A new global framework for calculating consignment-level carbon emissions from logistics and transportation operations is taking shape under the auspices of the World Economic Forum (WEF). The standards, albeit still in draft form, could become a reality in as little as three years.
WEF is an independent, international organization incorporated as a Swiss not-for-profit foundation that aims to help foster what it calls “a world-class corporate governance system.” One of WEF’s core tenets is that economic progress without social development is not sustainable, while social development without economic progress is not feasible.
WEF’s Logistics and Transport Industry Group began working to define a common set of standards for carbon emissions reporting in January 2009. The goal was to enable logistics and transport companies to report carbon emissions to their customers consistently while providing an industry specific annex to the upcoming GHG [greenhouse gas] Protocol Product Life Cycle and Scope 3 Standards. Those are expected to be released at the end of this year.
“Logistics and transportation providers face growing demand from their retail and manufacturing customers to report the carbon emissions generated by the shipping and handling of their products,” pointed out Jonathan Wright, senior executive with consulting firm Accenture’s supply chain management practice, which helped develop the proposed standards.
He noted that a recent Accenture survey found that 90% of U.S. consumers would be willing to switch to a new product if it was certified as minimizing its impact on climate change, while another Accenture survey found that 98% of Chinese consumers would pay a premium for consumer electronics products that are marketed as environmentally friendly.
“The emergence of new consumer trends, retailer stipulations and regulatory requirements is prompting a reemergence of interest in low carbon supply chains,” Wright told FleetOwner via email from Australia.
“Particularly obvious are new international efforts to bring about consistency and comparability to the calculation of product-level carbon emissions across the end-to-end supply chain,” he explained. “Responding to that, the guidelines we developed suggest a common approach to the calculation of consignment-level carbon footprints for the freight sector, which is a complex topic.”
These new carbon emission guidelines were recently endorsed by WEF’s governors at the organization’s recent annual meeting in Davos, Switzerland, and include principles for defining the scope of emissions to report and how these emissions should be allocated in cases such as shared transport or backhaul.
“Adoption of the guidelines by the WEF, and then more widely, would create a consistent approach to areas such as: scope and boundary definition for carbon emission calculations; data requirements (e.g. quality); dealing with complexities such as allocation across different consignments in a multi-consignment load; and the approach to measurement of subcontractors' emissions,” Wright said.
“For the trucking industry, the message at the moment is simply to be aware of the trends outlined above, and that some of the major logistics providers are interested in a standard industry approach to reporting carbon emissions,” he stated.
For the moment, the creation of an internationally binding set of carbon scoring standards is still several years away, noted Wright. “The GHG Protocol has their standard out there … and is maybe 12 to 18 months away from a voluntary standard,” he said. “My overall sense is that we are two to three years away from their being a clear, global framework around which the major providers have a consensus view.”