Are they balancing social, ecological, and economic sustainability? The Conscious Commerce Circles from diconium help to master this balancing act.

Written by Veronika Abraham 08 Apr, 2024

Sustainability in retail

Once an individual lifestyle and consumer trend, now a social movement and critical economic factor; once a "nice to have", now a topic on the C-level agenda - we are discussing social, ecological and economic sustainability. As an environmentally conscious and ethically minded generation grows, the pressure on retailers increases. Consumers, investors and new regulations such as the Corporate Sustainability Reporting Directive (CSRD) expect companies to take responsibility by understanding their business model's environmental and social impact and asking themselves: How can I manage my company in terms of (economic) sustainability? How can we make sustainable business decisions? But let's start at the very beginning and clarify the fundamental questions first:

What is social, ecological, and economic sustainability?

Social, ecological and economic sustainability includes generating profits without damaging the required resources in the long term. In concrete terms, this means using raw materials, goods, and capital to continue to be available in the same quantity and of the same or better quality in the future. Companies that operate sustainably aim to comply with legal requirements and align their actions with ecological, social and economic goals. These are mutually dependent. So, what is sustainability? In simple terms, if you only fell as many trees as will grow back, you ensure that the forest retains its value in the long term and acts economically sustainably in harmony with resource conservation and social compatibility.

One step further: Regenerative economy instead of sustainability

Experts warn that sustainable behaviour - "doing no further harm" - is no longer enough to reconcile the economy with the planet. Organisations must act according to the concept of the regenerative economy. The approach? Aligning the economy in such a way that companies create positive solutions through their economic activities and contribute to preserving still intact ecosystems or regenerating those already under attack. To stay with the example of the forest, this means that fewer trees are felled than grow back - and yet the concept is economically successful. By using only as many resources as are renewed by themselves, we help to ensure that the environment and the economy are in harmony. It means that we meet our own needs and ensure that future generations have access to more resources. If we design or redesign organisations according to these principles, we build a bridge between social, ecological, and economic sustainability and act regeneratively. 

How can the transition to a regenerative economy succeed?

You are probably asking yourself: How on earth do we get there? This question is more than understandable, given the complexity of the task. But as is always the case with development processes, it only happens in stages but step by step. A structural guide, such as the Conscious Commerce Circle from diconium, helps to set the direction and divide mammoth tasks into many small, manageable steps. The Conscious Commerce Circle is a starting point for companies to introduce and improve effective measures.

Economy & sustainability: examples & measures in (digital) retail

In the fast-paced world of digital commerce, many companies are rethinking their approach. Many consumers expect their favourite brands to design business processes in such a way that they conserve natural resources (or even actively contribute to restoring or regenerating them). Many companies have recognised this and firmly integrated sustainable practices into their business model and strategy. The following examples show what these measures can be:

• Digital monitoring of the supply chain: implementation of a digital system for comprehensive monitoring of all partner companies about social, ecological and economic sustainability along the entire supply chain
• A high level of emissions awareness and measures to save waste, energy and water, e.g. by using waste heat from IT data centres for production
• Orientation towards the 17 Sustainable Development Goals (SDG) of the United Nations and anchoring these goals in the corporate strategy
• Sustainable development of products: Increasing the ecological, social and economic sustainability of products through environmentally friendly product design, sustainable materials and manufacturing methods
• Subscription and sharing models: introduction of digital subscription and sharing platforms to promote product use while reducing resource consumption.
• Sustainable web design in the form of green hosting, green coding, improved accessibility and digital nudging.
• Establishing digital tools for employee communication and participation to create sustainable awareness and involve employees in the regenerative corporate culture
• Circular business models help to achieve ecological, social and economic sustainability goals in retail

Advantages of social, ecological and economic sustainability for the retail sector

In addition to positively impacting the environment, society and public image, ecological, social and regenerative sustainability in the company also brings economic benefits.

1. safe planning: The European Union and Germany have committed to the United Nations 2030 Agenda. To this end, some laws relating to sustainability will change in the future. One example is the new EU directive on corporate sustainability reporting, the Corporate Sustainability Reporting Directive (CSRD). The regulation obliges companies to report transparently on their environmental and social impact.
2. early commitment: If you start developing and implementing sustainable strategies now, you will be well prepared for increasingly demanding regulations and laws. In addition, there is still an opportunity to position yourself as sustainable in an increasingly competitive market before it becomes an essential requirement for all companies.
3. attractive employer: The future generation needs to identify with the values and mission of their employer. They are looking for meaning in what they do. Sustainable action, environmental protection and social responsibility are significant to them. If a company can credibly demonstrate this, well-trained specialists and young talents are more likely to apply there than to the competition.
4. More innovation and motivation: Implementing new ideas and technologies can create synergistic effects. Employees are more motivated to work if they approve of sustainable development.
5. lower costs: Companies save costs by conserving resources and acting ecologically. Even small interventions offer significant savings potential. In the long term, social, ecological and economic sustainability means lower expenditure and greater efficiency for a company.
6. higher demand: Consumers increasingly turn to brands from companies where they know corporate social responsibility is anchored in their corporate goals.

A sustainable company takes responsibility. Responsibility for the current community and future generations. Other interest groups also see and appreciate this - be it skilled workers and young talent, investors, potential customers or the general public.

Why is sustainability in retail important?

Word has gotten around that every robust and future-proof brand must "take care" of sustainability. Consumers and buyers are often more demanding than the current range of products offered by companies in the retail sector. In the worst-case scenario, the lack of consideration of sustainability issues can be a knock-out criterion when purchasing. This is because customers have a wealth of other brands to choose from, especially in retail. Here, sustainable practices serve as a differentiating factor to gain customers' trust. But it's not just customers who are demanding a rethink in retail. Legislators and financial markets are also increasing pressure on companies to operate sustainably. Today, every CEO must pay attention to the issue of sustainability. This offers the opportunity to do things better. But tangible questions need to be clarified before a company tackles the "social, ecological and economic sustainability" project: How do you reconcile economy and ecology? And how can economic success still be achieved? How can the transformation also succeed from a social point of view? How can the transition to a regenerative economy succeed? How can ecological aspects be monitored throughout the entire supply chain? Questions upon questions that show: The topic is complex.

Why is sustainable trade complex?

1. sustainable trade depends not only on the company but also on many different partners and suppliers along the entire value chain. How do you ensure that all stakeholders along the value chain act socially, ecologically and economically sustainably?
2. more and more regulations and laws are being passed in trade that companies must comply with. This requires additional investment in social, environmental and economic sustainability.
3. it isn't easy to measure and evaluate the success of sustainable measures in retail. More know-how and precise vital figures are often needed to track progress.
4. companies have different levels of ambition and maturity regarding sustainability. For some companies, it is enough to meet the legal requirements. Others already exceed current requirements and strive for a regenerative economy. The Conscious Commerce Circle by diconium is a structure provider for this.

Overcoming complexity - with the Conscious Commerce Circle

The fact is that sustainability in retail is a complex issue. How deeply sustainability should be anchored in a company depends on what ambitions the company is pursuing. For example, if a company strives for a regenerative economy, this goal should be anchored in the company's DNA and integrated at all levels along the value chain. However, sustainability does not necessarily have to change all company areas fundamentally. For example, a company can still strive for the highest profit but at the same time at least fulfil the legal requirements regarding sustainability. This company would then "only" make necessary changes along the value chain. Although companies are being pushed by stakeholder expectations and new legislation to integrate sustainability, there are different approaches and levels. But where does my company currently stand? And how do I get started? The Conscious Commerce Circle from diconium can help you discover. It provides a structure for social, ecological and economic sustainability in retail.

The Conscious Commerce Circle - a structural provider for sustainability in retail

What is the Commerce Circle?

The Conscious Commerce Circle is a structural tool that helps companies analyse a company's sustainability status quo and identify effective optimisation levers. The levels of the Conscious Commerce Circle are detailed by elements into which the company's current measures and challenges can be categorised. The Conscious Commerce Circle thus adapts individually to the level of maturity (How far along is the company?) and the level of ambition (What are the goals? How sustainable should my company become?). It, therefore, serves as a starting point for effective social, ecological and economic sustainability improvement measures. We also want to use the Conscious Commerce Circle to show our customers that they can make a significant difference even with comparatively small impulses and food for thought.

Who is the Conscious Commerce Circle aimed at?

The Conscious Commerce Circle is aimed at decision-makers in and around the field of (digital) sustainability. How you can recognise that the Conscious Commerce Circle is precisely the proper structure for you:

- You want more social, ecological and economic sustainability in your organisation and are looking for solutions and first steps.

- You want to find unused resources and potential or growth opportunities to develop your business model further in terms of sustainability.

- You want to make good, fact-based and quick decisions in sustainability.

- You want to know how to get others in your organisation excited about a regenerative future.

How is the Conscious Commerce Circle used?

Together, e.g. in the form of a workshop, we identify the status quo of your company in terms of sustainability and look to the future: What do regenerative practices look like? How can I align my business model with social, ecological and economic sustainability? What levers are still available for optimisation? And this is how we proceed together with you:

1. question the status quo: We closely examine your current business purpose and identity and consider how you can increase sustainability within the company.
2. define a new path to success: We rethink your strategy to pave a new path incorporating environmental awareness and societal benefits into your mission.
3. Redesign the business model: We provide ideas and input on transforming your business from a traditional business model to an impact model designed for social, environmental and economic sustainability.
4. optimise the value stream: We review and optimise your business processes to minimise adverse environmental and societal impacts.

What can the Conscious Commerce Circle not be used for?

The Conscious Commerce Circle needs to provide a detailed plan as to which of the recommended measures should be implemented first or which of the proposed projects has the most potential. It gives ideas or recommendations, but it is up to each organisation to decide which steps to take first and how to integrate them into their day-to-day operations.

What’s new?

A key difference to other management approaches is the more accessible access to sustainability and the acceleration of implementing measures. The Conscious Commerce Circle helps to discover white spots, i.e. previously unused resources potential or growth opportunities that can be used to increase the company's sustainability based on its ambitions.

The Conscious Commerce Circle: results from practice

In practice, the Conscious Commerce Circle helps us integrate existing measures and challenges into the framework's elements. This gives us an overview of the company's structure in terms of sustainability. This uncovers new dependencies and gaps and sharpens the overall understanding of sustainability within the company.

diconium Collaboration Day 2023: Online Workshop on the topic of conscious trade

In July, we organised an interactive online workshop on conscious commerce with existing and new customers from various sectors (e.g., textiles, IT, and industry). As part of the workshop, participants were introduced to the Conscious Commerce Circle and had the opportunity to apply it to a fictitious company. The discussion also resulted in valuable cross-industry insights that we would like to share with you:

- Due to the internal networking and external dependencies of sustainability, companies face similar challenges.

- Employees are the driving force behind sustainability and must be actively involved in the transformation from the outset. Therefore, giving them time to work on sustainability projects is essential.

- Transparency, honesty and communication are fundamental prerequisites. A strong vision also provides a solid starting point.

- Every step towards sustainability is a step in the right direction. Due to the high complexity of the topic, it is impossible to define a clear goal right from the start. The keyword is "just start", and take small steps to greater sustainability.

We accompany you on the way to a regenerative future

The sustainability experts at diconium know your industry and its challenges and can support you with tailor-made solutions for greater sustainability. Even if the challenges are significant and the topic is complex - it is worth being one who actively shapes your industry's future. Let's get started!

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