Companies are offering consumers carbon offsets for shipping. How effective is it?
  • Companies are offering consumers carbon offsets for e-commerce, which has increased during the pandemic
  • How companies green their supply chains and use carbon offsets to fill gaps shows whether their eco-friendly commitments are not just good PR
  • The UN’s Race to Zero sets ambitious carbon-neutral targets for companies and governments to reach by 2050

It’s easy to write off purchasing carbon offsets for a carbon-heavy activity as a cop-out. In the last few years, Prince Harry, Leonardo DiCaprio, and other celebrities vocal about climate change have come under fire for purchasing carbon offsets for flights on private jets. 

These days, travel is less of a concern for environmentalists. Thanks to lockdowns and quarantines, the coronavirus pandemic could cause an unprecedented 8% drop in carbon emissions before the end of the year. 

Those same factors are driving an increase in e-commerce — and more and more companies are offering customers a carbon offset option for shipping at checkout. Last year, online marketplace Etsy launched an effort to offset 100% of their carbon emissions, recognizing that they could not control the shipping practices of the individual artisans using their platform. 

That, according to experts, is the key to making carbon offsets meaningful: first ensuring that the company has already taken steps to green itself. 

“What people should be looking for are strong science-based targets that companies are taking for decarbonizing their own operations and their own supply chains,” said Kelly Levin, a senior associate at the World Resources Institute’s global climate program. “Depending on the company, there might then be some residual emissions that are harder to reduce and could be offset.”

There isn’t a straight answer for whether mailing a package is more carbon-neutral than driving to a store to buy it. “The emissions impact of mailing a package depends on a whole host of factors — the delivery routes, the packaging used,” Levin said. 

The other key, according to Levin, is making sure that any carbon offset purchased is funding an activity that would not have happened otherwise. “Thus far, we’ve seen many customers who have long-standing programs and public sustainability commitments in these sectors maintain those commitments,” said Stephanie Harris, director of carbon markets at 3 Degrees, which counts Etsy among its clients. “Additionally, we actually anticipate some growth in demand from sectors such as food and beverage and e-commerce.”

The most common offset is planting a tree, but Cloverly, a carbon offset company that works with e-commerce platforms like Shopify, sees more complex options in the future.

“In the coming years, we expect to continue to see an incredible amount of creativity and innovation in the offset space,” said Cloverly CEO Anthony Oni. “For example, we’re currently exploring a partnership with a ‘sea forest’ company that works to protect and grow underwater kelp forests, which naturally sequester carbon dioxide.” 

A survey by Salesforce Research in mid-May found that 44 percent of respondents making more of their purchases online, and that 63 percent expected to continue favoring e-commerce over brick-and-mortar visits even after the pandemic is over. For Millennials and Gen Z, that number is closer to 75 percent. That growth seems to be tracking with the increased popularity of voluntary carbon offsets, already a $300 million market before the pandemic. 

Cloverly was among the carbon offsetters that saw a spike: “We witnessed a surge in e-commerce activity throughout March and April, and, despite COVID-19, we saw considerable, week-by-week growth in ‘green, carbon-neutral’ transactions with companies using our platform,” said Oni.

Friday’s announcement of the UN’s Race to Zero initiative, which aims to get thousands of companies and countries to commit to net-zero emissions by 2020, is another potential boon for the market — especially with the COP26 climate policy gathering delayed until November 2021. 

“It shows the pathway that companies, cities, and countries would be committed to in a much longer-term way then these rounds of nationally-determined contributions, like the country pledges every five years or so,” said Levin. 

Both Harris and Oni expect companies to use carbon offsets to address the stickiest parts of their supply chains, including shipping. “To realistically achieve net-zero emissions by 2050, all companies must forge their own paths to carbon reduction,” said Oni.

“We expect these organizations to use carbon offsets both as a near-term option for addressing these emissions, but also as a funding mechanism and structure for longer-term solutions,” added Harris.