Your environmental impact

Every journey to net zero will be unique. Knowing what to consider and where to start will be starkly different for a freight forwarder, a port or a container terminal. You will have to consider many competing factors when looking at your transition to net zero: budget; regulation; commerciality and efficiency will all play a part. While looking after our planet is of upmost importance, we understand the need to balance the cost and benefit of emission-reducing strategies – you want to do the best with what you have.

As a Club, we have uniquely objective oversight of the global transport and logistics industry. We have seen first-hand the strategies that work and the resource that goes into making them successful. Being part of a Club means sharing best practice for the benefit of the entire membership, in this way we are able to share clear strategies to transition to net zero regardless of size or available resource.

While we endeavour to provide the best possible advice, we always recommend obtaining local legal advice relating to your specific legal obligations.

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Key questions about climate change and the supply chain

The maritime transport sector accounts for approximately 3% of all global emissions, generating an estimated 1 billion tonnes of Co2 each year. Without intervention, projections suggest that contuing ‘business as usual’ could see a 250% increase (towards 10% of global emissions) by 2050. It is estimated that the wider global transport sector contributed around 7.7 billion tonnes of Co2 in 2021 and remains on an upward track.

It is clear that the global supply chain is a contributor to greenhouse gasses, with a significant impact on climate change. There are opportunities to reduce the environmental impact of the global supply chain and many have already started their journey to Net Zero.

While the industrial revolution was recognised as having a detrimental impact on the environment and climate, it wasn’t until 2015 that an international treaty was adopted: The Paris Agreement (often referred to as the Paris Accords). The agreement serves to cover a host of aspects including climate change mitigation, adaption and finance.

Of course, while many countries are signatories to the Paris Agreement and have made commitments to reducing carbon emissions, not all are. In this context, it would be prudent to seek local legal guidance as to the exact environmental requirements that apply to your business, particularly at the start of your journey.

The fact that Earth’s climate is changing is generally accepted globally. There is evidence of more severe storms, in historically unusual locations, higher wind speeds, more frequent floods and droughts, all of which are not only impacting the environment, but also business risk. In the context of the supply chain, this might translate to flood losses, fire losses, equipment damage, disruption and delays.

Regardless of the perceived challenges, we must all act; delaying what has become an inevitability is not a prudent option. It is widely accepted that irrecoverable change to our climate has already happened; even if we were able to cease all emissions immediately, the effects of the damage already sustained will be felt for decades.

Evaluating your emissions footprint as accurately as possible is a critical first step. From this starting point, you will be able to assess, compare and measure any potential solutions to reduce your carbon emissions.

The journey to Net Zero is unlikely to be one you take alone. Whether decarbonising a particular operation or trade lane or measuring your emissions against Scope 3, collaboration with your counterparties will be key to success.

It’s important to recognise that each business will be at a different stage of development and ‘ESG maturity’ and this will depend heavily on many environmental, societal and political factors, sometimes beyond control. There will be those who have already taken several steps to reduce the environmental impact of their operations, however many will be considering where the journey starts and which steps to take first. Simply being aware of the need to review your environmental impact is a good first step.

Regulation and reporting

The quest of net zero is not an independent goal. It is fundamentally connected to the broader framework set out by the United Nation’s Sustainable Development Goals (SDGs). Therefore, targeting and delivering on your net zero goals contributes both directly and indirectly to the overall achievement of the SDGs.

The Paris Agreement was signed by governments of over 190 nations in 2015, who agreed to limit global warming to less than 2 degrees C and attempt to limit it to 1.5 degrees C above pre-industrial levels. The agreement also extended the scope of reduction commitments to include emissions from international shipping and aviation. It mandated the International Maritime Organisation (IMO) and the International Civil Aviation Organisation (ICAO) to develop and implement binding measures to achieve comparable reductions in these modes of transport.

Climate change refers to long-term alterations in Earth's average weather patterns, primarily driven by the increase in greenhouse gas concentrations in the atmosphere. These gases, such as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), trap heat from the sun that would otherwise escape into space, leading to a warming of the planet.

As nations around the globe ramp up action their against climate change and move their economies towards net-zero greenhouse gas (GHG) emissions, new practices, opportunities and indeed challenges are likely to arise for their respective ports and logistics operations. However, every journey will be unique, knowing what to consider and where to start will be starkly different for a freight forwarder versus a port or container terminal.

Science-based targets initiative (SBTi) are specific, measurable goals that organizations set to reduce their greenhouse gas emissions in alignment with the latest climate science and the global effort to limit global warming. These targets are designed to ensure that emission reduction efforts are consistent with the goals of the Paris Agreement.

Sustainability reporting and accountability is an important component of climate change mitigation strategy. The Intergovernmental Panel on Climate Change (IPCC) reported in 2018 that industry is globally responsible for 21% of direct greenhouse gas emissions, one of the largest contributors measured. As societies plan the journey to net zero, it is essential for governments, investors and consumers understand how business contributes to emissions so that they can make informed decisions about how to govern, invest and consume. For this to happen, sustainability reporting must be standardised and accurate.

In brief, carbon offsetting involves compensating for emissions by supporting external projects, while carbon capture is about capturing and managing emissions directly from your own operations. Both approaches play a role in reducing a company's overall carbon impact, but they target emissions at different stages of the carbon lifecycle.

Modern slavery, also known as contemporary slavery, refers to various forms of exploitation and coerced labour, despite being legally abolished in most countries. This violation of human rights involves the control and ownership of individuals through various means, often depriving them of their freedom, dignity, and basic rights.

As a result of escalating concerns over the consequences of global climate change, various regulatory frameworks have emerged. As scientific consensus solidifies around the human influence on rising temperatures, policymakers worldwide are facing an urgent mandate to design and implement measures that curtail carbon emissions, promote sustainable practices, and safeguard vulnerable ecosystems.

Information and guidance to help make sure your operations positively impact your communities.

Carbon offsetting vs. carbon capture: what's the difference?

 

What is carbon offsetting and carbon capture? And are they effective ways of mitigating the impact of your operation on the environment. Many schemes available oversell their impact on carbon emissions and your risk falling foul to "green washing".

Risks of climate change

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Climate change refers to long-term alterations in Earth's average weather patterns, primarily driven by the increase in greenhouse gas concentrations in the atmosphere. These gases, such as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O), trap heat from the sun that would otherwise escape into space, leading to a warming of the planet.

TT Club looks at recent storm events to draw risk guidance from ports and shipping container terminals

TT Club offers risk guidance advice in relation to quay container crane maintenance and changing climatic risk.

Climate change is already exposing ports to more extreme weather occurrences, and these can cause millions in damage, repairs and downtime. Today, ports are taking note of climate change, but many are still deciding what to do about it.

Freight transport and logistics insurance specialist TT Club's analysis of weather-related risk highlights water damage to cargoes in particular.

Find out how changing climatic risks and extreme weather events can impact your insurance cover and validity of claims

Leading transport & logistics insurer, TT Club, outlines Loss Prevention guidance relating to claims around wet cargo damage

The traditional assertion that storm events are unexpected and their consequence unavoidable may no longer be simple to establish. Planning from the outset is as critical as planning for the emergency.