The Environmental Impact of The eCommerce Supply Chain
In volume one of our sustainability series, we addressed how consumer behavior is driving the demand for more environmental measures across all segments of eCommerce. In volume two, we’re taking a closer look at how eCommerce supply chains are at odds with sustainability and what steps companies are taking to not only undo damage but offset future impact.
eCommerce has come a long way since the first online market launched in 1982, with sales projected to double between 2021 and 2025. Considering that today’s supply chain accounts for up to 90% of a company’s carbon footprint, those that recognize the need to course correct are overhauling their systems and implementing green practices amid an online shopping trajectory that shows no signs of slowing down.
Even though food production is responsible for roughly 37% of global greenhouse gas emissions, many manufacturers lack the framework necessary to measure (and therefore counteract) their environmental impact adequately. Some companies, however, are reassessing their operations in order to reduce waste. The range of measures includes, but is not limited to:
- Sourcing sustainable ingredients
- Adopting regenerative agriculture methods
- Harnessing solar power
- Opening a carbon-neutral distillery
- Reusing steam from potato chip production
- Generating biogas through waste treatment systems
- Upcycling pineapple juice and green beans
Companies are also coming up with their own benchmarks to combat their carbon footprint, and sharing progress through annual reporting. The broad variety of efforts includes advocating for healthy oceans, linking executive pay to climate action, and addressing land-use issues.
Perhaps the most common eco-friendly initiative is switching to sustainable product packaging. If companies aren’t moving away from plastic entirely, they are limiting its use, looking for alternatives, or facilitating recycling for customers. Without such measures in place, plastic is projected to outnumber fish in the ocean by 2050.
One of the latest environmentally-conscious trends making its way to the mainstream market throughout a variety of industries negates the need to dispose of packaging, opting instead for reusability with refillable products. The success of this “circular economy” is largely dependent on consumer follow-through, however. If a consumer disposes of a refillable vessel, which is often made of metal or glass and requires more energy to make, the environmental impact may be worse than a single-use option.
In 2020, Amazon alone delivered 4.2 billion packages in the U.S., a 127% increase from the previous year. The eCommerce giant now ships more parcels than FedEx, a daunting reality considering the fact that shipping materials account for more than 30% of annual waste. The use of excessive packaging materials remains an issue and recycling hardly mitigates the problem.
Companies looking to curb the environmental impact of their shipping practices have made efforts to reduce packaging or upgrade to sustainable alternatives. Smaller packaging weighs less and occupies less space, allowing for more efficient delivery routes.
Constant online competition continues to push the customer satisfaction goalpost farther and farther, with the promise of same-day delivery or even delivery within a few hours. Meanwhile, eCommerce transportation remains the largest cause of greenhouse gas emissions, with last-mile delivery in particular rife with inefficiencies.
Research shows “the demand for urban last-mile delivery of online shopping is expected to grow 78% by 2030, leading to 36% more delivery vehicles in 100 cities around the world, causing environmental-related emissions to rise by nearly one-third.” To make this process more eco-friendly, some retailers consolidate deliveries by offering a variety of shipping options when customers order multiple items.
Amazon is leading the charge in making delivery vehicles themselves more efficient. As a part of its Climate Pledge (more on that in volume three), the company is rolling out a fleet of 100,000 electric vehicles throughout major cities.
Reducing travel distance is also a consideration as companies carefully consider the location of their warehouses, going so far as reusing existing infrastructure in some cases. Setting up shop in centralized locations cuts down on transportation and lowers CO2 emissions. Plus, companies are sourcing more items made locally to avoid supply chain strain as well as stimulate the economy in their communities.
With major retailers at varying stages in their eco-friendly efforts, how can customers spot sustainable products on the digital shelf? We’ll tell you all about it next week in volume three.