The Green Way Forward

Mark Freidin

13th Jul 2010

The Green Way Forward

Online retailers in Australia have been slow to adopt initiatives that help the environment.  What is being overlooked, apart from the responsibility retailers have to care about important social issues, are the benefits that ‘going green’ can generate for a retailer’s bottom line.

In the U.S. all major retail companies, including online retail giant Amazon.com , have developed strategies to reduce their carbon footprint.  A 2009 U.S. survey shown below identifies a significant percentage of consumers, across a broad range of demographics, who will actively choose to shop at one store over another because the merchandise or operations were green friendly.

2009 Greentailing Survey from the NRF’s Sustainable Retail Consortium and clear Thinking group/McMillan Doolittle URL: http://www.eyecarebiz.com/article.aspx?article=104262

A 2010 Australian survey of 1000 shoppers showed that 84% are concerned about the impact of their purchasing decisions on the world.  In addition, 80% of the same survey agreed that they thought about environmental and green issues when shopping.

2010 AFGC/Netbalance Green Shopper Summary Report 2010 URL: http://www.afgc.org.au/doc-library/category/13-events-sponsorship.html?download=167%3Aafgc-green-shopper-survey-2010

Here in Australia we currently have the government initiating a policy platform that is aimed at imposing stricter environmental regulations on industry.  The resulting public awareness of environmental issues presents an opportunity for online retailers to enact changes before the regulatory process concludes, which will enable them to be seen as progressive instead of reactionary.  The above statistics suggest that companies that adopt environmental practices are more likely to improve their bottom line and increase the level of satisfaction enjoyed by their customers by simply introducing better environmental practices when compared to their competition.

A new service in Australia named DeliverGreen that has been developed by Impact Balance is a free green service for online retailers.  What DeliverGreen does is calculate the carbon emitted from the delivery of online purchases and it provides the customer with the option to offset this pollution through the purchase of carbon offsets.  The calculation uses the distance the package has to travel, the mode of transportation and average package size to determine the environmental impact of the delivery.  The customer is presented instantly with an offset total which they can voluntarily add to the purchase total in their shopping cart. For those customers who choose to offset their pollution, the cost to offset will never exceed the tens of cents. 

This is an innovative approach from the retailer’s point of view because the cost of ‘going green’ is assumed only by those customers who want to participate while the overall benefits of ‘going green’ are still generated for the retailer to enjoy.  This is not an unproven model, the airline companies in Australia have been using it for years and consumers are familiar with it.  Virgin Blue recently celebrated its millionth carbon offset customer.

All carbon credits purchased are Gold Standard which means they meet the requirements of the Kyoto Protocol’s Joint Implementation and Clean Development Mechanism guidelines.  DeliverGreen also allows customers to track what projects their contributions were committed to on their website.  The solution is not invasive and is presented in the same way a gift wrapping service would be.

Green is the way of the future for Australian online retailers.  Going green will enhance a retailer’s reputation and increase the loyalty of current customers.  It will also provide a competitive edge over other retailers that have not adopted environmental practices.  It is not a question of whether trends will move the online world towards green practices, but rather it is about who is quick enough to see the benefit of getting ahead of the curve.