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How sustainability is transforming commerce

Key ways that consumers, corporations, and policymakers can build a sustainable future

How sustainability is transforming commerce
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Sustainability is a more urgent concern than ever. A new report from the United Nations’ Intergovernmental Panel on Climate Change outlined serious consequences already taking effect—and what’s coming if we don’t act.

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Much of our environmental impact is wrapped up in commerce, so it’s only natural that our approach to sustainability should include transforming the way we behave both as businesses and as consumers. Recently, Visa and Fast Company hosted “A Sustainable Future: How innovation and collaboration are driving the future of commerce,” a virtual panel event with expert insights on how companies and consumers are altering their environmental impact today, and what we still must do to practice sustainability and live sustainably. Here are four key takeaways from the panel.

“RE-COMMERCE” IS ON THE RISE

Innovation in the world of commerce means more than just new technologies, notes Douglas Sabo, chief sustainability officer at Visa. Take the rise of “re-commerce,” which Sabo says can encompass a range of emerging retail models like rentals, resale, and repair. The concept is that there is more opportunity for a product than a one-time sale. For example, rental and subscription models are on the rise, as are online resale platforms. Even major fashion brands have begun buying back garments from customers to resell, while more brands are facilitating the repair and long-term maintenance of their products. “I’m really inspired by a lot of innovation that’s happening in entire business models,” Sabo said.

Rhandi Goodman, vice president of zero waste at TerraCycle, is also enthusiastic about re-commerce. Her company helps consumers and businesses move beyond the disposability mindset by offering recycling programs and reusable, refillable packaging. “We’re all so used to convenience, and a lot of times today, convenience means disposability,” she said. “I really have been pleased to see all of the different initiatives that are taking place around reuse and donation and giving all of your products and your packaging a second life.”

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EDUCATION MATTERS TO DRIVE BEHAVIOR CHANGE

Consumers are becoming ever more conscious of their role in sustainability. Ulrich Pietsch is the co-founder and CEO of ecolytiq, a technology company that uses payment data to estimate retail banking customers’ individual carbon footprints. Customers can draw on that data to inform purchasing decisions. “We’ve seen that just by [becoming] aware of your footprint, you start reducing your footprint by 50% in the first six months,” he said.

Pietsch added that those changes aren’t necessarily the result of less total consumption, but wiser consumer choices from an environmental standpoint. According to ecolytiq’s numbers, users of the service will opt for the more sustainable choice, even if it costs more.

CONSUMERS AND EMPLOYEES ARE DRIVING THE CONVERSATION

Individual empowerment isn’t just a matter of optimizing consumption choices; consumers and employees can leverage their positions as stakeholders to convince corporations to adopt sustainable practices. “If you see something that you’re not happy with, or you see some area of improvement, use your purchasing power,” Goodman said.

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Goodman also pointed out that businesses are increasingly willing to take cues in sustainability from their staff. In Sabo’s opinion, this dynamic will only become more pronounced. “We are not only trying to attract and retain the millennial talent,” he said. “Now we are attracting and retaining Gen Z talent, [for whom] climate and environmental [issues]…are off the charts in [terms of] importance.”

POLICYMAKERS NEED TO SUPPORT SUSTAINABLE CHANGE

For consumers, the challenges of sustainability relate to affordability and convenience; for corporations, it’s largely about profitability. To reach a truly sustainable future, lawmakers need to support these issues with policy.

Goodman would like to see policymakers step up with more regulations encouraging sustainable business practices, such as European rules requiring companies to offer more sustainable products and packaging. “I think that’s something really powerful and important that we should probably take note of here in the U.S. over the coming years,” she said.

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Sabo added that governments are in a unique position to provide the funding needed to create more sustainable infrastructure that can help all businesses reduce their environmental impact. He pointed out that businesses that want to move to 100% renewable energy sources may find it’s complicated to reach that goal without government support. “[If] we can get renewable electricity baked into the grid, [then] we don’t have to do all these very complicated power-purchase agreements,” he said. “And governments have a strong role to play in the extent of renewable electricity in the grid.”

Finally, policy change may be needed to ensure sustainability reaches everyone equally, as it must. “We need to make sure…that it isn’t just the affluent who can live more sustainably, travel more sustainably, or eat more sustainably,” Sabo said. “We need to make sure there’s equitable access, [especially] for underrepresented communities, communities of color…who are bearing the early price of climate change, air pollution, and other negative environmental impacts.”

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