ESG and Dropshipping Review

As industrialized consumption continues to increase, the ethical and ecological costs of systems like fast fashion and drop-shipping that primarily rely on developing countries for manufacturing have come under scrutiny. As such, efforts like Environmental, Social, and Governance (ESG) have attempted to impact the industry in making it more environmentally sustainable. This review will discuss how consumer-driven industries impact developing economies and evaluates whether ESG frameworks can meaningfully redirect global capitalism toward sustainable outcomes.

The fast fashion industry exemplifies the tension between economic development and environmental exploitation in globalization’s third wave. According to textile economist Laura Smith, clothing production doubled between 2010 and 2025, with 73% of garments now landfilled within a year of purchase (Smith 14). This disposability culture stems from what sociologist Amara Bhasin terms “micro-seasonal marketing”—a strategy where retailers like Zara and Shein release up to 52 collections annually to drive perpetual consumption (Bhasin 202). While this model generates $1.7 trillion in annual revenue (World Trade Organization 87), its environmental toll disproportionately affects manufacturing hubs in Bangladesh, Vietnam, and Ethiopia. A 2024 International Labor Organization report found that 68% of Bangladeshi textile workers face workplace injuries annually, while earning just $0.13 per finished t-shirt—a 23% real wage decline since 2000 (Hossain et al. 37). Environmental impacts prove equally dire: Bangladesh’s Buriganga River absorbs 22,000 liters of toxic textile dyes daily, rendering its water 350% more carcinogenic than WHO safety thresholds (Rahman 112). Despite these consequences, developing nations remain locked in what economist Kwame Owusu calls the “race to the regulatory bottom,” sacrificing environmental protections to attract foreign investment (Owusu 89). The rise of drop-shipping platforms like Oberlo and Shopify has further complicated sustainability efforts through hyper-globalized logistics. While proponents argue decentralized e-commerce reduces overproduction, MIT researchers found that the average drop-shipped product travels 8,400 miles—42% farther than conventional retail goods—generating 1.8 kg of CO₂ per shipment (Chen and González 2047). This “last-mile globalization” particularly impacts Southeast Asian economies, where 63% of drop-shipping suppliers operate (Vietnam E-Commerce Association 19). Environmental economist Priya Kapoor notes that Indonesia’s packaging waste surged 290% between 2020-2025, driven by millions of unbranded AliExpress products repackaged for Western markets (Kapoor 117). The economic benefits remain uneven: while Vietnamese drop-shipping intermediaries saw profits grow 14% annually, factory workers’ wages stagnated at $2.40/hour—below living wage benchmarks (Tran 33). This disparity supports what development scholar Fatima Zahra terms “algorithmic colonialism,” where digital platforms extract value from developing economies without transferring technical capacity (Zahra 78).

The proliferation of ESG metrics offers a potential pathway toward sustainable consumerism, though its effectiveness remains contested. According to Harvard Business School’s ESG Impact Index, companies scoring in the top ESG quartile achieved 4.8% higher profit margins than peers from 2020-2025 (Lee et al. 16). However, critics argue current metrics prioritize easily quantifiable goals over systemic change—a phenomenon legal scholar Michael Green calls “carbon tunnel vision” (Green 144). For instance, while 92% of S&P 500 companies now disclose carbon footprints, only 11% report on supply chain labor conditions (Global Sustainability Monitor 28). Developing economies face unique challenges in ESG adoption. A 2025 UNCTAD study of Kenyan manufacturers found that ESG compliance costs averaged $147,000 annually—prohibitively expensive for firms under $5 million revenue (Njoroge 212). Nevertheless, success stories exist: Ghanaian cocoa cooperatives using ESG-aligned practices increased export premiums by 22% while reducing child labor incidents by 67% (Adusei 55). As investor Ngozi Okonjo-Iweala observes, “ESG’s true test lies in value chain democratization—transforming metrics from audit checklists into tools for equitable growth” (Okonjo-Iweala 203). The dual crises of climate change and economic inequality demand reimagined consumer paradigms. Fast fashion’s ecological debts and drop-shipping’s logistical externalities reveal the unsustainability of extraction-based growth models. While ESG frameworks represent progress, their current implementation risks perpetuating neocolonial resource flows. True sustainability requires multilateral standards enforcing living wages, circular production, and technology transfer. As consumerism evolves, its measure must shift from units sold to value created—not just for shareholders, but for workers, ecosystems, and generations unborn.