Etsy, Inc

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.