Scope 3 – Reducing Transport and Distribution emissions in your value chain
Logistics account for over 20% of the global greenhouse gas emissions and play a critical role in your company’s value chain. This video looks at Upstream and Downstream Scope 3 emissions and potential strategies to reduce these.
Depending on the business, transportation and distribution emissions can be major contributors to Scope 3 emissions. We have worked with a transport company in Western Australia. Their fleet drives the equivalent of one lap around the world each day!
Where do you start?
Logistics can be a significant portion of a company’s value chain emissions, depending on the industry. The last couple of years has proven the disruption that can occur to logistics globally, which introduces risk to your company. There are several strategies and resources that we touch on below.
Short-term options to reduce logistic emissions
A few examples of short-term options to reduce transport and distribution can include:
• Review key suppliers and distributors, source locally where possible.
• Use of intelligent route planning systems and telemetry.
• Sourcing lower carbon-intensive modes of transport and fuel sources. For example, switching from truck to rail.
There are also options available where you can blend biodiesel into your fleet. Under the Australian Government’s Emission Reduction Fund, you may be eligible to generate carbon credits.
It’s important to talk to your logistic suppliers to understand how they are working towards decarbonising their service.
Longer-term options to reduce logistic emissions
Longer-term strategies to reduce logistics emissions may require higher investment.
Longer-term options can include:
• Locating production as close to consumers as possible
• Eliminate any intermediate transport, and change to a direct-to-consumer distribution model
• As technologies mature, source lower carbon-intensive modes of transport whether this is electric or hydrogen.
Be aware of the following trap
One thing to be wary of as you develop your sustainability strategy is the following:
With changing business models and increasing regulations around extended producer responsibility, some companies will need to consider the impact of reverse logistics on their carbon footprint. Reverse logistics is the movement of goods from the customer back to the supplier to enable the recovery and reuse of resources.
Depending on the volume of goods, a logistics strategy is critical to ensure no rebound effect (or significant increase in emissions).
What can you do to start?
Logistics is typically where some easy Scope 3 emission reductions can be achieved. The Global Logistics Emission Council provides great resources and frameworks to implement in your business.
Have a think about your company and which of the Scope 3 categories above might apply to your company.
Have a listen to the rest of this Decarbonising Scope 3 Emissions Series for other strategies to decarbonise your Scope 3 emissions.
If you would like to know more
Contact us at Evolveable Consulting, and we assist businesses in identifying decarbonisation solutions and strategies to reshape their business. You can learn more about our services or book a consultation directly with us.