L’ecommerce continues to grow but its sustainability deserves attention, as shown in the study ‘E-commerce and the EU Green Deal‘ (Luena Collini, Pierre Hausemer et al., 2022) carried out by VVA – Thematic Unit for Economic, Scientific and Quality of Life Policies – for the European Parliament, IMCO Commission (Internal Market and Consumer Protection). (1)
Sustainability ofecommerce
The study aims to provide information on the role of e-commerce in the implementation of the European Green Deal and EU policies to protect consumers. (2) In particular, it is proposed to.
- Analyze how to maintain high standards of consumer protection when grappling with online sales. The report examines the subject only with regard to Business to Customer (B2C) and Customer to Customer (C2C) transactions for used goods, excluding those between traders (B2B),
- Screening the environmental footprint ofecommerce,
- Assess the role that e-commerce plays or could play in implementing the European Green Deal,
- Propose tailored policy recommendations to address the problems identified by the study.
1) Online consumer protection
On the consumer protection front, there is indeed much to be done.
‘In general, consumers have limited knowledge of unfair practices existing in digital environments. In addition, many consumers are not aware of their rights. (…) More than one-fifth of EU consumers do not feel confident about their rights. An additional 20% reported not knowing how to file a complaint when they encounter a problem with a seller‘.
Europeans buying online, moreover, is increasing. Lockdowns imposed in the Covid era have madeecommerce commonplace, albeit with great differences from country to country.
1.1) Online shoppers doubled in 10 years
According to Eurostat, ecommerce purchases have risen from 13 percent to 20 percent, of business turnover in the EU, between 2010 and 2021. The share of European consumers buying on the Web has in turn increased from 27 percent to 57 percent over the same period.
The sudden surge in demand during the first phase of the Covid-19 epidemic (March-May 2020) was followed by a brief physiological decline. Soon recovered, as early as November 2020, by a further increase in long-distance purchases to the levels of the previous May.
1.2) The geography of users
The propensity forecommerce in different member states varies widely. In 2021, more than 80% of people in the Netherlands and Denmark have purchased a product or service online in the previous 3 months. The percentage drops to less than a quarter of people in Bulgaria (20 percent) and Romania (23 percent). In Italy the share is 40 percent, as in Portugal.
Clothing has been the most popular category of online purchases so far (39 percent of shoppers), followed by streaming movies or series (18 percent), food and furniture (18 percent each). More significant growth is expected in the next five years in other sectors, such as food and personal care.
1.3) The prevalence of online ‘markets’
Consumers mostly reward ‘virtual marketplaces’ such as non-EU giants Amazon, eBay, Wish and Alibaba/Aliexpress. As well as Poland’s Allegro and Germany’s Zalando.
These platforms account for two-thirds of the top 1,000 sites visited. And they are seen as a driving force for smaller companies, which can ‘jump on board’ to expand their ecommerce by delegating challenging tasks such as payment processing, marketing, logistics and quick delivery.
1.4) The pitfalls of the web.
So much business growth, however, has not generated as much respect for consumer rights. Unfair and deceptive trade practices mainly concern the provision of information. As also repeatedly denounced by our website GIFT(Great Italian Food Trade).
The research indicates three types of unfair practices, in defiance of European consumer protection regulations.
(a) Incomplete information
The omission of important information about the product or service, lack of price transparency (shown without delivery charges), or the provision of misleading information designed to influence consumer choice are widespread. (3)
A 2019 survey of 481 websites found omissions on:
- Right of withdrawal within 14 days (more than 25% of cases),
- 2-year warranty to have a defective good repaired, replaced or refunded (33%),
- connection to the online dispute resolution platform (more than 45%).
Equally serious is the failure to disclose the identity of the seller, with the various implications in dealing with critical issues (EU, non-EU). And fake reviews, which sneakily condition the buyer.
(b) Dark pattern
The expression dark pattern includes various forms of overpowering, based on interface design.
Such is the case with the unsolicited addition of items to the shopping cart, the opaque invitation to subscribe to repeated purchases of the same product over time (e.g., one bottle per month instead of a single supplement), the difficulty in finding ways to unsubscribe from a newsletter or to contact the complaint service. And again, the use of complicated or verbose language to provide important information (without thereby violating consumer law rules), the requirement to surrender one’s data to continue, invisible X’s to close a pop-up, etc.
(c) User profiling
User profiling, with sharing in Big Data of data that AI (artificial intelligence) processes to select advertisements, could go as far as defining the maximum price an individual consumer is willing to pay for a good or service.
In the context of web-based commerce ‘it is more important to define how, not what, information is provided,’ the study authors remind. Increasingly refined deceptive techniques also foolecommerce users with regard to the sustainability of the operation(greenwashing), with misuse of terms such as ‘sustainable,’ ‘green,’ ‘green,’ etc.
2) The environmental footprint ofecommerce
Comparing the environmental footprint of the two trade models (physical and digital) does not arrive at an unambiguous answer.
‘The dichotomy between online and offline retail has become increasingly blurred, and the environmental footprints of these two business models are becoming intertwined,’ the study authors report.
Online service delivery is peacefully more environmentally sustainable. The need for the user to use a car (or other means of locomotion) is eliminated, and consumption to set up and maintain offices, locations, and stores is reduced. Although it also seems appropriate, we add, to consider the impact on employment and human relations.
2.1) Physical point of sale vs ecommerce
Selling goods vice versa has pros and cons, in different sales channels, including in terms of sustainability. The physical store involves the ‘costs’ just mentioned of moving the customer and maintaining the premises.
Online commerce, in turn, lacks for
- Excessive use of additional packaging than the primary packaging in which the product is packed, also added to protect the contents from inevitable shocks during transport,
- CO2 emissions for deliveries (particularly, for the more onerous last mile, to the buyer’s home), attempted deliveries (for absent recipient) as well as for transporting returns, in some cases destroyed, further wasting resources and pollution.
Finally, the energy consumption of the web is no less impactful than that required by physical outlets.
‘Electricity consumption is the basis for traffic, data processing and storage, as well as ensuring interconnectivity with various devices. This is exacerbated by the fact that as technology develops (enabling faster high-speed Internet) and the e-commerce market becomes more sophisticated, the services offered by online platforms become increasingly data-intensive. For example, to incentivize purchases, platforms seek to provide interactive interfaces, video, audio, high-resolution photos, and virtual models, all of which involve higher power consumption due to increased data transfer requirements’.
2.2) Sustainability aspects ofecommerce
Online platforms , on the other hand, have certainly made a good contribution to the circular economy through
- used-goods exchange(re-commerce), which includes trading between private individuals in second-hand items, as well as reconditioned items (electronics, especially),
- greater ease in finding replacement(aftermarket) parts to repair, rather than throw away, failed products, even for those living in remote areas with no specialty stores,
- sharing consumption(sharing economy), such as offering car rides with participation in the cost of travel (Blablacar), renting and subletting private rooms (Airbnb), and renting household items (Peerby).
On the most impactful phase, last-mile deliveries, measures such as collection points and digital lockers spread throughout the territory, where consumers can go independently, have already been activated. More efficient in any case would be the adoption of zero-emission electric vehicles, according to the revolution initiated by the Central Tuscany Freight Village.
A few initiatives (LimeLook, Re-Pack, Loop, etc.) intend to reduce the harms of overuse of packaging by providing for reusable, free-return packaging for consumers. However, such measures are judged to be of little use in reducing the environmental impact ofecommerce.
2.2) How to measure environmental footprint
There is currently no standard for measuring the environmental footprint ofecommerce. Three criteria are used, which may also overlap in the analysis:
- academia and scientific community mainly use an almost exclusive focus on logistics and distribution,
- scientific community and policy makers use standard methods, such as environmental, social and governance (ESG) reporting. These standards focus on the Life-Cycle Assessment (LCA) of the product or the environmental footprint of the organization,
- industry and traders mainly use information that is easy to communicate to the consumer, sometimes comparable. These are usually simplified product-level sustainability certifications (e.g., energy labeling).
Overall, the three macro criteria are insufficient to calculate the environmental footprint (thus sustainability) ofecommerce, warn the study authors. Although product or organization life cycle assessment is more valuable than certification schemes.
3)Ecommerce and the Green Deal.
The adequacy of theecommerce to the sustainability goals of the Green Deal is still halfway there. ‘From a legislative point of view, there is no comprehensive and integrated EU policy instrument that covers the sustainable production and consumption of all products, nor the availability and reliability of information about these products for consumers’.
Several sustainability initiatives are on the horizon with regard to production and sales criteria (e.g.
due diligence
), as well as on the information and consumer protection front.
4) The necessary actions
In light of the problems highlighted, the authors of the study point to 4 areas of EU action to
– Ensure that existing legislation is respected in the digital space. This involves supporting national authorities to enforce existing rules, monitoring online practices with digital tools, and providing support for businesses to comply with existing rules,
– Improving information to consumers to enable them to make better decisions. In particular, harness digital innovation to facilitate consumer access to information about the sustainability of their ecommerce purchase while ensuring their protection,
– Incentivize consumers and businesses to be more sustainable. Therefore, support the role of e-commerce in promoting repair and reuse over replacement and promote the emergence of independent repairer networks,
– Ensure the reliability of sustainability information in the ecommerce channel as well. A goal that requires the harmonization ofecommerce environmental footprint assessment methods and ensuring that they are communicated to consumers in a simple and transparent way.
Cover image from EAV 2Cubed: Electric cargo vehicle for last mile delivery. Startup selfie. 26.3.21
Notes
(1) E-commerce and the EU Green Deal. December 2022 https://www.europarl.europa.eu/RegData/etudes/STUD/2022/734013/IPOL_STU(2022)734013_EN.pdf
(2) Dario Dongo. European Green Deal, the new EU strategy. Égalité. 13.12.19,
(3) Bad practices are even encountered on food ecommerce platforms, which deny the buyer basic information (ex EU reg. 1169/11), such as ingredient list or price per kg/l, even preventing comparison between products. Common cases in Italy as well, as vainly reported by this portal to the Antitrust Authority.
Professional journalist since January 1995, he has worked for newspapers (Il Messaggero, Paese Sera, La Stampa) and periodicals (NumeroUno, Il Salvagente). She is the author of journalistic surveys on food, she has published the book "Reading labels to know what we eat".
