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1 Introduction

With the increasing concern for climate change, environmentalists and governments of various countries are actively formulating action plans to address the crisis. Most initiatives in this area concentrate on limiting the environmental impact of unsustainable industrial production processes (e.g., pollutants from factories) [1] and the transportation industry [2]. One of the sectors that are given the least attention is the e-commerce industry.

E-commerce has expanded into a global industry that is quickly evolving. Online retail sales reached 4.9 trillion dollars worldwide in 2021, and it is anticipated to rise by more than 50% in 2025 [3]. It has become the preferred method of purchasing due to the advancements in Internet technology, online payment security, and speedy delivery methods. The covid-19 pandemic also contributes to the demand for online shopping. The positive growth of e-Commerce has resulted in various benefits to the economy. However, there is a need to ensure that the sector players do not harm the environment due to the activities of searching, packaging, shipping, and returning items [4].

Research shows e-commerce players contribute to carbon production and greenhouse gas (GHG) emissions. The negative effects of e-commerce on the environment are increasing due to the problem of transporting individual shipments, using special packaging materials, and issues with product returns [5]. For instance, in terms of packaging, online retailers’ continuous use of cardboard, plastics, Styrofoam, and other packaging materials when shipping their products generates a continuous stream of waste. Besides excessive packaging waste pollution, the carbon emissions due to the transportation (delivery and return) activities associated with online purchasing also harm the environment.

Studies on the environmental impact of e-commerce are diverse as researchers focus on different angles such as logistics [5,6,7], particularly the last mile delivery i.e. the process of shipping the products from delivery hubs directly to the customer’s door [8, 9]. Research also focuses on e-commerce consumer behavior and its environmental impact [10, 11].

Assessing the environmental impact of e-commerce is a non-trivial task due to the different factors and elements contributing to the problem. Furthermore, the emergence of new retail models such as omnichannel retail incorporating click-and-collect and ship-from-store functionalities, along with the introduction of new delivery services, has added to the complexity in understanding the e-commerce industry’s environmental impact [12].

Promoting sustainable carbon consumption practices among online businesses is the ultimate goal of the authorities. With long-term economic growth in mind, a comprehensive plan that consists of standards, taxes, subsidies, communications campaigns, and education needs to be devised. To come up with this plan, a preliminary investigation needs to be performed to understand the severity of the situation.

This paper provides a framework that can be used to perform a preliminary investigation on the existing scenario of the e-commerce industry toward building a carbon footprint profile for it. The framework outlines the preliminary investigation’s objective, method, and output in three phases. Using this framework, a preliminary investigation of e-commerce carbon footprint contribution can be performed to build a model that can aid in promoting sustainable carbon consumption among e-commerce.

The rest of the paper is organized as follows. Section 2 reviews relevant literature and discusses how carbon footprint has been defined and explored in previous research. Section 3 presents the proposed framework to perform a preliminary investigation of the current scenario of carbon footprint contribution among e-commerce. Section 4 discusses the challenges and impact of implementing the framework, and Sect. 5 concludes the paper.

2 Related Work

This section provides a comprehensive review of the literature on the carbon footprint of e-commerce. It begins by discussing the current state of e-commerce in Malaysia, followed by an overview of the impact of e-commerce on the environment in Sect. 2.2. Section 2.3 examines the various methods employed to construct carbon profiles and measure carbon footprints in previous research.

2.1 Greenhouse Gas

Greenhouse Gas (GHG) is an infrared-absorbing and emitting gas. Water vapor, carbon dioxide, methane, nitrous oxide, and ozone are the principal greenhouse gases in the atmosphere. The GHG Protocol divides GHG emissions into three ‘scopes’ [13]. Scope 1: Direct emissions resulting from activities within the control of the organization (i.e., on-site combustion of fuel, manufacturing and process emissions, refrigerant expenditures, company cars use); Scope 2: Indirect emissions from any electricity purchased and operated from the grid, as well as heat or steam; Scope 3: Indirect emissions from sources outside the company’s direct control (i.e., employee commuting, business travel, outsourced transportation, etc.) as well as emissions inherent in the production of goods and services. All three scopes of GHG will be considered in Phase 2 of the E-commerce Carbon Footprint Contribution Preliminary Investigation Framework presented in this paper.

2.2 E-commerce in Malaysia

E-commerce in Malaysia has experienced substantial growth in recent years, with a significant number of micro-entrepreneurs and SMEs (MSMEs) adopting this business model. As of the end of 2021, the number of MSMEs embracing e-commerce has reached 890,000, surpassing the initial target of 875,000 set out in the National E-commerce Strategic Roadmap (NESR) and the Malaysia Digital Economy Blueprint (MyDIGITAL) for 2025. MyDIGITAL is a national initiative to transform Malaysia into a digitally driven, high-income nation and regional leader in the digital economy. This initiative results from collaboration between various ministries, agencies, and the industry under the NESR framework.

As the leading agency in Malaysia’s digital economy, Malaysia Digital Economy Corporation (MDEC) [14] has led the Go-eCommerce Onboarding and Shop Malaysia Online campaigns under Belanjawan 2021. These campaigns are part of the national economic recovery plan (PENJANA) aimed at encouraging the digitization of micro, small, and medium-sized enterprises (MSMEs) and boosting the growth of the digital economy. The campaigns aim to support and facilitate MSMEs in adopting e-commerce as a new way of conducting business and expanding their market reach.

The Department of Statistics Malaysia (DOSM) reported that the total income generated from e-commerce transactions in Malaysia reached RM1.09 trillion by the end of the fourth quarter of 2021, a 21.8% increase from RM896 billion in the previous year. This is the first time the income from e-commerce transactions has exceeded the RM1 trillion threshold. This growth trajectory puts Malaysia on track to achieve its target of an RM1.65 trillion e-commerce market size by 2025, as outlined in the National E-commerce Strategic Roadmap (NESR).

Furthermore, Malaysia Digital (MD), started in July 2022, is a government-led national strategic plan to improve the nation’s digital capabilities and develop the digital economy. The government will implement Malaysia Digital Catalytic Programmes (PEMANGKIN) with local industry participation, targeted digitalization programs to equip businesses with the right digital knowledge, skills, and tools, and various facilitation services and competitive offerings to complement business needs. With the government’s support, this seems promising in improving e-commerce in Malaysia and the future digital economy.

2.3 Impact of Carbon Footprint of E-commerce

Despite the impressive revenue generated by e-commerce, the environmental impact of the growing number of online retailers must not be overlooked. Specifically, these businesses’ carbon footprint needs to be considered. The carbon footprint refers to the total amount of greenhouse gas emissions resulting from a product or service’s production, use, and disposal [15,16,17]. These emissions can be caused directly or indirectly by individuals, organizations, events, or products.

Reducing carbon footprint is a crucial public policy issue for environmental management, and retailers can play a significant role in tackling climate change by taking direct action where it matters most [18,19,20]. Retail is one of the largest economic sectors, employing 3.6 million people in Europe and representing over 23% of all businesses [21]. By implementing feasible solutions, retailers can substantially impact reducing carbon emissions on a large scale.

Transportation is a key aspect of retailers’ operations but also contributes significantly to greenhouse gas and air pollution emissions [22]. Retail transportation operations encompass multiple modes of transportation, a range of container and vehicle sizes, and driver and vehicle scheduling. One study found that switching from delivery trucks to cargo bikes can reduce greenhouse gas emissions by 42% [23].

To reduce the environmental impact of delivery, retailers and logistics service providers can consolidate deliveries to a specific location. According to a US-based study, e-commerce performs worse than in-store buying when fewer than four deliveries are combined, but outperforms every aspect when more than 92 deliveries are merged [24]. Moreover, it is better for the environment if the number of items purchased per delivery is higher, as the environmental footprint per item decreases as the number of items per delivery increases.

Studies show that consumers travel to shop approximately 20% of the time [25, 26]. [27] investigated the carbon footprint associated with pre-and post-purchase travel behavior. The rise of online retail as an alternative to individual shopping trips has raised concerns about its environmental impact [28, 29]. Although omnichannel retailers encourage using various channels (online and offline) to enhance consumer convenience, this may lead to increased travel and related negative environmental effects. Therefore, it is crucial to consider the impact of online and offline shopping on the environment, including the carbon footprint associated with pre-and post-purchase travel behavior.

Furthermore, research has shown that some consumers tend to order more items, anticipating that they will return a portion of them (e.g., clothing in multiple sizes or colors) [29]. The environmental impact of this practice depends on how retailers and logistics service providers handle the subsequent delivery failures and product returns, as well as on the travel behavior of customers themselves [30].

Besides transportation, packaging is an essential aspect to consider in e-commerce as it protects products during transit, reducing damages, refunds, and redeliveries. However, some consumers perceive online purchase packaging as excessive and wasteful, often made of materials that take longer to degrade, such as plastic, cardboard, and paper. As a result, most packaging materials end up in landfills, potentially contaminating the soil [31]. [32] suggest exploring the use of reusable plastic crates instead of cardboard boxes to improve the sustainability of e-commerce packaging. Despite efforts to reuse and recycle packaging materials, a significant portion is not recyclable. Furthermore, some materials like bubble bags, polystyrene, and plastic bags take longer to degrade.

The review reveals that retailers and logistics service providers can play a crucial role in reducing greenhouse gas emissions by implementing feasible solutions. Transport and packaging are key areas that require attention, with the consolidation of deliveries, switching to eco-friendly modes of transport, and exploring sustainable packaging options being some of the feasible solutions. It is also essential to consider the carbon footprint associated with pre-and post-purchase travel behavior and handling delivery failures and returns. By taking direct action where it matters most, we can make a substantial impact on reducing e-commerce carbon emissions on a large scale.

2.4 Method Employed to Construct Carbon Profile and Measure Carbon Footprint

Several studies have used a qualitative approach to identify e-commerce activities that could have an environmental impact. For instance, [33] conducted interviews with logistics operators and used secondary sources to evaluate the purchasing process’s impact on the electronics industry in Italy. [34] used semi-structured interviews with experts and document reviews of Corporate Social Responsibility (CSR) and carbon footprint reports to compare the environmental impact of last-mile deliveries and returns between six fashion e-commerce sites. [35] not only conducted interviews with retailers but also employed observation methods by visiting warehouses and stores to evaluate the environmental impacts of the grocery industry’s online and offline purchasing processes.

The literature proposes various methods for measuring carbon footprint. For instance, [36] calculated the carbon footprint of e-commerce activities in Thailand using a mathematical model based on supply chain parameters such as customers, sellers, marketplaces, delivery centers, and delivery agents. [6] proposed a network analysis approach to calculate carbon emissions from urban freight volume in Jakarta. They used a causal loop diagram with factors such as e-commerce growth, the carbon footprint from urban logistics, logistics cost, and truckload capacity. Carbon footprint measurement methods can broadly be mathematical modeling, regression, and network analysis.

Mathematical Modeling.

After a thorough review of existing literature, it was found that several carbon dioxide calculator apps are available for customers and logistics companies. However, the reliability of data obtained from these calculators cannot be determined as not all disclose their methods and data resources. A German Federal Environmental Agency study examined 18 pre-existing calculators to create a commonly used online tool for calculating personal carbon dioxide emissions [37]. Although it excludes buying methods, it contains categories like living, mobility/travel, nutrition and consumption, and purchasing behaviors. Nevertheless, until 2013, there was no accepted method for quantifying carbon emissions in logistics; therefore, businesses and research employed various techniques and data [38]. France mandated that logistics companies disclose the emissions of their transports starting on 1 October 2013.

The European Union established the European Norm DIN EN 16258 to calculate greenhouse gas emissions from transport in 2013 [21]. The scientific framework for precisely measuring GHG emissions in supply chains was developed and tested by COFRET, a cooperation of 14 predominantly academic institutions from eight European nations. Although it is planned for future adjustments, the norm does not currently consider emissions from buildings, warehouses, or handling. It emphasizes the emissions produced by the fuel or electricity used by vehicles allowing the calculation of carbon emissions for every single parcel, not simply for transportation. Equation 1 is the commonly used formula to obtain the carbon footprint for a shipment:

$$F=W\times D\times E$$
(1)

where F is the carbon footprint (in kg CO2e), W is the weight of the shipment (in kg), D is the distance traveled by the shipment (in km), and E is the emission factor (in kg CO2e/kg-km). The emission factor E represents the amount of greenhouse gas emitted per unit of distance traveled by the shipment, considering factors such as the mode of transport, the type of fuel used, and the efficiency of the transport.

The formula for calculating greenhouse gas emissions according to DIN EN 16258 depends on the mode of transport being considered. Equation 2 and 3 provides formulas to calculate emission based on each mode of transport.

For road transport:

$$E=F\times Ef$$
(2)

For rail, air and sea transport:

$$E=D\times Ef$$
(3)

where E is Emissions (kg CO2e), F is fuel consumption (liters) D is the distance traveled (km) and Ef is Emission factor (kg CO2e/liter for road or kg CO2e/km for rail, or kg CO2e/km/passenger for air and kg CO2e/km/tonne for sea), In each case, the emission factor is a value that reflects the amount of greenhouse gas emitted per unit of fuel or distance traveled.

Regression Analysis.

Shopping online has the potential to reduce the environmental impact compared to traditional brick-and-mortar retail, although the degree of impact depends on specific circumstances. However, due to the complexity of the factors involved, most studies that compare the carbon footprints of online and traditional retail provide a limited view. To provide a more comprehensive assessment, a study published in [30] developed a framework that takes into account all significant environmental factors associated with retail and e-commerce activities. This model incorporates consumer behavior, basket size, transport mode, trip length, and frequency to provide a detailed analysis. The framework utilized regression analysis, a quantitative tool that is easy to use and offers valuable information on carbon emissions based on the variables studied.

Network Analysis.

A method of ecological network analysis, which considers embodied carbon flows in socio-economic networks, was proposed by [39]. They conducted a case study in China to explore the relationship between embodied carbon structure and production-based carbon intensity. The study found that wealthy provinces exhibited lower carbon intensities, with embodied carbon flows dispersed across the network, implying a decentralized carbon mitigation measures requirement. On the other hand, underdeveloped regions had higher carbon intensities, with most embodied carbon flows concentrated in a few pathways, highlighting the need for centralized decarbonization policies. By focusing on the specific carbon emission structures of different regions, the method can help develop rational mitigation strategies. Given the ambitious emission reduction goals and uneven regional development, the study aims to support China’s decarbonization efforts and contribute to developing fair and rational carbon mitigation policies.

In conclusion, choosing the appropriate method for calculating carbon emissions in logistics and retail is important. While several carbon dioxide calculator apps are available, not all of them disclose their data resources, making their reliability difficult to determine. The European Union has established a standard for calculating greenhouse gas emissions in transportation, and the COFRET consortium has designed a methodological framework for accurately calculating GHG emissions in supply chains. Regression analysis and ecological network analysis are also valuable tools that provide valuable information on carbon emissions depending on the studied variables. Therefore, selecting the most suitable method for calculating carbon emissions can provide more accurate and comprehensive evaluations, leading to the development of fair and rational carbon mitigation policies.

3 The Preliminary Investigation Framework

This section presents the proposed framework to perform a preliminary investigation of the current scenario of carbon footprint contribution among e-commerce. The framework is shown in Fig. 1.

Fig. 1.
figure 1

The E-commerce Carbon Footprint Contribution Preliminary Investigation Framework

Full size image

Figure 1 shows a three-phase framework for performing a preliminary investigation of the E-commerce Carbon Footprint Contribution. The next subsection discusses in detail each of the phases.

3.1 Phase 1: Identifying Carbon Footprint Factors

The objective of the first phase is to identify and categorize the elements and factors contributing to carbon production or savings. The method that will be implemented to achieve this objective is a literature survey to identify the elements and factors related to carbon production in previous studies. The identified elements and factors will then be analyzed and categorized according to the e-commerce participating players’ i.e., retailers, logistics, and couriers. The output of this phase will be a list of e-commerce-related elements and factors that contribute to carbon production and a list of e-commerce-related elements and factors that reduce carbon production.

3.2 Phase 2: Constructing Carbon Consumption Profile

The second phase of this study involves the objective of evaluating the consumption profiling from the participating organization. To achieve this objective, a case study will be conducted on the participating organization to collect detailed information on the activities involved in the complete e-commerce process to construct the carbon profiling. The output of this phase will be the carbon consumption profile.

The case study is particularly useful for exploratory study and appropriate to understand the online business activities that could impact the environment. This case study focuses on Lazada, an online business website for retailers to enhance their sales channels. Lazada was chosen as it is ranked as number one of the top ten list of e-commerce sites in Malaysia for 2022 [40]. Its monthly traffic is around 31.29 million hits.

A multisource and multimethod data collection method is proposed in this framework. The data will be collected through secondary sources involving traditional media, company websites, and internet articles. Meanwhile, interviews will be conducted with managers handling the online business life cycle activities.

Data analysis and data collection will be conducted concurrently to allow the emergence of empirical data and theoretical concepts in capturing a novel phenomenon [41]. Face-to-face and online interview sessions will be recorded. The recorded data will be transcribed verbatim. The transcript will be subjected to thematic analysis using Atlas. ti software. The secondary data will be subjected to content analysis. The participants will be determined by contacting the liaison officers or representatives at Lazada through LinkedIn and their company website.

3.3 Phase 3: Developing Carbon Contribution Measurement Method

The third phase is to propose a measurement method and matrix suitable to measure carbon contribution for e-Commerce, logistics, and courier players based on best practices and industry standards across other sectors and/or jurisdictions. To achieve this objective, a literature search will be conducted on the best practice and industry standards in other countries or other sectors to devise the carbon contribution calculation. The output of this phase will be the measurement method for carbon contribution calculation for retailers, logistics, and courier players.

The literature revealed various approaches for measuring carbon contribution, therefore, this phase will involve a thorough search of the literature to identify the most suitable approach. Once the approach is identified, the next step is to conduct an analytical approach on the identified carbon contributing factors and elements from Phase 1 and the carbon profile of the identified online business from Phase 2. Both this information will be analyzed to be incorporated into the construction of the carbon footprint measurement method.

4 Implementation Challenges and Impact

The paper presents a framework for the preliminary investigation of the e-commerce carbon footprint contribution. This section discusses some challenges that may arise in implementing the proposed framework. We also discuss the implication of implementing the preliminary investigation using the proposed framework.

4.1 Implementation Challenges

Conducting a preliminary investigation related to carbon footprint profiling of e-commerce comes with challenges such as data acquisition, ensuring the sufficiency of data to create the carbon footprint profile and the challenges of developing a model with insufficient data.

One of the main challenges in conducting research related to carbon footprint profiling is gaining access to relevant organizations and their data. Acquiring data from these organizations can be difficult, especially if the organization is unwilling to cooperate or if the data is confidential. Also, it may be challenging to contact some organizations, which might make the research process more challenging. Researchers may need to build relationships with pertinent groups, explain the significance of the research and the advantages of participation, and reassure them that their data would be handled with privacy and security in mind to solve this difficulty.

The unavailability of adequate data to build a model is another problem in carbon footprint profiling research. This is particularly true for small and medium-sized businesses, which could lack the tools or capability needed to gather and disclose information on their carbon impact. Furthermore, it may be difficult to develop the model because of missing or faulty data effectively. We could need to leverage various data sources, including publicly available databases or secondary data, to address this problem, and we might need to create statistical models to estimate the missing data.

Even with the best efforts, there may occasionally not be enough data to build a carbon footprint model. This could happen if the company hasn’t gathered data on particular parts of its operations or if the data is unreliable or erroneous. We may need to employ alternate strategies to study the potential effects of missing data in certain situations, such as creating scenario-based models or performing sensitivity analyses. Another strategy is to use proxy data, such as industry benchmarks or data from organizations with comparable purposes, to calculate carbon emissions.

4.2 The Impact of Implementation

When the framework is implemented, the outcome of the preliminary investigation can provide the following implication; by identifying the contributing factors of the carbon footprint and constructing a carbon footprint profile for the e-commerce industry and its players, the preliminary investigation can provide valuable insights into the current practices and the severity of the existing carbon footprint produced by e-commerce companies. This information can help businesses make informed decisions about reducing their carbon emissions and developing more sustainable practices. For example, the researchers can identify which activities and processes have the highest carbon footprint and suggest ways to reduce emissions through changes in these areas.

The development of a measurement/model/matrix can be used as a measuring scale to measure and evaluate the future carbon footprint contribution of the e-commerce industry. Furthermore, it may be used to create a standard and compare the carbon footprint of different companies and industries. Another benefit of the measurement/model/matrix is that it can be used to monitor carbon reduction progress and set achievable targets over time. This could motivate businesses to take action to lessen their carbon footprint and foster a culture of sustainability within the e-commerce sector.

5 Conclusion

In conclusion, a carbon footprint profiling study can significantly benefit the e-commerce industry by providing a guideline to reduce carbon emissions and contribute to environmental sustainability. Establishing relationships with organizations, using different data sources, and devising alternative solutions can overcome the challenges faced in this research, such as gaining access to relevant organizations, dealing with incomplete data, and having difficulty adopting innovative modeling approaches.

Identifying the contributing factors and constructing a carbon footprint profile can enable the e-commerce industry to gain insights into their operations’ carbon emissions, enabling them to make informed decisions on reducing their carbon footprint. Additionally, constructing a carbon footprint measurement/model/matrix can be viewed as an initiative to develop a standardized and transparent method of assessing carbon consumption, setting targets for reduction, and monitoring progress over time. This can encourage companies to take responsibility for their carbon emissions, implement sustainable practices and create a sustainability culture in the e-commerce industry.

Future work will concentrate on implementing the proposed framework, developing the carbon footprint profile for the e-commerce sector, and devising an appropriate measurement/matrix/model to accurately calculate the carbon contribution of the e-commerce industry in Malaysia. Once the framework is implemented, the study’s finding can be extended beyond the e-commerce industry. Carbon footprint profiling can help impact business operations on the environment by increasing awareness of environmental issues. As a result, more sustainable practices in all industries can be established. Furthermore, climate change policy decisions can be devised by providing policymakers with accurate information about the potential impact of legislation on carbon dioxide emissions by the e-commerce industry.

To address the environmental impact of carbon footprint in online retail, customers, retailers, and logistics service providers can make significant positive contributions by taking specific actions. The initiatives include greening the delivery fleet, encouraging sustainable collection trips, and transforming packaging practices. Additionally, these stakeholders can generate and increase awareness about this issue in collaboration with policymakers. By working together, we can effectively tackle the challenges associated with carbon footprint and create a more sustainable future for e-commerce activities.