Etsy, the global marketplace for crafters, doesn’t control how its sellers ship their products. But the company realized that emissions from shipping make up the vast majority of its carbon footprint—and last year, it became the first major online retailer to fully offset its shipping emissions.
So far, since the program began in February 2019 through the end of March 2020, the company has invested in projects that offset 173,000 metric tons of CO2, for which it won the North American region category in Fast Company’s 2020 World Changing Ideas Awards. “It just felt like something that we could do right away immediately to acknowledge the urgency of the crisis,” says Chelsea Mozen, Etsy’s sustainability director. “And then also just put a flag in the ground around the fact that we take responsibility for this footprint and want to address it.”
The company is also working on ways to shrink emissions directly. Designers are working on ways to highlight local items, for example, since longer distances equate to more energy use. Etsy is also working with other retailers to figure out “what we can do to move toward a zero-emissions delivery future,” Mozen says. And it’s also actively advocating for broader change.
“I really think probably the most important thing that companies can do is work on public policy around this,” she says. “This is something that impacts all of society, and it will be really hard for businesses to make individual moves around this.” The company backed, for example, the Transportation and Climate Initiative, a regional policy in the Northeast to reduce emissions from transportation by setting a cap on total emissions and using process to invest in cleaner, low-carbon alternatives. In New York, where the company is based, it supported a new law that sets the state on a path to zero emissions by 2050. Etsy staff also visited federal lawmakers last year, along with other tech companies, to talk about carbon pricing.
As the logistics industry begins to change—with companies like UPS and Amazon investing in electric delivery vans and scaling up other solutions to cut emissions—Etsy argues that it makes sense for online retailers to offset shipping emissions completely in the meantime. The first step involves estimating what those emissions are; since Etsy doesn’t ship the products on its platform, it looks at data including the distance between a seller and buyer for each order and the expected weight of the item. “It’s not challenging, but you do have to take some time to do it, and you have to be committed as a company to reporting on it,” Mozen says. (The data is assured by PwC, along with other emissions data that the company reports with its financials in its 10-K filings.)
With the emissions data in hand, the company works with 3Degrees, a renewable energy and carbon offset company, to invest in projects that help reduce emissions elsewhere, such as a forest conservation program in Minnesota, wind and solar projects in India, and technology that reduces emissions from making auto parts. The cost is less than a penny per shipment.
The order checkout page says “Etsy offsets carbon emissions from every delivery.” When the company first made the change, they didn’t know how customers would respond. “The cart is a sensitive place—you don’t really want to mess with too much or make it confusing,” says Mozen. When the company ran a test with the new phrasing, they were hoping for a neutral result. But conversion rates increased. “I think it’s real proof that buyers care,” she says. “I mean, a lot of market research out there says buyers care more and more. They’re looking for options for sustainability. They want companies to help make it easier for them to shop more sustainably. That market research is one thing, but for a company to actually know how their own buyers and consumers will respond is a different thing.”