How the freight and logistics industry is tackling emissions

Scoping Scope 3

Supply chains are responsible for about 60% of global carbon emissions. According to research by Accenture, 69% of global CEOs say climate change is having a moderate to high impact on their business. Sustainability is a business issue, and almost all freight and logistics companies recognize it as such. Virtually all CEOs surveyed see making their businesses more sustainable as their primary role.

Scope 3 emissions (emissions created up- and down-stream of a company's core operations) are an urgent target. They're typically 11 times higher than Scope 1 and 2 emissions combined, but because most Scope 3 emissions are generated deeper in the supply chain (most companies don't even know their suppliers beyond Tier 1) they are notoriously difficult to track and mitigate. But as a renewed focus on ESG in the supply chain is a matter of urgency, freight and logistics organizations are prioritizing a number of different strategies to minimize climate impact and reduce Scope 3 emissions throughout the supply chain.

How supply chain organizations are reducing emissions

Reducing GHG emissions in the supply chain is a complex problem requiring as yet unrealized levels of visibility, transparency, collaboration and accountability to achieve. But many supply chain stakeholders are taking varied and concrete steps to tackle emissions in their supply chain ecosystems, including:

Carbon insetting

Carbon insetting refers to the business practice of implementing environmental regeneration projects along a particular company's value chain to reduce emissions and produce a net--positive environmental impact. This could involve reforestation, agroforestry, renewable energy, and regenerative agriculture in areas in which the business sources products, labor, or materials.

Focusing on last-mile emissions

Urban last-mile delivery is expected to grow by 78% by 2030, increasing last-mile delivery emissions by 30% without intervention. Logistics companies are implementing a number of measures to mitigate the impact of last-mile delivery -- a notoriously emission-heavy link in the supply chain -- including deploying electric delivery fleets, drones and dynamic AI-powered routing, which calculates the most carbon-efficient routes at any given moment, redirecting vehicles for carbon-optimized deliveries.

Increased supplier collaboration

Cross-sector collaboration, data sharing and incentivization are helping supply chain organizations decarbonize at scale. This includes supporting suppliers in their decarbonization efforts, or selecting suppliers based on their environmental practices and policies.

Digital twins

Digital twins give supply chain organizations the ability to map their entire operations in the virtual space, unlocking advanced scenario simulations, GHG risk assessments and other "what-if" modeling capabilities to optimize GHG emissions reduction.

Developing circular business models

The notion of a circular economy has gained major traction in the past few years. It involves a shift away from the current linear economy, in which products are produced, consumed and then thrown away, to an economy in which waste is reduced by the regeneration and reuse of materials, and more sustainable energy consumption practices. If the supply chain is to achieve sustainability, organizations must aim to become circular businesses, finding ways to recycle, reuse and regenerate as far as possible, and embedding these practices into their business models.

How major companies are tackling Scope 3 emissions

More and more, the world's largest companies are making public their efforts to reduce their carbon footprints and minimize their environmental impact. Apple plans to be carbon-neutral by 2030, with Amazon aiming for net-zero by 2040.

As early as 2017, Walmart announced Project Gigaton, in which the retail giant aims to reduce or avoid one billion metric tons of greenhouse gases from the global value chain by 2030.

Unilever aims to replace all fossil-fuel-derived carbon with renewable or recycled carbon in all its cleaning and laundry product formulations by 2030 through its Euro Clean Future initiative, while taking major steps to achieve a deforestation-free supply chain.

For key insights into your carbon footprint, choose Stargo

To identify GHG hotspots along the supply chain, freight and logistics organizations need clear visibility into their ecosystems. But gaining this visibility into the complex, dynamic, constantly shifting variables that make up the supply chain is a significant challenge without the right tools.

Stargo's AI-powered StarDox platform can calculate CO2 emission reduction efficiency along multiple routes and modes in a few seconds, flagging high GHG values and offering more carbon-friendly alternative routes.

Find out how Stargo can transform the way you tackle carbon emissions in your supply chain by trying a free demo today.