Can E-Commerce Companies Become Carbon Neutral?

How can e-commerce measure its impact, and do carbon offset purchases reflect the real-world cost of operations? Lyft and Etsy, have recently unveiled ambitious initiatives to support their goals of becoming carbon neutral by 2020.

E-commerce is taking over the retail market globally, and the gains are expected to continue. They have several unique challenges for both measuring their carbon footprint and becoming carbon neutral. Platforms that support freelance gig workers and human-cloud or crowdsourced business models are also attempting to measure and control their carbon emissions.

Lyft

Lyft uses crowdsourced freelance drivers, and they wanted to measure the emissions impact of their ride platform and offset the carbon emissions from every ride their customers take. Their goal is to become carbon-neutral through increasing shared rides, displacing gas-powered vehicles in the transportation ecosystem, and reducing emissions in the automotive manufacturing process. They are purchasing carbon offsets that estimate the value of each ride, investing in renewable energy projects, forestry projects, and projects that attempt to capture emissions in landfills for energy use.

Etsy

Etsy is a large e-commerce platform that supports the handmade and vintage markets and the burgeoning maker movement. The platform hosts individual makers, artists, and craftsmen who have their own shops, and these shop owners ship purchases directly to customers globally. Etsy wants to become carbon neutral by 2020, but they estimate that 98% of its carbon emissions burden comes from the global shipping of products. The estimated value of Etsy sales in 2018 topped $3.93 billion, with 2.1 million shops using the platform.

E-commerce does not always hold up to a direct carbon footprint comparison to brick and mortar shopping. Clustered shopping, when the trip in the car is combined with work, other errands, and several stops, can result in lower carbon emissions compared to shipping items directly to the home. E-shoppers tend to make smaller purchases, and these are packaged and shipped many times in split shipments. If shipping comes from a distribution center or warehouse, and all the products in an order are not present at that center, the order is split and shipped separately.

The environmental costs of this shipping model come mainly from product packaging, also a concern for those working to reduce waste and last mile delivery costs. New rapid delivery models incorporate air shipping, which has a larger carbon footprint than other shipping methods. But the majority of shipping, either domestic or international, involves either air transportation, trucking, or shipment by sea. All of these methods use fossil fuels at this time.

Etsy is estimating a shipping cost based on the location of the shop owner and the location of the buyer. While various shipment options are available, the majority of shops use local government-run postal systems, such as the USPS in the United States. Through their partnership with 3-Degrees, they are purchasing carbon offsets for these estimated shipping costs. 3-Degrees is also the organization supporting Lyft efforts.

3-Degrees has an excellent reputation, and performs both emissions assessment, independent third party verification of projects, and supports a number of models for carbon offsets, including renewable energy projects, carbon sequestration through forestry projects, and projects that capture emissions from landfills, among others.

For Etsy, these shipping emissions are Scope 3- indirect and out of their control. Their program is voluntary and based on the corporate value and mission. Lyft’s program is also voluntary, and is ambitious in scope, as they hope to change the future transportation ecosystem, as well as impact emissions today. Etsy has no way to measure the impact of product packaging. Several large e-commerce retailers, such as Amazon and Wal-Mart, are trying various models to reduce their shipping and packaging costs, such as using an in-store pickup or pickup points. While both retailers are working on plans to address their carbon emissions, neither has been able to accurately measure the impact of current models of shipping and product packaging. They are also not transparent about their current levels and methods of addressing their carbon footprint.

Both Lyft and Etsy have taken important steps to address how to measure indirect carbon emissions that stem from their unique business models, but over which they have no direct control. They also are large companies using voluntary carbon offsets to impact their future business ecosystems and are transparent with their efforts and challenges.