Creating a sustainable logistics ecosystem

by Maria Torrent-March

Following a tumultuous few years for the warehousing and logistics industry, there is hope on the horizon. Global supply chain pressures have gradually eased and wholesale energy prices fell this spring, prompting many to adopt an optimistic outlook on the progress of the industry.

However, due to the impact of supply chain activities on carbon emissions, sustainability progress still hangs in the balance. It’s apparent that the UN Paris Agreement climate pledge is at real risk of being missed unless action is taken immediately.

The industry must prioritize driving down carbon emissions. Thankfully, there are many ways the warehouse and logistics sector can act cooperatively to ensure progress benefits businesses, customers and the planet.

Planning for emissions reporting

Scope 1 and 2 greenhouse gas (GHG) emissions form a large part of many companies’ partners’ scope 3 emissions. Organizations face growing pressure to more accurately report and significantly reduce their indirect emissions. Last year, the U.S. Securities and Exchange Commission (SEC) recommended extending mandatory reporting to compel US businesses to monitor indirect emissions.

Reporting scope 3 emissions accurately can be difficult for organizations due to challenges with identifying and measuring emissions that are outside their control. When warehousing and logistics facilities and third-party service providers prioritize reducing their scope 1 and 2 emissions, scope 3 emissions are reduced for their customers, creating an ecosystem of collective responsibility to support carbon reduction throughout.

The role of the warehouse in reducing emissions

There is a clear desire to cut carbon and improve sustainability across the board. Many supply chain operators are taking steps to enhance energy efficiency by utilizing green energy from renewable sources, increasing recycling efforts, preserving natural resources and reducing the use of diesel fuel. However, warehouses can play a role in several other ways to reduce the carbon footprint of suppliers and customers.

The demand for warehouse space is currently far outstripping availability, so providers that can offer shared usage facilities with flexible and scalable contracts for customers in energy-efficient buildings are crucial to supporting the net-zero growth of their supply chain. The construction of new buildings can now be developed in accordance with low carbon specifications, ensuring that all assets have climate resilience measures installed to directly impact the emissions profiles of all concerned.

Choosing sustainably sourced materials for all buildings is also essential. Modern construction can now use existing elements at a site, like steel or aggregate, and purchase materials from local suppliers to reduce waste and their carbon footprint.

Supply chain operatives and logistics leaders have many options available to them to support carbon reduction efforts within their warehouses, transport networks and asset management processes. It’s key they understand that cutting carbon makes good business sense; by updating operations with energy efficiency solutions, more money can ultimately be saved than the cost of the initial capital outlay.

For example, warehouses can implement programs to drive efficiencies such as re-lamping with LEDs with motion sensors, integrating thermostats for zoned atmosphere control, employing battery technology, using carbon neutral fire suppression systems, and employing reverse logistics to optimize fleets and supercharge recycling. Furthermore, installing solar panels linked directly to electric vehicle charging stations creates a sustainable loop, drastically reducing the need for grid energy.

Operating solely on energy generated from 100 percent renewable sources means less reliance on fluctuating energy costs and electric logistics vehicles charged on-site are not susceptible to hikes in diesel prices and regulations changes. This allows providers to reduce overheads, mitigate organizational risks and remain resilient despite external economic pressures affecting the supply chain.

When looking at waste streams and preserving natural resources, rainwater can be harvested from the warehouse roof to be repurposed, including upkeep of the local biodiverse environment using AI-powered irrigation systems.

Recycling or reusing packaging and pallets and monitoring the performance and condition of the inventory for end-of-lifecycle, are just some of the ways that modern warehouses can innovate to tackle emissions and increase their productivity simultaneously.

Working collaboratively

The warehousing and logistics sector is in a strong lobbying position, both within government and to secure preferential rates from suppliers of energy efficient technologies. As seen with the Climate Group EV100 initiative, change can be enacted when organizations unite to make pledges on progress.

While organizations need to focus on reducing their own carbon footprint, the key to cutting carbon is collaboration. As mandatory reporting on indirect emissions draws closer, businesses will soon find themselves obligated to incorporate ESG factors into every decision.

Maria Torrent-March is warehousing and logistics strategy director at Iron Mountain.