10th May 2021. Commerce | Warming
From e-commerce to q-commerce; the finance of climate change
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#1: From e-commerce to q-commerce
We’re moving from a world of E-commerce to a world of Q-commerce, argues the futurist Peter Madden in a recent post. Q is for quick, and the post is about the trend for customers to expect rapid delivery.
Madden writes about “another type of 15 minute city”—with a nod to Paris’ city concept—in which deliveries never take longer than 15 minutes.
Speedy delivery caters to a fundamental human desire for instant gratification... Companies are dashing to satisfy this desire, and the competition is fierce. What began as speedy takeaway delivery, is quickly spreading to other product areas like food, flowers, and pharmacy goods... Companies like Foodpanda that started-out delivering meals now offer groceries within 15–20 minutes in cities across Asia. And start-ups such as Dija, Getir, and Snappy Shopper are joining the race.
It happens that Peter and I explored this in some collaborative work we did several years when he was setting up the Future Cities Catapult.
(Image: Andrew Curry. CC BY-NC 4.0)
Once down this route, infrastructure has to change. It’s more effective to deliver takeaway meals from dark kitchens—effectively own brand—and to deliver groceries from warehouses than supermarkets. Restaurants that allow customers to use a delivery channel such as Deliveroo end up paying up to 30% for the privilege, and handing over their customer data. (And this even though Deliveroo’s working conditions are poor and its business model is likely unsustainable.) The idea of the High Street is an obvious casualty here.
There are other casualties here:
In sustainability terms, speedy delivery brings an increase in traffic, a big increase in household waste, and depending on how the services are delivered, may lead to an increase in CO2 emissions. In dense cities more deliveries are by bike; in sprawling conurbations the motorbike or car dominate... Some Q-commerce companies are going electric, and trying to ensure that their waste, if not reduced, is at least recyclable. Q-commerce may not be great for the long-term health of the urban population either. We are home-cooking less and living more off takeaways.
In terms of our health and that of our environment, the Paris version of the 15-minute city is better for us than the Q-commerce version. There’s an immediate conflict between our sort-term desires and our long-term wellbeing. Some US cities have imposed a 15% delivery tax, which at least ensures that the companies contribute to the urban infrastructure they live off. But the long-term costs of this kind of urban delivery structure are much bigger than that.
#2: The finance of climate change
The Bank of England has has its mandate extended by the British government to include aligning the economy with a ‘net zero’ objective. The Bank’s already been heading in this direction.
Its ‘climate stress test’ will explore the robustness of financial institutions’ finances to climate risks. It is committed to accounting for climate impacts in buying financial assets. Its also played a big role in research and advocacy, at central bank level . And it has been working with the Treasury to make climate risk financial reporting mandatory.
But there’s more to do, as NEF notes: its own portfolio, which largely reflects the market mix, is consistent with 3.5 degree warming (on the upside, it has done this analysis already), and British headquartered banks, notably Barclays, are heavy investors in fossil fuel industries. The government decision, however, gives it permission to tackle this rather than having to use the cover of “financial risk”.
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