With the e-commerce industry growing rapidly and consumers demanding ever-speedier deliveries, it’s unsurprising that the logistics and transport sector currently contributes to just over a third of global carbon dioxide emissions1. In Ireland alone, the transport sector contributed to 21.4% of Ireland’s carbon emissions in 20232.
To understand how your company — or companies affiliated with yours — can reduce their carbon emissions, it's essential to first know what a carbon footprint is, and what causes carbon emissions in Ireland’s e-commerce industry.
Read on to understand these challenges, and the ways to implement sustainable business practices towards reducing your impact globally.
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. Conventional packaging materials like bubble wrap pose an additional 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 wildlife3.
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, intending to return several of them. This, of course, increases carbon emissions from the additional transport involved when returning products.
4. Energy intensive devices
With e-commerce platforms increasingly accessed via mobile phones, these devices need more computing power and stronger batteries. In today's age, an individual using their smartphone for just one hour per day can generate an average of 63 kilograms of CO2 emissions annually4.
5. Vast data centers
E-commerce has also driven an increase in the amount of data that needs to be processed, stored, and retrieved. This has resulted in enormous data centres that consume huge amounts of energy, as well as mirror servers in separate locations, which add to the problem. For instance, data centres alone contribute significantly to global carbon emissions, potentially generating 1% to 5% of all global greenhouse gas emissions5.
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 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 types6: 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.
You’ll find guidance and calculation tools on the Greenhouse Gas Protocol (GHG) website.
2. Offset your emissions
Carbon offsetting means participating in or financially supporting climate-related projects, such as renewable energy or rainforest protection, to compensate for your business’s own emissions. You could carbon offset shipping, for example. Always choose climate projects that are certified by international standards.
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.
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.
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 comparison7.
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. 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.
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 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 your e-commerce carbon footprint!
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.
