Impact and sustainable investing
The role of ‘re-commerce’ in the transition to a circular economy
3 min read 7 Aug 23
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Moving towards a circular economy will play a key role in achieving global net zero goals. This article explores how eBay is aiding this transition through the practice of ‘re-commerce’ which – through re-using and recycling products – helps avoid the extraction and fabrication of new materials, while cutting down on excess emissions in the process.
eBay – the e-commerce multinational – has approximately 147 million active buyers bidding on 1.5 billion listings across 190 worldwide markets.
“By facilitating the re-sale of pre-owned and out-of-season goods, eBay’s online marketplace platform helped to divert 47,000 tonnes of waste from landfill in 2021.”
The company’s business model centres around ‘re-commerce’ – the sale of used, refurbished and out-of-season items, rather than new products. According to management, nearly 90% of gross merchandise value (GMV) is made up of used, refurbished and non-new products.
The circular economy
eBay primarily makes a positive impact through its contribution to the circular economy. This involves re-using and recycling products already in the economic system, rather than relying solely on new products. This change in consumption patterns helps to avoid the extraction of new materials, the fabrication of these materials (which can be energy intensive), and negates the need for products to be placed in landfill prematurely (where they will produce further emissions).
“By facilitating the re-sale of pre-owned and out-of-season goods, eBay’s online marketplace platform helped to divert 47,000 tonnes of waste from landfill in 2021,” says Ben Constable-Maxwell, Head of Impact Investing at M&G Investments. “The company has calculated that it also delivered 1.5 million metric tonnes of CO2 emission savings in the year.”
According to The Ellen MacArthur Foundation, of which eBay is a member, up to 20% of carbon emissions could be avoided by adopting a more circular method to the way in which our economy operates. It will therefore play an essential role in global efforts to achieve net zero emissions.
Impact data and reporting
The nature of eBay’s business model makes the collection of impact data difficult. With so many listings, the company is somewhat reliant on sellers accurately categorising their products as new, refurbished or used. However, the company sends users surveys and engages with third parties to get a clearer picture.
“The measurement of any positive impacts is an essential element of impact investing, and is one of the key differentiators between this practice and other forms of sustainable investing,” says Constable-Maxwell. “Despite the challenges of data collection, it is encouraging that eBay is taking steps to ensure the accuracy of its reporting, and to improve its methodology in this area.”
Furthermore, eBay engages with independent specialists to calculate and validate its data for avoided emissions and landfill waste. The company believes the current numbers are conservative, and will look to improve the methodology and accuracy over time. Encouragingly, eBay also produces an annual impact report, covering the company’s impact and sustainability priorities, new initiatives in these areas, and its methodology for calculating impact metrics.
The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested. Past performance is not a guide to future performance. The views expressed in this document should not be taken as a recommendation, advice or forecast.
