An A-Z of Sustainability: T is for Transport & Travel

Oct 16, 20247 min read

This week’s article focuses on transport and travel, in particular considering transportation carbon emissions and how to reduce them. These emissions form part of your scope 3 carbon reporting and are areas where you can have a significant impact in the short term.

Three sources of transportation-related carbon emissions

There are three main areas to consider: product and purchased goods transportation (freight), business travel, and employee commuting. In each you’ll need to think about how you can reduce or avoid the activity and then how you can reduce the impact when the activity has to happen. So, let’s take each in turn.

Approaching freight transport emissions reduction

If you are a services company then product freight is largely irrelevant to you, although there will still be some inbound materials delivery that might be on your radar. But if you are a manufacturer or retailer then this category is going to be something you will want to focus on. It is not always the largest source of scope 3 emissions in relation to purchased goods or downstream emissions, but it is an area that can have lots of possibilities for reduction.

Consider how far your raw materials or inputs travel to your factories and how far your finished products travel to your customers. Buying from more local suppliers will reduce emissions. This also can have an added benefit of reducing risk in very long global supply chains that can be adversely affected by extreme weather and geopolitical events. Your transport emissions would also be reduced by siting your factories nearer to your main customers, but this is clearly a major strategic decision that is only likely to be a consideration if you open a new site or relocate an existing site due to other factors. In all cases there are likely to be cost considerations to weigh up too.

Impact of modal changes

Where there are a lot of near-term opportunities with freight emissions is in efficiency improvements and “modal changes.” If you are currently moving any products by air, then changing to a lower emissions mode of transport, e.g. sea, can make a dramatic difference in your emissions. Similarly, a modal change from road to rail can reduce emissions too. Air freight is generally much more expensive so there will be reasons why you currently use it; for instance, it could be to reduce standard lead times or to allow you to respond to ad hoc customer demands.

So, it is not just a case of saying, right that’s it, no more air freight. However given the cost savings as well as emission savings, you’ll have a lot of supporters in challenging the status quo. And remember what I said in an earlier article, people will have got used to the way you do things, often using customers’ views as the defence, but ask the question “what would it take to change this?” and you might conclude that some of the barriers are historic or at least able to be overcome. It’s also worth saying that other costs can come into play here too. You might save operating costs by moving from sea to air freight, but decide you need to increase stocks to act as a buffer to variable demand given the longer lead times, leading to an increase in working capital. This is definitely an area to get your finance team involved with.

Behavioural changes and practical efficiencies

When it comes to efficiency improvements in freight there are also likely to be lots of small projects that together can add up to substantial reductions. In terms of inbound supply, can you change from packaged supply to bulk supply, or change your ordering pattern to unlock efficiencies for your suppliers’ transportation? For product freight, can you package your product differently to increase efficiency? This could be about changing the shape of your packaging – often a truck’s capacity will be limited by space as much as by weight, so if you can get more on a pallet you’ll reduce emissions per product.

Changing product packaging is one thing, but you can also consider how products are then palletised or packed in crates or some other “outer”. This will likely involve manufacturing and transport people and could have up front costs to change, but the ongoing benefits can unlock cost as well as emissions savings.

An often-overlooked part of this area is the customer order process, often because people will tell you that customers won’t change. If customers are able to order individual products then your transportation is likely to be inefficient. If you have minimum order quantities it will be better, but if those quantities are linked to the number of products in outer packaging or a pallet layer, then better still. For bigger selling products you may even make products available in pallet quantities only or provide a small price incentive to encourage this. If you are supplying retailers, moving from supplying direct to store to via a central warehouse can also be beneficial from an emissions perspective.

Emissions related to business travel

Let’s turn now to the topic of business travel. For most companies this is unlikely to be a major source of emissions, but it is an area completely in your control and an opportunity for employee engagement on sustainability. It’s worth starting by mapping out what the sources of emissions are first. It’s likely to be a small number of people flying (usually some commercial people if you are an international business and your senior team) and your commercial team’s car emissions. The rest is probably quite small but of course every business is different.

Short-haul and long-haul business flights

For those flyers, the first question is of course, “is it necessary to fly?” Some people see flying to other countries as the best part of their job and for others it can be a status thing, so tackling this can often be tricky, particularly if your senior team are the biggest flyers! Perhaps a place to start is domestic flights, setting a policy that they are not allowed or only in certain circumstances. Some countries (not the UK) have started to restrict routes under a certain distance or time if a fast rail connection exists. In the UK, rail can be much more expensive than flying and can also mean that people may have to stay overnight given the extra time involved, so you’ll need to take all that into consideration.

It is likely to be long-haul flights that will be the biggest source of emissions. Many companies already have policies in this area driven mainly by cost arguments, so it may be that you can look to strengthen these further. Often just exposing who are the big long-haul flyers can open a real hornet’s nest so be prepared for some tricky discussions. Whilst we all proved during the pandemic that business could continue without flying so much, we also know that there are situations where face to face meetings have so much more impact than a virtual one. But where some companies have not gone back to pre-pandemic levels of flying others have, and even flown more as people want to make up for lost time, so challenging whether the business need is real or just habit is crucial.

Controlling business travel by car

Most of the rest of business travel impacts are likely to come from car use, particularly from your commercial teams. Whilst some can be avoided by virtual meetings, most is likely to continue, so here your focus is likely to be on reducing the impacts through policies on what cars are available through leasing lists and what steps you can take to increase the use of public transport, particularly within cities. You’ll need to think about how much you use the carrot and how much the stick.

You could just educate people on the impacts and hope that they will change habits, or you could nudge them on their way by setting policies around encouraging public transport use or limiting the cars they can have linked to CO2 limits, in particular moving to electric cars (EVs) only. Be aware there is a lot of misinformation on EVs, with some UK newspapers pursuing a daily agenda of misleading articles. You will therefore get a lot of pushback from people who see these and have no other information sources, so it is worth preparing for this. I’d recommend you download the Little Book of EV Myths (Fair Charge), put together by Fair Charge to deal with some of the common misinformation on EVs, so you’ve got some facts to help you respond. I’ll admit that as an EV driver for many years I’m probably biased, but if you don’t yourself have experience of EVs, talk to people who do and use the facts in dealing with challenges.

Emissions related to employee commuting

The final area is employee commuting, an area that until recently many companies steered away from, considering it beyond where they wanted to influence. But as more scope 3 reporting is done and commuting appears on companies’ carbon inventories, they’ve realised that it also presents a way of engaging with employees and potentially offering employee benefits that are really valued as well as reducing emissions. For instance, offering discounted rail cards or flexible working arrangements to work from home for part of the week can reduce emissions, but have really monetary benefits for employees too. Larger companies who are not in walking distance of railways stations could look at introducing a minibus at both ends of the day as a shuttle service to and from the station. And discounted bikes through “cycle to work” schemes are increasingly popular.

Whilst transport and travel may not be the biggest source of emissions, as I’ve hopefully illustrated there are a lot of opportunities that are available to you to take make reductions. It may be a long list of small initiatives, but taken together they can have a relatively short-term material impact and therefore form an important part of you net zero transition plan. You’ll need to tackle some habits and long held beliefs but get it right and you will find ways to reduce emissions, reduce costs and improve employee engagement.

About the Author

Chris is a senior strategic leader with over 25 years’ commercial experience including sales, marketing, strategic planning and major business change initiatives at AkzoNobel and ICI. He has a wide knowledge of sustainability and how to integrate this into business having held senior sustainability roles at AkzoNobel for 12 years, including as Global Sustainability Director Decorative Paints and AkzoNobel Planet Possible Programme Manager. Chris is now an independent sustainability consultant and a pension trustee director.