Firstly, let’s quickly remind ourselves of what logistics is. It covers all the processes a business has in place to get their goods from the point of origin to the customer – including procurement, inventory management, distribution, warehousing, transportation, packaging and risk management.
Sustainability in logistics refers to actionable steps a business can take to reduce the environmental impact of these processes. Examples include carbon offsetting, optimizing transport routes (to reduce emissions), and switching to electric vehicles.
Within the wider supply chain, logistics is the part your business has the most direct control over. Research1 has shown a positive correlation between a company’s GCSM practices (Greenhouse Emissions, Recycling, Waste, and Renewable Energy) and its profitability, making it a key area you should invest resources in.
The European Environment Agency predicts that logistics will account for up to 40% of global carbon dioxide emissions by 2050 unless effective measures are taken2.
Beyond playing its part in changing this gloomy forecast, there are many reasons your business should be considering how green its logistics practices are:
A survey by McKinsey3 found that 66% of respondents say that they consider sustainability when they make a purchase, aligning themselves with brands that are compatible with their values and priorities.
Yet, they’re also wary of “greenwashing”; in fact, a separate study found that 88% of Gen Z don’t believe businesses’ environmental, social and governance (ESG) claims4. So, building an authentic sustainability strategy is key to enhancing your brand image and gaining a competitive advantage.
A sustainability strategy will help your business embrace a culture of innovation and agility. You’ll review your current logistics operations, enabling you to spot inefficiencies and make changes that are not just better for the environment, but will save your business money. For example, implementing route planning software across your transportation fleet will reduce your emissions and your fuel costs. It’s a win-win!
Looking for ways to improve the sustainability of your logistics? As the subject becomes a key focus for industries globally, these are some of the key trends your business could adopt.
This refers to the steps a business can take to reduce its carbon footprint, which is the total amount of greenhouse gases emitted directly or indirectly by its activities. Currently, the transport and logistics sector contributes around 24% to global carbon dioxide equivalent (CO2e) emissions5, so there’s plenty of work to be done.
You may have heard the term “net zero”, which is the balance between the amount of greenhouse gas that’s produced and the amount that’s removed from the atmosphere. Here are some decarbonization steps your business can take on the path to net zero status:
Adopting renewable energy solutions will be a huge part of your decarbonization strategy. Renewable energy is defined as that derived from natural sources that are replenished at a higher rate than they are consumed; it promotes the use of sunlight and wind, for example, as an alternative to fossil fuels. It’s forecast that almost 33% of the world’s electricity will come from renewables by 20246. Some sustainable energy solutions your business could consider are:
Artificial intelligence is playing a big part in helping businesses transform the sustainability of their logistics. Some of its applications in this area include:
Reverse logistics is the movement of goods “upstream” through a supply chain, to return them from the end customer back to a retailer or manufacturer (e.g., product returns). It embraces a circular economy model – extending old or damaged products’ lifecycle by promoting recycling, repurposing, repairing and resale.
Fashion retailer H&M7 is an example of a brand with an innovative reverse logistics strategy. Its Garment Collecting program invites customers to drop off unwanted clothes – from any brand – to one of its stores. From there, the clothes are either resold as second-hand, turned into remake collections, or shredded into textile fibers to make other goods.
DHL has committed to reduce its logistics-related emissions to net zero by the year 2050. With a DHL Express Business Account, you’ll benefit from a portfolio of dedicated GoGreen solutions that will help your business reduce its environmental footprint, too.