Sustainable Goods and Payments: Navigating Risks and Opportunities

What are sustainable goods? Are they goods with a long shelf life? Sustainability claims that goods have a product life cycle with minimal negative impact—and ideally even positive impact—on the environment, society, and the economy.

The implication here is that “non-sustainable” or “unsustainable” products deplete the world’s resources, while sustainable products align with ethical standards of global stewardship. But now to the question that every business owner wants to know: can sustainable products not only reduce waste, but also increase the bottom line?

What Is The Product Life Cycle?

First, let’s understand the product life cycle. A product life cycle happens in four stages: introduction, growth, maturity, and decline. Many of the products you are familiar with are in the maturity phase. But eventually, all good things must come to an end, and products disappear from the market.

These different phases have some overlap with a different type of product life cycle, which focuses on the product itself. These phases are: extraction of raw materials, design and production, packing and distribution, use and maintenance, and disposal. The particulars of the product life cycle will vary from product to product.

Examples of Product Life Cycles 

But let’s take oatmeal as an example. Oatmeal starts with oats, which need to be planted and harvested (extraction of raw materials). Then these oats need to be processed (design and production). They then need to be placed in boxes or bags and shipped to grocery stores (packing and distribution). Customers will buy and consume the oats (use and maintenance) and then dispose of the bag or box (drumroll please…disposal).

This all sounds fairly sustainable. After all, how much waste can a bag make? And paper boxes are recyclable. But as we’ll see, there are plenty of opportunities for food products to become “unsustainable,” either in terms of resources or societal impact. But before we get there, let’s look at the product life cycle of a non-food product.

Furniture darts with wood, which needs to be forested. The metal components ultimately begin with mined materials (extraction of raw materials). A designer and/or carpenter creates a design and executes it in the shop (design and production). The furniture is then packed up and sent out to IKEA or wherever you like to shop (packing and distribution). Customers buy the furniture, use it, and occasionally repair and/or clean it (use and maintenance). Eventually, they throw the furniture away, gift it, or sell it to a social media influencer who will revamp it (disposal).

What Products Create the Most Waste?

Do non-food products create more opportunities for unsustainable waste? After all, physical products are less necessary than food in terms of sustaining life. They also might involve a larger supply chain providing raw (and finished) materials. This is especially true of electronics, which might have components from dozens of different countries.

It’s an interesting question: what types of products are the least sustainable? Some products that seem to be contributing positively to the environment may have a larger “footprint” than people realize. They may have a negative societal impact, for instance, on the people involved in the earliest phases of the life cycle. One contentious example is the impact of mining lithium, an element that is used in the batteries of electric vehicles.

Here are some examples of products that may be regarded as the least sustainable, at least by consumers: single-use products, synthetic fabrics, and animal products & non-organic plant products that use a high amount of pesticides or create disproportionate amounts of waste, or that involve unethical processes impacting humans or animals. We’ll look at each one in more depth momentarily.

Do Service-Based Businesses Need To Worry About Sustainability?

Can services be involved in a discussion of sustainability? One might wonder if such a discussion has any practical relevance. After all, it is possible to render services with minimal impact on anyone or anything other than the client. This is especially true today in the era of cloud-based software.

The potential for sustainability, however, can indeed exist in the services industry. For starters, sustainability can occur when a service-based business uses products. Are these products sustainably sourced? Take a healthcare practice, for example. Are their disposable products made from recycled materials, when possible?

Then there are actions that the service-based business may need to perform. Home repair services require contractors to drive to work locations. Are they using electric vehicles? Of course, electric vehicles and the sustainability thereof are open to debate, but you get our point. Are they using GPS technology to plan efficient routes and shorten drive times? And so on.

Once again, we come back to the importance of consumer perception. Even service-based businesses want to be viewed as sustainable operations. And part of sustainability is social impact. This is why many service-based businesses like banks get involved in community outreach. Customer service and sales teams may be asked or incentivized to volunteer at a food bank, pick up garbage, tutor children, or coach sports. 

Can Anything Be Made Sustainable?

Now let’s return to the aforementioned examples of non-sustainable business models, so we can see if there is any way to make them become sustainable. As we will see, such a purview will segue nicely into a set of best practices for making any business sustainable, whether it involves goods or services.

Discussing the sustainability of different industries has become politicized in recent years, especially when framed against ideas about climate change and social justice. We do not want to make any readers uncomfortable, so we will attempt to remain very neutral. If you are interested in further research, you will have to do your own internet sleuthing, with or without tinfoil helmets.

First off, we have disposable products: These are products like paper or plastic goods that are meant to be tossed. Paper plates, paper cups, napkins, toilet paper, plastic cutlery, and plastic bags are all examples of one-off products. There is not really any apparent way to improve the sustainability of such products. Or is there? 

For starters, the products themselves can be made with recycled materials. Paper production from recycled materials reduces the environmental impact. Certain disposable products can also be recycled for future use, and letting consumers know this can increase their perception of the product as sustainable. 

Now on to synthetic fabrics. These fabrics can create larger amounts of pollution in the manufacturing phase than natural fabrics. Moreover, they are subject to decomposition in the washing machine, which in turn puts microplastics into the ecosystem. Microplastics work their way into the food chain, creating havoc in the Animal Kingdom. They may even have an adverse environmental impact.

Can synthetic fabrics be made sustainably? Yes indeed. If synthetic fabrics are made from recycled plastics or other material, this reduces the energy and pollution of the manufacturing stage, along with reducing the impact of sourcing raw materials. Some studies have even found that recycled polyester fiber is just as sustainable as natural fabric production from linen and hemp. The upshot is that changing the manufacturing method may increase sustainability.

Eggs, Palm Oil, and The Family Farm

What about animal products? This has become a hot-button issue in recent years, with more than a dozen American cities creating “goals” to reduce the presence of red meat within city limits, following the lead of European cities like Haarlem. Is meat (cow, chicken, pig, turkey, and everything else on Old MacDonald’s farm) inherently unsustainable?

This issue has been explored in books like Upton Sinclair’s The Jungle and the more recent Fast Food Nation by Eric Schlosser. It does seem that industrial-sized meat production has some potential negative impact. Larger ranches may require deforesting significant tracts of land. The processing of animals into meat may also involve some humanitarian concerns such as low-paying, dangerous labor.

But the purveyance of animal products becomes much more sustainable once we interject words like free-range, grass-fed, and local. A local farmer selling eggs at the farmer’s market is going to be a lot more organic than a global conglomerate raising tens of thousands of franken-birds inside of an enormous processing plant. Issues of unsustainability therein may include everything from factory pollution to respiratory illnesses among the hens.

Certain non-organic plant products are also arguably unstainable. One permeating example is palm oil. Publications like National Geographic have run numerous pieces exposing the product cycle of palm oil as environmentally and socially impactful in negative ways. As they write, palm oil has led to significant amounts of deforestation and unethical land seizures of indigenous people. But for better or worse, as these same publications point out, palm oil is unfortunately in most food products.

Once again, we are back to buzzwords like local or ethically sourced. In regards to plant products, there is an entire burgeoning industry of farm-to-table restaurants that serve up dishes made from locally sourced food items. Local fruits, local veggies, local meat, local fish. The idea is that family farms are going to be better sources of food that do not create negative impacts on the environment or society.

What’s an ESG Score?

ESG stands for environmental, social, and governance. The ESG score rates how well a business minimizes its negative impact in these areas, while maximizing its positive impact. The overall ESG ranking of a company is believed to reflect the sustainability of that business and its products. Let’s take a look at each area.

The environmental aspect of the ESG score assesses how much the business contributes to climate change, pollution, resource depletion, waste, deforestation, and biodiversity. The social impact assesses how well the employees are treated and how the business impacts the community in which it operates. The governance aspect relates to the presence (or hopefully lack) of bribery, corruption, legal, and regulatory violations.

The companies with the highest ESG scores are Microsoft, Applied Materials, Woodward, Verisk, Mastercard, Caterpillar, Marathon Petroleum, Nvidia, Dover, and Motorola. If you’re wondering how defense contractors and oil companies made their way into the list, you’re not alone. Suffice it to say that a significant amount of the ESG rating is derived from the company’s own self-assessment.

Does an ESG score truly reflect the sustainability of a business? Once again, we will have to let you catch up to the white rabbit with the pocket watch to answer that question. In terms of addressing your bottom line, we can say that ESG scores (at this time) are irrelevant to most small to midsize businesses.

In the future, it is likely that banks and other financial institutions will create some sort of system for rating businesses along ESG lines, as they are already (bizarrely) doing for their own customers (and yes, this has led to some lawsuits). What we want to worry about here is how exactly you can increase consumer perception of your business as sustainable. And now, let’s finally sink our teeth into the red meat that the former CEO of Microsoft does not want you to eat.

Sustainability Tip #1: Actually Try To Make Your Business Sustainable

Go figure, but increasing consumer perception of your business as sustainable may be as simple as starting with sustainability. Are you using eco-friendly products? This is a simple purchasing decision that can increase the “ESG score” of your operations.

There is no one-size-fits-all answer to this question because every business is different. But let’s take a clothing boutique as an example. Are you selling mostly synthetic fabrics? As mentioned, there may be a significant carbon footprint to such products, as their manufacturing requires higher amounts of energy than fabrics sourced from natural materials.

Where are these articles of clothing made? Have you examined the supply chain to see if the “social” impact of your ESG score is satisfactory? It’s an established fact that even companies like Apple are sourcing some of their products from what are essentially labor camps in China.

For the online component of your business, are you delivering products via USPS, or selling them through Amazon FBA? Amazon FBA may be the most economical way to go, but rumors are swirling that during the holiday season, Amazon warehouse workers and/or drivers are relieving themselves in bottles for fear of “abusing” bathroom break privileges (this of course has led to the creation of myriad internet memes).

As you can see, there are a number of things to think about. You will want to review the entirety of the product lifecycle and examine the environmental and social aspects of what you sell. And lastly, regarding the social aspect, you will even want to take a look at your own HR paradigm. Do you treat your workers fairly and ethically, or are they forced to relieve themselves in bottles?

Sustainability Tip #2: Let Your Customers Know What You Are Doing

If a tree falls in the forest, and there is nobody to hear it, does it still make noise? The answer to this question depends on how “sound” is defined: vibrational waves, or an auditory experience. 

But in regards to sustainability, your quest to sell environmentally friendly products and/or reduce your carbon emissions will not translate to increased profits, unless you let your customer know what you are doing.

Let’s first return to our above-mentioned example of a clothing boutique. Large signage in your store can proudly proclaim that all your clothing is made from natural fibers: cotton, hemp, and bamboo. Put it on your receipts. Post about it on your Instagram page. Put it everywhere you can, to let your customers know.

If you are selling packaged goods, let customers know that the box was made from recycled materials. Is a portion of the proceeds going towards some environmental or societal cause? Put that on the packaging too.

You will need to think about your customer base, because societal causes have also become highly politicized in recent years. Notwithstanding, the right message can go a long way toward making your business look sustainable.

Here’s another example: let’s say you own a restaurant. If you are using locally sourced food, state it loudly and proudly on your menu. Make it one of the prime selling points of your establishment. Consumers love the farm-to-table because it feels like a good cause they can participate in. It also connotes something warmer, cozier, and family-oriented. Even giant conglomerates like U.S. Foods admit that farm-to-table is trending in the food business.

Sustainability Tip #3: Create a Community Story

Remember that part of sustainability is social impact. If you can spin your business as being part of a community, that will go a long way. Large, faceless conglomerates do not strike consumers as necessarily “sustainable.” With no “face” to speak of, there is an assumption that the business will do whatever it needs to in order to make money.

Putting a “face” to your business creates a sense of accountability. And by “face,” we are not talking about Ronald McDonald. Rather, we are talking about some of your own employees or contractors. Brands are now experimenting with “storytelling” on their packaging.

This is nothing new. Businesses have been doing this for a long time, through words and images. But these corporate stories may come across as forced narratives that are meant to create a particular sentiment, without necessarily carrying any truth. While Chef Boyardee might make us feel like we’re about to bite into some homemade pasta al forno, the end result is a slightly metallic-tasting ravioli.

In recent times, some businesses have experimented with putting actual employee stories on their packaging. This makes the stories more relatable and believable. It also creates an impression that your business cares about its employees. Consumers feel that your business is not just in it for the money, but to create an ethical imprint on the world as well, improving the lives of real people.

The sense of community created through storytelling can also include community outreach. Is your business involved with after-school tutoring? Serving up food at homeless shelters? Donating supplies to troops abroad? Put these stories on your packaging. Put them in your social media feeds. Put them up in your store.

When customers see the smiling faces of current employees, they’ll believe your business is a good place to work, where employees are happy. When they see snapshots of your business involved in the community, they’ll assume you’re committed to social causes. 

Again, you will want to carefully weigh and consider which causes your customers care about. In most cases, things like the aforementioned after-school tutoring or giving food to homeless people is universally appreciated.

Sustainability Tip #4: Highlight the Product Journey With Transparency

Customers are getting more interested in where their products come from, and how they are made. An industry survey found that when it comes to food, 68% of consumers feel that they don’t know enough about where it comes from and 92% said it’s very important to know. What consumers are seeking here is transparency.

There are a number of reasons why consumers want this information. They may have health concerns regarding allergies or food safety. They have environmental, ethical, or political motivations for buying or not buying certain foods. And in general, they just want to feel that you are being transparent.

In fact, 72% of consumers said that transparency was an important consideration in supporting a business. Being transparent about the product journey is a good way to build consumer trust, and perhaps make your packaging a little more interesting.

Supply chains these days are very complex, with raw materials coming from a number of different places. You can list these places on your packaging, menu, or product labels, creating a customer-facing story. Consumers will appreciate the transparency of your gesture. And if your products are indeed sustainably sourced, that can be communicated on your packaging.

Here’s an example, returning to the restaurant idea: you could create a social media post showcasing the apple harvest at a local orchard from which you’re sourcing fruit. Connect this video footage with content about your fall line of apple-based desserts. With this post, you have communicated with your customers about the origin of your products.

Or let’s go back to the boutique clothing store. Is the clothing handmade? Can you get footage of the weaving process? Playing this footage on a loop inside your store (obviously not the raw footage, but edited and packaged) will add to the ambiance while illuminating the supply chain with transparency.

This is a strategy that large businesses are using, and it’s one that smaller businesses can use as well. Of course, the strategy will not work if your products are not truly ethically and sustainably sourced. But if they are, this can become a meaningful and impactful way of building customer trust and perception of your business as sustainable.

Sustainability Tip #5: Change Your Packaging

This last tip is all about the people buying products from you. Our previous tips have explored sustainability attributes or the profession thereof. But this last point speaks to one of the timeless facts about consumers: they eat with their eyes first. That said, this idea can be exercised whether or not your business is sustainable.

As an example, think of how many fast-food franchises are revamping their image. You will see Mcdonald’s and Burger King establishments gutting their interiors and restyling their exteriors to include earthy tones and natural materials like stone and wood. What’s going on…are they serving something different inside?

As it turns out, not really. No offense to purveyors of fast food (it’s all delicious), but it’s pretty much universally agreed that it’s not the best quality eatin’ material. Moreover, much of the food comes from industrial-sized operations, which may create significant amounts of waste, pollution, and questionable labor practices.

But you wouldn’t think about that when driving up to the revamped facade of America’s favorite eateries. These seem like farm-to-table establishments with a cozy ambiance. It’s all in the packaging, you see. Since consumers readily associate a certain “earthier” or “natural” aesthetic with sustainability, trading in that iconic ribbed Mc-roof for wood and riverbed rocks starts building subconscious assumptions of sustainable business practices.

How you package your products or services can go a long way. This is something best parsed out with a design team and a little market research. But speaking in general terms, packaging with earthier tones and more natural aesthetics communicates an image of sustainability. This comes down to fonts, colors, images, and copywriting.

Returning to the establishment architecture, the layout and design of your business can also communicate sustainability. Once again, working with a committed designer can bring these ideas to life and help market your business as a sustainable operation.

Sustainability Must Be Genuine 

In creating this image of sustainability, however, remember that ultimately, consumers will find out if you are telling the truth or not. Rather than skipping right to suggestion #5 (revamp the packaging), we suggest that you implement all other suggestions, beginning with a genuine effort to assess your business and improve its own “ESG score.”

Sustainable Goods Payment Processing

Consumers are investing in a more sustainable future, and they expect businesses to do the same — from the products they sell to the payment options they provide.

Accepting digital payments is another way a business can promote sustainability. Offering consumers an alternative to paper and plastic payment types can be a relatively simple and powerful first step toward sustainability — something customers are beginning to expect from retailers and restaurants large and small. And you can help your clients get there.

Traditional payment methods include paper (cash and checks) and plastic (credit and debit cards). And while these payment types are immensely popular for many reasons, they don’t have to be the only option your clients offer. Especially clients who are looking for ways to improve sustainability.

Digital payments require minimal resources to produce, and they have a lower environmental footprint when compared to traditional payment methods. 

Ecological benefits of digital payments include:

• Reduced paper waste
• Reduced plastic waste
• Reduced energy consumption
• Reduced water consumption
• Reduced air pollution

However, digital payments rely on devices like smartphones and computers, which require energy and resources to manufacture and operate. Regardless, digital payments are a more sustainable option for both businesses and consumers.

Sustainable Digital Payment Choices

In addition to providing environmental benefits, digital payments offer consumers the efficiency and convenience they need. Here are six ways you can implement digital and sustainable payment practices. 

1. Accept digital wallets: Digital wallets, such as Google Pay, Samsung Pay, and Apple Pay, are cashless, cardless and paperless. Digital wallet users can make real-time payments from their connected smart devices in-store and online. Above payment information, digital wallets can also store concert tickets, travel documents, boarding passes, and more.

2. Offer payment links: Send customers a secure payment link through text, email, social media, and more. From clicking on the link, customers can pay online instantly.

3. Use QR code technology: Similar to payment links, QR code payments are a contactless payment option. It is simple and free to generate a QR code online or through an app. Customers use their smartphone cameras to scan the code from a printed or online platform to make a secure and seamless online payment.

4. Offer digital invoicing: If you provide invoices or bill your customers, consider using digital invoicing and online payment solutions rather than mailing paper invoicing. 

5. Automate B2B payments with ACH processing: Replacing paper checks with digital ACH transaction automation.

6. Digitize receipts: offer to send customers their receipts digitally on their smartphones or email to reduce printing paper receipts that usually end up in the garbage can outside your storefront 2 seconds later anyway. 

Bottom Line Benefits of Sustainable Payment Methods

Digitizing payment processes creates a more sustainable payment experience for your clients. It also benefits your business in several other ways, including:

• Reduce expenses: save money on paper, printing, and postage with digital receipts, invoices, and more. Simultaneously save on manual labor costs with automated digital payments.  
• Improved efficiency and accuracy: Digital payments help speed up payment processing times. Additionally, automated processes improve workflow and reduce errors.
• Enhanced security: Digital payments use encryption and tokenization security measures to protect sensitive cardholder information, reducing the risk of fraud.
• Increased convenience: Digital payments let your customers make payments from anywhere — in person, online, or on the go, delivering a more convenient payment experience.

Concluding Sustainable Consumer Goods, Payment Processing, and Business Practices

Consumers are aware of and searching for ways to reduce their carbon footprint. They even get excited when they find businesses that have the same goals. Although digital payments alone won’t solve our global environmental concerns, implementing them alongside sustainable products and business practices can help.

Ready to learn more about sustainable digital payments and how you can incorporate them into your business? Contact ECS Payments today.

Frequently Asked Questions About Sustainable Goods, Payment Options, and Business Practices