Digital platforms : time to skyrocket climate impact through technology
Since the Paris Agreement was voted at COP21 in 2015, each UN Climate Change Conference brings a new round of commitments taken by countries and companies willing to do good by reducing their greenhouse gas emissions. These conferences also invariably start with emergency calls from the scientific community — each year more alarming — reminding us that we are driving straight (and fast) in the direction of a wall. Until now, the positive efforts that have been done on the ground have not proven to compensate for the wrong direction we are taking. We have not managed to reverse the carbon emission curb nor to reach its peak point. It is an unanimous scientific fact. Facing the urgency, tech start-ups must act now and leverage their technology to maximize their positive climate impact. COP 25 is our last chance to stocktake our full capabilities before countries update their Nationally Determined Contributions next year, which will determine the world’s global warming trajectory for the next 5 years.
Glovo is a digital platform providing its users with on-demand courier delivery service. Since 5 years, we aim at giving access to everything in the cities where we operate. The company we are building is ambitious as it intends to deeply transform society in the way products are distributed and consumed. For those who collaborate with us (couriers and restaurants), Glovo is also redefining the way they work and the way they produce. The scale of our ecosystem gives us a huge responsibility to do things well. Until today, we have been busy focusing on growth. Indeed, the food delivery business is highly competitive: most of the time, we must go fast in order to be first-on-the-market, and to ensure sufficient customer traction. Let’s be honest, until today, sustainability was not a priority in our development path.
We believe that it is time for us to take the business risk to do things differently. The environmental danger from climate change is now absolute as it threatens the way we live, and the very survival of fauna and flora on the Planet, from which humankind is dependent. There is no doubt that heading for a fall with full knowledge of the facts will stop us more than any other business decision. For Glovo, it is all the more time to act that our greenhouse gas emissions are increasing. In 2019, they will reach almost 100,000 tonnes of CO2 equivalent, which corresponds to the emissions of a city of 20,000 inhabitants in Spain. Glovo’s greenhouse gas emissions come from the vehicles that are used for delivery of products sold on the app, from the data centers hosting our activities, but above all, they come from the packaging and the food waste generated by the consumption of goods — the latter generating methane, a greenhouse gas with a global warming potential 28 times higher than CO2. Considering that these sources of emissions are intrinsically linked to our operations (they come from the energy used for transportation, the consumption of materials, and the generation of waste), we need to be bold to avoid that they grow exponentially.
That is why we decided to get on track to reach carbon neutrality by the end of 2021. It is a must-do to maintain our environmental and social license to operate and to grow.
How are we going to get there?
First, we need to make the most out of our core business technology. Its evolution will determine whether or not we meet the criteria for being a responsible company. First, it means integrating certain sustainability standards in the user experience. To do so, we will dedicate part of our engineering time — our most precious resource — to sustainability projects, enabling our users to reduce their footprint while using the app. Moreover, the app can become by itself a tool to fight back against climate change, if it is used to raise awareness among our community of users regarding the consequences of their production and consumption behaviours for the Planet. In particular, Glovo can participate in the transformation of the food sector towards more sustainable practices by offering consumers with a varied and informed choice of products, and by ensuring that they dispose of the necessary information about the environmental footprint of the products they are buying through our platform. As a tech company, we believe these orientations are the best way to enshrine sustainability into our DNA.
Digital technology solutions can help us achieve our dreams. They can help restaurants manage their stocks of ingredients and their leftovers, thus reducing food waste which represents ⅓ of our value chain’s greenhouse gas emissions. They can increase efficiency of orders dispatching through bundling (which consists in transporting several orders at once) and optimize the allocation of vehicles based on the distance travelled by couriers. In the future, they could enable to develop reverse logistics in cities, and make Glovo an actor of the first-mille collection of reusable packaging, refillable products or hard-to-recycle materials. Those moonshot goals are our new horizon, and 2020 will be our first milestone in finding ways to reach them.
Technology is not all. The people behind it have the keys to unlock its full potential. As a start-up, we are young, agile, and also passionate about what we do. Everyone in the company is encouraged to endorse Glovo’s values, one of which — “Care” — actually includes our ability to contribute to the preservation of the natural environment through our business activities. More than just a function in the company, we want sustainability at Glovo to be a way of doing business throughout the entire organization. From next year onwards, each country will set its own sustainability goals in line with the company’s Roadmap, so each team can contribute to changing the way business is done, from procurement to operations and sales.
During the coming year, we will need to tackle our most pressing issues first. It means we should prioritize solutions with high impact and high feasibility, regardless of their imperfection. This is what start-ups are good at, and it can probably be a gamechanger in a race against time that climate change imposes us. One quick win is carbon offsetting: Glovo will start doing it in 2020 by compensating 100% of the greenhouse gas emissions derived from couriers’ motorbikes and cars using our platform, in the cities where we operate. Our peers Cabify and Lyft did that in the ride-hailing sector : it is time for the food delivery business to do it as well. In parallel, we will keep searching for the right solutions to facilitate access to electric vehicles for couriers collaborating with us. Similarly, we will also multiply efforts to improve access to sustainable packaging for our partners since costs are still a barrier for many of them, and we aim to provide as many of them as possible with solutions to eliminate virgin materials from their supply chain. Some will say that we are not using the correct packaging, others will say that we should eliminate single-use packaging once and for all. They will probably both be right. But the try and fail method is the best option we have to grow-up responsibly.
Innovation and policies are needed more than ever. Many barriers remain to be overcome in order to accelerate the pace towards carbon neutrality, like the cost of electrical vehicles, or the performance of sustainable packaging compared with virgin packaging in terms of resistance and thermal insulation, to name but a few. We can find synergies with other companies and start-ups and serve as a testing ground for innovation, for instance by using new types of packaging materials or smart urban equipment for vehicles (air quality sensors, electric batteries adds-on for bikes etc.). These experiments can benefit the public sector by highlighting the need for new policies to scale-up innovations, while helping us to sharpen their business models. In Spain, the city of Madrid has been implementing an air quality regulation in 2019 to limit CO2 and fine particle emissions. All cars except residents and zero-carbon vehicles are forbidden to enter into the city center. Results have been up to expectations: pollution felt by 11% during the first year of execution of the measure in the Spanish capital. At Glovo, we had to adapt to this regulatory evolution from an operational perspective, but with no harm to the business. We support this policy and its replication to other cities, even though we call for long-term clarity and certainty in their implementation. Successive policy changes can have a lot more negative impacts than regulations themselves for the business.
We are proud to take on the challenge, and at the same time feeling small in the face of the task at hand. But the urgency makes the effort worthwhile. Together with our ecosystem of riders, partners and users, we will build Glovo’s future, so it becomes the digital platform leader for sustainable logistics in tomorrow’s smart cities: zero-carbon, circular and plastic neutral. This is how we hope to maximize environmental impact through technology.
