November 2, 2023

Your guide to sustainability jargon in freight and logistics

Have you been stumped by some of these new terms around sustainability and sustainable supply chain operations? You’re not alone. Read our article to find out more.

Your guide to sustainability jargon in freight and logistics | Ofload

As industries in Australia and around the world begin to acknowledge the importance of sustainability, it has become clear that the logistics industry needs to look at new solutions to old problems, too. 

Your questions answered: decoding sustainability jargon

Carriers and shippers alike are increasingly recognising the importance of aligning their practices with the principles of a sustainable supply chain. This shift towards supply chain sustainability holds huge implications for businesses, the environment, and communities. However, within this industry, navigating the intricate landscape of sustainability jargon can often feel like deciphering a complex code—even for some sustainable supply chain companies.

Read on to explore different sustainability terminology and jargon, and to get a better understanding of what these terms and concepts mean.

What is happening regarding sustainability initiatives, and why?

There is now a world consensus in the scientific community concerning human-caused global warming. Let’s break it down.  Specifically, burning fossil fuels like gas or coal emits greenhouse gases into the atmosphere. Once these gases are in the air, they reflect heat emitted by the Earth towards space, resulting in less natural cooling and higher overall temperatures. 

Therefore, the more fuel we burn, the more greenhouse gases are released into the atmosphere. The more gases, the more they affect the climate and, ultimately, our lives. This is why governments are signing international treaties, like the Paris Agreement, to agree on emissions reduction targets to meet. Often, these kind of high-level agreements are filled with sustainability terminology and concepts that may be hard to decipher. 

What do we mean by ‘sustainability jargon’?

Carbon-neutral, net zero, scope 1, 2 and 3, green electricity, ACCUs… All of these sustainability terms are as important as they are new. And as they relate to the environmental challenges that humanity is facing in the twenty-first century, it’s crucial to understand them. 

Not only can further understanding empower you to take the right action in the fight against climate change, but it can also help you understand your own company’s commitments and governmental requirements when it comes to reducing greenhouse gas emissions. 

Decoding common sustainability jargon

Carbon neutral

This term does not mean that the company is not emitting any carbon dioxide into the atmosphere because of its activities, but that the amount of carbon emitted is balanced through an equivalent amount being removed. An example of this is offsetting. 

Net-zero emissions

Net-zero emissions is similar to carbon neutral, but it encompasses all greenhouse gases, like methane or nitrous oxide, and not just carbon dioxide. 

Carbon offsetting

Carbon offsetting refers to the process where companies, governments or individuals compensate for their own carbon emissions by investing in environmental projects that reduce an equal amount of carbon dioxide elsewhere. These projects might include reforestation, renewable energy, or methane capture initiatives. 

Carbon insetting

On the other hand, carbon insetting is all about trying to minimise those carbon emissions in the first place. While offsetting means that entities look for ways to balance their carbon emissions by investing in outside projects, insetting is actually about cutting carbon emissions down. 

We will use a shipping company with a fleet of 100 diesel-fuelled trucks as an example. This company has previously invested in carbon offsetting projects that plant hundreds of trees every year to offset the carbon emissions produced by these diesel trucks. Now they want to look at insetting, which could mean slowly converting their fleet of trucks from diesel to hydrogen, thus directly reducing their carbon emissions, rather than just simply offsetting them. 

Scope 1, 2 and 3

  • Scope 1 covers emissions from sources that an organisation owns or controls directly—for example, from burning fuel in its fleet of vehicles. 
  • Scope 2 emissions are indirectly caused by the company through its energy use. This could include coal burnt for electricity generation that is needed to power the various offices the company has.
  • Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organisation, but that the organisation indirectly affects in its value chain. This includes emissions related to the shipping of a company’s products by a third-party carrier. Scope 3 emissions often represent the biggest part of a company's emissions, sometimes up to 95%. They are also the hardest to quantify and reduce because the company responsible for them does not have full control over them. 

By knowing your impact, you can make positive change

There are many benefits to going green. Investing in sustainable solutions not only benefits communities and the environment, but it has long-term financial benefits, too. Here are 5 reasons how investing in sustainability solutions can help your business in the long run:

  1. While going green often involves a significant upfront cost, you will see big savings in the long run, especially when it comes to the rising cost of fuel and energy resources. 
  2. The money saved in the long term can then be re-invested into new sustainability prjects, further benefiting your bottom line. 
  3. As resources become scarcer and environmental concerns grow, businesses that fail to adapt may find themselves obsolete.
  4. In an age of information transparency, a commitment to sustainability can set a company apart from competitors, enhancing brand reputation and attracting eco-conscious partners and clients. Consumers care where they spend their money, and a commitment to sustainability can help to build trust with your customers, and potentially increase sales.
  5. Sustainable logistics can often lead to more efficient operations, streamlining processes, reducing waste, and optimising resources, which can lead to reduced operational costs.

At Ofload, we are speaking to more and more shippers who have started stepping up into sustainability. However, many are unsure how to use the scope 3 emissions data and the ways in which they can manage a more sustainable supply chain. That is where Ofload can help.

Ofload’s carbon reporting dashboard and initiatives with zero-emissions carriers (electric and hydrogen trucks) can help companies calculate and reduce scope 3 emissions related to road freight. The innovative reporting tool is also available in the Ofload Platform. Sign up today and join us on our mission to transform the industry with technology.

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