With an estimated customer base of 65 million in 2024 and a projected revenue of £194 billion by 20271 according to Analyzify, the e-commerce industry in the UK is a huge contributor to carbon emissions. To make matters worse, as reported by Statista, carbon emissions due to e-commerce logistics are forecasted to reach 25 million by 20302.
Ireland takes up a significant portion of this e-commerce market, with projections by Statista predicting the Irish e-commerce market to grow to 3.3 million users and US$8.75 billion in revenue by 20293. So, how can businesses in Ireland play their part and reduce their carbon footprint? To do so, it's essential to first know what is a carbon footprint, and what causes carbon emissions in Ireland’s e-commerce industry.
Read on to understand these challenges and the ways your business can start reducing your carbon footprint.
What is a carbon footprint?
A carbon footprint is the total amount of greenhouse gases (GHGs) generated by our actions. These gases, primarily carbon dioxide, are released into the atmosphere and contribute to climate change.
One’s carbon footprint can be seen as a measure of the impact one's activities have on the environment in terms of the amount of carbon dioxide one produces. This can include anything — from the fuel you use in your car to the energy required to manufacture the products you buy.
Understanding your carbon footprint is the first step towards reducing it. Many businesses are now asking themselves: "Why should companies reduce their carbon footprint?" The answer lies in recognising the collective responsibility to mitigate the impacts of climate change, conserve valuable resources and build a more sustainable future for everyone.
What causes carbon emissions in the e-commerce industry?
Here are six activities that increase the carbon footprint of the e-commerce industry.
1. Poor packaging
Sellers often ship products in standard-sized boxes, with lots of empty space filled with unnecessary material. In addition to creating waste, the package takes up unnecessary space while being transported, increasing its carbon footprint.Then there is the issue of the materials used.
According to GlobalData, the key packing materials used by Ireland’s businesses are rigid plastics, rigid metal, paper and board, glass, as well as flexible packaging4. Conventional flexible packaging materials like bubble wrap pose an environmental challenge. Traditional bubble wrap can take hundreds of years to decompose, contributing to long-term environmental harm. Although some manufacturers have introduced bubble wrap that breaks down within 90 days, it often still contains microplastics that can disrupt ecosystems and pose a threat to wildlife5.
2. Impulse purchases
E-commerce sites often encourage consumers to impulse buy, offering discounts and rewards. Statista reports that the average revenue per e-commerce user in Ireland is US$2.32k6, highlighting that while this model is clearly good for business, such increased buying leads to increased production and more CO2 emissions.
3. Frequent customer returns
According to research conducted by Whistl, a whopping 71% of online shoppers in the UK return items at varying frequencies7. When returns are free and easy, many consumers buy multiple items, intending to return several of them. This, of course, increases carbon emissions from the additional transport involved when returning products. In the fashion industry alone, UK returns are estimated to generate 750,000 tonnes of CO2 emissions8.
4. Energy intensive devices
With e-commerce platforms increasingly accessed via mobile phones, these devices need more computing power and stronger batteries. According to Statista, there are 5.05 million smartphone users in Ireland9. An individual using their smartphone for just one hour per day can generate an average of 63 kilograms of CO2 emissions annually10, giving you an idea of the scale of carbon footprint just one person can generate alone.
5. Vast data centers
E-commerce has also driven an increase in the amount of data that needs to be processed, stored, and retrieved. An article by The Guardian found that Ireland’s data centres used more electricity than all urban homes combined and that increased demands in data processing could lead Ireland’s data centres to consume 31% of the nation’s electricity in the next three years11.
6. Fast transport methods
Even in these days of climate-consciousness, consumers still want to receive their purchases quickly. In Ireland, transport accounted for 21.4% of the nation’s greenhouse gas emissions in 2023, according to the Environmental Protection Agency12.
Eco-friendly logistics: 9 ways businesses can reduce their carbon footprint
There are numerous ways that both businesses and companies alike can reduce their carbon footprint:
1. Track carbon emissions
The first step to reducing your e-commerce carbon footprint is tracking carbon emissions. They are divided into three types13: Scope 1, Scope 2 and Scope 3. Scope 1 is your business’s direct emissions; Scope 2 covers indirect emissions from purchased energy (eg. electricity); and Scope 3 are emissions produced by other businesses in your supply chain.The good news? More companies in Ireland are becoming willing to track and set targets to start reducing their carbon emissions. In fact, 62 Irish businesses have pledged to start reducing their carbon footprint by signing the Low Carbon Pledge initiative14. You’ll find guidance and calculation tools on the Greenhouse Gas Protocol (GHG) website.
2. Offset your emissions
One of the ways businesses can reduce their carbon footprint is by offsetting. This means participating in or financially supporting climate-related projects, such as renewable energy or rainforest protection, to compensate for your business’s own emissions.
For example, Irish business Coffeeangel, partnered with clean-tech company Bionua to purchase carbon units valued at €200 per unit to address nature restoration and enhance Ireland’s natural ecosystems15. These units were peer-reviewed and verified by the German-based Control Union to ensure that the carbon sequestration and biodiversity gains were validated.
3. Go paperless
As well as reducing your carbon footprint, you’ll save trees, ink and time. Switch to more efficient internal paperless systems and send customers documentation, such as their receipts, digitally.
Looking for inspiration on ways companies can reduce their carbon footprint? In Ireland, global companies like Allianz are leading the charge towards a paperless future. More than half a million of the business signed up for MyAllianz, the company’s initiative to cut down on paper printed and sent by post16.
4. Switch to sustainable packaging
Use the right-sized packaging to save on waste and shipping-related emissions, and package multi-item orders together. Look into reusable, recyclable or compostable sustainable packaging, 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. One great example of this is Irish-based beverage company The Naked Collective, which practices sustainability by only using recyclable packaging17 so that the business can remain carbon-neutral.
5. Offer eco-friendly transportation
To reduce the environmental impact of your deliveries, choose a logistics partner with sustainable delivery services. DHL Express’ GoGreen Plus, for example, is a solution to help businesses reduce the carbon emissions associated with their shipments using Sustainable Aviation Fuel (SAF). This biofuel is produced from renewable sources such as vegetable oils, animal fats and crops. SAF is designed to be used as a substitute for traditional jet fuel and can reduce greenhouse gas emissions by up to 80% in comparison18.
6. Efficient inventory management
If you have reliable suppliers, consider switching to Just In Time (JIT) inventory management. 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 realising 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. Businesses like Glen Dimplex, one of the largest privately owned manufacturing companies in Ireland, are demonstrating how companies can reduce their carbon footprint by insisting on sustainable supply chains. Through its “Empower Now” strategy19, the company is prioritising suppliers committed to reducing their business carbon footprint through energy-efficient products and sustainable resource management, driving collective progress towards a low-carbon future.
8. Introduce a circular economy initiative
A circular economy aims to minimise waste and maximise resource utilisation by keeping materials in use for as long as possible. It's a shift away from the traditional "take-make-dispose" model towards a closed-loop system where resources are reused, repaired, and recycled. This approach reduces pressure on the environment, conserves valuable resources, and can even create new economic opportunities.
FoodCloud, an Irish social enterprise, exemplifies the circular economy in action. They partner with businesses to redistribute surplus food to charities and community groups, preventing perfectly good food from ending up in landfills20.
9. Reduce customer returns
Every product returned to a business creates extra transport emissions. To minimise returns, start by focusing on prevention. For example, ensure your website has high-definition photographs and accurate product descriptions. This gives customers a clearer understanding of what they're purchasing. You can also adopt virtual reality (VR) tools, which can help customers visualise how a product will look and fit more accurately. Alternatively, you can consider using parcel lockers for more eco-friendly returns. These allow your courier partner to pick up several customers' returns packages from one location significantly helping to offset your overall carbon footprint.
Lead the way in reducing the carbon footprint of your business!
Understanding e-commerce and reducing its carbon footprint is a journey, not a destination. Our nine suggestions offer a roadmap to guide you but remember that even small steps can make a big difference. Ready to get started? If you’re wondering how, begin by identifying the areas where your business has the most significant impact: packaging, transportation or energy consumption.
Then, explore strategies to reduce their impacts, like sustainable packaging, efficient inventory management, and carbon offsetting. Remember: transparency with your customers will also go a long way. Open communication about your sustainability efforts can foster trust and loyalty and open the floor to a collaborative dialogue that might end with valuable suggestions. Regularly assess your progress, stay informed about new technologies and best practices, and adapt your approach as needed.
With a DHL Express Business Account, can access a range of sustainable logistics solutions and expert support to help you on this journey. Let us help you take the next step towards a more sustainable future for your business and the planet.
