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HomeEnvironmentReducing the carbon footprint of online retail | News | Eco-Business

Reducing the carbon footprint of online retail | News | Eco-Business

Aided by the Covid-19 health crisis, e-commerce is facing a golden year. According to the 2022 edition, e-economy SEA According to a report released last month by Google, Temasek, Bain and Co, e-commerce in Southeast Asia is projected to grow 204% from $43 billion in 2019 to become a $131 billion business in 2019. increase. Online shopping is projected to continue growing by 17% annually over the next three years, reaching US$211 billion by 2025.

As a result of the e-commerce boom, the region’s digital economy is expected to double its greenhouse gas emissions by 2025, the report figures show. These include direct emissions classified as Scope 1 (emissions from directly owned assets) and Scope 2 (electricity emissions), and pollution from indirect sources impacting the value chain classified as Scope 3. contains substances.

The report also found that 6 out of 11 countries collectively 31 million tons Amount of plastic waste produced annually.

However, he noted that while environmental awareness in the digital economy is “still in its infancy,” it is growing.

Regional ESG Report top 3 Online retailers (Lazada, Tokopedia, Shopee) or their parent companies are signaling that they are beginning to address the impact of their operations on the planet, with a focus on reducing packaging waste and emissions.

Carbon dioxide disclosures are still incomplete and there are no industry standards for what should be disclosed. His GoTo, the parent company of major Indonesian online retailer Tokopedia, which also operates ride-hailing service GoJek, said: produced T co2e in 2021 will be 828,898, of which 88% will be accounted for by products and services acquired from digital platforms.

SEA Ltd, Shopee’s parent company, said: released Last year was 112,014 T CO2e, three-quarters of which was from electricity use. The rest comes from company cars, refrigerants and heating. The report did not include Scope 3 emissions.

For its part, Lazada is its first ESG Report The report, published last October, did not disclose the carbon emissions produced, but said about 60% fall under Scope 3. Another 38% are direct emissions covering fuel consumption by the company’s resources and the remainder from electricity usage.

“Given the nature of our industry, ground transportation from logistics and delivery operations is a significant contributor to greenhouse gas emissions,” admitted Lazada.

To reduce the carbon footprint of parcel delivery, some of Lazada’s drivers are traveling in electric vehicles.Image: Lazada

Currently, online retailers’ decarbonization strategies target activities that can be directly controlled by the company. For example, Lazada and GoTo aim to reduce their Scope 1 emissions by converting their company-owned fleets to electric bikes with battery swapping capabilities for long-distance deliveries in Indonesia. Lazada also deploys cargo bikes for last-mile deliveries in densely populated areas.

Lazada also has electric scooter delivery vehicles that can deliver over 100 parcels on a single charge and travel up to 20km in Vietnam. In Singapore, his online grocery platform RedMart uses routing algorithms to streamline deliveries. To deliver temperature-sensitive goods, the retailer replaced a truck engine-powered refrigeration machine with an insulated tote bag.

Meanwhile, GoTo aims to convert its driver fleet to fully electric vehicles by 2030.

To reduce your Scope 2 emissions, visit Tokopedia Installation complete A 13.4 kWp photovoltaic system on the roof of the office. Shopee’s owner SEA remodeled the lighting structure for his office in Singapore. The company says this will halve energy usage, cut labor and maintenance costs, and cut his monthly carbon footprint by 13.4 tons. The company plans to roll out this initiative to regional offices and facilities, making it a group-wide project.

Paper packaging by Lazada

Last year, Lazada launched offering more sustainable parcels through its FBL (Fulfillment by Lazada) service for partner brands. Green parcels also use FSC-certified cardboard boxes filled with recycled shredded paper instead of plastic filling.Image: Lazada

Controlling plastic waste is also a popular initiative, with companies starting programs to promote paper packaging as an alternative to plastic packaging. For example, Lazada has a Fulfilled by Lazada logistics service that offers customers two alternative packaging options. Eco, which reduces the use of plastic in parcels, and Zero, which uses paper tape to seal paper parcels.

Tokopedia started using cardboard cushions last year instead of plastic pillows and bubble wrap. It also shredded and reused more than 10 tons of cardboard packaging to avoid dumping it in landfills, and recycled another 113 tons into pulp, the parent company said.

easy fruit

Industry reports point to the region’s online retailers’ current environmental practices leaving room for maturity and expansion. Schemes for reducing packaging waste focus on what McKinsey & Company categorizes. paper For sustainable packaging as an easily achievable outcome “where barriers to switching are low and most work can be done … without broader value chain coordination”.

“Online shopping platforms like Lazada and Shopee need to do more by redesigning the systems, processes and materials they use,” said Marianne, Greenpeace Southeast Asia zero waste campaigner. Francis T. Ledesma told Eco-Business. “They should also utilize reusable packaging for shipping and invest in reverse logistics for these.”

She noted that replacing plastic with paper and bio-based plastic is also “problematic.” Because these are still discarded. Paper use negatively impacts forests and the climate, but bio-based plastics compete with food production and require large amounts of water, land use and energy, she added.

McKinsey observes that the world’s largest manufacturers and retailers are already looking beyond “fast-acting” and experimenting with the use of returnable and reusable metals and glass.

Lazada pointed out that “collective efforts” across the supply chain are key to making a big difference. Lazada Group Chief Financial Officer Frank Luo told Eco-Business: Optional, and finally, supporting related projects implemented by the government. ”

Similarly, online retailers are being asked to include Scope 3 solutions with the highest environmental impact in their decarbonization efforts.and study The Boston Consulting Group, in its study of global retailers’ responses to carbon footprint, notes that scope 3 emissions typically account for more than 90% of an industry’s environmental impact.

“Focusing only on scope 1 emissions misses that a company’s supply chain, transportation and distribution are usually the most carbon-intensive. Scope 3 emissions should be included in any emissions reduction target or plan.” says Ledesma.

Lazada notes that reducing Scope 3 emissions is a challenge as it is influenced by market readiness, and works with its value to “develop a holistic ecosystem approach to create ripple effects across the network.” and aim to create wider change.” chain partner.

Meanwhile, e-commerce companies also play a role in promoting green practices among buyers, with a significant portion of buyers willing to pay more for sustainable products and services. No, says the study.

According to a report by e-Conomy SEA, 32-55% of digital users in markets covered by the region’s three largest online retailers (Singapore, Malaysia, Thailand, Philippines, Indonesia and Vietnam) are paying more. I don’t mind if you do. We offer sustainable products and services, but he also notes that there is a 30% gap between sustainability intentions and actions.

Companies are already running campaigns to promote environmental awareness, but these are currently time bound and/or limited in scope.

For example, Tokopedia allows users to donate funds for planting trees. Lazada, meanwhile, ran his LazEarth, his two-day campaign promoting eco-friendly products and sellers, making it easier for buyers to find them on the platform.

Lazada declined to discuss future initiatives to this end, but will work with brands to “offer alternative product options that meet the changing demands of greener Southeast Asian consumers.” I accept my position.

Ledesma recommends that online retailers review their policies to increase buyer engagement. “[Their policies should] Encourage consumers to choose lean transactions – [like] Incentives and higher seller ratings [for sellers] Use less or no packaging for non-perishable items. ”

Luo said Lazada is “committed to reducing its carbon footprint throughout its value chain.” He adds: As a platform, we recognize that we are uniquely positioned to make a difference. VALUE HIS CHAIN ​​Through deeper collaboration with his partners, we aim to develop a holistic ecosystem approach to create a ripple effect that spreads across the network and create broader change for the future. ”

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