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Branded Resale: The Most Powerful ESG Move

By Samantha Dersarkissian

Branded Resale: The Most Powerful ESG Move


Sustainability is more than just a “marketing” term that can help fashion brands stand out. Customers demand it from their favorite brands, creating new challenges for executives tasked with maximizing profitability. Customers also want to buy from brands viewed as socially responsible and transparent in their operations, often forcing industry executives to strike a delicate balance between generating revenue and protecting the planet. One initiative that has become more apparent lately supports a brand’s growth goals, demonstrates innovation and promotes social responsibility: recommerce. As an ESG initiative, recommerce increases profits and attracts new customers, maximizing brand growth and ROI.

Keep reading to learn more about how the recommerce model can help fashion brands create value and connect with customers who support social and environmental initiatives.


What Does ESG Mean?

ESG stands for environmental, social, and governance—a set of nonfinancial criteria that identify opportunities and risks in the marketplace. For brands that have embraced a more comprehensive approach to business, focusing on ESG makes it easier to measure social and environmental impact. The third aspect, corporate governance, relates to a company’s operating standards.

There’s no standard set of ESG factors used by all companies, but many brands consider the following when assessing their performance:

  • Environmental: Energy efficiency, water usage, carbon emissions, pollution, recycling, waste disposal, climate change, sustainable development goals
  • Social: Workforce diversity, policies related to forced labor/child labor, employee morale, customer satisfaction, customer privacy, community involvement
  • Governance: Executive compensation, political participation, board diversity, policies related to corruption and whistleblowing, audit requirements

Today’s shoppers are more sophisticated than ever, and most of them want to buy from brands that positively impact the communities they serve. 70% of Americans believe it’s “very important” or “somewhat important” for businesses to improve the world. More than 70% of investors also report that ESG factors influence their investment decisions, making the ESG framework essential for brands across all industries.

Why Fashion Brands Need to Make ESG Initiatives a Priority 

ESG is essential for the continued existence of fashion brands, as young customers demand eco-friendly practices at every point of the supply chain. Addressing ESG through innovative initiatives can also help brands maximize their return on investment and create long-term value for customers. 

Manufacturers currently use chemical dyes, plastic microbeads, viscose, and other nonbiodegradable materials, contributing to increased pollution levels. The fashion industry also accounts for 10% of all industrial water usage. It produces more carbon emissions each year than the airline industry, highlighting the importance of ESG initiatives in transforming the industry into something more sustainable.

Many customers are also concerned about unfair labor practices in the fashion industry. Garment workers are exposed to chemicals and tend to work long hours, putting them at risk for serious occupational illnesses and injuries. Low wages and a lack of diversity also affect employee morale, which has the potential to reduce customer satisfaction and make it more difficult for fashion brands to increase their market share.

5 Ways ESG Initiatives Can Create Value 

The good news for fashion brands is that you don’t have to choose between doing well financially and doing “good” in the world. Consultants from McKinsey & Company have confirmed that implementing the ESG framework helps companies create value in five key ways.

Increased revenue

Offering sustainable products attracts more customers, increasing gross revenue. Brands implementing the ESG framework also improve their access to needed resources by forming positive relationships with government agencies and local community members.

Legal considerations

Brands that implement the ESG framework may qualify for grants, subsidies, and other forms of government support. When brands take the lead on sustainability, they may also avoid increased regulatory scrutiny, giving them more freedom.

Cost savings

The ESG framework helps businesses save money by reducing sourcing and production costs such as water usage and increasing energy efficiency.

Investment returns and optimization of assets

Implementing the ESG framework allows brands to avoid investments that may not produce an acceptable return due to long-term environmental issues. Brands also have the opportunity to increase their return on investment by using more efficient equipment.

Increased productivity

Following the ESG framework can increase productivity by improving employee engagement. Brands also have the opportunity to increase their social credibility, making it easier to attract top talent for key roles.

Learn Why Branded Resale is One of the Most Powerful ESG Initiatives Your Brand Can Leverage

Why Brands Should Consider Branded Recommerce as an ESG Initiative

Resale is as important for brands today as e-commerce in the 2000s

Adding resale as a channel breathes new life into brands struggling to meet their ESG goals. Participating in the resale market gives brands the opportunity to sell the same item to multiple customers, increasing revenue and market share.On the other side of the exchange, customers save money, enjoy the “new-to-me” experience and get the satisfaction of knowing that their purchase is helping to keep a perfectly good item out of the landfill. Resale as a channel also increases access to premium brands, making it easier for fashion brands to build relationships with customers who are likely to buy from them again.

Brands must control their customer relationships and data

When customers buy from non-branded resale marketplaces, brands lose the opportunity to collect data that could help them better understand purchasing behavior. Non-branded marketplaces also reduce the number of customer touchpoints available to a brand, taking away valuable opportunities to shape brand perceptions. Adding resale as a channel allows fashion brands to avoid these pitfalls, giving them complete control over customer relationships and data.

Trove is the only platform that powers resale as a channel for the world’s most respected brands. Premium fashion brands like REI, Lululemon, and Levi’s rely on Trove’s technology to capture real-time data and use it to process, price, and resell millions of items. 

Reintroducing these like-new items into the supply chain increases sustainability while creating new opportunities to generate revenue. With Trove, brands get to extend the lifespan of their products and achieve their ESG goals, ushering in an era of commerce that is more inclusive and less wasteful.

Learn More About These 14 Brands Leading the Industry in Branded Resale 

What Premium Brands Need to Know About the Recommerce Opportunity

The recommerce opportunity turns every item you’ve ever sold into an asset that can be monetized, again and again. Recommerce can also make your brand more profitable while achieving your ESG goals. Customers are more aware than ever of how their buying habits affect the planet and the people they share it with. As a result, approximately 30% of all fashion items sold in the future will be pre-worn merchandise from other people’s closets, not new products made in a factory.

Brands that embrace recommerce are well-positioned to capitalize on this shift but to scale effectively, they must implement end-to-end technology to capture data and make informed decisions. Anything less than that is a stopgap measure that won’t help brands achieve their goals. 

It’s also important to understand that recommerce isn’t appropriate for every brand. Resale works best when a brand offers high-quality, high-desirability items, as the demand for these items increases over time, creating additional monetization opportunities.

Choosing the right platform and service to implement your branded recommerce strategy is a big decision.

If you want to learn more about how Trove can help you achieve your ESG goals while growing your brand, schedule a free demo with us today!