Jun 14, 20198 min read

How To Make Your E-commerce Business More Sustainable Overnight.

Louise Lindberg headshot

by Louise Lindberg

Climate change is one of the biggest challenges that we’re facing today, and as all other industries, e-commerce plays its part. But the good news is that small changes can make a big difference. Learn more about what you can do and get inspired by other companies here.

The climate change discussion has scarcely passed by unnoticed. It’s a fact that it’s happening, but the bigger question is what we can do about it. Every one of us holds a share of the responsibility, of course, but even bigger changes have to take place in large organizations and companies. E-commerce companies might be doing their part, but companies higher up in the funnel – such as shipping companies, manufacturers and payment providers – have to contribute as well.

So Klarna, as a payment provider for more than 130,000 merchants, naturally plays a big role in the challenges we are facing. The good news is that as a digital company without physical products, Klarna has a limited direct climate effect. But that doesn’t mean there is no work to be done.

“Even though Klarna has limited physical products – our technology powers online commerce for hundreds of thousands of merchants and millions of consumers across the globe – our operations and growth contribute to global climate change. We, like other companies, cannot and should not avoid our responsibility, but like everything else we do at Klarna, we want to focus on finding solutions that add value and have a real impact”, says David Sandström, Chief Marketing Officer at Klarna.

When talking about climate change within e-commerce, the matter of transport inevitably arises.

“I believe that transport is a shared responsibility between merchants, payment providers, logistic companies and consumers. That’s why we have hired external expertise to help us improve at our end”, David Sandström continues.

Klarna is now aiming to be carbon neutral by the end of 2019, meaning that we need to do everything in our power to reduce our carbon emissions and compensate for the emissions we can’t reduce.

“Klarna selects suppliers with care and makes sure that all contractors take environmental and ethical responsibility. Deliveries are optimized by engaging fewer suppliers to cover multiple needs which reduces the number of shipments. Recently, we have started to change to more climate-friendly data centers and we are trying to take the train for more of our business trips, including to our next conference. But we have also made small changes at our offices like offering bikes for our employees to use when going between meetings and have vegetarian food as our preferred choice when ordering food. I know that this will not solve the global climate challenge that we are facing but they are all small steps in the right direction”, David Sandström says.

Return, reuse, repeat?

This discussion is in no way new – it has been going on for quite some time already and we are seeing more and more companies taking action for the environment. As David Sandström says, even though making small changes won’t solve the climate challenges we are facing, it is still a good start. While trying to figure out how to make a big change, you might as well make small ones along the way. Here are some examples of rather simple ways you can make your online shop more sustainable.

Reuse material
Many clothing companies are putting a lot of effort into reusing garments when making new clothes. H&M Group was first up and put garment collection boxes in their stores, where anyone can leave old clothes – regardless of condition and brand. When depositing your old garments, you will also be rewarded with a voucher from the store.
In the store &OtherStories you’re encouraged to drop off old packaging for beauty products that you have bought there, and when doing so, you’ll get 10% off a purchase in any of their stores.

Taking actions to decrease returns
Making returns when shopping online is both a convenient and necessary option for consumers. However, processing returns is not only expensive for companies, but it also has an environmental impact. That’s why online retailers are implementing various solutions to decrease returns volumes. Although free returns are popular among consumers, lately many merchants have started charging a fee. A reduction in costs might be the main driver behind this decision, but if it results in fewer returns then it’s good for the environment, too.

Another hot thing to do is to add some AR technology to your online store. Asos does it, so does Amazon, and Nike is at it too. Asos have an app where consumers, with help from AR technology, can see how clothing fits different sized people. They also have a tool where you can fill in your measurements to receive a recommendation on size for that piece of clothing.

This is quite a simple way to use AR technology, but some merchants have taken it further. The e-commerce giant Amazon and the clothing merchant Chiquelle are two examples of companies using AR technology to give their customers a picture of what clothing pieces will look like in reality – on their body! Using an app, customers are able to select their size and body type then take a selfie to create an avatar of themselves, which they can dress in the clothes they’re interested in.

Nike is also testing the newest technology to make online shoe fitting a real thing. When it’s time to select your shoe size in their online store, you will be given the opportunity to measure your own feet using your mobile, so that Nike can choose the right size for you. You just point your mobile camera at your feet, and let their technology do the rest.

Are you shipping your products wisely?

Sustainable shipping
When it comes to online shopping, consumers care about getting their products fast and at a good price. But how can companies get their consumers to focus more on the sustainability aspect and choose an environmentally friendly shipping method? Beauty company Kicks has the answer to that question.
They simply changed the order of their suggestions for shipping method, putting the most sustainable option on top. Before, most customers would choose the fastest shipping, but after making that small change, they have more customers going for the sustainable option.

Smaller packages
Big box for one small product, surrounded by paper and bubble wrap – does that sound familiar? Having oversized packages when shipping out products to customers has a negative impact on the environment. With smaller boxes, you can fit more packages into the vehicle, and are thereby able to ship more in one trip. Careful packaging means more products can fit through a letterbox, too.
This is something that Swedish entrepreneur Pär Svärdson noticed as a problem for his e-commerce companies Adlibris and Apotea.

“I personally place two orders a week from my store to experience exactly what customers are going through. That is enlightening. For example, I’ve realized that we put products in too large packages sometimes, too big to fit through a letterbox. Unnecessarily big packages delay delivery and are bad for the environment. By being a customer, I also noticed that we were using too much plastic, which led to a decision to cut our plastic filling by half and replace it with more sustainable materials if necessary. I also have a network of colleagues and friends who order things from us and report their experiences to me. It works really well. If they get poorly packaged products they send a picture to me. That happens too often. I send those pictures to our warehouse staff, and ask them what’s going on”, Pär Svärdson says in an interview for Klarna Knowledge.

Carbon offset
Many companies are trying to reduce the number of flights within their organizations by arranging meetings over Skype or Google Hangouts. Some companies, like Klarna, have rules about taking the train instead of flying for shorter business trips, and some have bikes at their offices for shorter journeys to meetings.
But there might be times when the only option is to go by plane, so how do you solve that problem? The short answer is carbon offset. This means reducing carbon dioxide or other greenhouse gases in one area in order to compensate for emissions made elsewhere. Carbon offset has become a popular way for companies to compensate for their carbon footprint.