Accounting for Ocean Transport Emissions

BSR
Tuesday, March 26, 2013
Photo: BSR

BSR conducted interviews with Clean Cargo shippers—companies buying transportation services—to find out how they use Clean Cargo emissions data, how they integrate this data into their business processes, and what benefits they receive from being part of the group.

Rising consumer and regulatory pressures and the release of supply chain emissions reporting standards, such as GHG Protocol Scope 3, are pushing companies to account for the environmental impact of their supply chains, including the transportation of goods. Companies are increasingly asking their transport suppliers across road, rail, air, and ocean freight for reliable emissions data to better gauge the overall environmental footprint of their products.

The ocean leg of a products’ journey often represents the most significant percentage, sometimes up to 70%, of a given company’s transportation portfolio. Yet a web of factors weighs into calculating ocean transport emissions, including trade routes, calls at port and especially vessel capacity, all of which complicate cargo carriers’ efforts to provide a simple answer. Over the past decade, the Clean Cargo Working Group (CCWG) has been developing a standard methodology to enable carrier companies to calculate their fleet emissions and transparently share it with their customers using a standard and approved scorecard.

In this short report, participating Clean Cargo shipping customers (hereafter: shippers) have elected to share with the public how Clean Cargo data has helped them to measure, benchmark, and report on their ocean transportation emissions.

Clean Cargo Shipper Survey

In the fall of 2012, BSR conducted desktop research, a survey, and a series of interviews with Clean Cargo shippers to find out to what degree they use Clean Cargo data, how they integrate Clean Cargo tools and data into their companies, why they joined CCWG, and what value they receive from the working group. BSR collected this feedback from shippers in order to increase the working group’s business value for individual members and to develop best-practice sharing within the group.

Using Clean Cargo Data

As part of its objectives, Clean Cargo works to collect emissions data annually from its carriers throughout their entire fleet. Shippers receive this data in a scorecard format that highlights average fleet emissions on a trade-lane basis. BSR was curious to know how shippers use this data, and they responded as follows:

» CO2 emissions: Clean Cargo shippers use the Clean Cargo scorecard mainly to report on their CO2 emissions, but sulfur-oxide (SOx) and nitrogen-oxide (NOx) emissions are becoming increasingly important.

» Carbon footprint calculation: 80% of all interviewed shippers joined Clean Cargo because their companies wanted to access the primary data of ocean carriers in order to identify their baseline emissions in ocean transportation, calculate their carbon footprint, and set emissions reduction targets with a more accurate methodology.

» Intermodal transport comparison: Shippers highlighted that access to Clean Cargo data enables them to compare different modes of transportation and make informed decisions where it may be possible to shift certain flows to ones with lower emissions (e.g., from air freight to ships or from road to trains or inland water transport).

Integrating Clean Cargo Data

Certain companies are of course farther along than others in integrating sustainability within their supply chains. BSR was eager to understand where Clean Cargo shippers stood on the question of integration, and asked what internal processes and procedures Clean Cargo data currently informs.

» Procurement decision-making: 78% of responding shippers use the carrier scorecards to inform their procurement decision-making process.

» Sustainability reporting: 56% of responding shippers use the carrier scorecards either in their sustainability performance reporting or for other uses, such as to calculate their own carbon footprint, as well as the supply chain carbon footprint of their customers.

» Evaluating other carriers: Certain shippers use the carrier scorecards for carrier management, and they integrate the information into their ocean carrier key performance indicators.

Benefits of Clean Cargo Data

BSR was also interested to learn how Clean Cargo data compares to other industry-available emissions data. Shippers responded that both the quality and format of Clean Cargo data help them make business decisions as follows:

» Objective and measureable data: Shippers appreciate Clean Cargo data because it is objective and measureable and because it provides data about ocean carriers year after year.

» Aggregate industry view: The data enables shippers to have an aggregate view of the industry, as well as a deep understanding of each of their business partners.

» Improved decision-making: The high-quality data also helps shippers make better and more informed decisions in their sustainability performance reporting and procurement process.

Benefits of the clean Cargo Working Group

Ultimately, Clean Cargo positions itself as a platform for exchange. BSR asked to what degree Clean Cargo allows its shippers to exchange with their business partners and how it benefits their operations.

» Dialogue among carriers, shippers, and third-party logistics (3PL) providers: Clean Cargo shippers benefit from an open dialogue with other shipper, carrier, and 3PL members. They learn from each other’s experiences and see how other members tackle environmental and transport-related challenges. This dialogue also helps shippers to steer the direction for sustainable logistic supply chain management and set CO2 reduction targets.
A 3PL member also mentioned that they benefit from an industry initiative like Clean Cargo because it allows them to collaborate directly with their carriers and their customers (shippers) and exposes them to upcoming environmental issues in the logistics industry as well.

» Level playing field: Clean Cargo creates a level playing field for carriers, shippers, and 3PL providers. Within Clean Cargo, all group members can discuss their shared goals in reducing environmental impacts, use the same methodological process to measure the impacts, and report their data at the same time of the year. Clean Cargo provides its members with a standard process and methodology for reporting on their environmental performance.

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