Etsy Wants to Make Your Home Delivery Carbon Free

(Bloomberg) -- That bespoke necklace or twee craft you buy on Etsy Inc.’s marketplace now comes with a pledge that some of the fuel burned to get it to your door is being offset by green investments.

The New York-based e-commerce company said Wednesday that it will begin buying carbon offsets to manage the environmental impact of sellers and buyers shipping items sold on its website, becoming what may be the first U.S. e-commerce firm to take that step. Carbon offsets let a company that emits greenhouse gases buy credits from a green project that’s reducing carbon in the atmosphere.

“The free shipping we’re used to actually isn’t free,” said Chelsea Mozen, sustainability lead at Etsy. “When people think of the environmental impact from e-commerce, they immediately jump to packaging—but emissions from shipping has a big environmental cost.”

Etsy, which said it’s been calculating its emissions since 2013, said buyers and sellers on its website generated 135,459 metric tons of carbon dioxide equivalents from shipping last year, or about 98 percent of the company’s entire carbon footprint. That’s the same amount of emissions from the electricity used to power more than 23,000 homes for one year.

To calculate the figure, the company looked at the weight of packages and distances between buyers and sellers. Then it added an estimate of additional emissions generated by roundabout routes, Mozen said. The company said it also hired auditor PricewaterhouseCoopers to check its work.

Etsy would say only that it plans to spend several hundred thousand dollars on the initiative this year. Projects it plans to help fund include those aimed at protecting forests, generating wind power and developing lower-emission auto parts. The company estimated that the cost to consumers of these offsets will be less than one penny per package.

The move comes as e-retailers are starting to pay more attention to the environmental cost of fast, free shipping, an option that’s increasingly offered with purchases. More than 100 billion packages a year are expected to be shipped worldwide by 2020, according to Pitney Bowes, and that rate has been growing by 17 percent to 28 percent a year.

And just as the food industry recognizes the commercial value of organic and humane labeling, it’s arguable that e-commerce companies will benefit by promising consumers they’re making an effort to combat global warming.

Etsy said it estimated that the entire U.S. e-commerce sector generates about 55,000 metric tons of carbon dioxide equivalents per day from shipping.

Most e-commerce firms don’t report any information about their greenhouse gas emissions, though Amazon.com Inc. said earlier this month that it would report its carbon footprint for the first time later this year, and promised to improve its processes to make half of its shipping carbon neutral by 2030.

Carbon offsets are usually seen as an indirect way to reduce carbon emissions because the offset buyer isn’t making outright reductions in fossil fuel burning. Etsy said that its unique structure leaves it at the mercy of buyers and sellers, who make their own choices about shipping methods.

“Even though we don’t directly control that shipping, we feel responsible for it because we’ve enabled it,” Mozen said. “We want consumers to know what responsible e-commerce can look like.”

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