Retail Has a Greenwashing Problem; the Supply Chain Could Fix it

While all industries have seen an uptick in sustainability marketing in the past few years, retail — and fashion in particular — is one of the worst offenders when it comes to greenwashing. The International Consumer Protection and Enforcement Network (ICPEN) found as many as 40 percent of sustainability claims could be unsubstantiated, while Changing Markets Foundation found 60 percent of claims by UK and European fashion companies to be misleading customers.

Not only does greenwashing erode consumer trust, but it could have real consequences for a business. For example, H&M is still paying for being forced to apologize publicly for misleading consumers after claiming to use organic cotton and recycled polyester in a new “green” line. Consumers and business leaders alike should expect more government entities to crack down on greenwashing in the future and for the consequences, including fines and negative public perception, to get harsher.

The bottom line is, sustainable practices are great, but if “green” products aren’t actually sustainable, or if they’re getting to consumers in unsustainable ways, governments will take legal action to crack down on marketing speak.

Sustainability Along the Supply Chain

The first step for retailers to become truly sustainable is to evaluate the supply chain and plan for the transportation of goods so that as a company, you're doing this most efficiently. For example, how can the brand move more product at once, rather than small orders more times? Bigger orders allow retailers to move product in larger batches by ocean liner or freight — both of which are more environmentally friendly than moving small packages by air. When you break it down by cost on the environment per part, ocean liners are actually the most sustainable option with the least amount of carbon emissions.

It’s also important to consider what port the product is brought into; it’s advantageous to have goods delivered to the correct coast if arriving from overseas, also known as nearshoring. This seems incredibly obvious, but many retailers don’t even know it’s an option. While not always possible, it’s worth looking into and trying to implement nearshoring and challenging brokers to find better solutions. Another seemingly obvious solution is to place fulfillment centers where customers are. Again, many retailers would be surprised by how many people don’t consider this. If brands are truly serious about their impact on the environment, then it’s really non-negotiable. Along the supply chain, companies can employ these tactics to improve sustainability

Sustainability in Packaging

Once product has arrived in fulfillment centers, where and how a brand packages is an important aspect in creating a sustainable supply chain. By working with a warehouse partner that has a strong sustainability focus, companies might have access to sophisticated software that chooses packaging and consumables in a way that's most efficient while still protecting the product. Packaging is especially important and small details go a long way here. Some companies are still shipping small things in large boxes, but packaging produced to fit a specific product — even if that’s not the standard size of a shipping parcel — is more environmentally friendly. It comes at a cost and won’t make sense for everyone, but it’s an option for the company going green.

The materials used can also make all the difference. Some retailers and their partners print labels with soy ink on stickers made with plastic backing so they can be composted. Others have packaging with plant seeds embedded within — just plant instead of recycling and water for a future garden. Alternatively, not everything needs to be paper. There are recyclable plastic options made from starch that dissolve in water or can easily be composted.

Beyond packaging, some manufacturers use solar-powered energy solutions, offer recycling programs, and deploy electric, battery-powered forklifts which can be recharged overnight. By working with partners along the supply chain, each can help the other improve. Even if a partner doesn’t offer a specific solution right now, they might be considering it. Speaking up makes you a better customer and them a better partner. As a bonus, it helps the planet.

Communicating to the Customer is Key

Companies can go all in on supply chain logistics and sustainable packaging, but if they’re not incentivizing consumers to participate, the efforts will be wasted. If you want shoppers to recycle or reuse packaging in some way, it needs to be clearly communicated to them.

Beyond reducing and recycling, brands can encourage re-using. For example, some cosmetic companies let you send back an empty lipstick or perfume to be refilled again at a cheaper rate. Levi’s trade-in program is infamous for letting customers return old products in exchange for a trade-in or gift card. By extending the life of the jeans by just 10 months longer, Levi’s says it can reduce the carbon footprint of that item by 18 percent and water footprint by 23 percent. If you go through the steps to turn your product into something that can be refilled, recycled and reused in some form, you need to be very transparent in how it’s actually used so it doesn’t backfire. A bring-back program can’t just be a way to get people back into stores; brands need to be serious about generating more sustainable outcomes.

Communicate the goals of a program before it’s launched, publicly lay out steps taken and, most importantly, follow up by sharing the result to create broad awareness of the effort. The last thing any retailer wants is for consumers to feel as if they’re being greenwashed.

Nina Marten is vice president of business infrastructure at Scalefast, a company that powers direct-to-consumer e-commerce for global brands.