Stakeholders need to work together to make e-commerce more environmentally sustainable, including undertaking initiatives focused on responsible and sustainable sourcing, energy-efficient logistics and production processes, and eco-friendly packaging and delivery solutions, according to a UN Conference on Trade and Development (UNCTAD) report.
UNCTAD has released its Digital Economy Report 2024 underscoring the urgent need for environmentally sustainable and inclusive digitalization strategies.
“As e-commerce continues to expand, understanding its various sustainability challenges, especially for goods, is crucial. E-commerce has reshaped consumption patterns and logistics, with multiple environmental effects. Precise impact assessments are hindered by data limitations. But e-commerce presents both opportunities and risks — from warehousing and storage to transportation and logistics, packaging, returns and consumer behavior,” it said.
Complementary roles
The report said governments and businesses have complementary roles in advancing environmental sustainability.
Governments can establish regulatory frameworks, provide incentives and engage in international cooperation, it said.
Businesses, on the other hand, can drive innovation, adopt sustainable practices and engage with stakeholders to integrate sustainability considerations into their operations and strategies, it added.
“Sustainable warehouse practices are essential for reducing environmental impact and promoting resource efficiency within e-commerce. Governments can adopt economic incentives, such as tax rebates and reduced VAT (value-added tax), to encourage e-commerce companies to invest in resource-efficient infrastructure and effective waste management in warehouses,” the UNCTAD report said.
Energy-efficient solutions
Meanwhile, businesses should invest in energy-efficient solutions. This may involve installing energy-efficient lighting and opting for renewable energy sources, such as solar or wind power, to power warehouse operations.
“Businesses should also implement good practices to effectively manage waste, for example by optimizing inventory management to minimize overstocking or reducing packaging waste. They should also seek to separate different types of waste to facilitate recycling and proper disposal, and regularly monitor waste generation and disposal practices to identify opportunities for improvement,” it added.
The report also underscored the need for both governments and businesses to address employment, safety, and working conditions for warehouse workers to ensure social sustainability across the supply chain.