The world of logistics is a complex network, the backbone of global trade. But this vital network comes at a hidden cost – its environmental impact. In 2020, 101.5 billion t×km (tonnes per kilometre) of goods were transported worldwide by sea, resulting in 657 million tCO2e. In today's climate-conscious world, ignoring this cost is no longer an option. This blog explores the environmental impact of logistics, the risks of inaction, and the benefits of becoming an early adopter of sustainable practices.
The Environmental Footprint of Logistics The global supply chain stretches across continents, with countless modes of transportation and facilities involved. Each step – from production to final delivery – leaves an environmental footprint. Here's a breakdown of some key concerns:
Emissions: Transportation, particularly air and maritime shipping, contributes significantly to greenhouse gas emissions. Air freight is the most emissions-intensive mode of transport per unit of cargo, due to the high-altitude fuel combustion and contrail formation.
Waste: Packaging waste generated throughout the supply chain ends up in landfills, polluting the environment.
Resource Consumption: Logistics relies heavily on resources like fuel and energy, contributing to resource depletion.
The Push Factors: Why Sustainability Matters Ignoring the environmental impact of logistics creates several risks for businesses:
Climate Change: The World Economic Forum (WEF) identifies climate change as a major operational risk, impacting businesses across industries.
Legislation: Regulations are increasingly requiring companies to report on Scope 3 emissions (indirect emissions throughout their supply chain).
Reputation: Consumers are becoming more environmentally conscious. Failing to demonstrate sustainability can lead to "greenwashing" accusations and reputational damage.
The cost of inaction is high. Companies are facing up to US$120 billion in costs from environmental risks in their supply chains by 2026.
The Pull Factors: The Benefits of Going Green Embracing sustainable practices in logistics can bring numerous advantages:
First-Mover Advantage: Companies leading the charge in sustainability can attract environmentally conscious customers and investors.
Generating ROI: Climate disclosures are becoming a key factor in securing new business deals and enhancing your customer’s loyalty.
Consumer Demand: Consumers are actively seeking out brands committed to sustainability.
Reduced Costs: Optimizing logistics for efficiency can lead to cost savings in fuel, energy, and waste management.
Building a Climate-Positive Legacy Measurement is Key: Start by accurately measuring your Scope 3 emissions to understand your impact.
Optimize, Reduce, Inset: Focus on optimizing transportation routes and freight management, pushing for intermodality (lower emission intensity), reducing waste, and implementing "insetting" programs (carbon reduction initiatives within your operations).
Scaling Impact with Climate Projects: Partner with reputable carbon credits providers like Lune to fund high-quality climate projects that have a real impact across the globe. Vetted emission reduction or carbon removal projects that range from more traditional projects (eg., nature based reforestation, mangroves restoration or abating industrial emissions) to innovative projects (eg., biochar, bio-oil sequestration, direct air capture, or enhanced rock weathering).
Considering that at CargoClub we’re focused on directly addressing credits linked to your logistic value chain, particularly those focused on reducing emissions from the aviation sector.
Conclusion: The Time to Act is Now The logistics industry is at a crossroads. Embracing sustainable practices isn't just about environmental responsibility; it's a smart business decision. By becoming an early adopter of sustainable solutions, you can mitigate risks, gain a competitive edge, and build a future-proof business. CargoClub, with its commitment to sustainable FSPs and partnerships with trusted providers like Lune, is here to help you navigate the path towards a greener and more profitable future.
For a deeper dive into the impact of worldwide logistic, download Lune's insightful report, "Greening the supply chain."
Let's work together to build a sustainable logistics network. Contact CargoClub today to learn more.