With retailers increasingly focussed on sustainability, Simon Batt, CEO of Asendia UK, explains how emissions reporting per parcel, combined with carbon offsetting by shipping partners, will help e-commerce retailers meet their ESG goals
Importance is growing around carbon reporting, with the risk of ecommerce retailers racing to find metrics that aren’t 100% scientifically sound. All of us need to learn in this field, and be totally transparent about how we collect the figures and what the data sources are, so that calculations and reporting are clear and accurate, and in line with the latest best practice guidelines.
From Asendia’s conversations with retailers, we know most are grappling with which calculation model to use for accurate carbon reporting of their e-commerce shipping activity. We are regularly asked ‘what is the carbon measurement of our parcels?’. It is becoming an expectation that parcel shipping and courier partners will provide such data, and the proactive ones are stepping up to the challenge, developing calculation tools to measure and report emissions per parcel (as we are working to achieve in Asendia).
It’s vital to do so, as both we and our retail clients need transparency to meet the demands of customers and shareholders alike. At Asendia, our carbon offsetting projects means that today all shipments carried out on behalf of retailers are 100% carbon-neutral. However, we understand that offsetting is not a solution to the global climate change issue. Businesses need to have a detailed knowledge of their carbon footprint and find long-term solutions to reduce this.
The importance of consumer education
Importantly, there is evidence to show giving shoppers information about the environmental impact of their delivery – particularly for cross-border e-commerce – will help them choose lower-impact shipping options.
From the perspective of the consumer, when offered a variety of shipping options, there is always a trade-off between the cost and the speed of delivery. Additional information on the carbon impact of different options could influence that decision. A survey in China last year of Taobao website users found that out of 188 survey respondents, slightly more than half (55%) were willing to compromise the speed of international delivery for a less carbon-intensive alternative.
Similarly, 2021 research from the International Post Corporation (IPC), found 44% of online shoppers have changed their purchasing behaviour to be more sustainable.
Findings like this suggest that carbon labelling for e-commerce shipping options could help retailers meet their carbon reduction goals, and improve their brand reputation, while minimising environmental damage. However, first must come data transparency, and fathoming the carbon measurement of a parcel is incredibly complex.
Carbon calculation for e-commerce parcels
Calculation of CO2 emissions is based on the shipment’s weight, distance travelled from warehouse to final address, and modes of transport used – in our case normally air and road freight. At Asendia, we are currently setting up a solution for shipment data to be extracted from our systems and processed with emission parameters, and the methodology will follow the guiding principles of the Greenhouse Gas Protocol and World Economic Forum’s guidelines for consignment-level carbon reports.
Of course, challenges lie ahead regarding the choices we offer online shoppers, once accurate carbon data is made available to them. Time and effort must go into educating consumers so that they can make informed decisions. One question is whether shoppers would be willing to pay a premium for carbon neutral or other kinds of ‘green’ delivery services – the emerging range of urban logistics solutions often with ‘green’ delivery at the heart. Zalando has tested the water on charging shoppers a token amount (€0.25) to compensate for the emissions caused by their parcel delivery, and no doubt others will follow suit.
We are likely to see retail marketers weaving environmental values into the brand messaging, right through to shipping information pages on e-commerce websites. One option is for retailers to offer incentives like loyalty points for choosing the low-carbon shipping service.
Legal pressures on the horizon
What’s certain is the shift to green commerce is an absolute must in 2022, not least because inevitably, a legal framework for carbon reporting will kick in. The most responsible 3PLs will progress independently to be in a strong position as soon as new laws are passed’, although currently, there is a long way to go. A recent IMRG webinar, featuring ParcelLab’s State of Operations Experience Management 2022 study, revealed that a tiny minority of UK fashion retailers offer carbon neutral delivery, and only 25% of fashion retailers include sustainable messaging in their communications with customers.
My prediction is that once the ecommerce delivery industry fully masters measuring the carbon footprint of parcels, providing true transparency for end users, more sustainable choices can and will be made.
Written by Simon Batt, CEO of Asendia UK