2024 decarbonisation trends for freight forwarders
The global logistics landscape is at a pivotal point. Sustainability, once a fringe "nice to have" for many forwarders, is now becoming a significant issue, discussed in boardrooms and cargo holds across the industry. Shippers are no longer content with basic emissions measurements — they’re demanding forwarders take meaningful steps towards creating greener supply chains.
With this rising demand for sustainable supply chains in mind, what does 2024 have in store for freight forwarders? We’ve collected together our thoughts on trends and initiatives you should prepare for in the coming year.
Regulations will be a catalyst for change, putting pressure on forwarders to provide scope 3 emissions measurement services
Earlier this year, the International Sustainability Standards Board (ISSB) officially recommended that the measurement of scope 3 emissions should form a core part of governments’ sustainability reporting standards. As scope 3 is largely made up of supply chain emissions, shippers will be looking to gain visibility of the end-to-end supply chain emissions that can be attributed to their products. As a forwarder, you should prepare for when your shippers start asking for emissions data relating to their shipments and for new tenders to include emissions measurement as standard.
With the EU's Corporate Sustainability Reporting Directive setting the standard for emissions regulations on the international stage, scope 3 reporting mandates are expected to be introduced in other regions in 2024 — the UK, US, Australia and Brazil have already suggested these are on the horizon.
Once these additional regulations come into force, expect there to be increased demand from your clients for you to invest in accredited emissions measurement solutions and become a trusted ally in navigating the maze of scope 3 reporting requirements.
Improved data exchange across value-chain players
2024 will require enhanced data exchange among value chain players in freight and logistics. This shift is essential for systemic change, fostering collaboration between shippers, forwarders and carriers to signal demand, co-invest in decarbonisation solutions and optimise logistics supply chains to focus on emissions reductions.
A critical driver of this transformation will be the increased visibility of scope 3 emissions. Advanced calculation tools and data exchange platforms will play a crucial role in quantifying and sharing this data. This transparency acts as a catalyst for industry-wide sustainability efforts, compelling companies to not only collaborate externally but also internally. Integrating decarbonisation into functions such as accounting, communications, legal compliance, staff training, procurement and logistics operations will be fundamental for meaningful and comprehensive progress in the pursuit of a greener and more sustainable freight and logistics sector.
Industry standards will continue to drive emissions measurement standardisation
The Smart Freight Centre's GLEC Framework and the recently published ISO 14083 have catalysed the industry’s shift towards a more harmonised emissions reporting landscape. Yet, many forwarders still don’t understand the complexities of measuring and reporting under these frameworks.
In 2024, we expect forwarders to increase their knowledge of the industry emissions measurement standards — particularly driven by the SFC’s "Introduction to the GLEC Framework" e-training program. As a result, we’ll see the GLEC Framework become increasingly prominent in global logistics in 2024 as more businesses adopt accredited emissions measurements. This, in turn, will open opportunities for more consistent and collaborative emissions reporting across supply chain stakeholders.
Embracing the methodologies and tools necessary to gain an understanding of supply chain emissions now will ensure you become a champion of data accuracy for your clients, allowing your business to stay ahead of the curve as regulations start to impact the industry.
Insetting frameworks will continue to develop, offering hope for new pathways to decarbonisation for the logistics industry
Insetting involves companies investing in carbon reduction projects within their own supply chains. Unlike traditional offsetting, insetting directly addresses emissions from operational activities, presenting a unique opportunity within the intricate logistics network of suppliers, distributors and transportation providers.
However, challenges like the lack of standardised methodologies and transparent verification procedures have so far hindered its widespread adoption. But, towards the back end of 2023, the industry started making strides to overcome these challenges, particularly through the development of a book and claim system. This structured framework aims to quantify and verify emissions reductions through insetting, providing a credible basis for companies to make transparent claims and build trust in the industry.
The recent launch of the Smart Freight Centre's Book and Claim Community signifies a positive shift that we expect will gain momentum in 2024. This initiative will serve as a space for knowledge exchange, innovation and collective progress among industry players, fostering a rising demand for insetting within global logistics.
2024 will be a pivotal year for global logistics to prepare for decarbonisation at scale
While 2024 may not witness the widespread adoption of hydrogen planes or electric freight ships that so many people envisage as the answer to the industry’s emissions problem, significant strides will be made towards creating an environment conducive to emissions reduction within the logistics industry. Crucially, forwarders, irrespective of size, will be central to this movement. Establishing a robust baseline in 2024 will lay the foundation for future initiatives as the industry and businesses embark on the journey of decarbonisation.