With e-commerce booming and shoppers expecting faster deliveries, it’s no surprise that the logistics industry is now responsible for over a third of global CO2 emissions1. At the same time customers expect the businesses they deal with to adopt eco-friendly logistics practices, making green shipping and sustainability a key part of the conversation.
This article will explore various strategies to help you run a carbon-neutral business. We’ll cover the causes of carbon emissions in the e-commerce industry, provide strategies for eco-friendly logistics, and show how DHL Express can help reduce your business’s carbon footprint.
What causes carbon emissions in the e-commerce industry?
Before we dive into what you can do to reduce your carbon footprint, let's look at six of the major contributors to carbon emissions in the e-commerce industry.
1. Poor packaging
Sellers often ship products in standard-sized boxes, with lots of empty space filled with unnecessary material. As well as creating waste, the package takes up unnecessary space while being transported, increasing its carbon footprint. Then there is the issue of the materials used: with conventional packaging materials, such as bubble-wrap, the plastics used are energy-intensive to manufacture and can take decades or even centuries to break down.
2. Impulse purchases
E-commerce sites often encourage consumers to impulse buy, offering discounts and rewards. While clearly good for business, increased buying leads to increased production and more CO2 emissions.
3. Frequent customer returns
When returns are free and easy, many consumers buy multiple items when shopping online, intending to return several of them. This, of course, increases carbon footprints from the additional transport involved when returning products.
4. Energy intensive devices
With e-commerce increasingly taking place on mobile phones, these devices need more computing power and stronger batteries. As a result, e-commerce has helped drive up energy consumption.
5. Vast data centers
E-commerce has also driven an increase in the amounts of data that needs to be processed, stored, and retrieved. This has resulted in enormous data centers that consume huge amounts of energy – as well as mirror servers in separate locations that add to the problem.
6. Fast transport methods
Even in these days of climate-consciousness, consumers still want to receive their purchases quickly. Especially in cross-border e-commerce, this often leads to the use of air transport, which has the largest carbon footprint of all transport options.
Eco-friendly logistics: 9 tips to follow
Now you understand the challenges, here are some sustainable ways to reduce your carbon footprint:
1. Track carbon emissions
The first step to reducing your e-commerce carbon footprint is tracking carbon emissions2. They’re divided into three different types:
Scope 1 emissions: These are the direct emissions your business produces, like from company-owned vehicles or on-site fuel use. Reducing Scope 1 emissions means cutting carbon at the source, right within your operations.
Scope 2 emissions: These are indirect emissions from the energy your business buys, like electricity or heating. Minimizing Scope 2 emissions involves choosing greener energy sources and being more energy-efficient.
Scope 3 emissions: These are all other emissions tied to your business but outside your control, like those from your suppliers or customers. Reducing Scope 3 emissions means collaborating across your supply chain to make a bigger impact.
You’ll find guidance and calculation tools on the Greenhouse Gas Protocol (GHG) website. Moreover, DHL Express’s green solutions offer tools and services to help track and manage carbon emissions, providing transparency and actionable data when you ship with them.
2. Offset your emissions
Every business has a carbon footprint – it’s the total amount of greenhouse gases your activities produce, directly or indirectly. Carbon offsetting allows you to 'balance' those emissions by funding projects like reforestation, renewable energy, or clean water initiatives. Carbon offsetting not only helps your business reduce its environmental impact but also enhances your brand's reputation, because simply by investing in eco-friendly projects, you demonstrate your commitment to sustainability.
3. Go paperless
Switch to more efficient internal paperless systems and send customers documentation, such as their receipts, digitally. DHL Express offers electronic invoicing and tracking systems that support paperless operations. As well as reducing your carbon footprint, you’ll save trees, ink and time.
4. Switch to sustainable packaging
Use environmental packaging in the right sizes for your products to save on waste and shipping-related emissions, and package multi-item orders together. Look into reusable, recyclable or compostable packaging materials, such as mushroom mycelium or seaweed-based materials or, if your product really needs plastic packaging, consider biodegradable plastics. Switching to sustainable packaging can save you money and attract environmentally-conscious customers, too.
5. Offer eco-friendly transportation
Choosing a logistics partner with a dedicated portfolio of green shipping services will help you reduce the environmental impact of your e-commerce deliveries. DHL Express’s GoGreen Plus, for example, is a solution to help e-commerce businesses reduce the carbon emissions associated with their shipments through the use of Sustainable Aviation Fuel. This biofuel is produced from renewable sources such as vegetable oils, animal fats and agricultural crops. SAF is specifically designed to be used as a substitute for traditional jet fuel and can reduce greenhouse gas emissions by up to 80% compared to fossil fuels.
6. Efficient inventory management
If you have reliable suppliers, consider switching to Just In Time (JIT) inventory management3. The idea is to eliminate waste and increase efficiency. With JIT, raw materials arrive as they are needed for production or stock arrives to meet customer demand—but no sooner. It means you have very little stock sitting in your warehouse, using energy for storage and becoming obsolete. Adopting JIT can save you money, reduce waste, and increase your operational efficiency.
7. Insist on a sustainable supply chain
Companies are realizing the importance of sustainability in their supply chains. And it’s not just about improving supply chain efficiency or reducing waste in the supply chain and shipping processes. Nike, for example, has introduced a Sustainable Manufacturing and Sourcing Index, which assesses and ranks suppliers based on their environmental performance4. You can significantly reduce your carbon footprint just by partnering with likeminded suppliers and merchants.
8. Introduce a circular economy initiative
Extend your products’ lifecycle with a reverse logistics strategy. This promotes the idea of recycling, refurbishing and repairing damaged product returns (rather than sending them to landfill) – a more environmentally friendly and cost-effective route.
9. Reduce customer returns
Every product that is returned to your business means extra transport emissions. To prevent this, invest in reducing your returns rate in the first place: ensure you have lots of high-definition photographs and detailed product descriptions on your website, and adopt virtual reality (VR) tools to help customers visualize how a product will look more accurately.
You can also utilize parcel lockers for more eco-friendly returns. These allow your courier partner to pick up several customers' returns packages from one location – significantly reducing total transport emissions.
Reduce your company’s carbon footprint with DHL’s solutions today!
Our nine ways to reduce your e-commerce carbon footprint should give you plenty to think about. And remember, if you decide on some of these measures, you don’t have to implement them all at once. Instead, you can aim for incremental improvements. It’s also a good idea to be open with your customers and engage with them on sustainability issues. They may even have useful suggestions for you. Above all, regularly assess and audit your practices and update them as technology and best practices evolve.
With a DHL Express Business Account, you’ll have access to a range of dedicated sustainable logistics solutions to help you reduce your company’s carbon footprint.
With a DHL Express Business Account, you’ll have access to a range of dedicated sustainable logistics solutions to help you reduce your company’s carbon footprint.
