From rethinking sourcing to shipping, here are some of the key carbon- and waste-reducing strategies brands big and small are using to better balance sustainability and business goals.
The explosion of eCommerce was well underway before COVID-19 — but, according to eMarketer data, online spending soared to $795 billion in 2020, up 32.4 percent year-over-year. While the growth of online shopping is a revenue driver for businesses and a win when it comes to consumer convenience; as sales grow, so too does the environmental impact.
Transportation activities alone — the trucks, trains, ships, and airplanes needed to move goods around the world — are responsible for approximately 17 percent of global greenhouse gas emissions. As demand for package delivery grows, the World Economic Forum (WEF) estimates there could be 36 percent more eCommerce delivery vehicles driving around our cities by the end of the decade — resulting in more greenhouse gas emissions (GHGs), pollution and congestion.
But shipping forms just one part of the logistical backbone of eCommerce. For James Chin Moody, who co-founded sustainable shipping service Sendle, it’s about addressing the collective impact of a booming industry.
“Every product sold online and shipped to a customer represents a vast web of carbon-emitting activity,” he said. “It’s so important that right now, our industry comes together to acknowledge our growing footprint, and that we work together on long-term solutions. With the way things are going, failing to grow sustainably carries too many risks for a business’ operations, its bottom line and the planet.”
Net Zero: Aspiration vs. Reality in CPG & Retail
With thousands of consumer packaged goods (CPG) companies and retailers making net-zero commitments, but only 25% of them on track to meet them by 2035, there is a clear gap between aspirational thinking and reality on the ground. Join us as Capgemini and frog detail some of the tools, technologies, and shifts in mindset and skillset needed for companies to walk their talk and leave a legacy of resilience and stewardship for generations to come — Tuesday, Oct. 17 at SB'23 San Diego.
Consumer demand is one force putting pressure on the industry to be more proactive about its impact. Environmental issues, and how a business takes responsibility, is more top-of-mind for consumers than ever. According to IBM, nearly 6 in 10 consumers say they’re willing to change their shopping habits to reduce their environmental impact. Customers are voting with their wallets - and buying from brands that value sustainability.
From rethinking sourcing to shipping, here are some of the key carbon and waste-reducing strategies brands big and small are using to better balance sustainability and business goals.
Innovative approaches to packaging
Packaging makes up nearly a third of all household waste, according to the EPA; and much of the packaging produced and used today cannot be recycled in the existing system. Instead, it’s added to landfills.
Governments around the world are calling for change, and there’s a growing disdain among consumers for excessive packaging, as well — hurting loyalty for those who don’t package responsibly.
As the packaging waste problem becomes more top-of-mind, brands are trialing everything from recycled and compostable packaging to reusable packaging that can be returned to its source.
Olive is a relatively new entrant that’s joined forces with hundreds of retailers to deliver packages that can be reused and returned. Olive also schedules weekly, rather than daily, deliveries — allowing the company to aggregate orders and ship them together from a centralized location, cutting down on transport emissions. Noissue is a popular provider of custom sustainable packaging, with a product range made from compostable, recycled, and reusable materials. The company makes its packaging, which includes everything from mailers and tissue paper to stickers and tape, accessible to small businesses so brands of all sizes have an opportunity to meet consumer demands for sustainable packaging.
Many brands and retailers are choosing carbon-offset or carbon-neutral shipping.
Sendle is a 100 percent carbon-neutral shipping provider for small businesses. It reduces the impact of eCommerce delivery by making use of excess space in existing delivery trucks to ensure every route is maximized. It then offsets the emissions of every package it ships, by funding nature-based carbon-removal projects (through its partner, South Pole).
Through offsetting, Sendle gives businesses a way to make an immediate reduction to the footprint of their deliveries, and the company is actively looking at ways to move the larger shipping industry towards a zero-emissions future. In its native Australia, for instance, it partnered with Bonds — a prominent local courier — to roll out the country’s first fleet of solar-powered electric delivery vehicles.
Working towards a sustainable eCommerce supply chain
As the WEF reports, the top eight global supply chains account for more than 50 percent of global GHGs, and represent perhaps the largest opportunity for businesses to reduce their carbon footprint and inspire change through the industry. But it’s also challenging to gain transparency into complex supply chains and to have the oversight needed to make the right choices on who to partner with, and how sustainable they truly are.
For many, using partners that adhere to globally recognized environmental accreditations — such as Forest Stewardship Council, Better Cotton Initiative, Animal Welfare Approved and the like — offers a simple path to gaining confidence in supplier operations.
For others, adopting renewable energy throughout the supply chain is becoming a more accessible and affordable path towards sustainability, offering an effective way to reduce power costs, risk and emissions beyond a company’s own operations.
Product returns are a critical part of post-purchase logistics, and they can have a significant impact on both the environment and the health of a business.
Nearly three-quarters of US shoppers say returns are their least favorite part of the customer experience, so a positive returns process is key to customer satisfaction and loyalty.
Each year, US consumers return about 3.5 billion products, 5 billion pounds of which end up in landfills, as estimated by Optoro — a company that helps retailers process returns.
Brands are looking at a wide range of tactics to minimize returns — among those, expanding product descriptions, including high-quality product videos; making the return policy accessible and prominent; and offering live support and chat at checkout.
When products still need to get returned, some brands are using returned stock in innovative ways. Nordstrom, for instance, stocks used and returned items in its "See you Tomorrow" range; while Allbirds donates its returned shoes to people in need worldwide.
Environmental awakening long overdue
Developing a more sustainable approach to eCommerce logistics is not an easy task; but given the pace of industry growth, the clear business imperatives, and the looming climate crisis, an industry awakening is more critical than ever. From eCommerce brands and retailers to shipping services, many companies are taking much-needed steps, but greater awareness and action are needed now. It’s an industry that’s booming — but let’s encourage leaders to approach it in a way that sees both business and natural resources thriving far into the future.