What Is 'Carbon Offsetting'? How E-Commerce Businesses Can Contribute to the Environment — and the Benefits for Merchants

We spoke with Sustineri Inc., the company behind Carbon Offset Cloud — an app that helps Shopify stores address their CO2 emissions — to learn more about how sustainable practices can impact businesses.

— First, could you explain what "carbon offsetting" is? It's something we're seeing more and more in overseas e-commerce.

Carbon offsetting is a mechanism where businesses fund reduction or absorption projects elsewhere — such as forest management, solar power, hydroelectric power, or biomass energy — to compensate for the CO2 emissions that are unavoidably generated through business activities. In return, they receive the equivalent reduction value (credits) from those projects.

It's not just an overseas practice — many companies, organizations, and local governments in Japan use it as well. For example, Yahoo Japan offsets CO2 emissions from electricity used in its offices and data centers, and FamilyMart offsets CO2 emissions across the entire lifecycle of its eco-friendly private-label products — from raw materials and manufacturing through to disposal. While new technologies are emerging that prevent or capture CO2 at the source, significant further development is still needed before most businesses can drastically reduce emissions at a manageable cost. Against this backdrop, governments and the United Nations are actively encouraging the use of carbon offsetting.

— It does seem difficult to reduce emissions while growing a business, so carbon offsetting is essentially a necessary tool. Can you tell us more about Carbon Offset Cloud, your Shopify app that enables carbon offsetting?

E-commerce offers the convenience of selling without a physical store, but for businesses dealing in physical goods, "shipping" is unavoidable — and it comes with an environmental cost. With that in mind, we developed a service that automatically calculates the CO2 emissions associated with product shipping and makes it easy to offset those emissions — all through a simple app installation.
You can place an app block on your product detail pages to display real-time emission calculations based on shipping distance and product weight, with specific figures shown to customers. You can then promote the fact that all those emissions are being offset.
This gives e-commerce businesses a straightforward way to take action on climate change, while also strengthening their brand image as a sustainable business. Similar apps have been available overseas for two to three years, but in Japan, we're leading the way. Domestic businesses especially appreciate that they can direct funds to reduction and absorption projects within Japan. The app is also more cost-effective than developing your own in-house climate initiative, so we'd love for businesses to consider it as a first step. App block text is also available in English, making it ideal for businesses running cross-border e-commerce targeting environmentally conscious international consumers.
There's no monthly fee — you only pay for the offsetting itself. If you're curious about the cost for your own store, you can get a rough estimate here.

— What motivates the companies that are actively considering adopting this?

Companies and brands are interested in taking a fresh step in environmental action — and in being able to communicate that directly to consumers. I've noticed a shift in the conversations we're having: businesses are moving away from a mindset of simply growing their own bottom line, and toward exploring how their growth can have a positive impact on society and the environment.

— On the other hand, how do you view Japanese consumers' awareness of environmental issues?

Compared to overseas — particularly Western countries — there's no denying that Japanese environmental awareness lags behind. In other countries, it's common for people to skip work or school for everyday protests, and the idea of consumers paying for offsets themselves is already well established. I think this gap stems from Japan's geographically fortunate position on the globe, where people haven't faced the level of crisis that would make them feel personally affected. That said, global trends are already shifting attitudes, and the number of environmentally conscious Japanese consumers is growing. If you pay attention, you'll notice that Japan too has been experiencing abnormal weather, more frequent natural disasters, and declining food quality — signs that climate change is quietly affecting our daily lives. The key in Japan is how quickly people can develop a sense of personal stake in this issue. To accelerate that shift, Sustineri will continue to focus on developing services that drive CO2 reduction action.

— Are there any examples of sustainable practices in the commerce industry — your clients' world?

Starting with one of the most famous and large-scale examples: Patagonia. Many people may already know that they consistently donate 1% of sales to environmental protection groups. Recently, founder Yvon Chouinard made headlines by transferring all of his shares to an environmental nonprofit. But more than the act itself, what I want to highlight is the philosophy behind it — captured in his famous quote, "Earth is now our only shareholder." It reflects a fundamental truth: we humans exist within, and depend upon, nature's ecosystem. I think this is a mindset that anyone building a lasting business should carry with them.
Another example is allbirds, a well-known sustainable brand. They don't just make products from eco-friendly materials — they also make the carbon footprint of each product visible and offset it, selling their goods as "carbon-neutral products." This kind of commitment is gradually spreading among brands that place sustainability at their core.
In Japan too, we're seeing growth in brands focused on reducing food waste, brands that are carbon-neutralizing their packaging materials, and brands that collect and repurpose used products.
In an increasingly competitive e-commerce landscape, sustainability is an extremely effective way to differentiate your brand.

— It sounds like carbon offsetting can genuinely strengthen a brand's credibility as a sustainable business — and that in turn drives business growth. Is there anything Sustineri would like to say to Japanese businesses?

Sooner or later, sustainability and environmental impact will inevitably become part of how companies are evaluated and supported. If you already sense that you'll need to take action within the next three to five years, then there's no question that moving earlier than your competitors gives you a first-mover advantage. We'd encourage businesses to start as soon as possible. We also believe that in this early phase of shifting mindsets, it's companies that should lead environmental action and help raise consumer awareness.

— Cost sensitivity around environmental initiatives is still strong in Japan, yet overseas companies seem to embrace them as a matter of course. Do you see this as a business growth opportunity?

Absolutely. Taking meaningful environmental action earns recognition not just from investors and financial institutions, but also from business partners and customers. Overseas, this is already backed by data. For example, according to a similar offsetting service provider abroad, 90% of users said they support brands that take environmental action — and the same businesses saw cart abandonment rates improve by roughly 20% and retention rates improve by around 20% as well.

Some services even claim that adopting a carbon offset app is more effective as a CSR strategy than running paid advertising.

In Japan, data also shows that younger generations — especially those in their 20s and 30s — are increasingly conscious of whether their purchases are sustainable. One telling example: a major cosmetics company launched a sustainable skincare brand targeting primarily 30-somethings with a premium-priced product, only to find that buyers in their 20s far exceeded expectations. In other words, the old rules of marketing are being turned upside down. The share of consumers willing to change their purchasing behavior to reduce environmental impact is growing — with data showing that 57% say they'd be open to changing their habits.
For a long time, purchasing decisions were driven by two axes — price and quality, essentially economic rationality. Now, environmental impact is emerging as a third axis. The generation that holds these values will make up the majority of consumers in five to ten years. Brands that start acting on environmental responsibility as early as possible will be best positioned to earn consumer loyalty and grow alongside them.

If you're an e-commerce business owner who wants to contribute to environmental causes — even in a small way — and strengthen your sustainable branding, we encourage you to consider adopting the Carbon Offset Cloud app. StoreHero can help with the implementation on your store, so please feel free to reach out!