Etsy is a go-to platform for people who want to buy original items from independent traders. But how ethical is the Etsy platform?
Is Etsy, Inc Ethical?
Our research highlights several ethical issues with Etsy including: workers’ rights, environmental reporting, animal rights and political activities.
In particular, Etsy shows a shocking lack of responsibility for its supply chain. It is also shirking responsibility for carbon emissions by only looking at the tip of the iceberg – direct company emissions, instead of the mass of emissions produced by sellers.
Below we outline some of these issues. To see the full detailed stories, and Etsy's overall ethical rating, please sign in or subscribe.
People
Etsy received Ethical Consumer’s worst rating for Supply Chain Management. It had various policies stating what it expected from sellers. However, Etsy said it could not "guarantee the conditions under which products listed for sale on Etsy were made" and did not "require sellers to demonstrate that the materials incorporated into their products comply with the laws in the country or countries in which such suppliers do business". The company therefore failed to ensure that rights abuses were not taking place in its supply chain.
Etsy also lacked regulations related to a key workers’ rights issue – cotton sourcing. According to Anti-Slavery international (ASI), in 2018 Uzbekistan and Turkmenistan were two of the world’s largest exporters of cotton, and every year their governments forcibly mobilised over one million citizens to grow and harvest cotton. Etsy sellers retailed a significant amount of cotton clothing, household textiles and fabrics but it had no requirements for cotton sold on the platform.
Environment
Etsy discusses carbon emissions in its 2019 Annual Report. The report stated that, since February 2019, Etsy offset 100% of emissions generated from Etsy.com shipping through investment in "verified emissions reductions", which included "protecting forests, sponsoring wind and solar farms, and developing greener methods for producing auto parts". Ethical Consumer did not consider offsetting a meaningful way to address carbon emissions, and did not consider this approach to be in line with international agreements such as the United Nations' Paris Agreement.
What’s more, the company only appeared to discuss its subsidiary Etsy.com in its reporting of scope 3 emissions. It did not include emissions generated by sellers on its platform, which was assumed to be far higher than the emissions from its own operations.
Etsy also lost a whole mark under Pollution and Toxics as it did not address the use of toxics in household cleaning products and toiletries retailed on its platform. Its Prohibited Items policy prohibited sale of "toxic substances” (such as poisons) but did not prohibit the products that contained toxic chemicals such as parabens, triclosan or phthalates.
Politics
The 5% transaction fee independent sellers pay on Etsy helps generate the company’s £600m turnover and fill the pockets of company directors. The company’s five executive directors all received over £1m in compensation in 2019. The highest paid received £2,650,000.
Etsy investor, Vanguard Group is also involved in lobbying. In 2019 it spent USD$2.5m on lobbying, and made $649,000 in political donations. Vanguard was also a member of the Business Round Table, which Ethical Consumer considered to be an international corporate lobby group which exerted undue corporate influence on policy-makers in favour of market solutions that were potentially detrimental to the environment and human rights.
Animals
A visit to the Etsy website shows that the company sells a significant number of leather items. It also sold products containing silk, feathers, (merino) wool items and honey. While its Prohibited Items Policy prohibited the sale of live animals, ivory, and use of endangered or threatened animal species, no other restrictions were identified. Etsy lost half a mark under Animal Rights.
Etsy's did not appear to prohibit the use of animal testing, nor did it set a cut-off date for ingredients tested on animals. As the company sold household cleaning products and toiletries, such as perfumes and makeup, Ethical Consumer considered a clear policy on animal testing to be necessary. The company lost a whole mark under Animal Testing.
FAQs
Etsy received Ethical Consumer's worst rating for Supply Chain Management. It had various policies stating what it expected from sellers.
Is Etsy actually sustainable? ›
The Challenge. Etsy has a history of strong sustainability practices including committing to 100% renewable electricity in 2016, running 'Zero Waste' operations in 2017, and becoming the first ecommerce company to offset 100% of its shipping emissions in 2019.
Does Etsy greenwash? ›
Federal Court Said Plaintiffs Lacked Standing for Case Alleging Etsy Misrepresented Effectiveness of Carbon Offsets for Shipping Emissions. The federal district court for the Central District of California ruled that plaintiffs in a putative greenwashing class action against Etsy, Inc.
How is Etsy carbon neutral? ›
We offset 100% of carbon emissions from shipping and packaging on every delivery. The climate crisis is here. So is our commitment to a better future for our planet. Etsy is the first major shopping site to offset 100% of carbon emissions from shipping and packaging of every delivery.
What is the Etsy Code of Conduct? ›
We respect human rights, provide fair working conditions, and prohibit the use of any forced, compulsory, or child labor by or for our Company or our sellers. We prohibit discrimination and treat each other with dignity. We recognize, respect, and value each other for our differences.
Why did people boycott Etsy? ›
What's the issue? Etsy's reserve system means that some sellers are seeing 75% of their takings frozen for up to 45 days. This has led a number of sellers to call for a boycott, creating social media channels such as the Etsy Reserve Strike Group.
Is Etsy a Chinese company? ›
Etsy, American e-commerce company, founded in 2005 by entrepreneur Rob Kalin and partners Chris Maguire and Haim Schoppik, that provides a global Internet marketplace for handmade and other wares. The company's headquarters are in Brooklyn, New York.
Is Amazon really carbon neutral? ›
Climate scientists agree that the world needs to reduce its carbon emissions, and we at Amazon are working to do our part. We aim to reach net-zero carbon emissions across our operations by 2040 by investing in carbon-free energy, scaling solutions, and collaborating with partners to broaden our impact.
Is Burt's Bees carbon neutral? ›
We've achieved a 99.6% Natural Origin average across our formulas. 100% of our packaging is recyclable either curbside or through TerraCycle® and we use an average of 50% recycled materials across our packaging. We have Landfill-Free Operations and are CarbonNeutral® Certified.
What does Etsy offsets carbon emissions from every delivery mean? ›
Shipping is responsible for 98% of Etsy's total carbon emissions. We're partnering with climate change expert 3Degrees to balance out this impact through the purchase of carbon offsets that provide verifiable emissions reductions by preventing or absorbing carbon emissions that would otherwise enter the atmosphere.
Avoid Trademark Infringement
Using trademarked logos, names, or phrases without permission not only goes against Etsy's policies but can also infringe upon the rights of other businesses, who won't hesitate to issue a takedown notice for your Etsy listings. Come up with your own business name and stay original.
Are Etsy sales reported to IRS? ›
Etsy typically reports your gross income to the IRS on Form 1099-K, but even if you don't receive a 1099-K, you still have to report your Etsy sales income on your tax return. If your state has income tax, you'll need to pay state income taxes on the net income from your Etsy sales as well.
What is extortion on Etsy? ›
Extortion is prohibited on Etsy, as outlined in our Buyer Policy and Seller Policy. The following actions are examples of extortion: A buyer leaves a negative review in an attempt to force the seller into providing additional items that were not agreed upon in the original transaction.
Are Etsy shops ethical? ›
Our research highlights several ethical issues with Etsy including: workers' rights, environmental reporting, animal rights and political activities. In particular, Etsy shows a shocking lack of responsibility for its supply chain.
What is the downside of Etsy? ›
Etsy Shares Your Profits
So every dollar in profits isn't yours to keep. In addition, there are fees for accepting credit card payments or PayPal. Etsy views these fees as the price you pay for taking advantage of their strong customer base.
Is Etsy socially responsible? ›
Etsy is dedicated to sustainability and social responsibility, with initiatives such as renewable energy procurement, offsetting carbon emissions from shipping, empowering suppliers to meet their sustainability goals and supporting diverse and inclusive communities.
Is everything on Etsy really handmade? ›
The Etsy marketplace connects people looking for unique goods with independent sellers around the world. Everything listed for sale on Etsy must be handmade by you, vintage, or a craft supply. All items sold on Etsy must also follow our Prohibited Items Policy.
