Etsy Outlines Plan to Totally Eliminate Carbon Emissions

In case you've been wholly wrapped up in pandemic stories for the last year or so, here’s another bit of news: Brands really want you to know that they’re reducing their carbon footprints. Just this week, Wells Fargo committed itself to carbon neutrality, joining other major banks including Citigroup, Bank of America and JPMorgan Chase, which have all made ecological commitments in the last six months. FedEx also announced this week that it will sink $2 billion into electric vehicles as part of its promise to become carbon neutral by 2040. And remember GM’s Super Bowl spot with Will Ferrell? Its purpose was touting the automaker’s commitment to going all-electric by 2023. And let’s not forget Jeff Bezos' Climate Pledge of last year, an ambitious promise to meet Paris Agreement standards a decade early, which 52 additional companies have now signed. Beyond the warm and fuzzy It’s not hard to see why companies are getting green in earnest. Aside from what’s—hopefully—a genuine interest in keeping the Earth habitable, brands are simply responding to market forces, reducing carbon because consumers want it. A 2020 survey by the National Retail Federation found that 70% of consumers say they think it’s important that a brand be ecologically responsible. And it’s easy to feel good about these commitments, too, were it not for a persistent problem: Once you clear away all the warm and fuzzy verbiage, it’s hard to know what any of it actually looks like in practice. More than 50 companies have signed on to Bezos' Climate Pledge, but critics charge that transparency is lacking. Brand communications firm Radley Yeldar recently conducted an assessment on how brands communicate their sustainability pledges. It found that not only are the messages invariably illustrated with “lots of green, lightbulbs, an odd mix of dated corporate graphics, endless icons and off-time cutesy illustrations” but are also riddled with jargon and cliches such as “We are committed” and “Our biggest challenge.” The flowery language isn’t solely the fault of the brands, of course. Reducing carbon emissions is a long and labyrinthine task, one muddied by technical terminology and the kind of audits that would put even die-hard environmentalists to sleep. Etsy crafts a zero carbon plan Nevertheless, when ecommerce platform Etsy announced on Feb. 24 that it will reach net-zero carbon emissions by 2030, an opportunity presented itself. How does a publicly traded, multinational brand with 82 million buyers and 2020 sales of $10 billion actually go about reducing its carbon footprint to nothing? Where does it start? What steps does it take? These questions are especially pertinent because Etsy’s business relies entirely on shipping packages. And with online business now making up more than 21% of retail transactions overall, Etsy’s measures to address carbon reduction are ones that many brands are facing—or will soon. Adweek asked Etsy’s sustainability director Chelsea Mozen to walk us through the process of going to net-zero and tell us how it actually works in practice—no jargon, no feel-good adjectives. According to the International Institute for Sustainable Development, 177 companies have pledged to reach net zero by 2050. Carbon neutral comes first While brands tend to use the terms “carbon neutral” and “net-zero” interchangeably, they are really two different goals. When a company achieves carbon neutrality, it has found a way to remove the same amount of carbon dioxide from the atmosphere as it has dumped into it. Net-zero, by contrast, takes things a step further—but we’ll get to that. Etsy actually became a carbon neutral company in 2019. Part of how it got there started by assessing its home office operations, which it powers with electricity from 100% renewable resources, such as solar cells installed on its roofs. But since Etsy is an online platform, the real work of reducing carbon dioxide happens literally where the rubber meets the road: sellers shipping packages to buyers. “For us, shipping is 75% of our impact, and we wanted to address that,” Mozen explained. “So we've invested in carbon offsets, creating a positive carbon impact elsewhere. You’re really just balancing your carbon impact.” Shopping for offsets An offset is a means by which a company seeks to balance out the carbon it has emitted by eliminating a corresponding amount of carbon elsewhere. To offset its carbon dioxide emissions accurately, a company needs to know how big its carbon footprint is. Since that’s a highly complicated calculation, most companies hire a firm to do that. (Etsy partners with sustainability monitoring company Ecometrica, which has clients including Avis and UPS.) Most offsets take the form of environmental projects that can furnish the number of carbon credits a company needs. Offsets can include anything from capturing methane in landfills to financing efficient stoves for third-world countries to conserving a tract of hardwood forest to sponsoring a solar or wind farm. Etsy actually purchases an offset for each item that consumers buy on its platform. Those purchases helped it reach carbon neutrality in 2019 and are still helping. According to Etsy’s most recent 10-K financial performance filing, the company invested in 404,737 verified emissions reductions for 2020. Getting to zero But Mozen’s main objective for Etsy is moving the brand from its carbon neutral status to net-zero. Mozen said, “It’s not enough to balance the carbon emissions out—we have to reduce those emissions.” This is where things get a little technical. Etsy’s reduction targets break up along three categories of emissions: Scopes 1, 2 and 3. The first two categories cover carbon emissions from facilities the company owns or from utilities it has purchased. To reach net-zero, Etsy must cut these emissions in half over the next decade. But, Mozen said, “to be honest, it will be very easy for us to meet that 50% reduction because we already have a commitment to 100% renewable energy.” The big challenge comes with Scope 3, commonly defined as “all other indirect emissions that occur in a company’s value chain” by Carbon Trust, a strategy company that partners with businesses to help them on sustainability efforts. For Etsy, that means packages moving around the country on planes and trucks. To reach net-zero, the company will need to cut those carbon dioxide emissions by 13.5% After looking to replace its old trucks for years, the Postal Service will roll out these gas/electric hybrids in 2023. However, Etsy doesn’t own those trucks or those planes. Nor does it control the sizes of cardboard boxes its sellers choose or the amount of plastic bubble wrap or Styrofoam peanuts they put inside. Etsy does have the ability to influence these variables indirectly, though. Reducing carbon behind the scenes While Etsy cannot get rid of all the old, exhaust-spewing delivery trucks out there, it is “in contact with the carriers, advocating with them for electrification of vehicles,” Mozen said. On a broader scale, a company of Etsy’s size can also get the attention of policymakers and nudge for laws that, sooner or later, will pull polluting vehicles off the road. “In order to address emissions from transportation, regulation has to increase—we have to get to a point where, from the governmental perspective, it’s been mandated,” Mozen said. “I’m hoping that with the new administration, there will be many more opportunities for emissions reductions in public policies.” And while Etsy obviously cannot tell the shoppers on its platform what to buy, it can encourage them to favor items sold by vendors that live near them, thereby cutting shipping distances. Etsy already gives local items more prominence in search results. Etsy is also working on ways to encourage its sellers to be more mindful of the packaging they use when they ship their items to buyers. “We are going to be developing partnerships for our sellers to access more sustainable packaging,” Mozen said, including circular packaging, which can be used repeatedly. “There are a lot of solutions out there,” she said. Beyond the Buzzwords, Sustainability in Marketing Demands Consistency

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Etsy's Sustainability Director Shares the Plan for Totally Eliminating Carbon Emissions

No fluff or jargon—here's the plan for reaching net-zero

Robert Klara

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Robert Klara