Best Practice

Clean Cargo and APL Host Fall Member Meeting

Clean Cargo was delighted to host its Fall 2018 Members Meeting at the APL Singapore office from 13 to 15 November 2018.

Gathering like-minded shippers, carriers, and freight forwarders working for clean oceans and global climate goals, the event saw stakeholders deep-diving into methodologies to:

  • influence carbon emission reduction;

  • support improvement in Environmental, Social and Governance of the industry; and

  • advance the scale of the Clean Cargo to have more stakeholders aboard.

At the meeting, APL was elected to serve on the Clean Cargo Steering Committee from 2019.

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Closing the meeting, Nicolas Sartini, APL CEO, said:

“The shipping industry has advanced well with strategies to meet the Global Sulphur Cap 2020. Stakeholder collaboration and the search for solutions remain crucial in reducing carbon emissions by at least half by 2050. Committed to responsible and sustainable cargo transportation, our group will continue to address carbon emissions as a priority.”

Frank Clary, CSR Director of Agility and Clean Cargo Steering Committee Member, said:

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“It has been good progress. We have a new strategy and we are engaging a lot of people in the growing community. We adopted a three-year work plan during this meeting with two different groups of members working on these issues. We have some defined outcomes and a timeline we want to achieve, and we have allocated people who have volunteered to do the actual work. So we are expecting good progress in terms of measuring, reporting, and managing sustainability in the supply chain and procurement. And underneath all, the ambition of the group aligns with the global ambition of keeping temperature increases below two degrees. The work we are doing supports IMO requirements, objectives, and aspirations, and it will improve how the carriers are going to operate. It is going to be an expansion and improvement and in my opinion.”

Tomas Dahlman, Director Energy of Electrolux, Clean Cargo Steering Committee Member, commented:

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“The most important thing is the three-year workplan, with a focus on innovation, procurement methodology, and revising and updating the carrier ratings by expanding the scope to include forwarders. We have made good progress, starting on the innovation workstream. We have focused on decarbonisation and have included a new segment - Roll on, Roll off (RoRo) - in the group. The decision to move forward with the supplier sustainability index for the carriers and forwarders was also important. Shippers will have a revised assessment tool to rate carriers based on both qualitative and quantitative information. It will rate the suppliers based not only on their CO2 performance but also on their strategy, innovation, and goals.”

Nate Springer, Acting Director of Clean Cargo, concluded:

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“This meeting has been all about people getting things done and members have rolled up their sleeves to work towards that. Shippers are very excited to drive forward their work with the Forwarders and Carriers, and this is what is needed to execute on what has become a much more ambitious workplan and strategy than what we adopted at the last June meeting. I am incredibly happy that we might just make progress on all these fronts. We are in a good position to continue driving forward and making progress on emissions reductions, improvement on ethics and governance issues, and playing an important and critical role in coordinating and bringing together different stakeholders that are essential to making that progress.”

(All photos courtesy of APL.)

Clean Cargo Member Maersk Sets Ambitious Goal of Zero Carbon Emissions by 2050

With the aim of accelerating the transition to carbon-neutral shipping, Maersk recently announced its goal to reach carbon neutrality by 2050. To achieve this goal, carbon-neutral vessels must be commercially viable by 2030, and an acceleration in innovation and adoption of new technology is required.

To date, Maersk has reduced its relative CO2 emissions by 46% (baseline 2007), around 9% above the industry average.

“The only possible way to achieve the so-much-needed decarbonisation in our industry is by fully transforming to new carbon neutral fuels and supply chains,” says Søren Toft, Chief Operating Officer at A.P. Moller - Maersk.

“We applaud Maersk’s new goal that aligns with Clean Cargo’s new strategy,” says Nate Springer, Acting Director of Clean Cargo. “Clean Cargo will do everything it can to support Maersk, and any shipping company, that sets bold climate goals. We also believe that Maersk’s goal highlights the need innovation, investment, and scale of cleantech in shipping.”

Read more here.

The Supply Chain Leadership Ladder

For many years, companies across all industries have had sustainable supply chain programs focused on managing sustainability risks and opportunities among their global supplier networks. Leading companies recognize that these supply chain sustainability programs create value, and we have seen a positive trend toward more impact-focused programs among these leaders.

This working paper introduces the Supply Chain Leadership Ladder, a maturity model for supply chain sustainability programs, which companies can use to identify their level of maturity and impact and develop their program toward deeper impact in accordance with their level of ambition.

Business Action for Climate-Resilient Supply Chains

Global supply chains are among the most critical levers for companies to take action on climate changeand to gain business benefits from building resilience. However, supply chains are complex, diverse, and exposed to multiple, intersecting climate risks. Knowing where to start and how to take action is a challenge.

Through an action framework, resources for practitioners, and examples from BSR member companies, this report outlines how business can act on climate change by building resilience in the supply chain.

How BSR’s Clean Cargo Helps Shippers Improve Environmental Performance

Globally, transporting goods by ocean accounts for about 3 percent of carbon dioxide (CO2) emissions associated with climate change—more than the CO2 emissions from all the energy it takes to run the internet. As companies assess their exposure to climate risks and drive down emissions in their supply chain, they face two dilemmas: how to both measure and improve environmental performance in their logistics supply chains.

For 12 years, BSR's Clean Cargo has developed tools and methodologies that help shippers and their carrier suppliers understand and manage CO2 emissions from ocean transport. One of our priorities is to make the decision-making process simpler for shippers, which is the purpose of a short guide that we are launching today.

Clean Cargo's “How to Calculate and Manage CO2 Emissions from Ocean Transport” was produced with lessons from global brands (“shippers”) that are members of Clean Cargo. It describes how transportation procurement managers use Clean Cargo data and tools to:

  • Calculate a CO2 footprint

  • Assess supplier environmental performance

  • Select suppliers using sustainability criteria

For example, Clean Cargo member Marks & Spencer uses the data and tools to measure, evaluate, and report the CO2 impact of its global goods transportation. This allows the company to establish a baseline from which to measure improvements over time from approved CO2-saving initiatives. “By being a member of Clean Cargo, we can review and compare ocean carriers (our suppliers) on their sustainability practices and set expectations with transport providers for continuous improvement,” says Barry Wallace, logistics manager at Marks & Spencer, and member of the Clean Cargo Steering Committee.

The guide explains how to perform such comparisons by using illustrative trade routes. For example, three carriers provide the same service from Asia to North America’s East Coast, Asia to northern Europe, and Europe to Latin America. Using Clean Cargo emissions factors for each of these carriers, which is a measure of environmental performance, a shipper can compare its suppliers. In the example from the report, there is a difference in environmental performance of more than 50 percent across these three suppliers.

The Clean Cargo network also helps shippers engage with like-minded organizations. Clean Cargo provides a unique platform for peer companies to share best practices, and for brands to embed the latest developments across the transport supply chain into procurement. In 2015, Clean Cargo member-only webinars, facilitated by BSR, will ensure shippers stay on top of how peers are assessing their business partners to make their ocean supply chains more carbon efficient.

Underpinning these results is the ease of use that comes with a standardized methodology. The Clean Cargo CO2 emissions calculation methodology was developed over several years with industry practitioners, specialists, and academic experts. Recognized as the industry standard, 85 percent of the ocean container shipping industry uses this tool today. We will be releasing a new report this spring that provides technical details to the use and application of the methodology.

How to Calculate and Manage CO2 Emissions from Ocean Transport

Companies seeking to measure and reduce their supply chain emissions face a complex task in gathering comparable data and verifying its quality. The Clean Cargo methodology was developed to balance technical accuracy with practical application. Transportation procurement managers use these tools as a factor in supplier selection and to quantify and drive improvements for this important category in corporate greenhouse gas reduction targets. Specifically, they can:

  • Calculate a CO2 footprint

  • Assess supplier environmental performance

  • Select suppliers using sustainability criteria

In this guide, we explore each of these approaches to calculate and manage CO2 emissions from ocean container transport.

How Shippers Benefit from Ocean Transport Data

Rising consumer and regulatory pressures—and the release of supply chain emissions reporting standards—are pushing companies to ask their transport suppliers across road, rail, air, and ocean freight for reliable emissions data to measure the environmental footprint of their products. Yet companies still have questions on how to use this data in meaningful ways.

BSR's findings—based on a series of interviews with shippers—help answer how companies in Clean Cargo are addressing these issues.

Results include:

  • Procurement decision-making: 78 percent of shippers use Clean Cargo emissions data to inform their procurement decision-making process.

  • Sustainability reporting: 56 percent of shippers use Clean Cargo emissions data either in their sustainability performance reporting.

  • Intermodal transport comparison: Shippers highlighted that Clean Cargo emissions data enables them to compare different, lower emissions modes of transportation.

How Heineken and Maersk Line Are Reducing Their Environmental Impact Through Collaboration

Up until recently, it might have been seen as counterproductive for a company to set logistic supply chain goals based on improving its environmental performance. But examples of today’s leading companies have revealed a change in the business climate. Companies like Heineken that broadly embed sustainability in their supply chains, extending to include transportation providers such as Maersk Line, are seeing clear benefits—in both reputation and cost management, as well as in their ability to respond to new regulations.

Increasingly, key stakeholders are watching corporate sustainability efforts and reacting accordingly. One important stakeholder—the customer—has turned a corner regarding sustainability practices. According to the Carbon Trust in the UK, up to 45 percent of shoppers would stop buying their favorite brands if they refused to commit to measuring their product carbon footprint—doubling over the past year. Additionally, 56 percent of people would be more loyal to a brand they knew was working to reduce its carbon footprint. Heineken has responded to this rise in consumer pressure by setting aggressive transparent reduction targets.

Upcoming environmental regulation only stands to raise the stakes on Heineken’s environmental performance. The European Union has stated its intentions to implement a measurement, reporting, and verification scheme in 2013 and will pursue a future carbon tax (or similar mechanism) on container ships coming into and out of European ports—a cost that shipping companies will likely have to share with their customers. If Heineken was not already working on embedding sustainability within its supply chain, it would only be a matter of time before the company faced steep costs for failing to keep pace.

This begs the question: How is a company like Heineken or a transport provider like Maersk Line keeping up? The answer turns out to be rather easy: through collaboration. Both companies are active members of Clean Cargo, a global business-to-business initiative, made up of leading cargo carriers and their customers, dedicated to environmental performance improvement in marine container transport through measurement, evaluation, and reporting. By collaborating with their peers, Heineken and Maersk Line are setting themselves up to meet customer pressures and new regulations, and they are interested in sharing their experiences with others.

BSR’s Clean Cargo Makes Ocean Emissions Easy

I used to wonder why it was so difficult to measure ocean transport emissions at a product level. To me, the answer seemed deceptively simple: Why not take the distance traveled by a ship and multiply it by fuel emissions factors and the weight of a product? It turns out that the answer is not so easy. In ocean transport, a web of factors weighs into the equation including trade routes, calls at port, and especially vessel capacity, all making it complex for cargo carriers to provide a simple answer.

The Clean Cargo is cutting through this complexity by working with its members and stakeholders to make it easy for major brands and retailers to calculate their ocean transport environmental footprint. Hapag-Lloyd’s Erika Sagert and Nike’s Dawn Vance joined BSR on July 11 for a one-hour webinar to show us how Clean Cargo is working on this and other environmental issues.

Sagert and Vance provided a few insights during the webinar Q&A:

Q: How does Clean Cargo make it easier for Nike to go through carrier selection?
Vance: “It gives us real data so that we can look at the performance of a carrier. Where you see good performance, you can have a good conversation with that company to see what [they] are doing that’s working, and on the other end, [a carrier] might be underperforming to what the rest of the industry is doing.  I am really proud of the fact that we have been able to get all of our key business partners to say what their key goals and targets are for the future. The message has been sent from shippers that we are going to measure [data] and use it in our procurement decisions.”

Q: How does Clean Cargo’s work on environmental performance make it easier for Hapag-Lloyd to speak with customers?
Sagert: “It is an effort to collect and fill in the [environmental performance] data sheet, but the results we receive from BSR give us a very good tool that can be used in conversations with shippers.”

Sagert also stressed that the verified data gives Hapag-Lloyd confidence in using it, stating, “The data has been calculated according to [what is] recognized as the methodology for ocean shipping. It is verified, so it is credible and useful for shippers.”

Q: How can other shippers learn more from Nike’s work using Clean Cargo data?
Vance: “Nike is all about collaboration right now. We are willing to share what we are doing, and we encourage others to join Clean Cargo—it is a really good way to get connected with a large shipper group. We [have] learned a great deal from companies like IKEA who are shipping a whole variety of things and have had to solve different kinds of problems.”

Vance noted, “I often have business-to-business conversations with people from other companies from all over the world just to exchange ideas, talk about the current states of processing data and how we are using it.”