Is e-commerce really sustainable? Understanding its impact on the environment
Online shopping is becoming more and more popular worldwide. In 2020, there were 256 million digital buyers in the United States alone — this number is supposed to increase by nearly 22 million by 2024. People shop online for a variety of reasons. Some shop online for convenience while others shop online for better insight into environmentally-friendly items/organizations. According to the Nielsen study, “Unpacking the Sustainability Landscape,” 73% of consumers are willing to change their ways to reduce the impact on the environment. There is a perception that e-commerce is a sustainable practice and the information below is meant to provide insight into the impacts of e-commerce on the environment.
Positive impacts on the environment
According to a 2011 International Conference on Environmental Science and Engineering study, there are several positive environmental impacts of e-commerce business models, and sustainable e-commerce models help attract customers.
E-commerce business models allow for organizations to conduct business without physically commuting. Transportation is responsible for a large number of harmful emissions/pollution, and by reducing your organization’s reliance on it, you can reduce your carbon footprint. Additionally, if e-commerce organizations allow employees to work from home, they can decrease their footprint even further.
Paper waste is created by most organizations. When information is transferred digitally, it reduces the need for the use of physical paper throughout the business. This can help reduce an organization’s footprint by reducing (or eliminating) paper waste. Paperless business models have a number of benefits and can be made possible using e-commerce capabilities.
The digital transfer of information paired with digital manufacturing could eliminate warehouses and create on-demand production. It is not exactly common knowledge among consumers at large, but warehouses can be an environmental issue. Warehouses consume large tracts of land and freight trucks traveling to and from them can create air pollutants, pavement/road damage, noise pollutants, and potential traffic safety issues.
Negative impacts on the environment
According to the same 2011 International Conference on Environmental Science and Engineering study mentioned above, it is stated that “although the potentials of the Internet to save material and energy cannot be denied, it is too early to conclude that e-commerce has only positive impacts on the environment. Each potential positive impact is coupled with a potentially overwhelming negative impact as well.” It should be noted that each e-commerce industry and its respective supply chain could pose its own challenges.
Even though e-commerce business models reduce the number of transportation emissions put into the air by their customers, their delivery trucks and other vehicles (e.g. planes) can still emit large amounts of harmful pollutants. Additionally, the location of the customer to the distribution center can make a large impact as well. Wholesale businesses are already primed for cutting down transportation emissions, but this is not always possible for businesses operating at different scales. Since there is a large emphasis on the importance of immediacy in business — especially in shipping offerings — businesses may have to send out freights that are only partially full. This will require additional trips and more transportation emissions.
All shipped items require some degree of packaging, but the online shipping boom is creating a massive cardboard footprint from all of the materials used to ship. Additionally, organizations want to make sure their products are received in perfect condition. This can result in excessive padding techniques using styrofoam packing peanuts or additional paper. As mentioned above, immediacy is key. When people want something, they want it now, and this can result in buying a number of items one-at-a-time, rather than waiting and making a larger order. This can contribute to additional packaging waste. Although most packaging materials can be recycled, a 2018 EPA study on containers and packaging shows that out of the nearly 82,000 tons of containers and packaging generated in the U.S., only around half was recycled, and 30,000 tons went into a landfill.
Not every customer is satisfied with an item that is shipped to them. For example, an item may not be the same as it appears online, it may not fit, something could have been broken in transit — there are a variety of possibilities that lead consumers to return the item. Item returns contribute negatively to the environment through both transportation emissions and packaging issues. If an item needs to be returned, it takes double the amount of transportation used to get the item to the consumer. If the item is exchanged for another item, you are tripling the amount of travel required for one item — essentially tripling the number of transportation emissions. If you ripped open the box, you may not be able to reuse the packaging. If you are exchanging an item, there is a possibility that the packaging will not be reused. At a minimum, there are three different paper shipping labels being used.
The future of sustainable e-commerce
The future of sustainable e-commerce can change daily due to dynamic e-commerce trends, but the primary focus should consider the following:
- Sustainable packaging: Organizations need to create innovative packaging solutions. What a package is made out of is equally important to how it is made and the way it is shipped. You can reduce packaging size, find different sustainable packaging options online like compostable boxes, or even take an e-commerce packaging essentials class offered by the Sustainable Packaging Coalition to help design your own;
- Sustainable shipping: As mentioned above, the demand for immediacy is at an all-time high, so it becomes even more important to figure out ways to cut back on the effects of shipping. Aside from creating more sustainable packaging, organizations can take advantage of paperless invoicing. Organizations can also create different shipping options for customers ordering multiple items like item consolidation. This helps by reducing the number of trips to the customer’s home and the number of boxes used to ship the items;
- Supply chain integration: There are many diverse industries active in e-commerce, but they all have opportunities to reduce wastes and inefficiencies up and down the supply chain through smarter digital integration. Connecting all stakeholders, inputs, and information sources through a unified ERP system and powering savvier decision-making can be the key to unlocking a leaner, lower footprint supply chain. While business logistics and data management are often touted as beneficial to customer experience, the impact they can have on the supply chain through better communication and coordination may ultimately amount to more sustainable, tightly managed operations around the world;
- Decreased energy waste: This category is broad and it encompasses a variety of business factors like switching to solar or outsourcing specific work locally, but there should be an immediate focus on transportation waste. For example, Amazon revealed its electric delivery van in an effort to produce zero net carbon by 2040. Organizations can also provide detailed product descriptions and shipping processes to help decrease the number of items returned/exchanged due to lack of information, or misunderstanding.
E-commerce challenges have a big impact on your customer relationships.
Find out how to improve your customer relationships in 2021 with The Manufacturing & E-Commerce Benchmark Report.