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Carbon Neutral Logistics: A Business Opportunity and Climate Imperative

The context The logistics industry plays a significant role in the economy. The global logistics market is projected to reach USD 12.68 trillion by 2027, driven by the growth of e-commerce, globalization, and increasing demand for the efficient supply chain management. Furthermore, international trade and logistics create significant employment opportunities. In the United States alone, the logistics industry employs over 10 million people, with employment in the sector expected to grow by 7% between 2019 and 2029. Similarly, in Europe, the logistics sector employs over 11 million people, making it one of the largest employers in the region. Why is carbon-neutral logistics necessary? Decarbonizing logistics is important for several reasons. Firstly, logistics is a significant contributor to global greenhouse gas emissions. According to the International Energy Agency (IEA), the global transportation sector, which includes logistics and international trade, is responsible for approximately 24% of energy-related CO2 emissions. Additionally, the United Nations Conference on Trade and Development (UNCTAD) estimates that maritime shipping alone accounts for around 2.5% of global greenhouse gas emissions, projected to increase by up to 250% by 2050 without additional action. Decarbonizing logistics is essential for achieving global emissions reduction targets and addressing the climate crisis. An emerging demand for carbon neutral logistical services There are several reasons why logistic companies should invest in carbon neutral service. First and foremost, it is essential to address the urgent need to reduce greenhouse gas emissions to mitigate the impacts of climate change. With the transportation sector responsible for a significant portion of global greenhouse gas emissions, reducing emissions from logistics operations is crucial for meeting global climate goals. Moreover, investing in carbon neutral services can also be a business opportunity for logistics companies. Many businesses and consumers are becoming increasingly aware of the environmental impact of their supply chain and are looking to reduce their carbon footprint. By offering carbon neutral services, logistics companies can differentiate themselves from competitors, appeal to environmentally conscious customers, and potentially increase revenue. In fact, there is growing evidence to suggest that there is a significant demand for climate smart or carbon neutral logistical services. • A survey conducted by UNCTAD found that 70% of respondents plan to purchase more products and services from companies with a lower carbon footprint.• A report by DHL found that 69% of companies surveyed have implemented or plan to implement a carbon reduction strategy in their supply chain (DHL, 2019).• McKinsey also found that 47% of companies surveyed have set a carbon reduction target for their supply chain, and 87% of these companies believe their suppliers can help them achieve their targets.• A study by EcoVadis found that 62% of companies surveyed said that sustainability is a key factor in their purchasing decisions, and 38% have implemented sustainability criteria in their supplier selection process.• The International Transport Forum estimated that there will be a demand for up to 60% lower emissions in the global logistics sector by 2050 (International Transport Forum, 2018). In summary, investing in climate smart logistical services is essential for reducing greenhouse gas emissions, meeting global climate goals, and addressing customer demand for more sustainable products and services. Climate neutral logistics on practice DHL DHL is committed to becoming carbon neutral by 2050 and offers a range of carbon neutral shipping options to its customers. These options include carbon offsetting, biofuel, and electric vehicles. Maersk Maersk, the world’s largest container shipping company, has set a goal to become carbon neutral by 2050 and offers carbon neutral shipping options to customers through its “Carbon Neutral Programme.” UPS UPS has set a goal to reduce its greenhouse gas emissions by 12% by 2025 and offers carbon neutral shipping options to customers through its “UPS Carbon Neutral” program. FedEx FedEx has set a goal to reduce its greenhouse gas emissions by 50% by 2030 and offers carbon neutral shipping options to customers through its “FedEx Carbon Neutral” program. Amazon Amazon has committed to becoming carbon neutral by 2040 and offers carbon neutral shipping options to customers through its “Shipment Zero” program. These companies are just a few examples of logistics providers that are actively working to reduce their carbon footprint and offering carbon neutral options to their customers. By investing in these services, customers can offset the carbon emissions associated with their shipments and support companies that are leading the way in sustainability through decarbonizing their value chain. Who is leading this change? Some of the key players promoting the decarbonization of international trade and logistics are: IMO The International Maritime Organization (IMO) has set a target of reducing emissions from the sector by at least 50% by 2050 compared to 2008 levels. Global Maritime Forum Is leading a global call to action with the aim to accelerating maritime shipping’s decarbonization with the development and deployment of commercially viable deep sea zero emission vessels by 2030 towards full decarbonization by 2050. World Economic Forum Through the Supply Chain & Transport CEO Statement, the World Economic Forum is promoting a coalition of business leader in the transportation supply chain to run entirely on net-zero energy sources by 2050. Why Green Initiative? At Green Initiative we are working with leading global shippers and carriers to reduce their carbon footprint and improve climate performance in freight transportation. Our aim is to support the decarbonization of national and international trade by 30% by 2030 and to support the transition to zero emissions freight sector. We collaborate with our global partners to quantify impacts, identify solutions, and advocate logistics decarbonization strategies.

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Walking the Talk: Why USAID Contractors Should Care About Carbon Footprints?

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US Government’s OASIS+ Contract Vehicle Promotes Sustainability and Reducing Greenhouse Gas Emissions As the world grapples with the effects of climate change, governments, and organizations are increasingly focusing on reducing greenhouse gas emissions and promoting sustainability. The US government is no exception and has taken steps to address climate change through various initiatives, including the OASIS+ contract vehicle. This contract vehicle, developed by the General Services Administration (GSA), streamlines access to professional services, including sustainability-related services like carbon footprint management. US Government Agencies Now Require Scope 1 and 2 Disclosures from Contractors for Sustainability Initiatives Many US government agencies, such as EPA (Environmental Protection Agency), DOD (Department of Defense), and USAID (United States Agency for International Development), are now requesting Scope 1 and 2 disclosures from their contractors as part of their sustainability initiatives. Scope 1 emissions are directly generated by an organization, while Scope 2 emissions are indirect emissions generated by the organization’s consumption of purchased electricity, heat, or steam. Disclosure of Scopes 1 and 2 Emissions Helps Contractors Reduce Carbon Footprint and Boosts Business Performance Disclosing Scopes 1 and 2 emissions can help contractors identify opportunities for carbon footprint mitigation, crucial to reducing greenhouse gas emissions and slowing down global warming. In addition to reducing climate impact, a study by the UN found that companies that disclose their climate performance have a 67% higher return on equity than those that do not. This suggests that reducing carbon footprint can lead to lower operating costs, improved efficiency, and a more competitive market position. Emissions Reporting Crucial for Contractors Seeking Government Contracts, Particularly with USAID’s Focus on Sustainable Development Reporting on emissions can also improve contractors’ climate performance, which is increasingly important to many government agencies when evaluating contractors. This is particularly relevant to USAID, which invests millions of dollars in international aid to promote sustainable development in emerging economies. USAID contractors should therefore be accountable for their climate impact to demonstrate a commitment to sustainability. Partner with Green Initiative to Reduce Carbon Footprint and Improve Sustainability Performance: Position Yourself as a Climate Leader in International Development. Contact us Today! Green Initiative is a certification and climate advisory that specializes in helping organizations reduce their carbon footprint and improve their sustainability performance. By partnering with Green Initiative, USAID contractors can access expert advice and support to identify opportunities for carbon footprint mitigation, implement sustainability initiatives, and improve their climate performance. Green Initiative’s services can also help contractors meet the increasing demand for sustainability from government agencies like USAID and position themselves as leaders in the climate-smart international development arena. In addition to the benefits to contractors, reporting on Scopes 1 and 2 emissions can contribute to the US government’s broader efforts to address climate change. President Biden’s recent Executive Order on “Climate-Related Financial Risk” directs federal agencies, including USG contracting agencies such as USAID, to identify and disclose the climate-related financial risks their programs, assets, and liabilities face. The Order also requires federal agencies to integrate climate-related risk analysis into their procurement processes. By disclosing their carbon footprint, USAID contractors can help federal agencies like USAID meet these requirements and contribute to the broader goal of promoting sustainability and mitigating the impacts of climate change. In conclusion, USAID contractors should walk the talk, when it comes to promoting sustainable and climate-smart development. By disclosing Scopes 1 and 2 emissions, contractors can identify opportunities for carbon footprint mitigation and improve their sustainability performance. Green Initiative can provide expert advice and support to help contractors achieve their climate-performance goals and meet the increasing demand for climate action from government agencies like USAID. Contact us today to learn how we can assist you in achieving your climate performance goals.

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The Importance of Investing in Carbon Capture Technologies

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The Earth’s natural carbon sinks: Understanding their vital role in climate change The Earth has a remarkable ability to naturally sequester carbon, through a variety of processes that occur in ecosystems including forests, grasslands, wetlands, soils, and oceans. These natural processes, also known as “sinks,” play a crucial role in removing carbon dioxide, a major greenhouse gas, from the atmosphere and storing it in the Earth’s ecosystems. Although, recent studies suggest significant carbon sinks such as the Amazonia, may no longer be capturing as much carbon as they release. (Denning, 2020) The Impacts of Climate Change on Natural Carbon Sequestration Processes: Disruptions and Consequences Rising temperatures, changing precipitation patterns, and altered ecosystems due to climate change have disrupted natural carbon sequestration processes. For example, climate-induced disturbances such as wildfires, droughts, and floods can disrupt ecosystems, leading to changes in vegetation growth, carbon storage in soils, and oceanic carbon uptake. These combined impacts of climate change and human activities are reducing the Earth’s ability to naturally sequester carbon, contributing to the increase of atmospheric carbon dioxide levels and exacerbating climate change. Exploring the Potential and Limitations of Forest Regeneration as a Climate Mitigation Strategy To counteract the negative effects associated with increasing atmospheric carbon dioxide levels, climate certification and advisory companies most commonly employ the method of forest regeneration. This method is preferred due to the limited amount of required monitoring and maintenance, the added benefits to biodiversity and soil conservation, and its cost-effectiveness. Scientists estimate forest regeneration has the potential to store an equivalent of 25% of the atmospheric carbon pool (Bastin et al., 2019). However, forest regeneration is a time-consuming process and requires large areas of land, often resulting in land-use conflicts. Furthermore, considering the UN’s ambitious goal to reach carbon neutrality by 2050, it is unreasonable to hypothesize all the carbon mitigation will occur through forest regeneration. Carbon Capture and Storage (CCS) and Bioenergy with Carbon Capture and Storage (BECCS): Potential, Limitations, and the Need for Investment Decarbonization can also take place through Carbon Capture and Storage (CCS) and Bioenergy with Carbon Capture and Storage (BECCS). These emerging technologies have the potential to help mitigate the relatively large carbon footprint of aviation, maritime, and heavy industries that are considered hard to abate, as they have limited low-carbon alternatives currently available. For example, estimates suggest that CCS has the potential to capture and store up to 45% of the CO2 emissions from industrial processes. Even in the most conservative scenarios, these technologies are expected to scale up in demand enough to remove at least 2 gigatons per annum (GTPA) of carbon dioxide by 2050. However, we are still at the very beginning of development, with CCS and BECCS requiring large amounts of energy to operate and thus, having a limited carbon capture efficiency. Analyst estimates suggest a 120-fold increase in carbon uptake needs to occur for these technologies to be viable to achieve climate goals by 2050 (McKinsey, 2022) Therefore, private investment in these technologies is essential to achieve global decarbonization as it is only through advancements in material science, manufacturing, and engineering optimizations that we achieve technological improvements. Join the Climate Champions: Partner with Green Initiative for Sustainable Solutions At Green Initiative, we strive to help our clients stay up to date with the latest developments in climate action and provide our clients with the necessary tools and knowledge to set a plan to achieve decarbonization, reduce their carbon footprint, and contribute to a sustainable future. Contact us to learn more and become a part of our climate champions! This article was writen by Marc Tristant, from the Green Inititative team. References: Bastin, J., Finegold, Y., Garcia, C., Mollicone, D., Rezende, M., Routh, D., Zohner, C. M., & Crowther, T. W. (2019). The global tree restoration potential. Science, 365(6448), 76–79. https://doi.org/10.1126/science.aax0848 Denning, A. S. (2021). Southeast Amazonia is no longer a carbon sink. Nature, 595(7867), 354–355. https://doi.org/10.1038/d41586-021-01871-6 Scaling the CCUS industry to achieve net-zero emissions. (2022, October 28). McKinsey & Company. https://www.mckinsey.com/industries/oil-and-gas/our-insights/scaling-the-ccus-industry-to-achieve-net-zero-emissions

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Why Logistics Companies Should Provide Climate Smart Services and Gain Competitive Advantages

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The logistics industry is a vital component of the global economy, responsible for transporting goods and materials worldwide. However, it is also a significant contributor to greenhouse gas emissions and climate change. According to the International Energy Agency (IEA), the transportation sector accounted for 24% of global energy-related CO2 emissions in 2019. As a result, logistics companies are increasingly looking for ways to reduce their environmental impact and promote sustainability. Going Green: Climate-Smart Services in Logistics for a Sustainable Future Climate-smart services are transportation and logistics solutions designed to minimize environmental impact. These services can take many forms, including carbon-neutral shipping, electric or hybrid vehicles, and efficient routing and packaging.Logistics companies can lower their operational costs and improve their bottom line by reducing energy consumption and greenhouse gas emissions. In addition, by promoting sustainable practices throughout the supply chain, logistics companies can help reduce the industry’s overall carbon footprint and contribute to global efforts to combat climate change. Urgent Need for Logistics Companies to Prioritize Climate Action for Sustainable Supply Chains Logistics companies must adopt climate action at the core of their business model to effectively provide climate-smart services. These include investing in fuel-efficient vehicles, optimizing routes, reducing packaging waste, and collaborating with suppliers and customers to promote sustainable practices throughout the supply chain. Green Initiative: Empowering Logistics Companies to Achieve Climate Goals with Advisory and Certification Services Green Initiative’s climate advisory and certification services can help logistics companies achieve these goals. For example, Green Initiative can conduct a carbon footprint assessment to identify areas for improvement, guide high-impact climate action, and offer carbon offsetting programs to help companies mitigate their carbon footprint. Governments and international organizations also implement policies and regulations to promote climate-smart logistics. For example, the International Maritime Organization (IMO) has set targets to reduce carbon emissions from the shipping sector by at least 50% by 2050. The European Union is promoting low-emission vehicles and alternative fuels in transport through initiatives like the Green Deal and the Sustainable and Smart Mobility Strategy. In summary, sustainable logistics is crucial to addressing climate change. Companies and organizations can help build more sustainable logistics systems that benefit both the environment and global trade by employing various strategies to reduce emissions, optimize supply chains, and leverage digital technologies. By partnering with Green Initiative, logistics companies can take a proactive approach to climate action, reduce their environmental impact, and help address the urgent challenge of climate change. Click here to contact us.

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