Prevent or offset? Climate-neutral shipping and carbon offsetting

June 23, 2021
Prevent or offset? Climate-neutral shipping and carbon offsetting

Sustainability is the term currently on everyone’s lips and stakeholders in an increasing number of industries are committing to climate goals, CO2 reduction and sustainability.

That said, these terms are often understood to mean completely different things. They do, however, all have one thing in common: when assessing the environmental impact of products and services, it is important not just to consider one part of the value chain, but to include the bigger picture in your overall evaluation. Sustainability should not only look at the environmentally friendly raw materials used in manufacturing a product; the transportation and delivery of goods should also be considered to see how much CO2 they account for. Clever alternatives are now playing an important role, especially as e-commerce keeps growing.

What is climate-neutral shipping?

Grüner LieferwagenThe term climate-neutral shipping refers to all shipping methods where absolutely no climate-damaging carbon dioxide (CO2) is produced – for example, when pizza is delivered by couriers on bikes or the CO2 produced during shipping is specifically compensated for or offset. The definition of “climate-neutral” focuses on the greenhouse gas CO2, even though shipping processes can, of course, produce other climate-relevant gases like nitrogen or carbon monoxide, especially when combustion engines are used.

Even so, the focus on CO2 for climate-neutral shipping since the 2000s has generally proved to be effective, and there is a practical reason for this: it is particularly easy to calculate the amount of CO2 emissions for products and services. CO2 emissions (measured in grams, kilograms or tons of CO2 per unit of the product) have therefore become the common currency used in the last 20 years to understand and assess how good or bad something is from a climate perspective.
In established climate-neutral shipping, carbon emissions can be remedied quite accurately and precisely based on the supply chain and route taken by the products. To offset this carbon footprint, businesses support environmental projects or climate-friendly measures that mathematically compensate for the CO2 produced to create a healthy balance. So how can you offset CO2? Relatively easily – and either directly or indirectly.

One option for providers of goods or services is to offset the CO2 voluntarily by directly planting trees or getting involved in reforestation projects, for example. By doing so, they can then provide evidence to show that they are operating in a climate-neutral way overall. However, as not every provider can afford to plant a forest or trees, and with some only having a finite amount of company space available, another option is to get involved indirectly in environmental projects. This can be done by making regular contributions or donations and doesn’t have to be local; it can also be carried out in other countries, as climate neutrality is seen as a global CO2 calculation.

The last mile: a chance for sustainable action

When considering carbon emissions along the supply chain, we can see that the crux of the issue remains on the so-called “last mile”, the final stretch that sees a product reach the consumer’s door. And the growth of online retailing is making this last mile even more significant.

The reality is that, even before the online boom caused by coronavirus, last-mile deliveries were causing high carbon emissions. Even the World Economic Forum 2020 was prompted to look at the future of the “Last-Mile Ecosystem”, commissioning a study by McKinsey and the World Business Council for Sustainable Development on the issue.

The forecast until 2030::
●In the next nine years, the number of deliveries by vehicle in the top 100 cities in the world will increase by 36%.

●Stricter regulation of electric vehicles in inner cities, optimized follow-up deliveries and effective data-based connectivity solutions, such as dynamic route planning, load-pooling solutions and the expansion of parcel stations will improve sustainability.

●This will, in turn, reduce CO2 emissions by 30%, with traffic congestion also decreasing by 30% and delivery costs by 25%.

Experts recommend clear regulations and laws for autonomous driving, the introduction of sustainable supply chain technologies and, last but not least, the use of data and advanced analytics for better real-time transport taxes, all of which could make the last mile more sustainable.

Offsetting – a climate-neutral delivery option

Many online shops play a key role in offsetting CO2. To be considered climate-neutral, a product or service (e.g. parcel delivery) must not cause any greenhouse gases. As complete prevention of CO2 is almost impossible in practice due to the distances that a product has to travel, the emissions have to be offset retrospectively instead. Climate neutrality is therefore achieved mathematically by a company supporting climate protection projects or investing in reforestation, for example. 

7SGreen-KeyVisual2Online retailers that use more sustainable delivery options benefit from more than just a better environmental balance. This was shown in a recent study by Internet Retailing, commissioned by Metapack: 32% of those surveyed rated sustainable delivery higher than other convenience factors.

Martijn Kleij expert in e-commerce, supply chain logistics, and delivery at Seven Senders shares: “Sustainability and sustainable delivery is increasingly playing a role in consumer’s purchasing decisions. Reducing or offsetting carbon emissions in the shipping process is something we at Seven Senders have factored into our business model. As Europe’s leading delivery platform, we want to be part of the solution and are working to the best of our abilities toward becoming climate-neutral and helping our customers meet their climate goals as well with our 7S Green product.”

 

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