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Policy
brief
Policybrief
#117
January2025
UNCTAD/PRESS/PB/2024/3(No.117)
Fosteringenvironmentallysustainableelectronic
commerce
KEYPOINTS
Developingcountriescanleveragee-commercetoboosteconomicgrowthanddevelopment
Thee-commercelogisticschain(warehousing,packaging,transport,returns)needstoberethought,tolimittheenvironmentalimpactsofthisgrowingsector,particularlyofemissionsandwaste
Governments,businessesandconsumersneedtoworktogethertoreduceenvironmentalimpacts,byregulatingenvironmentalimpacts,promotingeco-friendlypractices,encouraginginformedconsumerbehaviourandimprovingtheevidencebaseforinformedpolicymaking
Globalinternationale-commerceanddigitaltradediscussionsneedtoexplicitlyintegrateenvironmentalsustainabilityconcernsandmakeuseofinternationalcooperationandtechnicalassistancetoaddresssuchconcerns
1
Policy
#117
brief
January2025
Electroniccommerce(e-commerce)isreshapingtheglobaleconomy,transformingconsumptionpatternswhiledrivingeconomicgrowth.Thevalueofthesectorrivalsthatofglobaltradeingoodsandservices,andkeepsexpanding.E-commerceplatformshelpmillionsofbusinesses,manyofwhicharesmallandmedium-sizedenterprises,sellonline,overcomingbarrierssuchasphysicalmarketaccess,infrastructuregapsandsocialconstraints.However,thebenefitsofe-commerceremainuneven,withmostdevelopingcountrieslaggingintheadoptionofonlineshopping.Itisalsocriticaltoensurethatthisglobaltransformationdoesnotcompromiseenvironmentalsustainability.Theenvironmentalimpactofe-commercedependsonthetype;business-to-consumere-commerceimpliesagrowingnumberofsmallerpackages,deliveriesandreturns,whilebusiness-to-businesse-commercemaybemoreefficient,withbulkordersrequiringlesspackagingandallowingforstreamlineddelivery.Thedifferentstagesofthebusiness-to-consumere-commercelogisticschainforgoods(warehousing,packaging,transport,returns)areexaminedinthispolicybrief,alongwithchangingconsumerbehaviour.Inaddition,theneedtorethinktheseelementsishighlighted,toreducetheenvironmentalfootprintofe-commerce,whilecreatingaregulatoryframeworkthatbalancesenvironmentalsustainabilitywitheconomicgrowth.1
E-commerceasacatalystfordevelopmentindevelopingcountries
Reducingemissionsthroughtheuseofrenewableenergyandoptimizedlogistics
Warehousinganddistributionarecentraltobusiness-to-consumere-commercebutsignificantlyaddtothecarbonfootprint.Large-scalewarehousesusedforinventoryandorderfulfilmentoftenemitmoregreenhousegasesthantraditionalretailcentresduetoincreasedtransportationandenergyusefromheating,coolingandlighting.E-commercetypicallyreliesonlarge,centralizedwarehousesfarfromurbanareas,increasinglast-miledeliveryemissions.However,emerginginnovationscansignificantlyreducetheenvironmentalimpacts.Forexample,inChina,in2023,solar-poweredlogisticscentresusedbyonee-commerceplatformreducedemissionsbyover21,000megatonsofcarbondioxideequivalent.2InPakistan,ane-commerceplatformusessolar-poweredfacilitiesandacouriercompanyhasadoptedsolarair-conditioninginordertoreduceenergydemand.3Inaddition,locatingwarehousesclosertoconsumerscanreduceemissionsbyshorteningdeliveryroutes.Forexample,inKenya,theintegratedlogisticshub
1Thispolicybriefbuildsonthefindingsinchapter5ofUNCTAD,2024,DigitalEconomyReport2024:
ShapinganEnvironmentallySustainableandInclusiveDigitalFuture(UnitedNationspublication,salesNo.E.24.II.D.12,Geneva).
Note:MentionofanyfirmorlicencedprocessdoesnotimplytheendorsementoftheUnitedNations.
2See
/en-US/document-1620276223567462400
.Note:AllwebsitesreferredtoinfootnoteswereaccessedinJanuary2025.
3See
/2021/08/22/daraz-revitalizes-the-e-commerce-ecosystem-with-
·100-recyclable-packaging-and-tree-plantations/
and
/fedex-sustainable-
warehouse-technology/
.
2
Policy
brief
#117
January2025
ofonecompanyreducedvehicletripsandcarbondioxideemissions.4However,suchmicro-levelfulfilmentcentresalsoposechallenges.Theuseofsmallersitesclosertoconsumersmayincreaseenergyconsumptionandinventoryacrossmultiplesitesandmightadverselyaffectthehealthoflocalpopulations.5Therefore,businessesshouldbalancelogisticsoptimizationandenvironmentalsustainability,byadoptingtechnologiesthatstreamlineinventoryandreduceexcessstock.
Recommendations
?Governments:Provideincentivesforrenewableenergyuseinwarehouses;andpromotelogisticscentresthatreducelast-miledeliveryemissions
?Businesses:Investinrenewableenergyandsmartwarehousemanagementsystems,tominimizeenergyconsumptionandemissions
Reducingpackagingandwastethroughinnovationandregulation
Excessivepackagingisahighlyvisibleelementofe-commerce.Goodspurchasedonlineoftenrequiremorepackagingthanthosepurchasedattraditionalretailcentres,toprotectindividualitemsduringtransit,increasingtheuseofcardboardandsingle-useplastics,aswellascarbondioxideemissionsandwaste.Forexample,intheRepublicofKorea,astudyfoundthate-commercegeneratednearlyfivetimesmorepackagingwastethanbrick-and-mortarretail.6Someinnovativepracticesinsustainablepackagingareemerging.Certaincompaniesshipproductsintheiroriginalcontainers,withoutadditionalpackaging.Forexample,inIndia,Amazonhasreplacedsingle-useplasticswithrecyclablepaper-basedmaterialsandinLatinAmerica,MercadoLibreusesForestStewardshipCouncil-certifiedpackaging,toensuresustainablesourcing.7Inaddition,Governmentsareincreasinglyregulatingpackagingwaste.Forexample,inChina,policieshavebeenimplementedtoreduceplasticsuseinlogisticsandinRwandaandothercountries,plasticbagshavebeenbanned.
Recommendations
?Governments:Strengthenrecyclingsystems;promoterecyclableand
biodegradablepackaging;andprovideincentivesforbusinessesusingeco-friendlypackaging
?Businesses:Userecyclablebiodegradablematerials;andadoptinnovative,waste-minimizingdesigns,suchasright-sizepackaging
4See
/news/jumia-opens-integrated-warehouse-facility-to-reduce-delivery-time
.
5BuldeoRaiH,2023,Urbanwarehousesasgoodneighbours:FindingsfromaNewYorkCitycasestudy,TransportationResearchInterdisciplinaryPerspectives,19.
6KimY,KangJandChunH,2022,Isonlineshoppingpackagingwasteathreattotheenvironment?EconomicsLetters,214.
7See
https://www.aboutamazon.in/planet/improving-packaging
and
https://sustentabilidadmercadolibre.
com/en/iniciativas/sustainable-purchasing
.
3
Policy
brief
#117
January2025
Reducingemissionsfromtransportationandlast-miledelivery
Transportingonlineorderssignificantlycontributestogreenhousegasemissions,particularlyduringlast-miledeliverytoconsumers.Emissionsareduetotheuseoffossil-fuel–poweredvehiclesandinefficientroutesandthedemandforfastshipping,whichoftenrequiresairtransportandroutesthatprioritizespeedoverthereductionofemissions.Incertaincircumstances,e-commercecanresultinlowerlevelsofemissions,forexampleifconsumerschoosehomedeliveryinsteadofdrivinglongdistancestobuyasingleitematastore.However,theuseofexpeditedshippingoftenoffsetssuchbenefits.Theprovisionofsame-daydeliverycandoubleemissionscomparedwithstandardshippingtimes.8Toaddresssuchchallenges,somee-commercebusinessesadopttheuseofelectricvehiclesandalternativedeliverymethods.Forexample,inChina,astudyfoundthatreplacingfossil-fuel–poweredvehicleswithelectricbicyclesforthelast-miledeliveryofbooksreducedemissionsbyupto71percent.9Governmentscansupportsuchshiftsbyinvestingininfrastructureforelectromobility,suchaschargingstations.Encouragingconsumerstochooseslowerdeliverytimesthatenableoptimizeddeliveryroutesandmoresustainabletransportmodescanfurtherreduceemissions.
Recommendations
?Governments:Promotetheuseofelectricvehiclesforlast-miledeliverythroughsubsidiesandinfrastructureinvestment;andcreatepublic
awarenesscampaignstoencourageslower,sustainableshipping
?Businesses:Investinlow-carbondeliveryfleets;andoptimizedeliveryroutesusingartificialintelligenceanddataanalytics
Reducingreturnrates
Returnratesine-commerce,particularlyforclothing,arehigherthanintraditionalretail,oftenduetoinaccuratedescriptionsandpoorsizing.In2022,returnsintheUnitedStatesofAmericaledto$816billioninlostsales.10Moreover,returnsinvolvepackagingwaste,transportationemissionsand,attimes,thedestructionofunsoldgoods,whichisparticularlyharmfulsincedisposalgenerates5–20timesmoreemissionsthanreuseorresale.11Innovativesolutionssuchastheuseofaugmentedrealitytechnologycouldhelpreducereturnsbyallowingconsumerstovirtuallytryproductsbeforebuying.Inaddition,someretailers,toencouragemoredeliberatepurchases,chargenominalreturnfees.InAfrica,Jumiauses“keep-and-refund”practices,reducingreverse-logisticsemissionsbypermittingcustomerstokeepcertainlow-valueitemsratherthanreturningthem.12
8See
/stories/how-online-delivery-in-asia-hurts-essential-workers-and-the-
environment
.
9ZhangLandZhangY,2013,Acomparativestudyofenvironmentalimpactsoftwodeliverysystemsinthebusiness-to-customerbookretailsector,JournalofIndustrialEcology,17(3):407–417.
10See
/media-center/press-releases/2022-retail-returns-rate-remains-flat-816-billion
.
11See
/circular-examples/frances-anti-waste-and-circular-economy-
law
.
12See
/news/jumia-shares-first-environmental-social-governance-report-highlighting-
its-current-sustainability-practices
.
4
Policy
brief
#117
January2025
Recommendations
?Governments:Bandestructionofreturneditems;andencourageeco-designprinciples,fordurableandrepairableproducts
?Businesses:Improveproductdescriptions;usedigitaltoolssuchasaugmentedreality;chargenominalreturnfees;andadoptimprovedreverse-logisticssolutions
?Consumers:Makeinformedpurchasingdecisionsbyreviewingproductinformation;andavoidover-ordering,toreduceunnecessaryreturns
Drivingchangethroughconsumerbehaviour
Consumerbehavioursignificantlyimpactstheenvironmentalfootprintofe-commerce.Theconvenienceofonlineshoppingdrivesoverconsumption,impulsivebuyingandthemakingoffrequentsmallpurchases,increasingemissionsandwaste.Marketingtacticssuchasflashsalesandpersonalizedadvertisementsfurtherexacerbateoverconsumption.Youngerconsumersareincreasinglyawareofenvironmentalimpacts;asurveyof16,000consumersin16countriesfoundthat,inacomparisonbydemographiccohort,over90percentofmillennialsexpressedconcernsaboutsustainability,comparedwithonly77percentofbabyboomers.13SuchawarenessoffersanopportunityforGovernmentsandbusinessestopromoteresponsibleshoppinghabits;Governmentscouldencouragethecreationofenvironmentallabels,tocertifysustainablee-commercepractices,enablinginformedchoices;andbusinessescouldoffereco-friendlyoptions,suchascarbon-reducedshipping,carbonoffsettingand/orminimalpackaging.
Recommendations
?Governments:Launchpublicawarenesscampaignsontheenvironmentalimpactsoffastshippingandoverconsumption;andintroduce
environmentalcertificationsfore-commerce,tohelpconsumersevaluateproductsustainability
?Businesses:Providetransparentenvironmentalinformationonshippingoptions;andofferincentivesforeco-friendlyalternatives
13See
/news/sustainability-conscious-consumers-leading-value-purchases-study/
.
5
Policy
brief
#117
January2025
Leveraginge-commerceplatformsforcircularity
E-commercehasanenvironmentalimpact,yetplatformscanpromoteresourceefficiencyandwastereductionbyenablingreuse,resale,swapsandtherentingofproductsandservicesbetweenindividuals.Doingsocanfacilitatethetransitiontocircularandsharingeconomies,easingpressureonscarceresourcessuchaswater,non-renewableenergysourcesandrawmaterials.14Platformsforclassifiedadvertisingenableconsumerstotradeusedelectronics,furnitureandclothes;inIndia,forexample,oneplatformreportedareductionofcarbondioxideemissionsby8milliontonsinoneyear,byreducingtheneedfornewproducts.15Innovativeapplicationsallowuserstoswapclothingandtrackenvironmentalbenefitswithanimpactcalculator,asusedforexampleinIreland.16Peer-to-peerplatformscanalsosupportthesharingeconomy,suchasthroughtheuseofride-sharing.However,reboundeffects,wherebythebenefitsofcircularandsharingsystemsarecounteractedbyincreasedoverallconsumption,canoffsetinitialenvironmentalgainsbyincreasingemissions.
Recommendations
?Governments:Establishregulationstomitigatereboundeffects
?Businesses:Advancecircularinitiatives,suchasbyofferingrepairsorpromotingresaleoptions
?Consumers:Participateinsharingsystems,prioritizingrepairsoverreplacementsanddemandingcircularity-focusedpolicies
Makinge-commercemoreenvironmentallysustainable
E-commercepresentsbothopportunitiesandriskswithregardtoresponsibleconsumptionandproduction.Makinge-commercemoreenvironmentallysustainablerequirescollaborationfromGovernments,businessesandconsumers,toaddresstheaspectshighlightedinthispolicybrief.Policymakersneedtocombineregulations,taxincentivesandothermeasures,toreducecarbondioxideemissionsandwaste,whilesupportingthedevelopmentdimensionofe-commerce.Consumersplayarole,byadoptingsustainablehabitsandencouragingbusinessestoprioritizesustainability.In2024,theGeneralAssemblyadoptedthePactfortheFuture,includingtheGlobalDigitalCompact,thegoalofwhichisaninclusive,open,sustainable,fair,safeandsecuredigitalfutureforall,withfiveobjectives,includingwithregardtodigitalinclusion;advancingdigitalinclusionrequiresapredictableandtransparentenablingenvironmentthat,amongotheractions,facilitatesthegrowthofe-commerce.Integratingsustainabilitywithe-commercegrowthcanhelpsupportenvironmentalandsocialgoals.Inaddition,environmentaldimensionsneedtobeemphasizedininternationaltradeagreements.Forexample,aprotocolondigitaltradeundertheAfricanContinentalFreeTradeAreaAgreementwasadoptedinFebruary2024;
14See
/development/desa/dpad/publication/un-desa-policy-brief-109-accelerate-action-
to-revamp-production-and-consumption-patterns-the-circular-economy-cooperatives-and-the-social-and-
solidarity-economy/
.
15See
/news/how-olx-india-users-helped-reduce-their-carbon-
footprint/article24078672.ece
.
16See
/fashion/2021/jan/29/reselling-repairing-and-swishing-the-rise-of-
sustainable-fashion-apps
.
6
Policy
brief
#117
January2025
implementationoftheprotocolcouldhelpstreamlinee-commerceoperationsacrossAfrica,fosteringcross-bordertradeandeasinglogistics.Inaddition,ajointstatementinitiativeone-commerce,negotiatedamong91membersoftheWorldTradeOrganization,isaimedatestablishingrulesfordigitaltrade.17However,atpresent,neithertheprotocolnortheinitiativehasmadeexplicitreferencetotheenvironmentalfootprintofe-commerce.Asafollow-uptobothprocesses,capacity-buildingeffortsneedtoaddressenvironmentalsustainability.Inthiscontext,UNCTADandotherinternationalorganizationscanprovidetechnicalassistance,fundingandtrainingwithregardtointegratingsustainabilitydimensionsintoe-commercestrategies.Doingsocanhelpempowerdevelopingcountriestoadoptmoresustainabletechnologies,improvelogisticsandpromoteresponsibleconsumption.ByfosteringcollaborationamongGovernments,businessesandconsumers,internationaleffortscouldcreateamorecohesiveglobalapproachtosustainablee-commerce,ensuringthatitsupportsbotheconomicdevelopmentandenvironmentalpreservation.
Policyrecommendations
Promotebettere-commercepractices
?Governmentandbusinesscollaboration:Governmentscouldcreate
regulationsandincentivesforsustainablepractices;andbusinessescouldinnovateandembedsustainabilityintooperations
?Sustainablewarehousingandtransportation:Governmentscouldpromoteresource-efficientinfras
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