top of page
Search

Key actions to make e-commerce more sustainable

Article by Isabel J. Barreto and Susan T. Jackson


Image by Karolina Grabowska via Pexels



It comes as no surprise that the Covid-19 pandemic has accelerated the growth we had already been seeing in e-commerce over the past few years. In 66 countries, the average number of people who made online purchases increased from 53% in 2019 to 60% in 2020 and 2021. More importantly, customers seem to be more aware of the social and environmental impact of their purchases and the companies they choose to buy from. In the past five years, there has been a 71% rise in online searches for sustainable products.



The rise of sustainable e-commerce and its challenges


Many consumers consider sustainable products over non-sustainable ones and are concerned about the environmental impact of delivery transport and packaging materials. Between 2015 and 2019, sustainability-marketed products contributed 54.7% of overall consumer packaged goods (CPG) market growth in the US. Furthermore, over half of Europeans claim to choose one online store over the other if its delivery is more environmentally friendly. In short, sustainable e-commerce is good for business and increases customer loyalty. However, it does come with its own set of challenges:


Packaging


While packaging comprises 45% of e-commerce’s greenhouse gas (GHG) emissions, it may be hard for consumers to connect how their purchases contribute to these GHG emissions. One way is through making the connection between the packaging itself and people’s opinions on how sustainable a brand is. Packaging heavily influences customers’ first impressions of a company and more sustainable packaging can encourage repeat purchases. Moreover, it is not only a concern from shoppers, the EU has been revising its Packaging and Packaging Waste Directive (expected mid-November, 2022). The Directive includes producer responsibility schemes and targets to recycle 65% by weight of all packaging by the end of 2025. E-commerce companies will need to adjust their packaging strategies in order to meet those targets.


Shipping and returns


Fast shipping, failed delivery attempts and merchandise returns also contribute to e-commerce’s carbon footprint. In Germany, 86% of online shoppers would rather choose environmentally sustainable shipping given the choice, and around one-third would accept longer delivery times if it makes their purchases more sustainable. Package returns alone represent about one-fourth of the total e-commerce-related emissions and are one of the biggest hurdles to sustainable e-commerce. Shipping and return policies that prioritize the environment are a must in sustainable e-commerce. Customers are already open to it, companies just need to offer it to them.


Sustainable sourcing


Finding sustainable suppliers and sources is challenging for many sectors and e-commerce is no exception to the rule. Among other things, the sustainability of a product depends on the materials and production methods used by the company. Businesses must rethink their ways of production by looking for as much recycled content as possible, natural materials that can be produced with minimal water and chemicals, and materials derived from a responsible, ethical and sustainable supply chain. This means that ‘only’ being environmentally aware is not enough. Human rights and social aspects including safe working conditions, fair pay, fair working hours, and eliminating child labor, are also crucial for an ethical and sustainable supply chain. In addition, the closer the manufacturing location to the rest of the supply chain, the better.


Transparent communication


When purchasing something many consumers ask themselves if the product being advertised as ‘green’, ‘sustainable’ or ‘eco-friendly’ is actually what it says it is. Consumers are legitimately concerned. After screening websites and analyzing 344 green online claims, the European Commission found that 42% of the claims were not only exaggerated, false or deceptive, but potentially could qualify as unfair commercial practices under EU rules. In addition, in over half of the cases reviewed, the retailer did not provide enough information for customers to judge the claim's accuracy. Companies must be as transparent as possible and disclose their sustainability plans, actions taken, accomplishments and next steps in order to avoid false promises and mislead customers.



Sustainable e-commerce in action


Although the EU has been working on digitalization and sustainability through policies such as the European Green Deal and the Packaging Directive mentioned above, legislation regulating e-commerce does not directly include sustainability. Nonetheless, there are still many ways businesses can act.


Leading your industry toward a sustainable pathway. Until February 2024, companies can voluntarily commit to the EU Sustainable Consumption Pledge to support sustainable production and consumption, beyond what is already required by law. Points covered in the pledge go from identifying your carbon footprint to social sustainability and circularity. Some steps businesses can take include reviewing return policies and packaging to make them more sustainable, offering sustainable shipping, and conducting a supply chain sustainability audit.


Innovating solutions to reduce e-commerce’s carbon and other environment-related footprints. Companies have been working on more sustainable solutions, such as using cargo bikes in the ‘last mile’ (last leg to the final destination). A study analyzing cargo bike potential in Munich and Regensburg showed that one-seventh of the CO2 emissions caused by deliveries can be saved by switching to cargo bikes. Cities and businesses can combine priorities and work together to reduce congestion, emissions and costs. After analyzing different last-mile simulations the World Economic Forum concluded that a multi-player ecosystem scenario (that includes e.g. electric vehicles, adjacent time deliveries and multi-brand parcel lockers) could benefit public and private players equally.


Strategizing from the get-go. Integrating package management by de-siloing packaging professionals can help to identify inefficiencies in the supply chain and align package design with transportation resources. This, together with changes in the package design and size, can lead to savings without compromising packaging performance. Companies should also implement strategies to reduce packaging waste through recyclable materials and add simple but really detailed descriptions of their products to avoid parcel returns as much as possible.


Transforming your and your customers’ mindsets. The concepts of e-commerce and sustainability can be mutually reinforcing. Sustainability is not only a trend. It is an essential part of any business that wants to keep up with environmental and behavioral changes we have undergone in recent years. Environmentally aware companies with purpose not only attract ‘conscious consumers’. They also have the opportunity to empower the ‘not so conscious consumers’ to make sustainable choices. E-commerce can bridge the consumer’s intention-action gap (when shoppers say they want sustainable products but do not always buy them). Finding and buying sustainable products must be made easier for customers, while the seller and the planet can simultaneously benefit from the transformation.



References:

Abrams, Karin von. “Sustainability in Ecommerce 2021.” EMarketer, Insider Intelligence, 2 Aug. 2021, https://www.emarketer.com/content/sustainability-ecommerce-2021.


Bayraktar, Cenk. “E-Commerce Statistics 2021/2022: A Sneak Peek into the Latest European Market Insights, Trends and Consumer Expectations.” Sendcloud, 2022, https://www.sendcloud.com/ecommerce-statistics/.


Chapman, Jessica. “Top 3 Packaging Innovations for E-Commerce Growth and Sustainability.” Catalpha, 2022, https://blog.catalpha.com/top-3-packaging-innovations-for-e-commerce-growth-and-sustainability.


Coppola, Daniela. “E-Commerce Average Emissions by Source 2020.” Statista, 28 June 2022, https://www.statista.com/statistics/1254302/e-commerce-average-emissions-by-source/.


Ecommerce Europe. Collaborative Report on Sustainability and e-Commerce. June 2021, https://ecommerce-europe.eu/working-committee/sustainability-working-committee/.


Economist Intelligence Unit. An Eco-Wakening: Measuring Global Awareness, Engagement and Action for Nature . 2021, https://bit.ly/3R9sRRe.


European Commission. Packaging Waste. https://environment.ec.europa.eu/topics/waste-and-recycling/packaging-waste_en.


European Commission. Screening of Websites for ‘Greenwashing': Half of Green Claims Lack Evidence. 28 Jan. 2021, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_269.


European Commission. Sustainable Consumption Pledge. https://ec.europa.eu/info/policies/consumers/consumer-protection-policy/sustainable-consumption-pledge_en.


European Parliament. Revision of Directive 94/62/EC on Packaging and Packaging Waste (REFIT). 23 June 2022, https://www.europarl.europa.eu/legislative-train/theme-a-european-green-deal/file-revision-of-packaging-and-packaging-waste-directive-(refit).


European Union. “Packaging and Packaging Waste.” EUR Lex, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM:l21207.


“Guide to Greening Your Ecommerce: Developing a Sustainable Business Model.” EcoEnclose, https://www.ecoenclose.com/guide-to-greening-your-ecommerce-developing-a-sustainable-business-model/#Designing.


Hofstädter, Jaqueline. “Sustainable Inner-City Logistics - How Does It Work?” Liefergrün, https://en.liefergruen.de/blog/nachhaltige-innerstaedtische-logistik.


James, Lisa. “How The Conscious Consumer Is Revolutionizing E-Commerce.” Forbes, 6 Apr. 2021, https://www.forbes.com/sites/sap/2021/04/06/how-the-conscious-consumer-is-revolutionizing-e-commerce/?sh=c211d33128b5.


Muñoz, Alma. “Sustainability in Ecommerce: 5 Ideas for Your Business.” Sales Layer, 7 Mar. 2022, https://blog.saleslayer.com/ecommerce-sustainability-practices.


NYU Stern. Latest Research From NYU Stern Center for Sustainable Business and IRI Shows That Sustainability Is Surviving COVID-19. 16 July 2020, https://www.stern.nyu.edu/experience-stern/faculty-research/latest-research-nyu-stern-center-sustainable-business-and-iri-shows-sustainability-surviving-covid.


Osgood, Diane. “How to Close Consumers' Intention-Action Gap.” Greenbiz, 12 Aug. 2021, https://www.greenbiz.com/article/how-close-consumers-intention-action-gap.


Rathi, Arpit. “E-Commerce Returns – 6 Ways to Build a Sustainable Strategy.” Nagarro, 24 Mar. 2022, https://www.nagarro.com/en/blog/ecommerce-returns-sustainable-strategy.


“The Rise of Sustainable e-Commerce.” Byrd, https://blog.getbyrd.com/en/rise-of-sustainable-ecommerce.


Samsukha, Amit. “6 Reasons Product Packaging Is Important to Ecommerce.” EmizenTech, 4 May 2022, https://www.emizentech.com/blog/reasons-product-packaging-is-important-to-ecommerce.html.


“Sustainability in e-Commerce: How Can Online Retailers Make Their Business Greener?” ParcelLab, 2021, https://parcellab.com/blog/sustainability-online-retail.


Tarakcioglu, Buse. “Why Sustainable E-Commerce Is Essential in 2022?” Sendcloud, 2022, https://www.sendcloud.com/why-sustainable-e-commerce-is-essential/.


United Nations Conference on Trade and Development. Covid-19 Boost to e-Commerce Sustained into 2021, New Unctad Figures Show. 25 Apr. 2022, https://unctad.org/news/covid-19-boost-e-commerce-sustained-2021-new-unctad-figures-show.


United Nations Conference on Trade and Development. Time to Empower Consumers to Make Sustainable Choices. 15 Mar. 2022, https://unctad.org/news/time-empower-consumers-make-sustainable-choices.


“What Is the Ethical Supply Chain?” OpenText, 7 Oct. 2019, https://blogs.opentext.com/what-is-the-ethical-supply-chain/.


World Economic Forum. The Future of the Last-Mile Ecosystem. Jan. 2020, https://www3.weforum.org/docs/WEF_Future_of_the_last_mile_ecosystem.pdf.

90 views0 comments

Commentaires


bottom of page