Whether it’s B2C or B2B, the national and global ecommerce industry is booming.

But that boom in how consumers and businesses go online to purchase goods and services — at work and home — is taking a huge strain on the global resources and the environment, says a new report from the United Nations Conference on Trade and Development.

The digital economy is booming. Annual smartphone shipments have more than doubled since 2010, hitting 1.2 billion in 2023. And Internet of Things (IoT) devices are projected to surge 2.5 times to 39 billion by 2029, from 2023. New data from 43 countries shows business ecommerce sales grew 60% from 2016 to 2022, to reach $27 trillion. The data represents about three-quarters of global gross domestic product (GDP).

This growth is taking an increasingly heavy toll on the environment, according to the UN report.

Ecommerce role in the environment

The digital economy is resource-intensive. A four-pound computer requires 1.7 pounds of raw materials.

While the production phase is the most impactful — generating some 80% of smartphone greenhouse gas (GHG) emissions — environmental harm occurs throughout the lifecycle of devices and information and communications technology (ICT) infrastructure, including through ecommerce, according to the report.

Digital waste is growing faster than collection rates. Waste from screens and small IT equipment rose 30% between 2010 and 2022, reaching 10.5 million tons. Improper disposal leads to pollution and other health and environmental hazards.

Increasing demand for data transmission, processing, and storage for recent technologies like blockchain, artificial intelligence (AI), fifth-generation (5G) mobile networks and IoT is boosting emissions. For example, the ICT sector emitted an estimated 0.69 to 1.6 gigatons of CO2 equivalents in 2020, corresponding to 1.5% to 3.2% of global GHG emissions.

As digital devices become more complex, they require more mineral resources. Phones used 10 elements from the periodic table in 1960, 27 in 1990 and 63 in 2021.

As a result, demand for critical minerals critical for both digital and low-carbon technologies is soaring. For instance, demand for cobalt, graphite and lithium is expected to increase by 500% by 2050, according to the World Bank.

A pressing concern is digitalization’s increasing energy and water needs. In 2022, Google’s data centers and offices consumed more than 21 million cubic meters of water. Newer technologies, such as generative AI, also require more potable water for cooling servers.

In the U.S., one-fifth of data center servers’ direct water footprint comes from watersheds that are moderately to highly water-stressed, according to the report.

“The digital economy currently generates excessive waste, reinforced by programmed obsolescence – the built-in reduction of a product’s lifespan due to technical, functional or psychological reasons – in modes of production,” the report says. “A circular economy minimizes waste and maximizes resource use through reusing, refurbishing, recycling, and extending product lifespans.”

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Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends in the growing B2B ecommerce industry. Contact Mark Brohan, senior vice president of B2B and Market Research, at [email protected]. Follow him on Twitter @markbrohan. Follow us on LinkedIn, Twitter, Facebook and YouTube.