Earlier this week, the world received devastating information as the UN’s climate panel, IPCC, published a new climate report. Extreme weather is expected as a result of global warming and the climate crisis is a fact. After living in a global pandemic for over a year (and still counting), this piece of news was probably the last thing we wanted to hear. However, today we will examine the issue from the brighter side and look into if E-Commerce can have a positive contribution to the climate.
Covid-19 has accelerated the e-commerce-business. As a result of lockdown upon lockdown more people than ever before are browsing the internet and shopping from their home. Seeing that online shopping increases and the climate issue being highly topical, you might ask yourself what is better for the environment – online shopping or traditional in-store shopping?
At the beginning of the year, MIT Real Estate Innovation Lab came out with a report that demonstrates the environmental benefits of e-commerce compared to in-store shopping. In their study it was found that carbon emissions are on average 36% lower from online shopping compared to in-store trips. The biggest part of the emissions related to in-store shopping comes from transportation. It contributes to 2.5 times the carbon emissions of e-commerce packaging. When using a full standard van for direct-to-home delivery it can replace more than 100 individual car trips which results in a lower carbon footprint. This method is also favorable for e-commerce operators because order consolidation and network optimization will cut costs.
A key to further reducing the emissions, according to a MIT study, is built-out logistics networks. Conducting direct-to-home deliveries from urban fulfilment centers and placing goods near the end customer, can save 50% of greenhouse gas emissions from transportation. Furthermore, such logistics reduce the overall footprint by 10% per package. Even more sustainable operations can be done by electrification of vehicles, advancements in smart buildings and packaging and by using artificial intelligence.
To sum it up, the effects of Covid-19 have accelerated the usage of e-commerce immensely and with the latest bad news concerning the climate, we have just yet another motivation for choosing e-commerce over traditional shopping.
Read the full report by MIT here.