E-commerce Sales are Skyrocketing. Its Carbon Emissions are too.

How Online Retailers Can Empower Their Customers to Tackle the Problem in One Click

E-commerce is soaring. At the click of a button, consumers can purchase goods that are thousands of miles away and have them delivered in no time – without ever leaving their doorstep. Accelerated by the Covid-19 crisis, in the past six months consumers have purchased products online at levels that were not expected until 2025, according to recent data from
IBM's US Retail Index report.

Today, online shopping comprises about one out of every six purchases in the US and is unlikely to slow down anytime soon. Just last year, global e-retail amounted to USD 3.4 trillion in sales and by next year is projected to surge to
USD 4.8 trillion.

Free shipping and convenience are driving customer growth, but are taking a heavy toll on our planet and health. However, there is good news for responsible retailers: providing customers with easy ways to take responsibility for environmental impacts boosts sales and retention rates – and the state of the global climate!

Why We Need Climate Neutral E-commerce

It would be nice if products were gracefully delivered by a stork straight to customers' homes. The reality is that orders journey via gas-guzzling air, maritime, and land freight which in turn accounts for a significant portion of a product's life-cycle emissions.

The Environmental Protection Agency (EPA) recently reported that transportation is the fastest growing source of GHG emissions in the US, and a leading contributor to local air pollution – amounting to roughly
28 percent of all GHG emissions. Last-mile delivery emissions, which are those associated with the final stretch of transportation to the package's destination, accounts for the lion's share of CO2 throughout the delivery journey. Earlier this year, the World Economic Forum warned that if last-mile freight isn't greened within the next few years, local urban emissions will jump 30 percent while adding 11 minutes to the average daily commute.

And getting deliveries right the first time is just half the problem. Online returns and failed deliveries happen in
nearly one third of online purchases and thus doubles their carbon footprint.

What we thought were once eco-conscious shopping habits have in fact left a long trail of emissions along the way. In the interim, as we wait for the next generation of sustainable freight and innovative delivery solutions to emerge, it is more important than ever to take action today.

How Responsible Retailers Can Act:

There are several options retailers can take to mitigate the environmental and health risks associated with e-commerce. Among the most simple are clustering purchases together, pricing next-day delivery appropriately to incentivize slower shipping, and making sure customers are home when the courier arrives. What cannot be removed by efficiencies can be offset by purchasing carbon credits.

• According to a 2017 Bain Report, local emissions can fall by almost a third if consumers bundle their purchases together, something many retailers like Amazon already do. When it comes to choosing delivery options, speedier deliveries can significantly increase the carbon intensity of your orders as they are typically hauled into aircraft for next-day shipping.

• Freight transportation emissions are expected to grow by 225% by 2050. Today, it is more important than ever that shipping companies ensure products take the most eco-friendly routes and once ensured, the next step is to cover unavoidable emissions associated with the deliveries.

• Carbon compensation, otherwise known as carbon offsetting, is a useful strategy used to accelerate emission reductions around the world by financing projects that either sequester carbon out of the air or scale renewable energy projects in order to phase out the development of fossil fuel ones.

As the world's leading developer of international emission reduction projects, South Pole's screening process is among the most robust in the world and works with the best third-party verification standards, such as the
Gold Standard and VCS. Our projects ensure the improvement of not only the health of our planet, but also the contribution to the environmental, social, and economic well-being of the communities we work with.

With South Pole's
Climate Neutral Check-Out service, retailers can seamlessly integrate an opt-in option for customers to cover the costs associated with their carbon footprint or compensate emissions on their behalf. Providing customers the opportunity to balance their emissions at checkout and investing in projects of their choice is a bold climate action step, especially as the rise of online shopping is here to stay. Furthermore, it has been shown over and over again, that sustainability drives sales and customer retention.

While carbon offsetting is only part of an overall sustainability strategy, it is essential in a shipping-intensive sector like online retail. There is an infinite market of goods on the internet, but as shoppers move online en masse, empowering them with climate solutions like
Climate Neutral Check-Out, is an important first step to prevent the worst outcomes of climate change.

Don't wait for others to act for the environment - you and your customers can act today!