By Michelle Lee, chief sustainability officer, SingPost
The transport and logistics sector contributes over a third of global CO2 emissions. By 2050, the European Environment Agency expects global logistics to account for up to 40% of global carbon dioxide emissions if decisive action is not taken. Confronting a footprint of this magnitude requires a fundamental overhaul of how the sector operates.
Many businesses have already taken up the opportunity to advance their own green efforts. For example, SingPost, a leading eCommerce logistics player spanning 13 markets and Singapore’s postal service provider has been looking at ways to optimise its operational efficiency, minimise wastage, adopt renewable energy, and impose internal carbon pricing influencing business and investments decisions to achieve net-zero for its operations in Singapore.
Yet, the questions linger – is it enough and how can the wider logistics industry band together to create a more positive impact that reverberates far and wide?
Understand what priorities are in order to measure and act effectively
It’s important to first understand what the business priorities are before embarking on a sustainability journey. Internal and external stakeholder engagement will need to be conducted alongside peer benchmarking. Companies can also look at global trends to better understand what might impact their business, both as risks and opportunities.
At SingPost, priorities like Climate Action and Resilience were first defined and a sustainability framework was then rolled out through the whole organisation for action. This included understanding the company’s footprint and contributing factors of scope 1, 2 and 3 carbon emissions before acting to reduce consumption levels with data-driven analysis.
Reduction or elimination as a first approach
There are currently two main approaches to reduce carbon emissions – reaching carbon neutrality through carbon credit offsets or achieving net zero of greenhouse gas (GHG) emissions via proactive reduction initiatives or greater efficiency from a company’s activities.
While carbon offsetting can be a possible tool, it should not be the primary strategy for achieving sustainability goals. Prioritising and making tangible changes within an organisation’s operations to eliminate redundancies and reduce consumption levels should be the first step to collectively drive down emissions.
By focusing on real reductions, organisations can create a more resilient, responsible, and sustainable business model that positively impacts the environment. Logistics players can consider adopting the decarbonisation hierarchy framework, a systematic approach that emphasises reducing and eliminating carbon emissions for a sustainable future. Key actions include:
Identify and Eliminate Wasteful Practices: Companies should analyse their operations to identify unnecessary resource usage that contributes to carbon emissions. By eliminating these practices, they can decrease their carbon footprint in a sustained manner. This includes streamlining processes, removing inefficiencies, and fostering a broader culture of sustainability.
Reduce Consumption: In cases where some carbon emissions are unavoidable due to operational requirements, the focus should shift to minimising consumption. This involves adopting energy-saving measures and promoting responsible resource management.
Find Lower Carbon Alternatives: Organisations should explore alternative options with lower carbon impact that are still financially viable. This step involves investing in renewable energy, eco-friendly technologies, products, and practices that emit fewer greenhouse gases while maintaining financial sustainability. Contracting methods, such as share of savings, leasing, and performance-based models can also be incorporated to align economies of scale, foster innovation, and drive positive outcomes.
Compensate or Offset: After all efforts and alternatives for eliminating or reducing emissions are exhausted, companies can then consider compensatory measures or carbon offsetting. This entails investing in credible and verifiable projects that remove or reduce greenhouse gases, such as reforestation or renewable energy projects. Offsetting should complement reduction efforts rather than replace them.
Ecosystem-level changes are critical to sustain momentum
To set the momentum beyond one’s own efforts, there’s a need to also engage with the broader ecosystem. This is because involving suppliers, customers, regulators and communities can help companies across the expansive logistics industry cultivate a more collective commitment to environmentally conscious practices.
An example would be taking steps to address Scope 3 emissions, often the hardest to track or control and can even account for more than 70% of a business’s carbon footprint. SingPost refreshed its Supplier Code of Conduct to set clear expectations with its suppliers on environmental, social and governance matters to collaborate and journey together on.
Companies should also actively seek out and gather ideas from their stakeholders, such as customers and employees. Companies can then harness their expertise and insights to draw up plans of action, attempt to embed sustainability throughout their operations, and drive meaningful change across the organisation.
The logistics industry stands at a crucial juncture where individual actions are insufficient to address the complex challenges of sustainability. Embracing a collective approach that involves stakeholders from all corners is imperative to drive transformative change, revolutionise practices and pave the way for a sustainable logistics future that protects our environment while enabling global commerce to thrive in the long run.