What Is Sustainable Ecommerce — And How Can It Benefit Your Business?

The rise of the conscious consumer is well and truly set in motion. In fact, shoppers across all generations are now willing to spend more money on sustainable products, according to Forbes.

Another key consumer trend blooming in the 21st century is online retail — also known as ecommerce. It’s estimated that around one in four purchases will take place on the internet by 2026.

These two trends go hand-in-hand. While online shopping isn’t always better for the environment, there are many ways a business can reduce its impact on the planet by switching to sustainable ecommerce. Read on to find out how to make this switch successful.

Alternatively, you can book a call with one of our in-house experts to see which areas of your business could cut back on waste and lend itself to a more circular economy. Once we’ve received your details, we’ll be in touch to create a bespoke plan.

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What is sustainable ecommerce?

The term ‘ecommerce’ refers to businesses buying and selling goods/services online — and ‘sustainable ecommerce’ is a way of doing this with a limited impact on the environment. 

So what does a sustainable ecommerce business strategy look like? Typically, it involves online stores adopting environmentally and socially responsible practices, such as reducing packaging, utilizing renewable energy, and avoiding high shipping emissions.

Want to see how Shopify can make your ecommerce business greener? Check out our helpful guide: How to Make An Eco-Friendly Ecommerce Business With Shopify.

Is the term 'sustainable ecommerce' contradictory?

The term ‘sustainable’ can be a bit of a murky phrase, so let’s clear it up. 

Environmental sustainability encourages people to live in a way that doesn’t put stress on natural resources. But does that mean the term ‘sustainable ecommerce’ is contradictory, given shopping encourages the consumption of materials?

That all depends on the individual business’s practices. Any brand that’s truly dedicated to sustainable ecommerce will outline transparent plans on how it aims to lower emissions, avoid unnecessary packaging, and generally reduce its impact on the planet. 

That’s why it’s important for consumers to be aware of greenwashing — it can be fairly easy for businesses to claim to be sustainable, despite continuing with harmful practices.

Benefits of using sustainable ecommerce for your business

Sustainable ecommerce doesn’t just benefit the environment and conscious consumers — the company itself can benefit too. 

Here are the top benefits of having sustainable ecommerce in a business strategy: 

• Attracts more customers – More shoppers are choosing sustainability as a metric for whether or not they want to support a brand. In fact, there was a 71% increase in Google searches for sustainable goods between 2016 and 2021
• Reduces impact on the planet – By cutting back on plastic packaging, businesses can reduce the amount of fossil fuels they rely on, and the amount of natural resources they consume
• Saves money – Running factories and warehouses on renewable energy can be cheaper for businesses, especially if they switch to either solar or wind power. Similarly, using electric vehicles to deliver ecommerce goods can cut fuel costs
• Attracts more employees – 71% of employees and employment seekers say that environmentally sustainable companies are more attractive prospects, according to a survey by the IBM Institute for Business Value (IBV). And nearly half of people surveyed said they would accept a lower salary to work for these organizations
• Prepares businesses for the future – Fossil fuels are finite, which means businesses will have to make the switch to more sustainable practices in the near future. These changes have already started to happen too, with governments around the world announcing tighter laws on unsustainable business practices
• Can reduce tax – Some countries, such as the UK, offer tax incentives for any businesses that are switching to more sustainable processes

Best ways to make your ecommerce business more sustainable 

Thinking of adopting sustainable ecommerce as part of your business strategy? Here are the best ways you can do it.

Reduce unnecessary packaging

When it comes to reducing your ecommerce business’s impact on the planet, packaging is a good place to start. 

A recent study found that ecommerce generates around 4.8 times more packaging waste than in-store purchasing. What’s worse, packaging waste in the online shopping industry is projected to reach 4.5 billion pounds by 2025.

To combat this waste, ecommerce companies can utilize recycled cardboard, plastic, paper, or glass — a simple and easy way to encourage circularity. This could have a major impact on company carbon emissions, with recycled plastic taking nearly 70% less energy to make than new plastic. 

Opting for recycled materials can also save businesses money, since some countries — including the UK, Italy, and Spain — currently have plastics taxes in place. 

Of course, packaging is unavoidable for some products, but it can often be reduced in both weight and size. 

Offset your impact

For some industries, completely avoiding packaging will be challenging — and in some cases, impossible. For example, industries with certain hygiene laws and safety procedures will find it hard to avoid using single-use protective gear until a better alternative comes along. 

But that doesn’t mean these businesses have to accept a hefty plastic footprint. They can also fund waste recovery to offset the amount of plastic they consume, whilst also working on areas of improvement in the production line.

Juice company PRESS provides a key example of how to do this effectively. 

This innovative company has introduced eco-friendly materials into its production line, with recycled plastic making up 75% of its bottles, and bioplastics making up the rest. To offset the waste they can’t remove just yet, PRESS partners with us to fund waste recovery efforts in vulnerable coastal areas.

As a result, the company has now become “plastic neutral” and has helped improve the lives of waste pickers in developing nations in the process. 

Lower your transport emissions

Ecommerce transportation accounts today for 3% of global greenhouse gas emissions, which is on track to become 17% by 2050. 

The two main factors driving this increase in emissions? Growing demand and consumption of fossil fuels. 

Ecommerce businesses can reduce their impact on the planet by switching to a fleet of vehicles that run on electricity. One study found that electric vehicles (EVs) release up to 43% fewer emissions than diesel vehicles.

In a bid to reach net zero targets, some countries around the world are even incentivizing businesses to switch to greener transportation methods. For example, the UK government now offers a grant for new EV chargepoints in workplaces. 

Empower your customers

Conscious consumers are on the rise around the world — and they show no signs of going anywhere any time soon. 

How is this impacting businesses? A survey carried out by Deloitte found that one in three people stopped buying from brands over certain ethical- or sustainability-related concerns.

Customers are looking to buy from greener brands — and want to feel empowered in the process. This means you can see sustainable ecommerce as an opportunity to work with customers. 

One of the most impactful ways to do this is by giving your customers a stake in plastic offsetting. If you’re funding waste recovery, for example, you can let consumers know exactly how much is being recovered when they make a purchase. 

The right recovery partner will allow you to build that information into advertising campaigns, checkout screens, and email workflows. Consumers get to know that they’re making the right choice, and businesses benefit from customer loyalty and transparent sustainability practices. 

Remove recycling barriers

Consumers want to make responsible choices, but recycling often presents a confusing barrier. In fact, 42% of people who are unsure about a product’s recyclability will take a guess, according to a recent survey by On-Pack Recycling Label (OPRL). 

This means that items can easily end up contaminating the recycling stream.

As a business, it’s impossible to account for the huge range of recycling systems around the world, but you can give customers a leg up by providing some guidance on how to recycle your products. 

Telling people what they should do with your packaging can be a fun, engaging way to signpost your commitment to the planet. 

For example, Yeo Valley prints instructions directly on some of their products, using their brand style to show customers exactly how things should be separated before disposal. 

Reducing returns

Ecommerce has made it easier than ever to buy products — but it’s also made it far too easy to return items.

In fact, one in three items bought online now are returned, which is much higher than the 9% return rate for items purchased in-store. 

A lot of those returns are the result of damaged products, but as many as 64.2% are the result of poor product descriptions. 

To avoid this from happening as frequently, it’s worth auditing your existing descriptions, making sure they’re accurate and up-to-date. Want to take it a step further? Create an automated email flow to ask customers why they returned items, and what could have been clearer. 

More online shoppers are also giving into the ‘buy, try, return’ culture, which means they have the intention of returning the entire order after trying on items for social media. It’s worth assessing how your returns policy can prevent this from happening. 

While it may seem counterintuitive, research from the University of Texas-Dallas found that lengthening policies to 60 (or even 90 days) can lead to fewer returns as it removes the element of urgency. 

When customers are given more time to test out whether they like the product, they are less likely to return it.

Try “recommerce”

“Recommerce” involves selling previously owned items through online marketplaces.

This market has been growing rapidly in recent years, as consumers become more open to the idea of buying second-hand items — especially in certain industries, like fashion, interior, and tech. 

According to GlobalData, the clothes resale market in the UK grew by 149% between 2016 and 2022, and is forecast to rise by a further 67.5% from 2022 to 2026. 

If your business works in a recommerce-friendly industry, it’s definitely worth setting up a platform that will allow your customers to buy second-hand items. 

Host your ecommerce site on a green platform

When businesses want to reduce their carbon footprint, excess packaging and high-emission transport issues are often the first port of call. But something that’s often overlooked is the site that hosts the ecommerce platform. 

Why is this an area of concern? Well, websites rely on servers that often run on fossil fuels. 

As a result, it’s estimated that the average website produces 4.61 grams of CO2 for every page view. For websites that have an average of 10,000 page views per month, that leads to 553 kilograms of CO2 per year.

If you’re trying to make your ecommerce business more sustainable, it’s worth looking into a green hosting platform, like Shopify. 

Shopify decommissioned all of its physical data servers in 2018, and moved its entire platform to Google Cloud — a green hosting solution, powered by 100% clean, renewable energy.

How does ecommerce impact the environment?

Although emissions fluctuate from business to business, we have a general idea of where ecommerce emissions come from, thanks to researchers at the Massachusetts Institute of Technology (MIT). 

Packaging topped the list, representing almost half of the average online retailer’s carbon footprint. Product returns made up a quarter, with transport and property-related emissions filling the rest of the footprint. 

And as consumption continues to increase — especially as events like Black Friday continue to gain popularity — so will these emissions. Not only will this further deplete our planet’s natural resources, but the rising amount of carbon emission pumped into the atmosphere will speed up climate change. 

But if more brands adopt sustainable ecommerce as part of their business strategy, we can prevent climate change from worsening.

How do ecommerce emissions compare to in-person stores? 

Various studies suggest that ecommerce businesses generally produce fewer emissions than in-person stores (also known as brick-and-mortar stores). The study carried out by MIT found ecommerce to be more sustainable than traditional retail in more than 75% of the scenarios developed in their base case. 

Another study suggests that online shopping at large retailers in the US is 17% more carbon-efficient than visiting traditional stores.

Check out the charts below to compare how the average emissions generated from ecommerce and traditional stores are broken down.

Summary

There are countless factors that contribute to a company’s carbon footprint, and just as many ways to start chipping away at it. 

Build sustainability into your company’s values, and it will ensure that every decision you make takes the planet into account – whether you’re sourcing raw materials, choosing a shipping partner, or deciding on packaging material.

Sustainable e-commerce isn’t always as obvious as recyclable packaging and electric vehicles. In some cases, it’s as subtle as detailed product descriptions or offsetting plastic use.

But if you’re investing time, money, and energy into the planet, you don’t have to be subtle. Consumers want to know which brands are sustainable, because they want to make a conscious choice. 

Want to reduce your business’s plastic footprint? We can help. All you have to do is get in touch with our in-house team. Once we’ve received your details, we can arrange a call to discuss which plastic recovery plan will suit your business needs best.

FAQs

Why is ecommerce sustainability important?

The key reason why sustainable ecommerce is important is to limit our impact on the environment. 

By utilizing more recycling materials, creating a more circular economy, and limiting carbon emissions whilst transporting products, sustainable ecommerce can help us continue our but 

Sustainable ecommerce also increases brand loyalty amongst environmentally conscious customers, which can lead to more profits in the long term.

How can an online business be sustainable?

Retailers can introduce multiple sustainable practices into their production line and distribution services to reduce emissions. These can include using sustainable or recycled materials, introducing refill stations, powering offices and fleets with renewable energy, and partnering with green businesses.

What is the prediction for ecommerce in 2025?

Ecommerce sales are forecast to increase by at least 50% between 2022 and 2025 — from $907.9 billion to $1.4 trillion, according to dropshipping app Oberlo.

If we want to reduce the chance of climate change escalating, these ecommerce sales need to adopt sustainable practices.