The Impact of Supply Chain Decarbonisation on Consumer Preferences and Loyalty: How Sustainable Practices Can Drive Brand Value and Market Share
Explore how supply chain decarbonization and sustainable practices can influence consumer preferences, drive brand value, and increase market share.
- 01Supply chain emissions run 5.5x higher than direct operations, making supply chain decarbonization the biggest lever for corporate climate impact.
- 02Consumers increasingly buy — and switch away — based on a brand's sustainability credentials, not just price and quality.
- 03Winning strategies combine brand-level commitment, transparent reporting (GRI, SASB, TCFD), supplier collaboration, and product innovation, as shown by Patagonia, the Sustainable Apparel Coalition, Allbirds, and REI.
In today's rapidly evolving business landscape, sustainability is no longer a nice-to-have, but a strategic imperative for companies that want to stay relevant and competitive. From investors and regulators to employees and consumers, stakeholders are increasingly demanding that companies take action to reduce their environmental footprint and contribute to the transition to a low-carbon economy.
And while many companies have made significant strides in reducing emissions and waste in their own operations, the reality is that the majority of a company's environmental impact often lies outside its direct control, in the complex web of suppliers, logistics providers, and other partners that make up its supply chain.
In fact, according to CDP, supply chain emissions are on average 5.5 times higher than a company's direct operational emissions. This means that any company that is serious about sustainability must look beyond its own four walls and engage its entire value chain in the effort to reduce greenhouse gas emissions and mitigate climate change.
But decarbonizing the supply chain is not just about doing the right thing for the planet - it's also about doing the right thing for the bottom line. And one of the most compelling reasons for companies to invest in sustainable supply chain practices is the impact it can have on consumer preferences and loyalty.
Consider this: according to a 2020 study by IBM and the National Retail Federation, nearly 60% of consumers surveyed were willing to change their shopping habits to reduce environmental impact, and nearly 80% of respondents indicated that sustainability is important to them. And a 2019 study by Hotwire found that 47% of internet users worldwide had switched to a different product or service because a company violated their personal values, with environmental impact being one of the top reasons cited.
These findings suggest that consumers are increasingly basing their purchasing decisions not just on price and quality, but also on a company's sustainability credentials. And for many consumers, a company's environmental impact is not just about its own operations, but also about the sustainability of its entire supply chain.
So how can companies effectively leverage supply chain decarbonization to drive consumer preference and loyalty? Here are a few key strategies:
Make sustainability a core part of your brand story and value proposition
To truly win the hearts and minds of environmentally conscious consumers, companies need to make sustainability a core part of their brand identity and value proposition — going beyond a few eco-friendly products, and embedding sustainability into the very DNA of the company. Patagonia, the outdoor clothing and gear retailer, has done this particularly well: from using recycled materials to donating 1% of its sales to environmental causes, sustainability is a fundamental part of its brand story, centered around "using business to inspire and implement solutions to the environmental crisis." By making sustainability core to its brand identity, Patagonia has attracted a loyal following willing to pay a premium for products that align with their values, and has built trust that has helped it weather challenges and controversies over the years.
Be transparent and accountable about your supply chain sustainability performance
Consumers are increasingly demanding that companies be open and honest about their environmental and social impacts, and are quick to call out greenwashing or hypocrisy. To build credibility, companies need to go beyond high-level commitments and provide detailed, quantifiable, verifiable information — using frameworks like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD) to measure and disclose ESG performance consistently. By reporting using these frameworks and setting ambitious, science-based targets, companies can build trust and credibility with consumers over time.
Collaborate with suppliers and stakeholders to drive systemic change
Decarbonizing the supply chain isn't something companies can do alone — it requires collaboration with suppliers, industry peers, policymakers, and other stakeholders. One example is the Sustainable Apparel Coalition (SAC), a multi-stakeholder initiative bringing together brands, retailers, and manufacturers to develop common standards for measuring and improving sustainability performance in apparel and footwear. Through the SAC's Higg Index suite of tools, companies can assess environmental and social impacts and work together to drive improvements — accelerating their own decarbonization efforts while helping build a more sustainable industry as a whole.
Innovate and differentiate through sustainable products and business models
One of the most powerful levers is sustainable product and business model innovation. The footwear company Allbirds has built its entire brand around sustainable materials — merino wool, eucalyptus tree fiber, and sugarcane-based EVA foam — to create low-carbon, high-performance shoes, attracting a loyal following of environmentally conscious consumers. The outdoor equipment company REI has experimented with resale and rental programs and product take-back initiatives, reducing its environmental impact while creating new revenue streams and customer touchpoints that deepen brand loyalty and advocacy.
The road ahead
As the business case for supply chain decarbonization becomes increasingly clear, more and more companies are recognizing the potential to drive consumer preference and loyalty through sustainable practices. But the road to a truly sustainable supply chain is long and complex, requiring sustained effort, collaboration, and innovation over time.
To effectively engage consumers on supply chain sustainability, companies need to approach it not just as a risk management exercise or a compliance requirement, but as a core part of their brand identity and value proposition. They need to be transparent and accountable about their sustainability performance, and work collaboratively with suppliers and stakeholders to drive systemic change. And they need to constantly innovate and differentiate through sustainable products and business models that meet the evolving needs and preferences of environmentally conscious consumers.
Of course, the journey to supply chain decarbonization is not without its challenges and trade-offs. Sustainable practices can often come with higher costs and complexity, at least in the short term, and there is always the risk of greenwashing or backlash if companies are perceived to be insincere or ineffective in their sustainability efforts.
But for companies that are willing to make the investment and do the hard work of truly embedding sustainability into their supply chains and their brands, the rewards can be significant. Not only can they reduce their environmental footprint and contribute to the urgent goal of mitigating climate change, but they can also build deeper, more loyal relationships with consumers who are increasingly looking to align their purchases with their values.
As a sustainability and marketing professional, I have seen firsthand the power of supply chain decarbonization to drive brand value and market share. From global giants like Unilever and Patagonia to disruptive startups like Allbirds and Imperfect Foods, the companies that are leading the way on sustainable supply chains are also some of the most successful and admired brands in the world.
But the opportunity is not limited to just a few niche players or industry leaders. As the low-carbon economy takes shape and consumer preferences continue to shift, every company in every sector will need to grapple with the challenge and opportunity of supply chain decarbonization. Those that do so effectively, and that authentically engage consumers in the process, will be the ones that thrive in the decades to come.
The road ahead may be uncertain, but the destination is clear — a more sustainable, resilient, and value-creating supply chain that delivers for people, planet, and profit.
By working together and putting consumers at the center of the sustainability journey, we can accelerate progress and build a better future for all.
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