Following a difficult and tumultuous few years for the warehousing and logistics industry, there is hope on the horizon.
By Randeep Somel, vice-president: global head of communications and sustainability at Iron Mountain
Global supply chain pressures have gradually begun to ease, prompting many to adopt an optimistic outlook on the progress of the sector as it navigates its post-pandemic response. However, due to the enormous impact of the global supply chain on carbon emissions, sustainability progress still hangs in the balance as it becomes apparent that the UN Paris Agreement climate pledge is at real risk of being missed unless action is taken immediately.
According to a report by the National Business Initiative in partnership with Business Unity South Africa and Boston Consulting Group, South Africa’s transport sector is the third largest emitting sector, with over 90% of these emissions coming from road transport. This sector must decarbonise to enable other sectors to decarbonise.
The Just Energy Transition Investment Plan for South Africa, which launched during the World Leaders’ Summit at COP 27, highlights that incentivising accelerated new energy vehicle adoption in South Africa will contribute to the decarbonisation of the logistics sector and the transition of the automotive manufacturing industry.
The logistics industry must prioritise driving down carbon emissions, as a matter of urgency. Doing so will secure not only its future but the future health and prosperity of the global business ecosystem that relies so heavily upon its suppliers, partners, and customers.
Thankfully, there are many ways in which the warehouse and logistics sector can act cooperatively to ensure progress is swift, substantial and achievable, and ultimately beneficial to all – business, customer, and planet alike.
Planning ahead for increased emissions reporting
Supply chain operatives, by their very nature, are deeply embedded within the operations of a great variety of businesses of all sizes. This means that their scope 1 and 2 greenhouse gas (GHG) emissions form a large part of their partners’ scope 3 emissions. From a regulatory perspective we are now seeing this reality contribute to a shift, as organisations face growing pressure to more accurately report and significantly reduce their indirect emissions from governments, investors, and increasingly climate-conscious customers.
Reporting scope 3 emissions accurately can be difficult for organisations due to challenges with identifying and measuring emissions that are outside of their control. When warehousing and logistics facilities, and other third-party service providers, prioritise reducing their own scope 1 and 2 emissions, scope 3 emissions are reduced for their customers, creating an ecosystem of collective responsibility, where the wider supply chain works in tandem to support carbon reduction throughout.
The role of the warehouse in reducing emissions
The desire to cut carbon and improve sustainability across the board has been demonstrated by many supply chain operators in recent years, with many taking steps to enhance energy efficiency by utilising green energy from renewable sources, ramping up recycling efforts, preserving natural resources, and reducing the use of diesel fuel.
However, there are several other ways in which warehouses can play a role, reducing not only their own carbon footprint but also that of their suppliers and customers. Making a concerted effort to run more efficient buildings now, will support businesses’ wider ESG goals in the long-term.
The demand for logistics and warehousing space, including vacant industrial land remains high, so providers that can offer shared usage facilities with flexible and scalable contracts for customers, within an energy-efficient building are crucial to supporting the net-zero growth of their supply chain, starting from the ground up.
The construction of new buildings can now be developed in accordance with low carbon specifications, ensuring that all assets have climate resilience measures installed, in order to directly impact upon the emissions profiles of all concerned.
Choosing sustainably sourced materials for all buildings is also essential, with modern construction techniques now enabling the use of existing elements at a site, such as steel or aggregate to reduce waste. Purchasing materials from local suppliers is another way that a provider’s carbon footprint can be closely managed.
Concrete steps to cutting carbon
Supply chain operatives and logistics leaders have a wealth of options available to them to support their carbon reduction efforts within their warehouses, transport networks, and asset management processes. Key to this is the understanding that cutting carbon makes good business sense, by updating operations with energy efficiency solutions, operations can save more money in the long run than the cost of the initial capital outlay.
For example, warehouses can implement an aggressive programme to drive efficiencies such as re-lamping with LEDs with motion sensors to ensure usage only when needed, integrating thermostats for zoned atmosphere control, employing battery technology, using carbon-neutral fire suppression systems, and employing reverse logistics to optimise their fleet and supercharge recycling. Furthermore, installing solar panels linked directly to electric vehicle charging stations creates a renewable-to-renewable loop, drastically reducing the need for grid energy.
When looking at waste streams and preserving natural resources, rainwater can be harvested from the vast roof of the warehouse to be treated and used for other purposes, including upkeep of the local biodiverse environment using AI-powered irrigation systems.
Recycling or reusing plastic packaging and pallets, as well as continually monitoring the performance and condition of the inventory to identify goods, records, and assets coming to the end of their lifecycle are just some of the ways that modern warehouses can innovate to tackle emissions and increase their productivity at the same time.
Working collaboratively to enact change
The warehousing and logistics sector should not underestimate the strength of its position as a lobbying force, both within government and to secure preferential rates from suppliers of energy-efficient technologies. As seen with the Climate Group EV100 initiative, change can be enacted when organisations unite to make pledges on progress, in this case, to electrify its members’ global vehicle fleet.
While organisations need to focus on reducing their own carbon footprint, ultimately, the key to cutting carbon is collaboration. As mandatory reporting on indirect emissions draws closer, businesses will soon find themselves obligated to support their suppliers and partner organisations to build ESG factors into every decision – hoping that it will set us on a 1.5-degree pathway to meet the goals of the Paris Climate Accord.