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Simply Sustainable

Critical building block in the transition to a sustainable economy

A sustainable economy is not possible without sustainable transport and logistics. Globally, transport is responsible for approximately 20% of total greenhouse gas (GHG) emissions, with road transport being the main contributor1.

Virtually every company makes use of transport, either directly or indirectly, for the transport of materials and products upstream in the value chain, employee travel, and downstream distribution to value chain partners or clients. This means that transport emissions are part of the GHG emissions footprint of fundamentally every company.

Full focus on reducing emissions

We have seen many transport and logistics companies step up their sustainability strategy, recognising that sustainability creates risks and opportunities for their business. Unsurprisingly, given the sector’s global footprint, reducing carbon emissions is the primary sustainability focus for many transport and logistics companies. Transport emissions grew at an annual average rate of nearly 1.7% from 1990 to 2021, faster than any other end-use sector. To get on track with the pace of emissions reductions necessary to achieve net zero by 2050, GHG emissions from the sector must fall by about 3% per year to 2030.2

Building a strategy to deliver on such targets is not easy. There are real and important technology choices, for instance about the respective roles of biofuels, hydrogen and electricity in zero-emissions transport. Biofuels for road transport are increasingly widely available but come with a significant cost premium over fossil diesel. Electrically-powered heavy goods vehicles are commercially available, but their viability for long-distance journeys is still a limiting factor due to their range and lack of charging infrastructure. Production of emerging fuels, like green hydrogen and sustainable aviation fuels is still small and they are only few fuelling points. Moreover, switching to zero-emission vehicles often requires significant investment, which may pay itself back over time, but raise short-term costs at a time when businesses are already facing cost pressures.

Despite the challenges, transportation and logistics companies can, and should, still strive for significant short-term emissions reductions. Across the UK and EU, examples of commitment and initiative within the transport and logistics industry are many.In 2023, the number of zero-emissions heavy goods vehicles in the Netherlands will exceed 1,000, a tripling compared to 2022.3 To continue this growth, collaboration with cargo owners committed to switching to zero-emission transport will be critical. For example, Lidl has announced that, before 2030, it will only use electric heavy goods vehicles for supply its stores. Following extensive consultation with its transportation partners, this ambition gives all parties the clarity to plan for the switch to zero-emission transport.4

A robust decarbonisation strategy for transport requires an in-depth, systematic review of the business, a critical analysis of potential net-zero carbon pathways and modelling of selected carbon reduction trajectories, demonstrating the transformational action required, impact on carbon footprint and timescales. Only with a fact-based approach, transport companies can make the best short-term decisions across the business, while preparing the uptake of zero-emission solutions that will put them on track for net zero by mid-century at the latest.

Sustainability beyond carbon

We also see that transport and logistics companies are increasingly expanding their sustainability strategies to topics beyond carbon. As in many other sectors, biodiversity and nature are receiving more and more attention. Logistics hubs are prime candidates for creating biodiversity benefits. In October 2023, Mainfreight, a major global logistics services provider, opened a nature-inclusive distribution centre in Utrecht, the Netherlands.5 The facility, developed by Heembouw, is situated in newly created grassland with native flower species and features vertical building elements that support plant life. All rainwater is collected and used on site, limiting runoff with potential pollution to the surrounding nature.

Many organisations in the industry are also considering their role in facilitating circular business models, for instance by enabling return of products and components for reuse, refurbishment or recycling.

The EU Corporate Sustainability Reporting Directive (CSRD) is a major reason why companies are looking at sustainability topics beyond carbon. It requires companies to consider their impacts on a wide range of sustainability topics, including biodiversity, but also social topics like human rights, working conditions and relationships with local communities – all very relevant for transport and logistics companies.

A major business opportunity

Sustainability presents a major opportunity for transport and logistics companies, and many have realised this. With their pivotal position in global value chains, they can enable emissions reductions for many other companies across multiple value chains, accelerating the transition to net zero across the business ecosystem. By facilitating the sustainability journey of their clients, they can deepen client relationships and set themselves up for long-term success.

Author: Sytze Dijsktra, Netherlands Country Manager, Simply Sustainable

 

1 Share of global CO₂ emissions by sector 2022

2 IEA. Transport Sectoral Overview. September 2022 

3 ING Research. Assetvisie trucks en trailers. October 2023

4 Transport & Milieu. Lidl rijdt al voor 2030 volledig elektrisch. October 2023

5 Warehouse Totaal. Mainfreight neemt natuurinclusief distributiecentrum in Utrecht in gebruik. October 2023

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