As leading corporations respond to increasing customer, investor and community pressures to reduce environmental impacts, it is becoming clear that the biggest impacts occur outside their control but within their influence along the value chain. For some sectors such as retail and food manufacturing, latest estimates put their supply chain emissions at 50% to 90% of their total carbon footprint, and transport often accounts for the largest share.

Food Supply Chains Go Sustainable

After first reducing environmental impacts within its operations, leading brewer Anheuser-Busch InBev now recognises there are bigger challenges across their supply chain, where a large part of their impacts occur. Despite having less control over outsourced logistics processes, ABInBev has taken great strides by:

  • Developing emission measurement systems within a global framework
  • Understanding their network baseline emissions profile and setting reduction targets
  • Collaborating with partners to find innovations including fleet sharing with Walmart and Unilever, and working with industry programs such as Lean & Green in Europe

Food manufacturer Mars recognises that the supply chain represents their largest impact on people and the planet. As the infographic shows, transport makes up a full 25% of lifecycle emissions, with the most controllable activities on-site making up only 14% of all emissions in the Mars value chain.

Nestle meanwhile takes a full product lifecycle approach from farm to customer to certify emission reductions along their value chain, while SABMIller, ABInBev’s global rival and owners of Fosters and CUB brands in Australia, works with suppliers to build a detailed picture of supply chain emissions so that substantial reductions can be found.

Economic Growth = More Transport Emissions

No one has yet worked out how to de-couple economic growth and transport’s environmental impact. Simply put, the more freight you move, the more fuel you burn. Linehaul trucking is particularly energy and carbon intensive. While freight customers are beginning to set targets to reduce fuel use and carbon emissions from their outsourced transport, residual emissions will continue to be generated for the foreseeable future.

With Freight Transport accounting for 5.5% of global greenhouse gas emissions and growing it makes sense that progressive transporters are responding to an emerging market niche that seeks carbon offsets for transport emissions. Developing in parallel with ongoing cost pressure on Australian supply chains, large freight forwarders like DHL, UPS and Agility now offer carbon offsetting options as a premium service for their customers.

Offsets Create Shared Value

Enabling customers to offset 100% of the CO2 generated in their freight task creates shared value for customers, transporters and the communities we serve. By balancing freight emissions with investments in emission reduction projects, we can create a self-sustaining investment model that produces environmental improvements with social and economic returns.

Some fear that Offsetting may reduce the impetus to keep lowering emissions. Mars, for instance, uses no carbon offsets at all. Yet until de-coupling technologies and practices are realised, carbon offsetting may be an effective interim measure allowing manufacturers, retailers and other freight transport customers to demonstrate environmental and social responsibility to their local communities, and gain economic benefits from consumer and investor demand for low carbon goods and services.

Offsetting freight emissions can help companies take big strides to meet their environmental targets across the whole supply chain.