E-environment Trademark The implications of globalization
Potentially, online shopping through transactional e-commerce can also have environment benefits. Imagine a situation where we no longer travelled to the shops, and 100 of items
were efficiently delivered to us at home or at work. This would reduce traffic considerably Although this situation is inconceivable since most of us enjoy shopping in the real world
too much, online shopping is growing considerably and it may be having an impact. Research by the Internet Media in Retail Group
www.imrg.org
shows the growing impor- tance of e-commerce in the UK where over 10 of retail sales are now online. In 2007
IMRG launched a Go Green, Go Online campaign where it identified six reasons why it believes e-commerce is green. They are:
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Less vehicle-miles. Shopping is the most frequent reason for car travel in the UK, accounting for 20 of all trips, and for 12 of mileage. A study by the Swiss online grocer
LeShop.ch calculated that each time a customer decides to buy online rather than go shop- ping by car, 3.5 kg of CO
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emissions are saved.
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Box 4.6
HSBC customers plant virtual forest
HSBC has committed to improving the environment since it became a climate-neutral company globally in November 2005. Through the use of green technologies and
emission-offset trading, HSBC counteracts all CO
2
emissions generated by its building operations and corporate travel. In 2006, 35 of operations in North America were
offset by investments in Renewable Energy Certificates from wind power alone. Another aspect of HSBC green policy is its online banking service, where it encour-
ages paperless billing. For example, in the UK in 2007, over 400,000 customers switched from paper statements to online delivery, creating a virtual tree each time Figure 4.10,
and for every 20 virtual trees, HSBC promised to plant a real one.
Figure 4.10
HSBC virtual forest
Source: www.hsbc.co.uk
Part 1 Introduction
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Lower inventory requirements. The trend towards pre-selling online – i.e. taking orders for products before they are built, as implemented by Dell – avoids the production of obso-
lete goods that have to be disposed of if they don’t sell, with associated wastage in energy and natural resources.
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Fewer printed materials. Online e-newsletters and brochures replace their physical equiva- lent so saving paper and distribution costs. Data from the Direct Mail Information Service
www.dmis.co.uk
shows that direct mail volumes have fallen slightly in the last 2 years, at the time of publication reversing an upward trend in the previous 10 years. This must be
partly due to marketing e-mails which the DMA e-mail benchmarks
www.dma.org.uk
show number in their billions in the UK alone.
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Less packaging. Although theoretically there is less need for fancy packaging if an item is sold online this argument is less convincing, since most items like software or electronic
items still come in packaging to help convince us we have bought the right thing – to reduce post-purchase dissonance. At least those billions of music tracks downloaded from
iTunes and Napster don’t require any packaging or plastic.
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Less waste. Across the whole supply chain of procurement, manufacturing and distribution the Internet can help reduce product and distribution cycles. Some even claim that auction
services like eBay and Amazon Marketplace which enable redistribution of second-hand items can promote recycling.
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Dematerialization. Better known as ‘digitization’, this is the availability of products like software, music and video in digital form.
If companies trading online, can explain these benefits to their customers effectively, as HSBC has done, then this can benefit these online channels.
But what does the research show about how much could e-shopping reduce greenhouse gas emissions? A study by Finnish researchers Siikavirta et al. 2003, limited to e-grocery
shopping, has suggested that, depending on the home delivery model used, it is theoretically possible to reduce the greenhouse gas emissions generated by grocery shopping by 18 to
87 compared with the situation in which household members go to the store. Some of the constraints that were used in the simulation model include: maximum of 60 orders per route,
maximum of 3,000 litres per route, working time maximum 11 h per van, working time maximum 5 h per route, loading time per route 20 min, drop-off time per customer 2 min.
The researchers estimated that this would lead to a reduction of all Finland’s greenhouse gas emissions of as much as 1, but in reality the figure is much lower since only 10 of grocery
shopping trips are online. Cairns 2005 has completed a study for the UK which shows the importance of grocery shopping – she estimates that car travel for food and other household
items represents about 40 of all UK shopping trips by car, and about 5 of all car use. She considers that a direct substitution of car trips by van trips could reduce vehicle-km by 70
or more. A broader study by Ahmed and Sharma 2006 used value chain analysis to assess the role of the Internet in changing the amount of energy and materials consumed by busi-
nesses for each part of the supply chain. However, no estimates of savings are made.
How to change tax laws to reflect globalization through the Internet is a problem that many governments have grappled with. The fear is that the Internet may cause significant reduc-
tions in tax revenues to national or local governments if existing laws do not cover changes in purchasing patterns. Basu 2007 notes that around a third of government taxation rev-
enue is from domestic consumption tax with revenue from import taxation around 17. Governments are clearly keen that this revenue is protected when purchases are made over-
seas outside their jurisdiction.
Taxation
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