Cumulative Gains in Reducing Carbon Emissions
According to the Delivering Net Zero Supply Chains report , a total investment of $100 trillion will be needed to reach a net-zero economy by 2050 – a conservative estimate that will likely increase as the collateral costs of climate impacts continue to mount worldwide.
Critically, up to 80% of carbon emissions come from global supply chains – Scope 3 emissions – something which organisations rarely have complete control of.
There are three scopes of emissions defined by the Greenhouse Gas (GHG) Protocol, the global framework for measuring and managing GHG emissions:
Scope 1: Direct emissions from owned or controlled sources
Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the company
Scope 3: Indirect emissions that occur in a company’s value chain, including suppliers’ operations, distribution, business travel, company’s investment in the supply chain, and use of sold products
To make the transition to a net-zero carbon, every supply chain must be considered as a sum of its parts with all three scopes taken into account.
This is a highly complicated undertaking that requires the cooperation, commitment and collective efforts of all stakeholders, big and small, across value chains.
Building sustainability into business
“Every organisation, no matter their size, industry or operations, has a part they can play in the drive to Net Zero,” says Stuart Bowie, Group Vice President, Commercial of the GAC Group, one of the world’s largest providers of integrated shipping, logistics and marine services.
Established since 1956, GAC employs over 7,500 people at more than 300 offices in over 50 countries worldwide.
Its logistics arm GAC Logistics meets the global needs of manufacturers, distributors and retailers for efficient supply chain and logistics through a comprehensive portfolio which includes multi-modal freight services, contract logistics, project logistics, land transportation and supply chain management.
It serves diverse sectors from fast moving consumer goods, pharmaceutical, automotive to electronics, time-critical and energy.
“While there are no one-size-fits-all solutions given the breadth of our service offerings and the range of sectors we support, there are multiple opportunities to act more sustainably and to demonstrate leadership in working towards net-zero targets,” adds Stuart.
“For us and our customers alike, accounting for value chain emissions is an extremely challenging task given the complexity of each supply chain and the myriad of companies involved in the production and movement of cargo.
“It is possible, however, to make incremental gains through business decisions based on sustainability drivers and choosing partners and suppliers dedicated to achieving net-zero carbon emissions goals in their operations."
"At GAC, we are committed to measuring, managing and reporting on our performance for all three scopes while supporting our customers looking to reduce their supply chain emissions.”
The Group has set a goal to achieve net zero carbon by 2050.
To guide its operations, GAC has drawn up its Roadmap to Sustainability outlining its commitment to adapt, innovate and reduce in its activities and engage stakeholders to create non-destructive, long-term value towards a sustainable future, guided by the United Nations’ Sustainable Development Goals (SDGs).
In particular, it has committed to work towards eight of the SDGs, with SDG13 Climate Action being a key priority. The organisation is implementing a Logistics CO2 Emissions Reporting Framework to calculate CO2 emissions for cargo movements by land, sea and air.
The CO2 calculations will be displayed on quotations and sales invoices to help customers understand their carbon footprint and make informed decisions about their transportation and routing options.
GAC is also taking steps to invest significantly in greener warehousing facilities, starting with offices in the Middle East. The region is GAC’s home market where it has developed its business most strongly, with offices in Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and Yemen.
Fredrik Nystrom, GAC’s Group Vice President for the Middle East said: “To find suitable pathways, we look at both sector and company-wide changes we can make to reduce our carbon footprint, and also consider leveraging in-country opportunities where practicable.
"Across the Middle East, utilising solar energy to help power warehouses is an obvious yet underutilised opportunity to reduce emissions, and we are keen to show the benefits using our own assets."
In Dubai, GAC installed nearly 21,000 solar panels on the rooftops of three of its contract logistics facilities, producing clean energy powering between 75% to 93% of the facilities’ electricity needs.
This reduces carbon emissions by approximately 5,600 tonnes of CO2 per year – an effort in line with the Dubai 2030 vision of having 25% of the Emirate’s power generated from renewable energy by 2030.
Similar projects have been replicated by the Group elsewhere across the region. In Bahrain, GAC has committed to installing 552 photovoltaic solar panels on the rooftop of its warehouse in Bahrain Investment Wharf in Al Hidd.
This will generate at least 300 KW of power to fully cover the facility’s electricity needs, with any excess output to be used by other GAC premises.
This project is linked to Bahrain’s Economic Vision 2030, which aims to reduce carbon emissions by 30% through local decarbonisation projects and doubling the development of regional renewable infrastructure.
In Qatar, GAC’s new Contract Logistics facility in the Ras Bufontas Free Zone is Global Sustainability Assessment System-certified.
Constructed using sustainable materials, it boasts numerous eco-friendly features such as wastewater recycling, electric shuttle buses, LED lights, an energy-conserving automated cut-off system, sewage treatment plants, and more.
Supporting emerging fuelling solutions
“We seek to make a difference by enhancing our own sustainable infrastructure and at the same time, support further advancement and innovation in the industries we operate within,” says Stuart.
“For most global supply chains, the impact of transportation fuelling sources is a major determinant of overall Scope 3 emissions, so leadership in this area is exceptionally important.”
The GAC Group is part of the Global Maritime Forum’s Getting To Zero Coalition, an alliance of more than 140 companies from the maritime, energy, infrastructure and finance sectors working to accelerate the decarbonisation of shipping by developing and deploying zero emission vessels (ZEVs) by 2030.
In the maritime segment, the rapid development of ‘greener fuels’, such as hydrogen, ammonia, LNG and bio-methanol, as well as innovative technological solutions, are helping to build the foundations for a longer-term transition.
While these developments are still in the early stages and real-world applications remain small scale, GAC’s marine fuel and lubricant procurement arm GAC Bunker Fuels has taken a long view and embraced alternative fuels bunkering early on.
It works closely with partners and peers to ensure that expertise and infrastructure are available to source and supply alternative fuels to vessels.
While the company recognises there is much more yet to do, the cumulative gains delivered by following a clear strategy of reducing emissions across its operations will have a knock-on effect.
This is the type of action called for in the Delivering Net Zero Supply Chains report, which highlights the important role that maritime and logistics services providers have in supporting change across supply chains.
“The imperative to decarbonise is clear and we have been taking incremental but critical steps toward a sustainable future. If other suppliers follow in a similar vein, the potential impact on Scope 3 emissions across a great number of value chains could be unparalleled."
"We will spare no effort to support and influence change with our partners because every effort counts,” Stuart adds.