As an example of ecommerce getting serious about the environment, Amazon is striving for net-zero carbon emissions by 2040. From transportation to packaging efficiencies, the e-commerce giant has a lot to do to reach its goal.
How can technology help Amazon achieve this milestone, with only two decades left to decrease its carbon footprint and a promise of speedy delivery to uphold? Scott Fletcher, President and CEO at LocatorX outlines the strategies that the company should be adopting.
Digital Journal: What environmental issues are facing e-commerce retailers?
Scott Fletcher: Many consumers see e-commerce as a greener alternative to traditional brick and mortar shopping due to a lower impact to the environment. Most research on this topic indicates that it’s still too early to tell from quantitative data. However, e-commerce retailers are still faced with how to minimize the environmental impact of large data centers, air emissions due to transportation via plane or truck, and impact of waste – whether packaging or unreturned products in our water supply or landfills.
DJ: How and why are e-commerce providers seeking to reduce their carbon footprint?
Fletcher: Sustainable data centers are a strategic priority for most e-commerce retailers as well as tech giants that support e-commerce such as Facebook. Amazon not only focuses on powering their data centers through 100% renewable energy but also through greater utilization of existing compute resources.
DJ: How can advances in technology help Amazon with its environmental goal of reaching net-zero carbon emissions by 2040?
Fletcher: Improvements in renewable energy, such as solar or wind, coupled with storage of excess energy with improvement in battery technology will help Amazon and others reach net-zero carbon emissions. Other innovations will continue to assist with the increased compute needs such as cooling of data centers – Facebook is pursuing innovative ways to cool data centers with State Point Liquid Cooling.
These improvements will help with the operations of technology providers; however, supply chains have a proportionately larger impact on the environment than operations. A study by McKinsey finds that the typical consumer company’s supply chain accounts for more than 80 percent of greenhouse-gas emissions and more than 90 percent of the impact to land, water, and biodiversity .
DJ: How can Amazon square its environmental ambitions with its aim to reduce delivery times?
Fletcher: Tradeoffs are a reality of any business and Amazon and other retailers are faced with many. However, for Amazon and others, sustainability isn’t just a marketing term. Buying data shows that consumers are voting for sustainability with their wallets – from 2013 to 2018 50% of CPG growth was related to sustainable products. Investing in technology that reduces delivery times through supply chain and distribution optimization can reduce waste such as the amount of fuel used. This is good for the bottom line of the business and also reduces the environmental impact.
DJ: What lessons can other retailers learn?
Fletcher: Investing in sustainability isn’t just good for the environment but it’s also good business. As mentioned earlier, supply chains play a unique role in sustainability; therefore, an important lesson is optimizing logistics from warehouse to distribution to consumer which requires context-specific insight into asset location and asset event data. Nanotechnology plays a key role in this approach. For example, LocatorX’s track and trace solutions allow manufacturers or retailers to apply smart tags with microchips or certified QR codes to provide every stakeholder of a tagged asset the ability to monitor each asset’s location, journey, and change of ownership. The data obtained such as distance traveled, fuel usage, product waste, or spoilage can be invaluable in making smart, environmentally-friendly decisions.
