How to Incorporate Environmental Responsibility into Your Business Practices

Sustainability is no longer just a buzzword; it's a core driver of business decisions and consumer preferences in today's world. Consumers are increasingly conscious of the environmental impact of their purchases, and businesses are responding by adopting eco-friendly practices throughout their operations.

This sentiment is particularly strong in Japan, where the government has set ambitious goals to reduce fossil fuel usage by 41% by 2030¹, signaling a clear shift towards environmentally responsible practices.

Sustainable supply chains are one of the key vehicles for achieving these goals. By integrating sustainability into their supply chain strategies, businesses can not only minimize their environmental impact but also unlock new opportunities for efficiency, cost savings, and enhanced brand reputation.

Why is Sustainability Important for Businesses in Japan and Around the World?

Japan is actively promoting sustainability within its business sector, with a strong push for standardized sustainability disclosure. The Sustainability Standards Board of Japan (SSBJ) has outlined clear guidelines for companies to report on their environmental, social, and governance (ESG) performance. 

These standards are expected to be mandatory for all companies listed on the Tokyo Stock Exchange (TSE) Prime market by the 2030s, with a phased rollout starting as early as 2027²:

* More phases may be implemented in between to progressively move towards the final goal.

This move towards greater transparency and active sustainability efforts offers several benefits for businesses:

• Reduced Environmental Impact: By adopting sustainable practices and carbon-neutral shipping, businesses can minimize their carbon footprint, conserve resources, and contribute to a healthier planet.
• Improved Brand Reputation: Consumers are increasingly drawn to businesses that demonstrate a commitment to sustainability. By showcasing their environmental efforts, businesses can enhance their brand image and attract new customers.
• Compliance with Investor and Consumer Expectations: Investors and consumers are increasingly demanding transparency and accountability when it comes to sustainability. By meeting these expectations, businesses can attract investment, build trust, and gain a competitive advantage.
• Enhanced Supply Chain Resilience: Sustainable supply chains are often more resilient to disruptions, as they prioritize diversification, ethical sourcing practices, and risk management. This can help businesses navigate challenges and maintain continuity in a volatile global environment.

Furthermore, understanding and addressing Scope 3 emissions—those generated throughout a company's value chain—is becoming increasingly important for businesses. By tracking and reducing Scope 3 emissions, businesses can demonstrate their commitment to comprehensive sustainability and contribute to broader climate action goals.

What are Scope 3 Emissions?

Scope 3 emissions can be defined as indirect greenhouse gas emissions that occur throughout a company's value chain, encompassing activities both upstream and downstream from the company's direct operations. These emissions can arise from various sources, including purchased goods and services, transportation and distribution, waste disposal, and the use of sold products.

While Scope 3 emissions can be challenging to measure and manage, they often represent a significant portion of a company's overall carbon footprint.

Image source: DHL GoGreen Plus: Tackling Scope 3 Emissions in APAC | DHL Express Singapore

How to Calculate and Disclose Carbon Emissions

Companies can determine their supply chain emissions in one of two methods:

1. Obtaining emissions information from related trading partners; and
2. Performing calculations with formulas.

To facilitate the calculation and disclosure of Scope 3 emissions, the Japanese Ministry of Environment has outlined a standardized methodology³. This methodology categorizes Scope 3 emissions into 15 categories, providing a clear framework for businesses to measure and report their emissions.

Among the 15 categories, your Scope 3 emissions would essentially cover:

• Procurement of goods
  • Cat. 1: Purchased goods and services
  • Cat. 2: Capital goods
  • Cat. 3: Fuel and energy-related activities not included in Scope 1 or 2 
• Upstream and Downstream Transportation:
  • Cat. 4: Transportation and delivery (upstream)
  • Cat. 9: Transportation and delivery (downstream)
• Product Lifecycle:
  • Cat. 10: Processing of sold products
  • Cat. 11: Use of sold products
  • Cat. 12: End-of-life treatment of sold products
• Other Indirect Emissions:
  • Cat. 5: Waste generated in operations
  • Cat. 6: Business travel
  • Cat. 7: Employee commuting
  • Cat. 8: Leased assets (upstream)
  • Cat. 13: Leased assets (downstream)
  • Cat. 14: Franchises
  • Cat. 15: Investments

How to Calculate Carbon Footprint from Scope 3 Emissions

Accurately mapping your greenhouse gas emissions across your supply chain is crucial for transparency and informed decision-making. The Japanese Ministry of Environment³ provides detailed guidelines and emission factors for each category, which can be used to estimate emissions based on activity data, such as fuel consumption, waste generation, or product usage.

Due to the complexity of Scope 3 emissions accounting, many businesses seek expert assistance. DHL Express can connect you with trusted sustainability consultants who can provide guidance and support in calculating, disclosing, and reducing your Scope 3 emissions. 

Contact us today to learn more about our sustainability solutions and how we can help your business achieve its environmental goals.

How to Report and Disclose Carbon Emissions

While specific reporting formats may vary, businesses should generally aim for a clear and concise presentation of their emissions data. This includes:

1. Categorizing emissions by Scope: Clearly separate emissions into Scope 1, Scope 2, and Scope 3 categories.
2. Providing detailed breakdowns: For each Scope, provide further breakdowns by emission source or activity.
3. Using visual aids: Utilize charts and graphs to present data in a visually appealing and easy-to-understand manner.
4. Including relevant metrics: Report on key metrics such as total emissions, emissions intensity, and year-over-year changes.
5. Explaining methodologies: Clearly describe the methodologies used to calculate and track emissions.
6. Setting targets and goals: Communicate your emissions reduction targets and progress towards achieving them.

Ways to Make Your Supply Chain More Sustainable

Ethical sourcing is a crucial aspect of building a sustainable supply chain. It involves procuring materials and products from suppliers who prioritize environmental responsibility, fair labor practices, and social well-being. 

By integrating ethical sourcing into your operations, you can minimize your business's environmental and social impact while also enhancing your brand reputation and building trust with consumers.

Here are some key practices in ethical sourcing:

• Source materials from certified sustainable suppliers: Look for suppliers who have certifications or accreditations that demonstrate their commitment to sustainability, such as those from the Forest Stewardship Council (FSC) or Fairtrade International.
• Adopt fair labor practices and safe working conditions: Ensure that your suppliers adhere to ethical labor practices, including fair wages, reasonable working hours, and safe working conditions for their employees.
• Promote traceability and transparency in the supply chain: Work with suppliers who provide transparency about their sourcing and production processes, allowing you to track the origins of your materials and verify their ethical and sustainable business practices.

How Logistics Can Support Carbon-Neutral Shipping Operations

Despite being a backbone of the supply chain, logistics can also have a significant environmental impact due to transportation emissions and packaging waste. By adopting green logistics strategies, businesses can minimize their carbon footprint and contribute to a more sustainable future.

Here are some key strategies for green logistics operations:

• Optimize transportation routes: Utilize route optimization software and AI in logistics to plan the most efficient delivery routes, reducing fuel consumption and emissions.
• Choose fuel-efficient vehicles: Invest in fuel-efficient vehicles or explore alternative transportation methods, such as electric vehicles or hybrid trucks, to reduce your carbon footprint.
• Utilize alternative transportation methods: For certain shipments, consider using alternative transportation methods like rail or even cargo bicycles, especially for local deliveries, to reduce reliance on road transport and its associated emissions.
• Minimize packaging waste: Optimize packaging design to reduce material usage, utilize recycled and recyclable materials, and explore innovative packaging solutions that minimize waste and environmental impact.
• Optimize warehouse operations: Implement energy-efficient lighting and heating systems in your warehouses and optimize storage and handling processes to reduce energy consumption and waste generation.

Building a More Sustainable Future Through Responsible Business Practices

Collaboration among stakeholders in the supply chain is essential for achieving comprehensive sustainability goals. By working together, suppliers, manufacturers, distributors, retailers, and consumers can create a more sustainable ecosystem that benefits everyone.

DHL Express is also committed to their Mission 2050 initiative through which the company aims to achieve net-zero emissions across all logistics operations by 2050. In line with this, DHL Express introduced a new zero-carbon fleet in Japan in 2023, incorporating 18 Hino Dutro Z EVs and one eCanter.

As a further step towards their 2050 goals, DHL is actively working to replace conventional jet fuel with sustainable aviation fuels (SAF). SAF can achieve greenhouse gas emission reductions of up to 80% over its lifecycle compared to conventional fuels. These initiatives highlight DHL's commitment to environmental responsibility and their efforts to create a more sustainable logistics industry. 

By partnering with DHL Express, businesses can leverage these sustainable solutions and contribute to a greener future.

Open a DHL Express business account today and adopt a green logistics solution to reduce your carbon footprint for international shipping and contribute to a healthier planet.