ESG in e-commerce: best practices for your business

ESG, an acronym for Environmental, Social and Governance, has attracted the attention of the corporate and financial world in recent years. Part of the interest in the topic stems from the deepening of environmental disasters and the growth of the most vulnerable part of society.

And in the face of drastic changes, the behavior of consumers has also changed, and they have begun to value companies that have a sustainability policy even more.

Despite its great importance in various sectors, ESG is still little discussed within e-commerce.

Therefore, ESG is expected to gain even more importance in different sectors of the economy, not only because of environmental concerns, but because good environmental practices attract more investment and capital.

To give you an idea, research conducted by Morningstar, at the request of Capital Reset, found that in Brazil, ESG funds raised R$2.5 billion in 2020 alone, with more than half of the funds coming from funds created in last 12 years, months.

But despite its great importance in various sectors, ESG is still little discussed within e-commerce – a segment that still faces challenges when it comes to environmental practices.

What is ESG?

ESG (Environmental, Social and Corporate Governance) is a set of practices and policies aimed at environmental sustainability, management and social responsibility in the corporate and financial universe.

And, as its name suggests, the ESG agenda selects companies and market players that follow some guidelines, such as:

  • Sustainable development that takes into account the impact on the environment;
  • Relationship with the social environment and the surrounding community, such as inclusion policies, together with employees and consumers;
  • Guarantee of shareholder rights, with well-defined compliance standards, as well as governance.

The growth of e-commerce and the impact of ESG

It is not new that e-commerce has been breaking sales records in recent years. And all this success can be explained, among other things, by the social isolation caused by the Covid-19 pandemic, which is still reflected today.

According to research by SmartHint, the first five months of this year showed a 785% increase in e-commerce revenue compared to the pre-pandemic period.

Therefore, the trend is for virtual shopping to remain high, even with the return of face-to-face activity and the reopening of stores.

After all, the change in consumer behavior combined with the convenience and time savings provided by e-commerce are the perfect formula for the continued expansion of the segment.

However, another aspect of this transformation also presents challenges, as consumers are much more demanding in terms of good practices and transparency in relation to sustainable policies.

Proof of this is the Global Consumer Insights Pulse Survey 2021, which was conducted on five continents after the pandemic by the consulting company PwC, and showed that 54% of consumers choose products with sustainable packaging.

This means that the e-commerce ecosystem – which is full of actions with a large impact on the environment – will have to rethink some concepts, such as the type of logistics and the issue of packaging: extremely polluting, but necessary to send goods.

How to adopt good ESG practices in e-commerce?

Implementing ESG policies in companies, especially in e-commerce, can be challenging. However, little by little, it is possible to make changes towards a more sustainable enterprise. Check out some tips.

Good environmental practices

Among the good environmental practices that can be implemented in e-commerce, it is important to highlight recycling, proper waste disposal, adoption of reverse logistics, sustainable packaging and carbon reduction by using less fuel. pollutants in the transport of goods.

The use of renewable energy sources, such as the sun, should also be considered.

good social practices

In terms of good social practices, e-commerce companies can implement diversity and inclusion programs, projects with the local community, climate research, transparent communication between employees and leaders, and attractive benefits.

In addition, it is important to carry out actions aimed at taking care of the mental health and well-being of employees.

Good management practices

Good governance practices for e-commerce include the creation of a board of directors, transparency of information and concern for data security and the privacy of customers and employees, who are increasingly vulnerable to cyber attacks and fraud.

Make the changes that are within your reach

We know that adopting all ESG practices can be difficult, especially for SMEs.

However, faced with a complex scenario at the environmental level, it is necessary to adapt and implement the measures that are within your reach.

By the way, what is your company’s environmental policy? And what is your position on that? Share with us!

Also read: ESG aspects in the e-commerce market

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