How can logistics as we know it today be transformed towards carbon neutrality? What are the most effective pathways to reduce logistics-related GHG emissions over the next decade? And how can industry leaders drive this transformation? KLU’s Center for Sustainable Logistics and Supply Chains (CSLS) took the occasion of COP26 to invite international experts and a public audience to its first public event and discuss these questions with them.
The overall message of all speakers: Economic actors along supply chains need to collaborate much closer to reduce emissions and get on track towards carbon neutrality. In his welcome address, KLU President Thomas Strothotte added dialogue between industry and scientific institutions like KLU. “Not just today, but in the coming months and years we will need the dialogue. Please, give your ideas to us, approach us – challenge us – and together we can come up with better solutions than we have in the past,” Strothotte said. Otto Schacht, Executive Vice President of Global Sea Logistics at Kuehne+Nagel International AG, echoed his sentiment. “Sustainability is a very important part in our mission,” he stated, an assertion clearly shown both in Kuehne+Nagel’s own operations and its support for KLU’s Center for Sustainably Logistics and Supply Chains.
Improve the State of the World
“We want to improve the state of the world,” said CSLS Director Prof. Moritz Petersen in his opening session, “by focusing on logistics operations and supply chains. And there we aim to accelerate the transition towards more sustainable and essentially future-proof business practices.” Petersen and Co-Director Prof. Johannes Meuer invited several top international experts to discuss the results of the latest COP conference in Glasgow, as well as practical business solutions for change.
Sophie Punte, Managing Director at We Mean Business Coalition, gave a first direct insight from COP26 in her keynote. “My verdict: The bottle is half full!” she said. “We are headed in the right direction, though undeniably, it is not enough yet to get to 1.5 degrees.” In her opinion, it now needs “all in for 1.5 degrees,” meaning halving emissions by 2030 and net-zero by 2050 at the latest. “Many companies already have this ambition,” she reported, “but it now needs to translate into action, accountability through disclosure of emissions and reductions, and advocacy for supportive policy.” Punte thus once more stressed the need for collaboration between governments, businesses, and the wider community as key for the next steps towards decarbonizing our economy by 2050. We cannot get their without including logistics and supply chains.
Carbon Insets and Offsets for Green Logistics
Suzanne Greene, Global Procurement Sustainability and Advocacy Leader at Dow, focused on a new tool to accelerate transportation decarbonization, carbon insets. Until now, companies have mostly offset their freight transportation emissions by financing measures outside their area of operations, such as reforestation. In the future, according to Greene, carbon offset purchases should align with the same sector or supply chain where the climate impact originated – this where a carbon offset can be considered a carbon inset. Very few carbon offset projects for freight transportation exist in the marketplace today; demand from buyers is needed to build a marketplace of projects. Acceptance of carbon insets by groups like the Science-Based Targets initiative will also help to advance the uptake of these projects.
The Importance of Carbon Accounting
Jakob Muus, CEO & Founder of Tracks GmbH, followed with an innovation pitch on the importance of digital solutions for carbon transparency. According to the EU Sustainable Finance Disclosure Regulation of 2021, companies must now conduct proper carbon accounting to secure capital, leading to competition on who can show the lowest accredited numbers. Right now many companies have to deal with very low data accuracy. In fact, they often overestimate carbon when using standard values for GHG emissions because they lack real data. “You can only really lower CO2 if you have real data,” Muus stated.
Supply Chain Collaboration
Pietro d’Arpa, Vice President Supply Chain for Europe Logistics & End to End Strategic Planning at Procter & Gamble, closed the event by giving insight into what role collaboration among different supply chain actors can play on the way towards sustainable logistics. Collaboration might be as easy as sharing warehouse space with competitors to increase asset utilization, in Proctor & Gamble’s case, from 23 to 100 percent. Another example: introducing and negotiating the standard of reusable, plastic “smartbox” containers instead of the current cardboard containers, which might reduce carbon emissions by up to 20 percent. “Stop talking and start testing. There are a lot of ideas, but we need to accelerate the testing time. It’s only through this testing that we can accelerate and win the journey that we have in front of us,” d’Arpa concluded.