This primer focuses on the forces of change that will reshape supply chains from today to 2025 and offers recommendations for how companies can develop their supply chains to be fit for the future.
Annually, Clean Cargo discloses trade lane carbon dioxide emissions factors for ocean container transport, this year collected from 22 ocean container carriers on more than 3,200 ships that collectively represent approximately 85 percent of ocean container capacity worldwide. Our annual reporting indicates that average CO2 emissions per container per kilometer for global ocean transportation routes fell 1 percent from 2016 to 2017. Since Clean Cargo began publicly reporting data from the industry in 2009, emissions per container per kilometer have dropped 37.1 percent on average.
Several years ago, Clean Cargo published its peer-reviewed, standardized methodology and reporting system that has been adopted globally by the industry, with carriers submitting operational data from the entire fleet to BSR on an annual basis. The results produce environmental performance scorecards for each carrier, which are used to meet corporate supply chain sustainability goals by 95 percent of shipping customers who participate in the group.
Today, Clean Cargo tools represent the industry standard for measuring and reporting ocean carriers’ environmental performance globally. Clean Cargo’s 50 members benefit from these tools while sharing knowledge and best practices for cutting emissions, and they publicly demonstrate their commitment to global efforts to reduce emissions.
Annually, BSR’s Clean Cargo discloses trade lane carbon-dioxide-emissions factors for ocean container transport, this year collected from more than 3,200 ships for 22 ocean container carriers that collectively represent 87 percent of ocean container capacity worldwide. Our annual reporting indicates that average carbon dioxide emissions per container per kilometer for global ocean transportation routes were reduced by 2.4 percent from 2015 to 2016. This was also the first year that 100 percent of carriers included in the emissions factors were verified using the Clean Cargo protocol.
Today, Clean Cargo tools represent the industry standard for measuring and reporting ocean carriers’ environmental performance globally. Clean Cargo 50 members—including 30 global brands and freight forwarders—benefit from these tools while sharing knowledge and best practices for cutting emissions, and they publicly demonstrate their commitment to global efforts to reduce emissions.
Freight movement is the lifeblood of global supply chains and economic development in many regions. It is also at the heart of many 21st-century challenges to global business: Markets want shipping to be faster, more flexible, and more sustainable. Yet freight is a distributed, global system, in which no single entity controls central decision-making—and, likewise, green freight efforts are dispersed and interconnected in unexpected ways.
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.
This report provides a detailed description of Clean Cargo's accounting methodology for carbon dioxide emissions. This industry-standard methodology is used by container carrier operators worldwide, representing more than 80 percent of global container cargo carried. Following the guidance in this report ensures its applicability and proper use for performing emissions calculations, bench-marking, and evaluation of performance.
Clean Cargo will continue to engage with policymakers and other global initiatives to ensure this methodology remains in leading practice among global industry carbon-emissions-accounting methodologies.
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.
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.
The report is one in a 13-part series that translates the IPCC assessments for business leaders and also part of BSR's Business in a Climate-Constrained World initiative.
Impacts of climate change—including more intense droughts and floods, heat waves, thawing permafrost, and sea-level rise—could damage transport infrastructure such as roads, railways, and ports, requiring extensive adaptation and changes to route planning in some regions.
Transport accounts for about a quarter of global energy-related carbon emissions. This contribution is rising faster than for any other energy end-use sector. Without aggressive and sustained policy intervention, direct transport carbon emissions could double by 2050.
Cutting carbon emissions from transport is challenging given the continuing growth in demand and the slow turnover of stock and infrastructure. Despite a lack of progress to date, the transition required to dramatically reduce emissions could arise from new technologies, implementation of stringent policies, and behavioral change.
Many energy-efficiency measures have a positive return on investment. Examples such as improving aerodynamics, cutting vehicle weight, and bringing engines up to leading-edge standards could cut energy consumption by 30 to 50 percent by 2030. Some of these measures have a negative lifetime cost.
Efficient, low-carbon transport systems have significant co-benefits, such as better access to mobility services for the poor, time-saving, energy security, and reduced urban pollution leading to better health. Integrated, far-sighted planning can create resilient low-carbon emission transport networks, particularly in new urban areas.
The report also examines the impacts of climate change and considerations by sector of the industry: road, rail, air, and ocean transport. And it looks at opportunities for building climate resilience (through land infrastructure, rail systems, inland waterways, and coastal adaptation) and for mitigating greenhouse gas emissions (through modal shifts, demand reduction, vehicle efficiency, reduction in carbon intensity, and policy intervention).
A Spanish-language translation is available for download here.
Today, 90 percent of what you own comes from far-flung regions via ocean, air, and land, yet the environmental impacts of transporting these products are not always clear. However, new approaches that increase transparency are improving the sustainability of the goods that fuel our global economy.
It is widely accepted that as a significant contributor to global carbon emissions, the transport sector needs to make environmental improvements in the pursuit of creating a low-carbon economy. Today, around 4 percent of global emissions come from ocean shipping—about equivalent to that of aviation. For global brands, this translates to significant carbon impacts in their own supply chains: Up to 70 percent of carbon emissions during a cargo journey come from the ocean segment.
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.”