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The environmental impact of eCommerce and how you can help reduce it

environmental impact of ecommerce logistics shipping and delivery

The environmental impact of eCommerce and how you can help reduce it

Opinion piece by Paul Skeldon, Contributing Editor

The pandemic has changed many things, not least how consumers shop. However, in parallel to the acceptance of eCommerce that has surged over the past two years – and shows no real sign of abating – there has been another shift, one that has much further reaching implications for how we live, but which also has a dramatic impact on how we shop: environmental concerns.

Whether it was the lockdown giving them time to think more deeply, or simply the fact that Covid-19 might be nature’s revenge for mankind’s cavalier attitude to our home, consumers are now more aware of the impact on the environment of their – and more importantly the brands and companies they spend with – on the environment.

A study by Mastercard of shoppers in 24 countries in 2021 found that 58% of adults are more mindful of their impact on the environment, and 85% said they’re willing to take personal action to combat environmental and sustainability challenges. More than half of them (54%) believe it is now more important than ever to reduce their own carbon footprint since the pandemic. Almost two thirds (62%) say that its more important now than ever that companies behave in a more sustainable and eco-friendly way.

But this presents many retailers and brands – and to some extent consumers – with something of a conundrum. Shoppers are keen to use eCommerce and demand rapid delivery of goods, but they want those goods to be ethically sourced and the impact of their manufacture and delivery to be green and clean.

Consumers are prepared to vote with their feet. A study by Unfolded last month found that 76.6% of people said that the fashion industry needs to make rapid changes, while 88% of those questioned stated they would rather buy from brands who take a stance on global issues. Meanwhile, the Digital Consumer Behaviour report by Avery Dennison Corporation, which quizzed 5000 fashion shoppers throughout the US, UK, France, Germany and China in late 2021, found that fashion shopper habits shows that consumers are now driven by green issues when making choices, with more than 60% believing brands and retailers should be making end-of-life options clearer and offering more transparency about production and transport.

Retailers and brands across all retail sectors need to make changes – changes in every facet of how they operate to meet these new demands. Here’s how.

Driving change in delivery

The most obvious area where environmental impact of eCommerce can be seen, often literally on the shopper’s doorstep, is in transportation and delivery. The transportation of goods produces the majority of CO2 emissions from eCommerce, with delivery and returns accounting for 37% of total greenhouse gas (GHG) emissions in 2020, according to Statista. And it is on course to increase, as more consumers shop online and more deliveries take place – which in turn leads to more congestion on roads, longer journey times and more emissions.

There are two major factors that are driving this, if you’ll pardon the pun. Firstly, the desire for rapid same and next-day delivery are seeing many shippers having to send goods out in half-empty delivery vehicles, rather than waiting for a full load. It is also seeing more, smaller delivery vehicles on the road, adding to congestion and delays – and emissions.

Secondly, there is the more eCommerce takes place, the more returns there are, especially in apparel and fashion. Many consumers buy multiple sizes, colours or styles of the same items and only keep one, sending the rest back. This rise in returns leads directly to more transportation and a rise in emissions.

One answer is to switch to electric vehicles (EV) for at least some of these delivery and return runs. Many major carriers are certainly investing in new fleets of EVs, often to handle the last mile in urban areas, but some are also looking to switch to larger electric trucks for longer-haul transport.

DHL recently added 270 pure electric vans to its existing fleet of 50, while DPD has made Oxford ‘all electric’ with its delivery vehicles in the city and its environs removing more than 40,000 tonnes of CO2 each year. Royal Mail too has started trials of a range of electric vehicles, again for last mile local deliveries.

However, these are largely focussed on local deliveries: longer distance, intercity transportation, however, is largely confined to looking at how to make existing lorry runs more efficient… at least until the Tesla semi or similar becomes more mainstream.

Here, retailers need to look at how to use carriers more intelligently, looking at how to manage carriers so that packages are put into trucks that are increasingly full. This means working with a third-party carrier management company to help find the right van on a package by package basis, ensuring that the carbon impact is minimised.

Unpacking green packaging

How the items that shoppers buy has also become an environmental trigger for many. A study by a packaging company Aquapak finds that 67% of consumers say that, going forward, will try and buy more products that do not use single-use plastic packaging. Furthermore, 54% said that they will try and stop buying products which use single-use plastic packaging completely over the next three years.

The use of cardboard boxes – often seen as an easily reused and recycled packaging medium – is also an issue with modern eCommerce, for no other reason that the sheer volume of boxes now being used.

The solution to the packaging problem is, however, straightforward – and is something that is becoming good for business. Using recycled fibre to make boxes and to encourage consumers to recycle boxes so that the ‘fibre’ is in constant use. Already consumers are looking to retailers, brands and indeed packaging companies to create more sustainable packaging solutions be it boxes, bags or alternatives to plastics.

This drive by consumers gives the retailers and brands the impetus to make the change. Packaging is something tangible that consumers can demand changes and retailers that make that change see an uplift in sales as a result.

A study by packaging company Pro Carton in the US found that sales of FMCG products increase when switching to more environmentally friendly packaging, according to one in three (31%) marketing professionals. A separate study by Nielsen also found that almost two-thirds (66%) of consumers are willing to pay extra for products and services that come from companies who are committed to positive social and environmental impact.

The first step in reducing the environmental impact of eCommerce packaging is to reduce the amount of packaging used. Using more recycled materials can help, but looking at designing packaging that uses less packaging overall is key. Using recyclable materials in the packaging that you do use if vital, as is not mixing recyclable and non-recyclable materials together.

What about the web itself?

One of the more hidden environmental impacts of eCommerce is the use of the internet itself. While we all take for granted that we have a connection and things magically appear on the screen in front of us, there is an environmental cost.

The increase in internet use created by the pandemic saw an extra 42.6MWh of extra electricity use annually across 2020 and 2021. This, it has been estimated, has added an extra 3.2 million tonnes of carbon dioxide to the atmosphere.

Much of this energy use for the internet comes from data centres, vast server farms that are always on and which have to be powered, cooled and never fail. For their part, Google, Microsoft and Amazon Web Services have pledged to make their data centres all carbon neutral through 100% renewable energy by 2025-2030. But businesses and consumers both have to act to do their part.

Much of what consumers can do to reduce their energy usage centres on removing unwanted files from web servers, unsubscribing from unwanted emails and being mindful of the time spent online.

From a business point of view, it is all about off-setting the environmental impact of their online activities in other ways. There isn’t really an inherent way to make eCommerce itself more energy efficient, other than constant care to keep what is stored in the cloud minimised and to cull email databases regularly. Instead, retailers and brands need to look at how to make sure that their packaging and their transport and logistics, as well as their general operations, are all energy efficient.

Conclusions

There are of course many other factors that affect the environmental friendliness of eCommerce, but transport, packaging, order fulfilment and energy use are key. How the goods themselves are manufactured is perhaps the single most impactful element of business on the environment, but that is a very complex story – one for another day. But looking at how to minimise energy use across the business is vital. Trumpeting this is a key way to help consumers choose the brands that are ‘green and clean’ that they want to shop with and can also save the world.

Paul Skeldon

Contributing Editor at Parcelhub - Part of the Whistl Group

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