At a time when sustainability and environmental awareness are paramount, organizations worldwide are increasingly recognizing the importance of reducing their carbon footprint. The supply chain, which accounts for 11% of the world's CO2 emissions, holds immense potential for emissions reduction and sustainability. Many shippers and forwarders have already committed to becoming carbon-neutral by 2040 to 2050. This transformation will create new challenges and opportunities for companies. In this article, we delve into the fascinating world of carbon footprinting in the supply chain, exploring the regulatory standards, measurement methodologies and framing techniques that are driving this transformative journey.
Navigating the regulatory maze
In the field of carbon footprint management, a complex web of regulatory frameworks and standards has been woven to guide organizations towards a greener path. Take, for example, the influential Paris Agreement, which has set emission reduction targets to combat global warming. In addition, internationally recognized standards such as :
- ISO 14001:2015 - Environmental management systems - Requirements and guidance for use: This standard provides a framework for organizations to establish, implement, maintain and improve an environmental management system (EMS). Although it does not focus specifically on the measurement of carbon emissions, it includes requirements for the identification and management of environmental aspects, which may encompass emissions measurement and reduction efforts.
- ISO 14083:2023 - Greenhouse gases - Quantification and reporting of greenhouse gas emissions from transport chain operations. The most recent ISO standard should be used comprehensively for accounting carbon and greenhouse gas emissions.
Illuminating measurement methods
The quest for an accurate measurement of the carbon footprint has given rise to ingenious methodologies that shed light on emissions data. One of the main approaches is the Greenhouse Gas Protocol, a powerful tool that classifies emissions into three distinct categories:
Scope 1: direct emissions from sources owned or controlled by the company. This includes emissions from the combustion of fossil fuels in company-owned or leased vehicles used to transport goods, emissions from company-owned or controlled warehouses or distribution centers, and emissions from company-owned or controlled industrial processes, such as manufacturing or production facilities.
Scope 2: Scope 2 emissions include indirect emissions associated with the production of electricity, heat or steam purchased and consumed by the company. This may include emissions from the production of electricity used in facilities owned or leased by the company, such as offices, warehouses or data centers.
Scope 3: Scope 3 emissions include all other indirect emissions that occur in the company's value chain, beyond the sources it owns or controls. These may include emissions from activities such as the purchase of goods and services, transportation and distribution, employee travel, business trips and waste disposal, among others.
Science Based Target Initiative - Validation of companies' decarbonization trajectories
The Science-Based Targets (SBTi) initiative is a collaboration between CDP (formerly known as the Carbon Disclosure Project), the United Nations Global Compact (UNGC), the World Resources Institute (WRI) and the World Wildlife Fund (WWF). It was launched in 2015 with the aim of mobilizing companies to set science-based targets (SBTs) for reducing their greenhouse gas (GHG) emissions, in line with the objectives of the Paris Agreement.
It defines the criteria and guidelines enabling companies to align their emissions reduction targets with the latest climate science, and ensures that these targets are sufficiently ambitious to contribute to the global goal of limiting global warming to well below 2 degrees Celsius, and continuing efforts to limit the temperature increase to 1.5 degrees Celsius.
Companies that set and achieve SBTi-compliant SBTs can benefit from a number of advantages, including
- Enhanced reputation with stakeholders, including customers, investors, employees and other stakeholders.
- Risk management: adapting to regulatory and market developments in carbon emissions, ensuring that companies are well positioned for the transition to a low-carbon economy.
- Competitive advantage: Companies that adopt science-based goals early on can gain a competitive advantage by distinguishing themselves as leaders in sustainability and climate action, potentially attracting more customers, investors and talent.
- Access to capital: Some investors and financial institutions are increasingly taking climate-related risks and opportunities into account in their investment decisions.
Overall, SBTi offers companies a credible and recognized framework for setting science-based targets, demonstrating their commitment to tackling climate change and contributing to global efforts to mitigate its effects.
Other collaborative organizations can add considerable value to supply chain decarbonization, including the Smart Freight Center, which helps companies apply the Global Logistics Emissions Council (GLEC) framework.
MyTower TMS uses EcoTransIT as the methodology for calculating the carbon footprint of each shipment. EcoTransIT was founded within the framework of GLEC, and provides a calculation methodology compliant with ISO 14083 and European standard EN 16258.
Paving the way for a greener future
Building sustainable supply chains requires a commitment to continuous improvement and innovation. Organizations can embark on this transformative journey by implementing sustainable practices such as optimizing transport routes, adopting energy-efficient technologies, sourcing materials responsibly and working with environmentally conscious suppliers. By constantly monitoring, analyzing data and evaluating progress, organizations can steer their supply chains towards a more sustainable and environmentally friendly future. This is precisely the challenge facing shippers today: transport data remains fragmented, and data on transport-related carbon emissions even more so. Unfortunately, without solid, consolidated data, it is not possible to assess and establish an effective, realistic strategy for becoming carbon neutral. In our next article, we'll take a closer look at this topic, providing you with an overview and recommendations for solving your data gaps when reporting transportation-related carbon emissions.
In our next article on TMS, we'll take a closer look at this topic, providing you with information and recommendations for solving your carbon emissions reporting data gap in the transport sector through the implementation of MyTower TMS.
