2022 Climate and Energy Benchmark on the Transport Sector

The World Benchmarking Alliance (WBA) and CDP (formerly Carbon Disclosure Project) published the 2022 Climate and Energy Benchmark on the Transport Sector – a report highlighting the urgent need for the global transport sector to collaborate on and scale their sustainability efforts, back in October last year.

According to the latest data, we have already crossed the safety threshold of the Earth and the world will definitely warm beyond the 1.5°C limit set out by the climate science community in order to avoid the worst consequences of climate change. This limit was the most prominent decision that was taken under the purview of the Paris Agreement of 2015. Scientists say that every tenth of a degree above this limit will bring unpredictable consequences, increasing the severity of extreme weather events and climate fluctuations.

Though it has been more than 5 years since the Paris Agreement, the world is far from having come closer to the UN Sustainable Development Goals. There is a long journey of decarbonisation and energy transformation that needs to be completed.

This makes sustainability a global priority and the supply chain industry is not excluded. Lately, there has been an increased pressure on organisations from the government, their customers as well as investors, to demonstrate higher levels of environmental and social concern, and act upon it with equivalent dedication.

Supply chain sustainability entails the efforts of various industry organisations to consider the environmental and human impact of their products journey through the supply chain. It starts with procurement of raw materials, and moves through production, storage, before finally reaching the delivery stage, covering every transportation link in between. The goal is to minimise environmental harm from factors like energy usage, water consumption and waste production, while having a positive impact on the people and communities in and around their operations. These concerns are in addition to traditional corporate supply chain concerns around revenue and profit.

Transport is critical to achieving global decarbonisation. After all, it has the highest reliance on fossil fuels of all sectors. In 2021, transport accounted for 37% of CO2 emissions among all end-use sectors. In the US, the transport sector accounted for 27% of total greenhouse gas (GHG) emissions in 2020, the highest of any sector. In China, transport accounted for 10% of total GHG emissions in 2021, with the share growing rapidly.

The report assesses 90 keystone transport companies that have a disproportionate influence on achieving the Paris Agreement goals and the SDGs, covering freight and passenger companies across air, rail and road, as well as sea freight (shipping) transport companies.

The top 5 companies on the Benchmark include:

  1. Singapore based ComfortDelGro Corporation (Score 47.8/100)
  2. France based La Poste Groupe (Score 46.7/100)
  3. UK based FirstGroup (Score 41.3/100)
  4. Netherlands based NS Groep (Score 39.5/100)
  5. Denmark based A.P. Moller-Maersk (Score 38.8/100)

It was particularly disheartening to see minimal participation from the APAC region. With respect to Indian companies, there were only 2 assessed – IndiGo (rank 43, score 20.4/100) and Indian Railways (rank 87, score 1.9/100).

Out of the 90 companies that were surveyed across rail, road, air and ocean transportation, 51% have set and announced their net-zero targets. Out of these 51%, 50% have not conducted scenario analysis, 65% do not include any financial details in their transition plans, and 87% have not set any targets between 2030 and their targeted net-zero year.

Traditional PTL market players are experiencing increased competition from techenabled startups. PTL services are in high demand around the country, while the business is getting more complex with challenges linked to network and load patterns.” Amir Sokolowski, Global Director, Climate Change, CDP

When it comes to supply chain, transport companies are not engaging enough with their stakeholders on environmental issues, like transitioning to clean fuels, which is an issue that needs to be highlighted. There is also not enough data from Asia, let alone India. This also means we don’t have enough disclosure from the region, which is a matter of concern.” Prarthana Borah, Director, CDP India

This is an abridged version of the original regional story which was published in the January 2023 edition of the Logistics Insider magazine. To read the complete article, click here.

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