Shopify and Sustainability

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Shopify and Sustainability in Ecommerce

While sustainability has always been important in retail, in recent years it’s evolved from something that brands should do, to something that brands actively promote in their marketing, mission and values. So why is this?

It’s probably a mix of things:

An increasing awareness of the climate emergency and a genuine need to do things differently
Sustainability becoming more important to consumers
Brands ‘greenwashing’ to give the impression they’re more environmentally conscious to appeal to their audience and make sales

The Rise of Sustainability

Being seen as a sustainable brand has become increasingly important in the last decade. A market for sustainable brands has grown and therefore, brands moved to fill that space by appealing to that audience. It's been a long time since The Body Shop was the trailblazer for its ethical trading ethos and cruelty-free beauty products - a USP that has eroded as other brands have moved to occupy the same space, and perhaps contributed to its recent collapse into administration.

Of course, people are more likely to buy online these days (and to shop more in general), thanks to shoppable social platforms and lightning fast ecommerce sites.

You can search for, find and buy anything you desire in about 30 seconds and 3 button presses. This is great for convenience, but it does mean that more purchases are less considered (especially when you factor in ease of returns), and as a consequence, more goods and items are being manufactured, bought, consumed and discarded.

So what is the truth around ecommerce - how sustainable is it, and what can brands, ecom platforms and consumers do to reduce their impact on our planet?

The Environmental Cost of Commerce

By 2025, ecommerce sales are predicted to exceed $1.6 trillion - double 2020’s numbers. Every sale of a physical product represents energy and materials taken to create the product, plus the storage, packaging and delivery costs.

Sustainability in ecommerce, or any other endeavour, means behaving in such a way as not to deplete natural resources while supporting the long-term future of the environment we all share.

Consumers increasingly consider sustainability and environmental consciousness important. Shoppers want the online brands they purchase from to sell products with less packaging and to do business in a more sustainable way.

So is ecommerce more or less sustainable than bricks and mortar shopping? There are conflicting studies on this. One recent study into the sustainability of ecommerce puts forward the case that in-store shopping is actually up to 60% more sustainable than shopping online:

IRL shopping total emissions (metric tonnes of carbon dioxide equivalent) of 45,911
Online shopping total emissions of 73,447

(This is measured across delivery and logistics, customer interface, packaging, product acquisition and returns.)

Notable differences include:

nearly 3 times as much emissions for online shopping when it comes to returns
70% more emissions for delivery and logistics when shopping online

This isn’t altogether surprising, given that online shopping involves a lot more moving of products via air, road and sea, increasing emissions.

A key stat in a report by Nielsen revealed that 73% of shoppers would definitely or probably change their consumption habits to reduce their environmental impact.

That kind of market force puts pressure on brands to behave more responsibly and has given rise to a mix of

more sustainable commerce
more marketing around sustainable commerce
inevitably, more greenwashing

What Is Greenwashing?

Greenwashing is a serious problem that undermines credible efforts to tackle climate change. In the context of online shopping, it manifests in misleading marketing messages which have become more ubiquitous in recent years as consumers lean towards a preference for ‘sustainable’ brands. A recent report found that 60% of sustainability claims are misleading.

Examples include:

Using misleading terms or labels like ‘green’, ‘eco-friendly’ or ‘recycled’ which do not have standard definitions and can be misinterpreted.
Referring to the sustainability of a product when the overall brand behaviour does not support this (for example, clothes made from recycled fabric in a factory that causes excessive pollution).
Professing to be moving towards net zero in terms of CO2, without a credible plan.

The issue with this is that it misleads customers and the public into thinking that brands are doing all they need to and the climate situation is better than it really is. The net effect is that it can reduce the ambition and action needed to actually make human civilisation sustainable.

Shopify and Sustainability

Shopify has recognised that ecommerce has a significant environmental impact, and with over 4.8 million stores trading on the Shopify platform, it has a part to play in that. In recent years it has taken steps to mitigate the impact it has on the planet.

In 2019 the ecommerce giant launched the Sustainability Fund, which houses all of its environmental investments and initiatives. Shopify committed to spending a minimum of $5M annually on the most promising, impactful technologies and projects fighting climate change globally.

It also publishes an annual climate report which is available for all. Some key takeaways from the 2022 edition:

Renewable energy: a power purchase agreement enabled a wind power project to be launched in Canada. While the energy produced there doesn’t directly power Shopify’s buildings, it counteracts the use by adding the equivalent of green energy to the grid.
Clean fuels: Shopify pays the green premium for clean fuels to help accelerate transportation decarbonisation to create a more sustainable future of commerce. In 2022, Shopify signed its first agreement in the clean fuels space with the company Twelve, at a total contract value of $2.5M. Twelve produces E-Jet: aviation fuel with an 80%+ lower carbon footprint than jet fuel made from fossil fuels.
Carbon removal: Shopify funds companies that develop durable carbon removal technologies. Shopify is also a carbon neutral company.
Carbon-neutral platform: Shopify runs on Google Cloud which runs on 100% renewable energy.
Planet app: this app, available for Shopify merchants to install, estimates the brand’s shipping emissions and lets them reduce them by funding companies that remove CO2 from the atmosphere.
Black Friday sales weekend: Shopify buys carbon removal and credits to counteract the estimated emissions from the delivery of every single order placed around the world during the year’s peak sales period.
Restoring mangroves: Shopify worked with WeForest to plant 4.6m trees in Senegal to offset carbon emissions and rebuilt habitats for endangered species and wildlife.

The Environmental Impact of Artificial Intelligence

You can’t read anything about tech or ecommerce these days without some kind of reference to AI, but I’m not just shoe-horning the topic into this article. It’s a very real issue when it comes to environmental impact, albeit one that is less obvious than the carbon footprint of delivery vehicles, or the waste of unwanted products being sent to landfill.

Training and maintaining an AI system requires a huge amount of processing power and energy, resulting in significant CO2 emissions. For example, the initial training on Chat-GPT produced around 500 tons of carbon dioxide.

When it comes to marketing ecommerce businesses, algorithms and AI are used for automated advertising across Google Ads, Instagram, Facebook and TikTok. This creates the dilemma of using more energy to sell more things and increase overall consumption. This is particularly problematic when it comes to industries like fast fashion which, by its very nature, is constantly selling, delivering and receiving returns of cheap items, to replace the cheap items that their customers have recently bought, had delivered, returned or sent to landfill. It might be good for business, but it’s not good for the planet.

Shopify Apps for Sustainability

It seems reasonable that brands should consider entire lifecycle of their products, Within the Shopify ecosystem there are sustainability-based apps like Tern which help lessen the environmental impact of ecommerce: when installed on a store, it enables customers to trade-in almost any product, bought from any channel in exchange for store credit. This helps to drive revenue through reuse and resale with an ethos that ‘what you make should never go to waste’.

If you search for ‘sustainability’ in the Shopify app store, you’ll find others that can help reduce your business’ impact on the environment. Here are a couple of examples:

Greenspark enables you to plant trees, rescue plastic & offset carbon emissions to increase conversions & engage customers. ‘Good for the planet and your metrics.’

If you’re an apparel business, Arbor calculates and displays the environmental impact of your clothing - it calculates the carbon footprint of your apparel products and highlights their lower-than-average emissions to attract environmentally conscious shoppers.

Examples of Shopify Businesses with Sustainable Models

There are lots of brands that have made sustainability a key part of their messaging, values and ethos, and have the data and facts to back up their claims. Here are a few examples:

Honeybee Wrap

‘Australian-made and owned Honeybee Wrap uses an antibacterial blend of ingredients for an eco-friendly alternative to plastic wrap and a fantastic food preserver. By using a beeswax food wrap you are helping to reduce the 8 million tons of plastic that enters our oceans each year!’

Wild Deodorant

‘Millions of bathroom products are thrown away every year and the sustainable and natural alternatives out there don't cut it — until now. At Wild, we want to shake-up the throwaway culture of bathroom products with high-performing products made from natural ingredients that never compromise on convenience or efficacy.

Single-use plastic stinks so we’ve created a reusable deodorant applicator and Shower Gel case, made from aluminium and will last you a lifetime.

Every time you refill your case, you’ll save over 30 grams of plastic going to landfill.’

(See how we partnered with Wild to launch their Shopify store.)

Flora and Fauna

‘Flora & Fauna is an online eco store that’s driven by purpose. We’re here to bring you the best ethical, eco, organic and vegan products – products that are ethically sourced, cruelty free and kinder to our environment and its flora and fauna (that is, planet, people and animals).’

Lucy and Yak

‘Our mission is to prove that it’s possible to create great products, that give people joy, and are kinder to the planet and the people that make them.’

How Can You Make Your Shopify Brand More Sustainable?

Re-commerce

There are options available to extend the life of products, letting them be sold a second or even third time, rather than going to landfill. As an example, Yerdle works with leading brands to develop white-label channels that take control of the resale marketplace. This deepens customer engagement, increases profit and helps the planet by advancing the circular economy.

Reduce energy waste

Switch to energy saving light bulbs, renewable energy source providers, turn equipment off at the end of the day, turn off the lights when not in use - every little helps! It sounds basic but if we all did these things the cumulative effect can have a big impact in overall energy wastage.

Packaging, delivery and returns

Using carbon-neutral delivery services to offset emissions via renewable energy projects can help reduce the impact of your goods coming and going.

Engaging delivery services that are electric or hybrid can help, as can using recycled, recyclable, or less packaging.

Finally, reduce returns by making sure your store gives detailed, clear information on your products and sizes to reduce the risk of your customers experiencing buyer’s remorse and returning the products. Offer free labels for returns, or incentivise customers to reuse their product packaging.

It’s not all down to brands of course. There are problems on the customer side too. A report by the University of Portsmouth shows that in the US alone, returns create 5 billion lbs of landfill waste and 15 million tonnes of carbon emissions each year, and ‘the rise of eCommerce has made it easier to succumb to impulsive and compulsive buying, as it is easy to reverse by returning the products.

Recently, illegitimate “borrowing” has also become socially acceptable, be it “wardrobing” (ordering clothes and accessories with the purpose of producing images for Social Media or to attend an event) or buying a large TV for the duration of a sports event / children’s bikes for the summer holidays, and then returning the products. With their focus on providing great customer service, many companies struggle to stop these trends.’

Give back to the environment

You could partner with and donate a percentage of profits to conservation organisations, or use Shopify’s Planet app to reduce your own carbon footprint.

Make sustainability an integral part of your brand’s mission

Transparency is key when it comes to being a sustainable brand. We’ve talked about greenwashing and the importance of avoiding that. If you’re on a journey towards sustainability, talk about the steps you’re taking to get from A to B, and use measurable claims or evidence to back it up. If you incorporate sustainability into not only your behaviour and business practices but your ethos and values too, it will embed itself into your business, your staff and your customers.

Consider B Corp Certification

Admittedly, this is not an easy thing to do. It is not a tick-box exercise which enables you to show a logo on your site. B Corp Corporations have to demonstrate values and processes that are embedded through the entire organisation. They must show that they are leaders in the movement for an inclusive, equitable, and regenerative economy.

The B Corp website states:

"B Corp Certification is a designation that a business is meeting high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials. In order to achieve certification, a company must:

Demonstrate high social and environmental performance by achieving a B Impact Assessment score of 80 or above and passing our risk review. Multinational corporations must also meet baseline requirement standards.
Make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders, not just shareholders, and achieve benefit corporation status if available in their jurisdiction.
Exhibit transparency by allowing information about their performance measured against B Lab’s standards to be publicly available on their B Corp profile on B Lab’s website."

Conclusion

There is no doubt that as a species, we have a huge impact on our environment in everything we do, and our modern, consumer-driven society has a large part to play in this. However, it’s also clear that when it comes to retail, all parties - ecommerce platforms, fulfilment companies, energy providers, brands and consumers - have their part to play in reducing their impact and making ecommerce more sustainable for us, and future generations.

Shopify and Sustainability in Ecommerce

The Rise of Sustainability

The Environmental Cost of Commerce

What Is Greenwashing?

Shopify and Sustainability

The Environmental Impact of Artificial Intelligence

Shopify Apps for Sustainability