It’s important for organizations to seek like-minded partners that understand their climate goals and are interested in working together to identify decarbonization strategies and solutions.
There is more focus than ever right now on companies investing in environmental transparency and reporting on greenhouse gas (GHG) emissions. With growing interest from customers, investors and policymakers in organizations’ carbon footprints, the business world is facing increased pressure to disclose emissions data at a more granular level. This means disclosing Scope 1, 2 and 3 emissions.
As companies publicly share their carbon footprint data and set timebound climate goals, it’s critical they determine strategies to address all three emission types. Scope 1 and 2 emissions are easiest to control, so are often first on the list to address; but to make significant progress toward sustainability, Scope 3 reductions also need to occur. In fact, according to CDP, Scope 3 emissions are 11 times higher than operational emissions for the average company — presenting a significant opportunity to decarbonize.
One way companies can begin addressing and driving Scope 3 emission reductions is partnering with like-minded transportation and logistics companies that have established their own sustainability goals and are investing in low-carbon solutions and innovation.
Transportation’s role in scope 3 emissions
Scope 1 and 2 emissions are the most commonly discussed and reported because they have been widely understood for some time. They are an easy entry point for organizations looking to start reducing its carbon footprint.
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As defined by the EPA, “Scope 1 emissions are direct GHG emissions that occur from sources that are controlled or owned by an organization … Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat or cooling.”
Scope 3 emissions — defined as emissions that are the “result of activities from assets not owned or controlled by the reporting organization, but the organization indirectly invests in its value chain” — remain a bit more challenging for organizations. There are 15 categories of Scope 3 emissions, which include emissions from upstream and downstream transportation and distribution activities.
Recent data from Reuters found that while 79 percent of companies with more than $1 billion in revenue are at least somewhat concerned about Scope 3 emissions, only 33 percent of companies are reporting on them. It’s clear companies need to begin understanding and addressing their Scope 3 impacts and set carbon-reduction goals; but many are unsure how to start.
As companies begin investing in Scope 3 reporting, transportation and logistics activities — which account for 29 percent of US GHG emissions — represent a large opportunity for decarbonization.
Partnerships to decarbonize transportation activities
For organizations looking to reduce their transportation-related emissions, there are clear best practices and strategies for success. One effective strategy includes partnering with a logistics company that is committed to reducing emissions and exploring new, innovative technologies.
It’s important for organizations to seek like-minded companies who understand their goals and are interested in working together to identify strategies and solutions focused on decarbonization. However, determining the right partner may be a challenge; so we recommend asking the following questions to learn more about its sustainability efforts and commitments:
Have you publicly shared a carbon-reduction goal or commitment? It’s important your transportation partners have publicly shared goals for reducing their carbon footprint and impact by decarbonizing their operations and investing in low-carbon solutions. By lowering their own carbon footprint, they also help their customers reduce their Scope 3 emissions. Having a publicly declared goal means partners are being transparent about their efforts and sustainability journey, and they are holding themselves accountable for their climate impacts. Ask your current or potential partners what their carbon-reduction targets are and how they set them to better understand their commitment to sustainability.
Do you have emissions data? Is it easy to access? Reporting is a considerable challenge for most organizations; and as the saying goes, “if it can’t be measured, it can’t be managed.” For transportation-related emissions, it’s important to find logistics partners that can provide customized, real-time data to fit your specific reporting needs. They should work with you to understand what data you need and when you need it; and provide it in an easy-to-understand, accessible format.
How new is your fleet? Newer fleets have inherent carbon emission benefits because they are outfitted with the latest technology — including solutions around fuel efficiency, alternative fuels and hybrid or fully electric drivetrains. The younger a transportation partner’s fleet is, the more it can aid in Scope 3 reduction goals.
How diverse is your portfolio of solutions? It’s important to partner with a transportation and logistics company that provides a diverse, well-rounded portfolio of solutions; so all your supply chain needs are understood and easily met. Ask potential or current partners about their offerings and if they are including these as part of its ongoing efforts to reduce carbon emissions.
Once you select a transportation partner, it’s critical to engage in ongoing conversations about goals, the latest innovations, changing needs and more. Having a strategic, transparent relationship is a great way of staying aligned and exploring new opportunities as the industry evolves. We increasingly see both sustainability and transportation leaders at large-enterprise organizations joining these discussions to ensure all are working toward the same goals.
Exploring new technologies & innovations with climate goals in mind
Beyond conversations, it’s also critical to understand your partners’ commitment to the exploration and testing of new sustainable technologies. There are many exciting innovations available today for further testing — including battery-electric vehicles, hydrogen engines, hybrid diesel/battery-assist engines, compressed natural gas trucks, solar panels and more.
While there are still obstacles to the widespread use of these new technologies, having a testing strategy highlights a company’s commitment to driving efficiencies and building a scalable framework for driving decarbonization while still meeting customer needs. For example, charging infrastructure remains a prominent obstacle when it comes to electric vehicles. Still, testing and validating, mostly in California, are determining what an electric future could look like.
Of course, not all new technologies may be a fit for your organization and processes; so having a partner who can help determine if it’s something worth exploring to meet your needs is also valuable.
A low-carbon future for transportation
As with any industry, there is no single solution for how the transportation and logistics sector can reduce its emissions and support a climate-stable future — there are many avenues for solution providers to explore to support their customers and help make meaningful progress toward carbon-reduction goals.