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Why corporate ethics are integral to retail’s bottom line

Airbnb, Alohas, and Cloud Paper are leading with their values—and winning over consumers as a result

Why corporate ethics are integral to retail’s bottom line

For consumers in the 21st century, values aren’t something you set aside when clicking the buy button. Members of younger generations experience climate change as a daily reality and a threat to their future and have spent two years navigating a global health crisis and its economic fallout. Maybe that’s why they’re increasingly rejecting brands that don’t contribute to the greater good. 

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Recent consumer research from Klarna, a global payments and shopping service, finds that 70% of Gen Z and 73% of millennials are more likely to purchase from retailers with a sustainable or ethical mission. 

“Younger generations vote with their wallets in an effort to drive meaningful change,” says Sebastian Siemiatkowski, cofounder and CEO of Klarna. Siemiatkowski sees more evidence for this phenomenon in the extraordinary growth of the Klarna App, which has more than 22 million monthly active users worldwide. Klarna recently rolled out sustainable collections in its app, making it easier for consumers to access environmentally-friendly fashion. It also features a CO2 tracker providing shoppers with their personal carbon impact from their purchases.

“As consumer expectations continue to evolve, it’s critical that brands approach values-driven initiatives with clear objectives and a long-term plan, rather than throwing money at a problem for short-term image building,” Siemiatkowski says. Airbnb, Alohas, and Cloud Paper are three companies doing precisely that. Their contributions to humanity make them deserving winners of the inaugural Smoooth Move Awards presented by Klarna and Fast Company, celebrating brands making inspired moves over the past year. 

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SHELTERING THOSE IN NEED

Best known for providing great vacation stays, Airbnb is equally committed to giving back to local communities. Last June, it launched the Airbnb Community Fund, distributing $100 million to organizations supporting local communities during the next decade. In 2021, the fund awarded grants to over 150 organizations from more than 40 countries. Recipients include an organization devoted to preventing child trafficking in northern Thailand, a foundation dedicated to the economic empowerment of rural women in India, and a provider of education in the Brazilian Amazon region.

In addition, in 2021, through the Airbnb.org nonprofit arm, Airbnb met its goal of providing temporary housing to more than 100,000 people displaced due to natural disasters, war, the COVID-19 pandemic, and other events. The effort helped over 10,000 Afghan refugees resettle.

ENDING OVERPRODUCTION

In a traditional fashion cycle, mountains of unsold clothing go to waste every season, sacrificed at the altar of the Next Big Thing. Barcelona-based Alohas is out to break that cycle. Each week, the company drops a new product and offers pre-orders available at a significant discount for three weeks. Knowing exactly how many units to produce, the company continues to sell the product—though at less of a discount—throughout the manufacturing process, before halting production altogether. Through this unique on-demand shopping model, customers get their shoes, clothing, swimwear, or accessories without worrying that they’re contributing to the overproduction problem.

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Alohas is also committed to locally producing its shoes in coastal Spain and allows consumers to easily make donations to projects that help reduce the carbon footprint of their purchases. 

FIGHTING DEFORESTATION

According to the United Nations, the world loses nearly 25 million acres of forestland every year. A big driver of this widespread deforestation is paper production, for which a significant percentage goes into home products, including toilet paper and paper towels.

Cloud Paper, a Seattle-based startup, is doing its part to curb deforestation. Its bamboo-based toilet paper and paper towels have already saved more than 17,000 trees—and the brand is just getting started. Initially a B2B company, Cloud Paper expanded into direct-to-consumer retail at the outset of the pandemic, and it was an immediate hit. With investors including Gwyneth Paltrow, Mark Cuban, and Robert Downey Jr.’s Footprint Coalition, the company is growing fast—just like the bamboo it’s made of—which is great news for people and trees all over the world. “Every box of Cloud Paper that goes out is one less box of paper-based product,” says Ryan Fritsch, who cofounded the company. “So, the impact happens immediately, and it adds up quickly.”

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The fresh approaches taken by Airbnb, Alohas, and Cloud Paper are proving that what’s good for the planet can also be good for the bottom line. The world of retail is rapidly changing, along with customers’ expectations. 

Brands looking to build connections and relationships with shoppers are adapting as well. “The only metrics we are interested in are those that force us to reflect and ultimately change how we operate as a company in a better, more sustainable way and which have a positive impact on the consumer,” Siemiatkowski notes.

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To learn more about the recipients of this years’ Smoooth Move Awards, click here.

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About the author

FastCo Works is Fast Company's branded content studio. Advertisers commission us to consult on projects, as well as to create content and video on their behalf.

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