Pesticide Action Network (PAN) UK, Solidaridad and WWF have released the list of companies that will be assessed in the new round of their Sustainable Cotton Ranking to be published in October 2017. The second edition of the ranking will include major companies from all continents, including from countries such as China and Brazil, and online companies such as Zalando and Amazon. As in 2016, the ranking will score companies on their policy, traceability and actual uptake of sustainable cotton.
On the Target List
This year the scope of the ranking will be broadened. The target list of companies (PDF) has been expanded to offer a more global representation of consumer-facing companies estimated to use more than 10,000 metric tons of lint cotton annually and include companies from emerging markets and online retailers.
Creating a list of the largest corporate cotton users is challenging as most companies do not publish the volumes they use in their products. PAN UK, Solidaridad and WWF welcome feedback from any companies who believe their cotton use has been under or over-estimated, as well as those whose may have been omitted from the list and wish to be included.
Scoring Company Progress
The first Cotton Ranking (PDF) published in 2016 showed that the majority of companies using most cotton globally were failing to deliver on cotton sustainability, with just eight companies out of 37 showing positive progress in the ranking.
By conducting a second Cotton Ranking in 2017, PAN UK, Solidaridad and WWF expect to see that more companies have taken steps forward on their sustainable cotton policies, traceability and sourcing. As transparency and accountability to customers is considered paramount by the three NGOs, only publicly available information will be used in scoring company performance. The report will be published in October 2017 so as to take into account companies’ public reporting on their 2016 performance.
Updating Market Trends
The report will also include a market update on the available supply and uptake of cotton from the main cotton sustainability standards (organic, Fairtrade, Cotton Made in Africa and Better Cotton). While around 10% of global cotton supply was grown according to one of these standards in 2014, less than a fifth of this amount was actually being bought as more sustainable cotton, with the rest being sold as conventional due to lack of demand from top brands and companies.
Thirty-seven companies estimated globally to use the most cotton in their products were scored on their sustainable cotton policy, sourcing, and traceability. Only publicly available information was used in scoring company performance.
The Cotton Ranking focuses on companies rather than individual brands as, while sustainability practices can vary significantly between different brands, entire companies need to change sourcing practices in order to transform cotton production.
Cotton is grown in around 80 countries worldwide and is a key raw material for the textile industry, accounting for around 32% of all fibres used. Sustainability issues include the widespread use of pesticides, with 6.2% of global pesticide sales associated with cotton production (which uses just 2.3% of the world’s arable land), and intensive water use, with 73% of global production currently dependent on irrigation.
While many smallholder cotton farmers are driven into debt by the cost of pesticides and fertilisers, sustainable cotton production has the potential to lift farmers out of poverty by providing a more stable income and improving working conditions.
A number of sustainable cotton standards have been developed in the last 35 years, starting with Organic cotton in the 1980s, followed by Fairtrade in 2004, Cotton made in Africa (CmiA) in 2005 and the Better Cotton Initiative (BCI) in 2009. All provide guidance and support for farmers and seek to assure retailers and consumers that the cotton in the products they buy are being produced using sustainable farming methods.
The supply of sustainable cotton has never been greater (estimated to be at 13% of global supply in 2015) but uptake by companies, essential for mainstreaming sustainable cotton, remains low at approximately 17% of what is available.
While online heavyweights are quick to boast about the environmental impact of e-commerce, this holiday shopping season millions of eco-conscious consumers face a largely unanswered question.
As the gift-giving season ramps up, so too does the battle between brick-and-mortar and digital retailers for holiday dollars. But given that consumers play an increasingly crucial role in the effort to combat global warning, is e-commerce or traditional retail greener?
Online heavyweights are quick to boast about the environmental benefits of e-commerce. On its site, Amazon declares: “Online shopping is inherently more environmentally friendly than traditional retailing.” While conventional knowledge might suggest so, several studies published in recent years indicate that the reality might not be as black-and-white as Amazon claims.
The carbon footprint (greenhouse gases emitted as a consequence of an individual’s activities) generated while shopping is dependent upon a range of factors, from IT infrastructure and packaging to vehicle emissions. For instance, brick-and-mortar shoppers in the cycling-friendly Netherlands may yield lower carbon emissions per person than in the American Midwest, where people are more dependent on their cars.
Unable to account for every particular hypothetical scenario, researchers have studied consumer patterns through the use of the following archetypes:
The Traditional Shopper
The Traditional Shopper is one whose shopping journey is conducted entirely in-person, from search to purchase to return. With no use of e-commerce, the Traditional Shopper represents a shrinking demographic. According to research from MIT’s Center for Logistics and Transportation, customer travel accounts for more than 75 percent of greenhouse emissions in this wholly-offline process, yielding approximately 3.1kg carbon dioxide per journey by the average Traditional Shopper in an urban centre.
More minor emissions come from packaging and the overheads of displaying goods in-store, as well as returns. According to Accenture, apparel will account for 78 percent of gifts in the US during the upcoming holiday, making returns a significant factor. While an optimised parcel pick-up for an online return yields a minimal contribution in greenhouse emissions, an individual physically driving back to the store is much worse for the environment.
The Cybernaut’s shopping journey is conducted entirely online: from researching products to payment, to arranging a return.
Despite the proliferation of e-commerce across the retail landscape, Deloitte’s research shows that only 12 percent of US consumers are not planning to visit any traditional retailers during the holiday season.
According to Dr. Alexis Bateman, director of the Responsible Supply Chain Lab at the MIT Center for Transportation and Logistics, “Major emission factors [for the Cybernaut] include greater IT infrastructure to support computing, [which supports] e-commerce, [and] increased packaging in some cases.”
Nevertheless, by completing all steps online, the Cybernaut bypasses travel to and from stores, greatly reducing greenhouse gas emissions, and yielding a carbon footprint approximately 50 percent lower than that of the traditional shopper.
The Modern Shopper
While the above two models represent pure paths for the consumer, they are archetypes that fail to accurately reflect the majority of shoppers.
Engaged in an omnichannel experience, the Modern Shopper represents a hybrid between the Traditional Shopper and the Cybernaut. For this archetype, the research process might involve both brick-and-mortar and digital stores, before ultimately making a purchase online.
In a bid to counter the rise of e-commerce, many physical retailers are making efforts to increase foot traffic. But unfortunately for both them and the environment, more people in-store does not translate into a higher transaction rate. Deloitte’s research predicts that 48 percent of US consumers will check out products in a physical store before actually buying online.
The route to purchase is rarely a direct one, however. In the past, there was only one touch-point — the point of transaction — but today, consumers interact with retailers in multiple ways both offline and online, blurring the lines between entertainment and intent to purchase.
“Unfortunately, there is no straight answer to the question whether online or in-store shopping is better to the environment,” says Dr. Patricia Van Loon, a research fellow at INSEAD’s Social Innovation Centre and senior researcher at Viktoria Swedish ICT, a non-profit research institute that is part of RISE Research Institutes of Sweden.
Dr. Bateman echoes this remark. “E-commerce has lower total emissions because customer trips are greatly reduced. But there are caveats to this,” she warns. “Each situation is unique, so you can never really say e-commerce is always better for the environment.”
By participating in the process of “showrooming,” for instance — trying a product in-person before buying online — the Modern Shopper increases their carbon footprint in transportation, offsetting any deductions related to the ultimate e-commerce purchase.
“Associated physical trips by consumers can add significant amounts of carbon to the online purchase,” says Dr. Van Loon. “Picking up items after a failed delivery or a click-and-collect point, returning unwanted items, or other complementary shopping trips all increase the carbon footprint.”
According to MIT, transport-related greenhouse gas emissions for the Modern Shopper account for over 1kg of carbon dioxide emissions (over a third of the shopper’s total carbon footprint).
Modern delivery methods pose a significant toll on the environment too. In 2005, when Amazon introduced its ‘Prime’ membership, offering free two-day shipping on all eligible purchases for an annual flat rate, such rapid delivery was still novel. Since then, Amazon has amassed about 63 million Prime members globally, according to Consumer Intelligence Research Partners, and in major cities, free two-day shipping has become nearly as commonplace as online shopping itself.
The proliferation of high-speed delivery is not without environmental impact. This season, three-to-four-day shipping is not sufficiently “fast” for US shoppers, according to Deloitte, and they expect lower fees for expedited delivery — shifting consumer expectations and giving rise to the Impatient Modern Shopper.
“Obviously, same-day delivery and tight delivery slots make it more challenging for the delivery company to combine shipments in the same neighbourhood,” explains Dr. Van Loon. “It therefore increases the distance driven per item and consequently the carbon footprint.”
Indeed, the extra emissions of expedited freight transportations account for a nearly 0.75kg increase in carbon dioxide emissions per shopper, more than double that of non-expedited delivery methods and enough to offset the green benefits of not travelling to a physical store — rendering the Impatient Modern Shopper archetype the least environmentally friendly of the four.
The Bottom Line
For those who are serious about reducing their carbon footprint this holiday season, Amazon is right: the numbers show that e-commerce is better for the environment — as long as the entire process remains digital from start to finish. But this path might not be feasible for many consumers.
Consumers who find it necessary to purchase in-person can greatly reduce their carbon emissions by “webrooming,” or researching online. This shopping process emits only approximately 0.2kg more carbon dioxide than conducting the entire journey digitally, so even those who purchase at a brick-and-mortar retailer can cut their environmental impact by up to 50 percent.
The most green holiday shopper is digitally-savvy, researching and purchasing online well in advance — avoiding next-day or same-day delivery. They opt for eco-friendly packaging wherever possible, and if they do need to visit a brick-and-mortar store, they will coordinate shopping trips with other errands, reducing the total distance travelled by vehicle. Perhaps most fundamentally for the green holiday shopper, they also understand that what and where they buy is as important as how they buy it.
“Some of the biggest sources of environmental impact actually lie upstream in a supply chain (materials and producer level),” says Dr. Bateman. “So purchasing products from responsible companies can actually lead to some of the biggest savings, over online versus brick-and-mortar purchasing decision.”