Meet two environmental pioneers taking responsibility amid the COVID e-commerce boom
This article was originally published on the Greenbiz website.
The pandemic has triggered a dramatic e-commerce boom as consumers avoid physical retail locations in favor of online shopping. The World Economic Forum estimates that COVID-19 may have accelerated the shift to e-commerce by five years.
While this "bricks to clicks" phenomenon is a boon for the e-commerce industry, it comes with its fair share of environmental shock. With every online purchase comes more delivery trucks on the road and more packaging in the landfill.
An environmental awakening across the logistics industry couldn't be more urgent. Across all methods of transport — aviation, rail, shipping, heavy and light trucking — the sector produces about 17 percent of global greenhouse gas (GHG) emissions.
As e-commerce continues to grow, the World Economic Forum estimates there could be 36 percent more delivery vehicles driving around cities by the end of the decade. This high-polluting industry generally has been reluctant to act due to compliance and cost. However, it undoubtedly will come under pressure from climate-conscious consumers to help take environmental responsibility for the COVID e-commerce boom.
We might be in the middle of a health crisis but the climate crisis is "still top of mind" for many consumers, according to an IBM study that found 54 percent of respondents said they are prepared to adopt less environmentally impactful shopping habits this holiday season.
With climate change back on the agenda in the U.S. and President-elect Joe Biden preparing to hit the reset button to bring the nation back into the Paris Climate Agreement, there's no doubt many industry leaders will be watching.
But, real action is required to achieve net-zero emissions by 2050.
Pioneers of change in transport and logistics
A small but growing number of shipping companies lead the way on climate action with carbon-neutrality programs, new fuel technologies and sustainable packaging strategies.
These companies are inspiring change at the highest levels and will be remembered as environmental pioneers. I had the pleasure to talk to two such companies at consulting firm South Pole's recent Green Logistics event.
Slashing carbon emissions
Danish firm DSV Panalpina is the fourth largest third-party logistics business in the world. It orchestrates the movement of goods by road, air, sea and rail.
As an asset-light company, DSV Panalpinahas set ambitious science-based targets to reduce the carbon emissions from all shipments and decarbonize its entire supply chain.
"I've been in the industry 16 years, and if you go back in time you would say, 'Well we're asset-free, why would we have to do anything?' Well, that whole landscape has changed, and there's actually a lot that logistics could be doing," said Lindsay MacIver Zingg, senior director of sustainability at DSV Panalpina.
Specifically, the company has committed to reducing its Scope 1 and 2 emissions by 40 percent by 2030 against a 2019 baseline and lowering its Scope 3 emission by 30 percent over the same time period. "The CEO and top management has to be committed to make these ambitions targets. It won't go forward without the CEO," MacIver Zingg said.
Recently, DSV Panalpina has investigated its entire logistics operation, including that of its customers, uncovering environmental inefficiencies around loading the trucks. "The vehicles are coming back half-empty, which generates needless emissions, so let's ensure we have the optimal loading factors, maximizing the filling of containers," she said.
On top of its decarbonization efforts, DSV Panalpina has introduced a green procurement program and is part of a high-profile renewable hydrogen project with other leading Danish companies.
"By 2030, the project will be delivering 250,000 tonnes of sustainable fuel for the buses in Denmark, our trucks, maritime vessels and airplanes, so it's really exciting," MacIver Zingg said.
European companies are leading the way on tackling the problem of climate change but Australia — often criticized for inaction — is also home to private-sector companies tackling the challenges of zero carbon emissions and zero waste for e-commerce activities.
One company, Sendle,is the first 100 percent carbon-neutral shipping carrier in Australia and the United States. As a certified B Corporation, Sendle considers concerns about the environment to be a key stakeholder in business decisions.
Sendle reduces the environmental impact of shipping by tapping existing carriers and filling vehicles to ensure every trip is maximized. Then, it offsets the carbon emissions of every package.
Since its launch in 2014, Sendle has offset more than 9 million miles of carbon emissions. That's equivalent to driving a one-ton truck from Earth to Mars and back 128 times.
The offsets that Sendle buys support reforestation projects in Australia and the U.S., including the Lower Mississippi Valley Reforestation initiative, which aims to reforest 1 million acres throughout Louisiana, Mississippi, Arkansas, Tennessee, Kentucky, Missouri and Illinois.
Sendle has been carbon-neutral from day one. Chief Marketing and Customer Officer Eva Ross said the company is "very proud" of that.
"As we've seen this shift to e-commerce over COVID, making a decision like that would be quite a costly one had anyone made it now," she said. "But because we embedded that and made that decision from day one, it has just been a huge benefit to us."
Sendle has inspired change within its network of regional carriers. One courier partner has set an ambitious environmental target to be carbon-neutral by 2025, while another has partnered with Sendle to roll out Australia's first fleet of solar-powered electric vehicles. Australian logistics provider Bonds' 100 percent electric fleet is totally off the grid with all charging accomplished by 320 solar panels atop its warehouse. The vehicles can operate 10-hour days, covering over 125 miles in metro areas, with ample battery left at the end of the day.
"By partnering with a solar-powered delivery company, we've found a zero-emissions solution but also it means that all of the deliveries that are happening in the inner cities, first mile, are not only carbon-neutral but carbon-zero," Ross said. "That's something we'll continue to push through with but certainly a great initiative."
Tackling the packaging crisis
Both DSV Panalpina and Sendle are also deeply concerned about the overwhelming amounts of packaging generated by e-commerce and transported by their own digital operations.
The packaging crisis is hard to quantify but instead of watching it pile up, these two companies at opposite ends of the globe are doing something about it.
DSV Panalpina has a sustainable packaging expert who carries out audits and highlights where there are issues and how to reduce them. The company has seen huge benefits from optimizing packaging, including:
- A reduction in the number of shipping containers required — down 1,800 20-foot equivalent units (TEUs)
- 15 percent drop in carbon emissions
- 30 percent decrease in transport damage
- A reduction of more than $6 million in transportation costs per annum
"Packaging is something that I think is often overlooked and in a logistics company, we can all be optimizing the environmental impact of packaging," MacIver Zingg said.
According to Sendle's own U.S. consumer survey, conducted ahead of its compostable packaging launch in early 2020, 57 percent said they get frustrated with how much packaging comes with the products they buy, and 64 percent said they would be more likely to buy from a retailer that offered compostable packaging.
Sendle took that advice and ran with it.
"We talked to Americans who've got back alleys full of cardboard, and there's no space left in the recycling bin. So we thought of this idea of creating some compostable packaging and making it super price-competitive so that our customers can use it," Ross said.
The company's mailers are 100 percent biodegradable and home-compostable. They look like plastic but are made from corn starch and plant-based bioplastics.
At the end of its journey, the mailer can be stripped of its label and tossed in with food scraps, where it will break down within 90 days, according to Sendle.
Climate action pays off
To avoid the catastrophic consequences of climate change, action is needed now. The world cannot afford for global warming to become the forgotten crisis during COVID-19.
While governments are focused on addressing the pandemic, it's promising to see private sector companies, in an industry that generates so much pollution, lead the way to net-zero.