Valuing Non-Financial Information: Introduction of "Impact Reporting" for EC Managers

In future EC business, it is difficult to attract new consumer layers centered on Gen Z with just "cheapness" or "convenience". What is required now is the visualization of "non-financial information" showing what impact the company has on society and the environment, that is, Impact Reporting. In this article, beyond financial indicators such as sales and profits, we explain specific introduction steps to quantify the brand's "Reason for Being (Purpose)" and promote ethical consumption behavior.

Table of Contents (Click to Expand)

1. Why EC Needs "Impact Reporting"

In traditional EC operation, GMV (Gross Merchandise Value) and ROAS (Return On Ad Spend) were the top priorities. However, Gen Z, who are sensitive to environmental issues and social inequality, strictly check the "story" and "reality" behind the brand.

Impact Reportingis a mechanism to report 'social value' created through business activities quantitatively and qualitatively. Introducing this excludes greenwashing and builds true trust.

2. 3 Pillars of "Non-Financial Information" Valued by Gen Z

To be evaluated as ethical EC, transparency in the following 3 areas is essential.

Reduction of Environmental Load: CO2 emissions, plastic reduction amount, recycling rate.
Supply Chain Transparency: Appropriateness of labor environment, implementation status of fair trade.
Contribution to Community: Donation of part of sales, cooperation projects with local communities.

3. Practice: Design and Visualization of Impact KPI

To measure impact, it is necessary to first build your own "Logic Model". Define what activities the injected resources led to, and ultimately what social changes (outcomes) they produced.

The following graph shows the correlation image between customer brand loyalty and social contribution indicators before and after ethical EC introduction.

Q. Is it effective for generations other than Gen Z?

A. Yes. Interest in ethical attitudes is increasing across all generations, and it becomes a very powerful differentiation factor especially in B2B transactions, investors, and recruitment markets.