Why e-commerce retailers need increased product transparency

When shopping online, consumers are able to see a lot of information about a product. There’s the product description and specifications of an item. For a bottle of perfume, the listing would declare the fluid ounces and describe the scent. A piece of clothing would show the material makeup and available sizes. A page for a bookshelf would have information about the dimensions. And of course, all of these would display the cost.

But even with so much information at the ready, it is still rare to see details about the impact the product has on the climate or the chemical makeup of an item. The Environmental Defense Fund is calling for change.

“You have this greater real estate available to share this information about products right on the product page, just like you would the size of a product or colors or product reviews and you have the ability to tell more of the sustainability story, because you essentially have endless shelf space online,” said Boma Brown-West, senior manager of EDF+Business at the Environmental Defense Fund, the arm of EDF focused on corporate sustainability.

In late July, EDF+Business released a report called “The Roadmap to Sustainable E-commerce” that pushes companies to do better by their customers and the environment by sharing more information about the products they offer. “We want to call attention to how the biggest environmental impacts and the biggest health impact of products is really due to the products themselves and the creation and the use of a product,” Brown-West said.

As the COVID-19 crisis rages on in the United States, some people are relying on e-commerce retailers for their needs — from household goods to food. Making these goods and transporting them has a cost to the environment. And as my colleague Joel Makower wrote at the beginning of the pandemic, “This is exactly the right time to be talking about climate change.”

The EDF+Business report outlines how the world’s biggest e-commerce retailers — such as Amazon, eBay and Walmart — could use their influence to benefit the environment and their bottom lines.

In addition to calling on e-commerce retailers to step up, the report outlines seven steps to do just that:

1. Assessing chemical and carbon footprints of the products they sell. This would help e-commerce companies understand the prevalence of toxic chemicals in their product assortment as well as their contribution to global climate change.
2. Setting ambitious goals to address footprints. This step could set retailers on the path to offer products with safer chemicals and reduce their climate impact. To improve their chemicals footprint, e-commerce businesses are encouraged to establish a chemicals policy with specific, time-bound goals that incentivize their suppliers to use safer ingredients in their products. Regarding retailers’ climate impact, the report suggests setting specific, time-bound goals that reduce their Scope 3 emissions. That could look like setting a waste goal that prioritizes eliminating single-use plastics or one that encourages the growth of reuse and recycling infrastructures.
3. Align business operations with sustainability goals. E-commerce retailers would need to integrate sustainability goals into their organization and operations.
4. Engaging product suppliers and sellers to meet goals. E-commerce companies should establish new expectations with their suppliers and incentivize them to lead.
5. Help consumers make sustainable choices. This step could look like translating product data into compelling consumer terms.
6. Measure progress and share it publicly. Companies should regularly report and share on their sustainability goals with employees, consumers and investors. In this effort, leaders should include both their successes and lessons learned in their reporting.
7. Lead the industry forward on sustainability. By stepping up, e-commerce industry leaders can recruit other parts of the value chain to participate in relevant industry groups, commitments and coalitions.

Some retailers already are doing this work, although not specifically in the context of e-commerce. For example, back in 2013, Target launched its Sustainable Product Index, which tasked vendors with assessing the sustainability of product ingredients as well as their health and environmental impacts.

“We definitely see some movement in [companies] trying to communicate to consumers some more information about environmental or health impacts of products,” said Brown-West, who authored the report. “But we haven’t seen a full, we haven’t seen the full experience.”

Transparency from companies is key to ensuring consumers know about the work a company is doing to improve (or not improve) on its sustainability efforts, Brown-West said. In addition to the report, EDF+ Business launched SustainaBuy, a prototype of an e-commerce website that shows how a company can display information about a product’s climate and chemical footprint.

EDF+Business envisioned SustainaBuy as a way to weave sustainability into the entire shopping experience, Brown-West said.

There are numerous reasons for companies to employ this type of approach to transparency. For one, there is consumer demand for this type of information. The report notes a Nielsen projection that estimates consumers are projected to spend $150 billion on sustainable products by 2021.

“Consumers want to buy sustainable products and e-commerce retailers can help them do so by sharing environmental and social data on their online platforms,” said Tensie Whelan, professor and director of the NYU Stern Center for Sustainable Business, and author of the report’s foreword, in a statement. “Whether companies choose to jump at this opportunity will determine their ability to cultivate the consumer and remain competitive over the long-run.”

Brown-West noted that since releasing the report, EDF+Business already has started having conversations with some e-commerce retailers about how to improve their transparency, which is key for accountability of their sustainability goals.