The Difficult Balance of Ethical E-Commerce

Posted on January 2, 2019

Corporate social responsibility (CSR) is proving to be far more than just another temporary fad among consumers. Thus, creating the opportunity for e-commerce companies to potentially still drive sales while making an ethical approach a top priority. 

[Millennials are] the most socially responsible generation that has ever existed

David Jones, One Young World co-founder

It’s a major challenge, though, not just to be profitable or ethical independently but to be both at the same time. At the end of the day, the overall cost is still the primary component driving decision-making for both brands and consumers. 

We recently discussed this struggle with Returnity CEO Mike Newman. A veteran in sustainability, Mike is guiding Returnity in the quest to limit single-use packaging in e-commerce. He, quite obviously, deals with the challenge of mixing ethical practices with profitable commerce on a daily basis. Here’s what he had to say:

Mike Newman, Returnity CEO

The sustainability component is central and critical. It’s the first thing we love about the business and it really motivates us. But the reality of that is if you can’t scale, you don’t make an impact. So you can have the best product or service in the world but if no one is using it, it doesn’t matter. We had to be really smart about when and why the sustainability component of it was relevant to achieving that scale and I think we were really forthright about that from the early days.

A few months ago we were with sitting with the marketing team of one of the largest clothing retailers in the country. The head of marketing for them made the point that they’ll put Instagram posts up about what they’re doing from a sustainability standpoint and their followers will click “like” on that all day long and they’ll love it. But then if you ask them to pay more for something that sustainable, they don’t.

That is kind of the core lesson for us in how we’ve approached it. We absolutely want to make sure we’re transparent and that we are a better choice from a sustainability standpoint, but we’re going to win based on math and that comes down to cost and revenue. We really are super focused on building applications for companies that are at least cost neutral or save them money. And then they also benefit from the brand experience and the sustainability metrics they can brag on. But if it costs them money, it’s a tough way to grow and we’ve tried to stay away from that.