With the increased attention being given to climate change and being good corporate citizens, many companies have a renewed focus on sustainability and reducing their carbon footprint. But to achieve their sustainability goals, companies must understand the role and impact of emissions from their transportation operations. What are some of the challenges companies face in measuring transportation’s contribution to carbon emissions? What measurement tools or capabilities are required? How are companies leveraging this new data to reduce transportation-related emissions? Those are some of the key questions I discussed with Brett Wetzel, Senior Director of Applied Knowledge at Breakthrough, during a recent episode of Talking Logistics.
Scoping Out Emissions
Much of the sustainability discussion today centers around Scope 1, Scope 2, and Scope 3 emissions. So, I began by asking Brett to define what those terms mean. Brett relates it to your personal experience where Scope 1 “are the direct emissions you have, such as the natural gas or heating oil used to heat your home, or the gasoline or diesel you consume to power your car.” Scope 2 is “about indirect electricity, where the energy and emissions are created by a power generator, such as a utility company, but you are the end user of that electricity.” Scope 3 is all other indirect emissions. “It’s everything up and down the supply chain,” says Brett. “It’s everything from how you source your products and materials to how you get your products to customers. Think in terms of that FedEx or Amazon truck that pulls up to your house to deliver an order. Although you weren’t driving that truck, you’re still responsible for those emissions (if you think of yourself as a company) because you were part of the chain that got it to your house in the first place. So, Scope 3 is a very broad and vague category.”
I asked Brett to elaborate on the challenges companies face in trying to measure their Scope 3 emissions. Brett notes that while Scope 1 and Scope 2 emissions are easier to measure and reduce because you have more control over them, measuring Scope 3 is much more difficult. “The big difficulties in measuring Scope 3 emissions are the availability of data and whether you have any control over the assets and decisions of third parties,” Brett says.
“As the revolution in data and insights moves forward, Scope 3 is finally coming into the limelight,” Brett continues. “Without this visibility to data, it has been a world full of averages. Therefore, it’s been hard to understand how those numbers were derived and what you could do to improve them. It’s about understanding actuals, not averages.”
Obviously, gathering third-party data requires collaboration with partners and that brings up communications and standards. Brett says that while standards for Scope 1 and Scope 2 have been fairly well defined, that process is just beginning for Scope 3. “The good news is the disruptions of the past year have led companies to be more open to changing processes and adopting new standards.”
Measurement Tools and Processes
How can companies get started on emissions measurement? Brett states that this begins with understanding what you’re trying to measure in the first place. For example, Brett notes that there is a movement toward lifecycle emissions, “which is no longer just about what is coming out of the tailpipe but also understanding how the fuel was sourced and created, and it includes more than just carbon dioxide.”
“Once you understand what you need to measure, it’s all about figuring out some of the key components, such as what equipment was used to move a load,” adds Brett. “A lot of the work is gathering the data about those baseline components and seeing where you’re at today.”
Brett points out that there is a lot of push from shippers to have measurement standards so they can evaluate shipping options, compare themselves to their peers, and understand the impact for their customers, as well as to collaborate on reductions. “Getting better visibility and better data helps solidify the supply chain for everyone on emissions.”
Converting Data to Action
Brett notes that the process of converting emissions data to action is a bit of a Wild West situation, which means there is plenty of opportunity for early-movers to set the benchmarks. He says that, “While electric vehicles and next-gen technologies may be great solutions in the future, right now it’s about finding the costs and emission benefits of certain choices. So, it is things like mode conversions and verifying loads are full, and eliminating waste. The Smartway program can also help carriers be more efficient. You have to find those local, targeted solutions so you walk before you can run.”
Building the Business Case
Beyond being a good corporate citizen, the big question is how do you build a business case for your sustainability initiatives? Brett has some great insights on this question, so I recommend that you watch the full episode for his ideas and advice. Then post a comment and share your own perspective and experience on this evolving topic.