The boom in online shopping has resulted in increased demand in the logistics industry, which has resulted in continued growth in road and air freight.
From SAI Global Expert in Environmental Management Systems, Saeid Nikdel.
The logistics sector will contribute to alarming CO2 emissions if it does not combat emissions effectively and strategically now – but a successful environmental strategy must be led by board members and executives.
The rapid growth in deliveries of goods took a large part of the logistics industry by surprise last year and took on the challenge of accelerating deliveries to consumers and businesses. The added pressure on delivery volumes may have delayed the industry in making progress in defining and reducing carbon emissions. Now that companies have had time to adjust to the continued high volume of shipments, 2021 is a good year to come up with a plan to reduce each company's environmental impact and bring about change in the industry as a whole.
Research shows that online shopping sales in Australia have increased by 64% since March 2020 (ABS February 2021) compared to the previous month. Similarly, global air freight demand has surpassed pre-pandemic levels – up 9% in February 2021 compared to February 2019 volume (IATA, February 2021). With the transportation sector accounting for 18% of Australia's total emissions, logistics and freight companies have to lag behind the energy sector.
The logistics industry is facing an enormous challenge and business leaders need to drive this change from above. Although transport is at the heart of the sector, stakeholders still want organizations to be transparent and accountable to their sustainability goals. They want companies to take active steps to minimize their impact. Governments' emissions targets of net zero by 2050 also put pressure on companies to take it seriously.
A top-down approach, in which executives and CEOs actively guide an organisation's environmental strategy and policy, is critical to a low-carbon strategy. Logistics leaders need to demonstrate their strong commitment to achieving business goals for all employees and relevant third party vendors and have a framework to guide them.
The transport and logistics industry can use different approaches to minimize their ecological footprint. There are minor changes, such as using recyclable or recycled packaging materials, to more important ideas, including switching to electric vehicles and getting electricity from renewable energy sources. To hold a company accountable for its environmental goals and ensure that it is making progress, certification against international benchmarks such as the ISO 14001 environmental management system can be valuable. It shows the stakeholders and the broader company that there is a strategic plan in place for the sustainability of the company.
Organizations that certify according to ISO 14001 can follow their environmental strategy as independent audits take place several times during the three-year life cycle of the certificate. It also guides business leaders who commit to environmental policies that hold them accountable for driving change:
- Managers should take responsibility for the effectiveness of the organisation's environmental management system and ensure that environmental objectives are set and consistent with the direction of the organization.
- Business processes should reflect the environmental management system and strategy to which they are committed. For example, an organization could employ green procurement strategies that select products and services based on their minimal environmental impact versus cost-based decisions.
- Managers should equip the company with the necessary resources to successfully implement the environmental strategy.
- To ensure that the intended results are achieved, managers need to have their environmental policy and strategy reviewed on a regular basis. Those who opt for ISO 14001 certification are regularly audited several times during the certificate lifecycle to ensure that it meets the international benchmark.
- Managers should communicate the importance of the company's environmental strategy and goals to enable employees and relevant external vendors to contribute to the effectiveness of the goals and to ensure they have a clear understanding of the results.
- As leaders of an organization, they are also encouraged to drive continuous improvement within the company and support key employees who lead and drive this change in the company.
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