Like a lot of organizations, executives at ecommerce website Etsy are concerned about their company’s operational impact on the environment. Founded in 2005, Etsy’s global marketplace features unique handcrafted pieces and vintage items sold by 2.1 million active sellers, 87 percent of which are women. More than 60 percent of its sellers are under 45; 80 percent are sole entrepreneurs with no other employees and 97 percent operate their businesses from their homes.
Most items ship directly from sellers to buyers, which presents a challenge: The sellers control how purchases are sent, and are limited by the fact that shipping items on emissions-free trucks and planes is not yet a widely available option.
“Since we don’t ship the goods it is nearly impossible to make reductions in our carbon footprint,” says Chelsea Mozen, head of sustainability for Etsy. “But we can offset our carbon emissions with positive efforts.” Each time someone buys an item on Etsy, the company automatically purchases verified emissions reductions, known as offsets, from energy and carbon offset firm 3Degrees.
Etsy has had long-standing initiatives to reduce its footprint, installing solar panels at its offices and running zero-waste operations globally in 2018. Its offset purchases also include initiatives such as sponsoring wind and solar farms and development technology for a cleaner method of producing auto parts.
CONSERVATION AND WIND POWER
Taking the idea a step further, Etsy paid for shipping emissions offsets for the entire U.S. ecommerce business sector for one day in February. It estimates there are about 55,000 metric tons of carbon dioxide emitted each day into the atmosphere in the United States alone from delivering packages associated with online orders.
“With shipping projected to play an increasing role in global emissions, there is a pressing need for both the public and private sectors to play a role in addressing this society issue,” says CEO Josh Silverman.
Company executives estimate the offsets cost less than a penny per package, and Etsy absorbs the cost. “When we looked at the costs of these projects and the benefits, we asked why everyone isn’t doing this,” Mozen says.
Among the offset programs Etsy has worked on is the UPM Blandin Native American Hardwoods Conservation Project, which is expected to conserve more than 10 million trees in a 188,000-acre forest in Minnesota. The project not only absorbs carbon dioxide from the air, it also helps protect biodiversity and wildlife and improves local air quality, creates a space for local recreation and increases the supply of sustainably sourced forest products.
Another effort is a windmill farm in India. As part of the Giriraj Wind Power Project, Etsy’s investment will help displace reliance on coal, diesel, furnace oil and gas combustion in a region where electricity demand is increasing. The Solar Grouped Project by ACME invests in 11 solar developments across India to replace energy from power plants; another project involves replacing fuel sources at an automotive parts firm in Michigan. The Meridian Magnesium SF6 Reduction project supports new technology that reduces a greenhouse gas that is nearly 23,000 times stronger than carbon dioxide.
In addition to those projects, Mozen says Etsy continues to push lawmakers to pass legislation that would reduce emissions impact. And while Etsy itself cannot completely control how its sellers ship goods, it has started to work long-term with them on efforts toward carbon reduction, Mozen says.
Etsy has a long history of working to help the environment. In 2016, the company began running its data and computing center on renewable energy. It has goals of zero waste by 2020 and a 25 percent reduction in all energy use for 2025.
Both Etsy and 3Degrees believe more retailers and other businesses will follow Etsy’s lead in using carbon offsets. “We definitely have seen an uptick in companies reaching out to 3Degrees after reading Etsy’s announcement,” says Rachel Fagan, senior director of integrated marketing for 3Dgrees. “Since the transportation sector represents the largest source of emissions globally, it’s important that more organizations are aware of the problem and take action to address it.”
That’s why Etsy’s leadership is so important in the ecommerce sector, Fagan says. “Etsy’s leadership in this sector is raising awareness and helping to catalyze broader industry change, which is exactly what we need to combat climate change,” she says.
Shippers of goods are among the companies most important to achieving carbon reduction. “The electricity sector has historically been the single-largest emitter of carbon dioxide emissions,” Fagan says. “However, in 2017, the transportation sector took the lead as the largest source of emissions. The surge in ecommerce obviously contributes to this dynamic, so it’s critical for companies like Etsy to step up and take action to mitigate that impact.”
Among other projects, last year 3Degrees worked with ride-sharing company Lyft to make all of its rides carbon-neutral worldwide.
Lauri Giesen is a Libertyville, Ill.-based business writer with extensive experience in covering payment and finance issues.