October 4, 2022
5 Steps to Carbon-Neutral Shipping - What You Need To Know
The global supply chain and climate change. Sounds like the beginning of any one of a dozen recent news articles, doesn’t it? But few of those articles offer concrete, actionable steps a business can take to start reducing their impact on the planet. For today’s modern, fast-growing ecommerce companies, the need to make real change has never been more pressing for multiple reasons.
First the biggie—climate change and its ties to the retail industry. There is a fundamental shift in millennials’ preference toward eco-conscious brands. This cohort wields more spending power than any before it, and they’re buying according to their values:
- By 2030, the collective income of Millennials worldwide is expected to top $4 trillion
- 75% of them consider it important that a brand gives back to society
- 52% say they’ll be loyal to brands that align with their values
Second, legislation is shifting towards further transparency and responsibility. Multiple legislative efforts in the U.S. may require some brands to start tracing and reporting the climate and social impacts of their supply chains and other operations. Legislation out of New York and California, two states that are established economic leaders, is changing the way businesses account for supply chain transparency and responsibility, and more states may follow suit.
So what’s an up-and-coming ecommerce player to do? Working towards net zero emissions in your supply chain is more doable than you think. It also provides your organization an incredible opportunity to contribute to a more sustainable future for everyone.
What follows are five recommendations any company can start on today, to lower your carbon impact and optimize your supply chain to reach net-zero emissions.
Pre-Step: Identify and Prioritize Your Carbon Output
You wouldn’t launch a new product or expand to a new market without doing market research would you? Taking the same approach to decarbonization will help set you up for long-term success. While every organization’s emissions footprint will look a bit different, a rough breakdown may include:
- Transportation/logistics (including upstream and last mile)
- Manufacturing (rethink the production process of goods)
- Packaging (can you use more recyclable, reusable, reduced weight packaging, etc.)
- Energy efficiency (in all owned buildings including offices, warehouses, retail stores, etc.)
Did you know?
Freight transport makes up 8% of global greenhouse gasses (MIT Climate Portal), yet currently, decarbonizing the freight industry has been a slow process as electrification of planes and cargo ships is not yet practical and electric trucks aren’t ready for adoption at scale.
Step 1: Conduct a Scope 3 Emissions Assessment
In ecommerce, the majority of your overall footprint is from your supply chain. Did you know that on average, supply chain emissions are 11.4 times higher than operational emissions like manufacturing and office energy use? The GHG Protocol offers helpful tools to assess your supply chain emissions and get a handle on steps you can take to reduce them.
Start with understanding your emissions by conducting a Scope 3 emissions assessment. Conducting this assessment will allow you to understand the material impact in your end-to-end supply chain, and which categories contribute most to your overall carbon footprint. This data will help you identify where to focus your reduction efforts.
Step 2: Break Down The Numbers
Once you conduct your Scope 3 assessment, you're ready to baseline your emissions and Flexport's free, accredited emissions calculator makes it easy to get started with your logistics calculations. This step focuses on shipping and logistics since this industry does not have a clear decarbonization plan to date, leaving ecommerce brands with few alternatives.
Our calculator is accredited by the Smart Freight Center and conforms to the Global Emissions Logistics Council (GLEC) framework. For existing Flexport customers, emissions are calculated in-app, shipment-by-shipment, and leg-by-leg based on variables unique to your cargo’s characteristics and journey—and that data is accessible throughout the platform in reporting and analytics. At this stage, you can start working with your logistics team to understand the ins and outs of various freight modes, trade lanes, trucking routes, etc.
Did you know?
Air freight is responsible for 47 times more emissions than ocean shipping but trucking has the largest macro impact— producing 62% of all freight emissions.
Any company not currently working with Flexport is also welcome to use our calculator via our free API and Non-Flexport Shipment Emissions Uploader for shipment data. Please contact email@example.com for more information and access to the calculator and we can help you get started.
Step 3: Offset What You Can
Carbon offsetting is a way for you to support high-impact climate projects to balance the emissions you’re not yet able to reduce. For example, you can support organizations working on conservation or reforestation projects around the globe to use nature as a tool in the fight against climate change.
Flexport recently announced a new partnership with Pachama, a technology company on a mission to solve climate change by restoring nature. Harnessing the latest advancements in satellite imagery, remote sensing, and machine learning, Pachama evaluates the carbon stored in our forests and monitors forest growth over time. Flexport.org partners with Pachama for their rigorous acceptance criteria and high-quality forestry projects. Our clients can offset your emissions with a few clicks from right inside the Flexport platform.
Step 4: Reduce Where Possible
Now that you’ve balanced things out for the short term, it’s time to look for ways to start permanently reducing your footprint. While the transportation sector may be slow to adopt new, lower-emitting alternatives, there are ways to reduce your overall impact. Looking into partnerships with biofuels providers, electrified trucking fleets, or alternative energy last-mile delivery solutions are all viable options.
For example, Flexport partners with GoodShipping to offer our customers the option to use marine biofuels to reduce emissions from their ocean freight shipments. GoodShipping substitutes biofuels based on the cargo volumes, replacing fossil fuels with truly sustainable alternatives.
Step 5: Certify for Social Proof
The idea of social proof comes from psychology and describes the phenomenon of people copying other people’s actions in an attempt to emulate their results. In marketing, social proof is a powerful tool that works because people are more likely to try a new product or brand if it’s recommended by a friend. These methods are particularly effective with ecommerce brands and the millennial generation mentioned above.
By obtaining green industry certifications and displaying them on your website, you give your existing customers a way to get excited about your environmental impact. By sharing your commitment to our planet, your consumers can then share their excitement with their social circles. Your company is able to expand your reach without spending any of your marketing dollars. Work with an organization like Climate Neutral to certify your efforts and show your customers the steps you’re taking. Climate Neutral is a long-standing partner of Flexport.org and uses data from our API to inform their decisions and help certifying brands understand the impact their supply chain has on their total carbon footprint.
It’s important to remember that even when you reach carbon-neutral status with your shipping, there’s more work to do. Working with an organization like the Science Based Target initiative (SBTi) is a great next step to ramp up your emissions reduction plans. They can provide excellent information and guidance as you continue your journey toward carbon neutrality for your entire supply chain.
When it comes to reducing carbon emissions, every small win is exactly that—a win. At the same time, remember to balance these wins in the moment with continuing to map out a future strategy that will bring your overall carbon footprint down as technology advances and more opportunities become available.