth of product assortment and speed of delivery. While the new panorama of choice delights shoppers, their rising expectations are increasing retailers’ carbon footprints (Cheris, et al., 2017; Speranskaya et al., 2021).
Shortcomings Of Current Practices
Global apparel and footwear industry is responsible for around 8 percent of the world’s greenhouse gas emission — almost as much as the total climate impact of the European Union (Kent, 2019b). Almost all top consumer goods companies worldwide (96 percent) evaluate ways to reduce their greenhouse gas emissions, only 63 percent work within their entire supply chains to do so, and only 21 percent embark on programs to lower the environmental impact associated with the consumer's use of their products (Kearney, 2021).
Rather than evaluating sustainability in terms of the entire life cycle of their products, companies generally stay within their traditional approaches, which focus mainly on internal processes such as manufacturing and logistics. Yet, it is found that in some categories less than 5 percent of the total impact of greenhouse gas emissions arise from these internal processes (Kearney, 2021). Companies must go beyond their traditional internal approaches and consider the entire product life cycle when measuring environmental impact (Kearney, 2021). Future growth will depend on aligning with consumers' priorities. Companies are under pressure to create sustainable products, not only from consumers but also from governments, retailers and suppliers (Kearney, 2021).
As sustainability becomes a company-wide issue, leading consumer-focused companies are using it as a driver of change—to mobilize all functions around a topic that has the power to transform the business model and be a key pillar of future growth (Kearney, 2021). Just 1 percent of the market is currently made up of sustainable fashion (Kent, 2019). Sustainability is becoming a cradle-to-grave process and a powerful growth engine. The end-to-end approach to sustainability considers a wider range of activities and makes cross-functional cooperation compulsory (Kearney, 2021).
Figure: New Approach to Sustainability
Source: Self Administered, 2021
References
A T Kearney (2021) Sustainability: a product life-cycle approach, Available at: https://www.kearney.com/consumer-retail/article?/a/sustainability-a-product-life-cycle-approach, Accessed on 25 April 2021
BOF Team And McKinsey & Company (2020a) The Year Ahead: Sustainability Takes Centre Stage, Available at: https://www.businessoffashion.com/articles/sustainability/the-year-ahead-sustainability-takes-centre-stage, Accessed on 25 April 2021
Cheris, A., Taylor, C., Hayes, J. & Peccoud, J. (2017) Retailers' Challenge: How to Cut Carbon Emissions as E-Commerce Soars, Bain & Company, Available at: https://www.bain.com/insights/how-to-cut-carbon-emissions-as-ecommerce-soars/, Accessed on 24 April 2021.
Kent, S. (2019) How Big Retailers Are Selling Sustainability, Available at: https://www.businessoffashion.com/articles/sustainability/how-big-retailers-are-selling-sustainability, Accessed on 25 April 2021
Kent, S. (2019b) Making the Business Case for Sustainability, Available at: https://www.businessoffashion.com/articles/sustainability/davos-sustainability-kering-asos-climate, Accessed on 25 April 2021.
Speranskaya, O., Caterbow, A., Buonsante, V., Adan, H., Mutsaers, M., Karkee, R., Ciu, A., Denwood, D., Gorial, M., Geerts, A., Allers, S., Bles, R. & Malhotra., D. (2021) The Sustainability of Fashion: what role can consumers play?, HEJSupport, Available at: https://hej-support.org/the-sustainability-of-fashion-what-role-can-consumers-play/, Accessed on 26 April 2021.
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