32% of brands have already seen a boost in customer loyalty thanks to recent efforts to make their supply chains more sustainable, a recent EY report reveals. This isn’t surprising, given that people are more likely to stick with brands that genuinely live up to their values. For example, Nestlé has made notable strides in this area, with nearly 94% of their supply chains for meat, palm oil, and coffee now deforestation-free. This move sends a strong message to customers that the brand’s committed to its environmental responsibilities. Aside from ethical sourcing, sustainable packaging and circular supply chain practices are also gaining traction as companies look for ways to further lighten their environmental footprint and build stronger customer loyalty at the same time.
Ethical sourcing for responsible supply chains
Procuring materials and goods responsibly and sustainably is what ethical sourcing is all about. This simultaneously means that workers are treated fairly and that production doesn’t harm the planet. Nestlé is a great example of the environmental side of ethical sourcing as they trace their suppliers back to areas with low deforestation risk. They work with the Earthworm Foundation, a non-profit which uses satellite imaging to monitor forest loss specifically to help businesses identify environmentally-responsible suppliers.
Brands who want to follow Nestlé’s lead should take care to partner with suppliers who share their sustainable values. Look for ones with certifications like B Corp, which indicates a company meets high environmental standards, including sustainable sourcing and waste reduction. Another important thing to look for is Fair Trade certification. If a supplier has this, it means they treat workers fairly and farm (or produce) sustainably. Ethical sourcing isn’t a one-off task, though. Regularly check-in with your suppliers to see if they still meet your ethical standards. If there’s any issues, work with them to solve the problem. This will strengthen both your supply chain and brand credibility.
Packaging materials that keep waste out of landfills
Sustainable packaging is another essential part of an eco-friendly supply chain. Fashion brand, Zara, for example, uses 100% recycled cardboard for its boxes. They also have a “boxes with a past” program that means the store’s boxes get used and reused five times before they’re then recycled into new ones. Similarly, Patagonia, an outdoor clothing brand, uses boxes made from certified post-consumer recycled materials to ship orders to customers.
In fact, 60% of customers say they’d pay more for a product with sustainable packaging, so a switch to eco-conscious materials can really pay off for brands. The good news is that many fulfillment providers now offer sustainable packaging as part of their services. Fulfillment for ecommerce brands usually includes solutions that reduce packaging waste and environmental impact without the brand having to manage it themselves. To take it a step further, research the materials your suppliers and providers use. Opt for recycled or sustainably-sourced paper and cardboard and biodegradable plastics. Ideally, work companies who can provide data on the environmental impact of their materials, so you can see exactly how sustainable they are.
Make your supply chain circular with returns
Making a product with a circular supply chain means you need to think about how it can be reused, recycled, or repaired at the end of its life, so it’s not just thrown away. A simple take-back system can make it easy for customers to return used products or packaging. For example, IKEA’s take-back program lets customers return their old furniture in-store for a refund, along with a discount on their next purchase. The old furniture doesn’t end up in a landfill; instead it gets resold and finds a new home. Setting up this kind of system can be as simple as partnering with a supplier or fulfillment provider to handle the logistics. From there, you can then decide what to do with the returned items: can they be repaired or recycled into something new? Incentivize customers to participate in the take-back program with loyalty points or discounts. This is a smart way to extend the life of products and materials and involve customers in your sustainability efforts.
Sustainable supply chains are better for the planet and customer loyalty alike. Brands that commit to ethical sourcing, sustainable packaging, and circular practices will stand out to customers and earn their trust for the long term.
To read more content like this, explore The Brand Hopper
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