This simple framework can drive responsible consumption

Consumption is related to every part of the industrial value chain, from circulation, to manufacturing, all the way to procurement and product design. Consumption plays an important role in driving economic prosperity, but should not stop at driving economic growth.

Going forward, consumption should exercise greater responsibility when it comes to the impact on social welfare and environmental sustainability.

“Responsible consumption” is about not only satisfying the basic needs of consumers, but also managing the impact and external cost to society and the environment.

As China is experiencing the macro trend of “consumption upgrade”, responsible consumption has become critical.

On JD.com, we have noticed that Chinese consumers – regardless of age, region or education level – have been increasingly favoring “green” or “responsible” products, such as energy-saving home appliances, smart water-saving toilets, stationery made of recycled materials, organic food and more.

Moreover, the recent macro events of COVID-19 and occurrences of extreme weather across the globe have further increased public interest in consuming more responsibly.

The rise in consumers’ awareness is a positive driver, but to fully realize responsible consumption, joint efforts are also required from the supply side, with brands/manufacturers, distributors, retailers, tech providers, industry associations and more joining forces, as described by the UN’s Sustainable Development Goal 12 (SDG12), “Responsible Consumption and Production.” On the consumer side, responsible consumption is both right and a duty for consumers to exercise, while on the corporation side, it is a key building block of CSR and a critical source of competitiveness in the long term.

To better understand the evolution and practices of SDG12 in China, we conducted in-depth research on both the consumer side and corporation side. The major findings can be summarized by two concepts: a “double helix” structure for “responsible DNA in consumption,” and a “GIFT” framework to measure corporations’ responsible consumption initiatives. These concepts can provide clear yet simple frameworks for the industry to further drive responsible consumption forward in China.

The key driver of responsible consumption in China is bilateral promotion from both consumers and corporations through the “double helix structure”. This means responsible consumption will be mutually propelled and helically deepened by both the consumer and the corporation, thus embedding the DNA of responsibility in China’s consumption ecosystem.

Here’s how it works. As awareness grows among consumers, corporations will increasingly realize that, beyond catering to consumers’ needs, they should also pay attention to consumers’ expectations and proactively drive the collective effort from the corporation side.

Consequently, active initiatives from the corporation side will provide more sustainable products and services, broaden and deepen awareness among consumers and inspire more consumers to practice responsible consumption in their everyday lives.

This “double helix” creates a positive feedback loop between the corporation side and consumer side.

On the corporation side, consumption initiatives are expanding beyond the leading corporations that have been early pioneers, though wider collaboration is needed.

Key motivations for corporations are diverse yet concrete, including sustainability procurement requirements along the value chain, brand image enhancement, consumers’ preference for sustainable products and compliance with government policies.

Corporations’ responsible consumption practices can be captured by what we call a “GIFT” framework:

Different sectors have their own strengths across the four categories:

As a long-time practitioner of responsible consumption in China, JD.com has both the consumer side and the corporation side in its ecosystem. To expand the double helix, every consumer and every enterprise should have the ownership to drive the DNA of responsibility in the consumption ecosystem.

Corporations across sectors should join forces around four key initiatives:

1. Form a responsible consumption roundtable, led by leaders in different sectors to facilitate collaboration and share best practices across enterprises, along the value chain and across sectors.

2. Promote standards with credibility around responsible consumption. Establish and refine the “responsible” or “sustainable” product standard system for each sector to enhance credibility among consumers so as to guide more consumers to make responsible choices.

3. Build the circular system. Under the framework formed by the roundtable, build the circular system across the entire lifecycle of products across sectors.

4. Influence via communications. Corporations should not only transform their products and operations, but also influence the general public by embracing new communication channels and formats to proactively educate the public and drive awareness and adoption among consumers.