Making sense of emissions reporting in logistics

In the world of sustainability reporting, companies are now turning their eyes to measuring and reducing their so-called Scope 3 emissions. 

It is estimated that there are 335 million companies worldwide, for whom Scope 3 emissions account for up to 90% of their carbon footprint. In some cases this figure can be even higher, such as with Kraft Heinz foods who reported that their value chain emissions comprise more than 90 percent of their total. They are now one of Zeus’s customers.

What are the different scopes in emissions reporting?

The concept of emissions “scopes” originates from the Greenhouse Gas (GHG) Protocol, a widely adopted emissions accounting and reporting framework developed in the late 1990s. Broadly speaking, emissions are grouped into three categories as follows:

Scope 1: Direct emissions from owned assets.
Scope 2: Indirect emissions from energy (e.g., electricity) used.
Scope 3: All other indirect emissions not covered by Scopes 1 and 2.

Depending on the sector, Scope 3 emissions can account for the vast majority of their carbon footprint, and the upstream and downstream logistics often accounts for the vast majority of this.

However, it’s important to realise that the Scope 3 logistics emissions of a shipper (i.e., a company procuring logistics services) will themselves form Scope 1, 2 and 3 emissions for the logistics companies doing the shipping. To account for logistics emissions specifically, we turn to the industry gold standard GLEC framework, now the basis of the newly launched ISO 14083 standard.

Logistics emissions reporting

The categorisation of emissions for a logistics company (i.e., providing transport services to a shipper) depends on whether the vehicles used to fulfil the shipments are owned or subcontracted, and whether these vehicles have conventional or electric powertrains.

For example, for a haulier who owns and operates a fleet of diesel trucks, the tailpipe (or “tank-to-wheel”) emissions from fuel burned in the vehicles would be Scope 1 (direct emissions from owned assets), and the upstream (or “well-to-tank”) emissions associated with the production of that fuel will be Scope 3 (indirect emissions from burning that fuel). If the vehicles are electric, the Scope 1 emissions become zero, but the upstream emissions associated with the production of the electricity to charge the vehicles is reported as Scope 2.

In the case of a logistics service provider with subcontracted fleets (such as Zeus), all emissions associated with their logistics services are reported as Scope 3 irrespective of whether the vehicles are electric or not, but this includes both the tank-to-wheel and well-to-wheel emissions: the “well-to-wheel” emissions.

Emissions aggregation and double-counting

We can see that the possibility exists for overlap between emissions from one company to another, but the system is structured in such a way to ensure no double-counting of Scope 1 and 2 emissions - if the reporting is done correctly.

Because of this, when aggregating emissions across several companies or sectors, only Scope 1 and 2 emissions are used. Although Scope 3 emissions can be double-counted and so can’t be aggregated in this way, they are just as important in assessing the impact of a company’s activities on the environment.

How Zeus helps

Facilitating the visibility of emissions data up and down the value chain is clearly a major enabler of accurate emissions reporting. In tackling Scope 3 emissions, it’s important that transparency, accountability and working closely with your suppliers is paramount.

At Zeus, we have adopted the GLEC Framework to report emissions associated with our freight operations using our valuable data on loads shipped, distances moved, and vehicles or modes used.

Our focus is on moving beyond just reporting, to offering real decarbonisation solutions that companies can implement today. Read more about our Solutions and you can see real results in one of our first client pilots - which is still running today.