Closing the Logistics Emissions Disclosure Gap: An analysis of emissions disclosure to CDP by corporations worldwide
Amsterdam, 14 July 2020 - Smart Freight Centre and CDP believe that transparency on carbon emissions is key to achieving our climate goals on freight transport.
Smart Freight Centre analyzed the state of logistics emissions disclosure to CDP, using the 2019 CDP disclosures of 2,604 companies. The key conclusion is that there is a lack of transparency due to under-disclosing of transport and logistics emissions by companies to CDP, with stark differences between modes and between industrial sectors that rely on freight transport.
Only 110 transport operators report their direct, or scope 1 emissions, amounting to less than 20% of global freight emissions. The majority of that comes from aviation, while the high-emitting road freight sector is barely represented. Looking at supply chain, or scope 3, emissions, just over 500 companies report these emissions, accounting for only 10% of global transport emissions. Furthermore, no carriers specifically address well-to-tank emissions, which highlights a gap in understanding of the emissions required to produce and distribute transportation fuels – an important element of the low-carbon transition, especially as alternative fuels like biodiesel, natural gas, or hydrogen increase their market shares.
There are many opportunities to increase transparency in emissions using the CDP questionnaire, which can also inform corporate climate goals, investment ratings, procurement programs, and circular economy strategies. This report provides guidance on best practices for disclosing freight transport emissions to CDP for scope 1, 2, and key categories of scope 3 for transportation in line with the GLEC Framework. The Global Logistics Emissions Council (GLEC) Framework, developed by Smart Freight Centre together with the GLEC partnership, is the global method to help companies to calculate and report freight transport emissions, including to CDP and the Science-Based Targets initiative.
Finally, five recommendations are provided to close the logistics emissions disclosure gap:
- Invest in disclosing by road freight companies
2. Ask companies to disclose carbon intensities
3. Improve capturing of well-to-tank emissions from transportation fuels
4. Give guidance on how to provide meaningful comments in CDP reports
5. Encourage companies to look beyond disclosing
This additional guidance is entirely in line with the GLEC Framework.
To achieve our global climate goals for freight transportation, we must face climate impacts head on and make carbon a KPI throughout our business operations. Disclosing carbon emissions in your operations and supply chain is a meaningful step all companies can take, which will in turn enable companies to set and reach their climate targets.
We have the tools we need to manage carbon emissions, the GLEC Framework provides measurement method and CDP provides the disclosure platform.
Suzanne Greene, Expert Advisor, Smart Freight Centre.
Measuring and transparently reporting climate impact is crucial for companies to ensure risk awareness, prepare for the future and respond to the growing market demands for disclosure. Over the last 20 years environmental disclosure has become a new business norm, with 8,400 companies covering over 50% of global market cap disclosing through CDP’s system in 2019. But of course, this varies by sector. The freight sector, which is such a crucial enabler of other business activity, needs to step up on climate disclosure”.
Dexter Galvin, Global Director of Corporations & Supply Chains, CDP.
Smart Freight Centre and CDP will continue to support companies on their
journey to zero emissions freight through increased transparency and climate action.