Sustainability is crucial for companies in today's business landscape, driven by environmental challenges, evolving consumer expectations, innovation, and long-term resilience.

Consumer expectations are shifting, with 73 percent of global consumers willing to change their consumption habits to reduce their environmental impact. Prioritizing sustainability allows companies to attract and retain environmentally conscious customers, enhance brand reputation, and gain a competitive edge.

“At DHL, we can help customers on their decarbonization roadmap. Typically, this includes the transparency about the emissions, optimization of flows such as network, mode switch, load, route, and the main lever which is the use of clean fuel and technology,” said Florian Schwarz, Head of Sustainability, DHL Customer Solutions & Innovation.

For companies to start on this sustainability route, they must first understand the four key aspects crucial for a sustainable future: decarbonization, circularity, digitalization, clean energy and mobility.

Decarbonizing from end to end

Decarbonization begins with reducing carbon emissions within their control, either directly or indirectly.

But decarbonizing aspects beyond their control is the key to a successful sustainability strategy. A report by Accenture has noted that the supply chain generates 60 percent of all carbon emissions globally. Thus, there is an urgent need to focus on decarbonization in the logistics network to achieve emissions reduction targets.

Companies need to establish a clear understanding of where carbon emissions lie along the supply chain, and through that, set their decarbonization targets. Understanding the carbon footprint, setting reduction targets, optimizing the supply chain, switching to sustainable fuels, and adopting technology are key steps to decarbonization.

With a better understanding of how to decarbonize both the direct and indirect aspects of their end-to-end value chain, companies can set a clear decarbonization roadmap to achieve their net-zero carbon emissions targets that align with the Science Based Target initiative.

Going full circle with circularity

According to the Ellen MacArthur Foundation, only 8.6 percent of the global economy is currently considered circular. However, transitioning to a circular economy could bring significant benefits. For instance, a report by Accenture estimates that circular economy practices could generate US$4.5 trillion (€4.2 trillion) in economic benefits by 2030.

Circularity involves designing products with efficient processes such as better packing practices and promoting the reuse of materials in packaging. The former has an almost immediate impact, as reducing empty space in packages means less boxes, and thus filling materials used. Companies can also switch from normal to pre-stretched pallet wrap, which has a significant effect in reducing the plastic intake by half.

According to the World Economic Forum, if all plastic packaging was made from recycled materials, it could save up to 30 million tons of carbon emissions per year.

Optimizing sustainability through digitalization

By adopting digitalization, companies can deploy smart systems to monitor and manage energy consumption, optimize supply chains, and facilitate sustainable practices. Leveraging digital technologies, for example, can identify energy-saving opportunities, optimize operations, and improve energy efficiency.

Organizations can use advanced analytics and machine learning algorithms to optimize energy usage in buildings, reduce energy waste, and lower carbon emissions. This applies to the supply chain perspective too, ranging from warehouses being able to reduce energy usage to optimizing the last-mile delivery route to reduce fuel consumption.

Cleaning up the act with green energy

Transitioning to clean energy is essential for reducing greenhouse gas emissions, mitigating climate change, and achieving a sustainable energy future.

According to the International Renewable Energy Agency (IRENA), renewable energy accounted for 72 percent of global power additions in 2019. The falling costs of renewable technologies have contributed to their rapid adoption. For instance, the cost of solar photovoltaic (PV) panels has decreased by 82 percent over the past decade, making it one of the most cost-effective sources of electricity generation.

On the logistics front, solar panels and LED lighting have become key considerations when upgrading or building new warehouses. In the United States (U.S.), the flat and open roofs of medium and large warehouses and distribution centers are perfect locations for solar panels. With more than 450,000 such buildings, totaling almost 16.4 billion cumulative square feet of rooftop space, the solar power potential is enormous. In fact, the rooftops of American warehouses built before 2019 have the capacity to generate 185.6 terawatt-hours (TWh) of solar electricity each year, enough to power almost 19.4 million average homes.

Deploying clean energy such as sustainable aviation fuel (SAF) for transportation to reduce carbon emissions is also a key driving force for sustainability. “70 percent of our customer’s emission are on average related to aviation, so SAF will play a key role. The nice thing with solutions such as SAF is that there is no risk of path dependency. This product can be switched on and off flexibly and does not require upfront investments,” added Schwarz.

Driving the sustainability bandwagon with clean mobility

Transitioning from traditional gasoline-powered vehicles to electric vehicles (EVs), promoting public transit systems, and encouraging cycling and walking are all part of clean mobility initiatives.

The IEA projects that the number of electric cars on the road could reach 145 million by 2030. This shift towards EVs is crucial for reducing transportation emissions and improving air quality. A study by the University of Michigan noted that a battery-powered pick-up, from manufacturing to operating the EV, . While there are steps taken to reduce the upstream carbon emissions from manufacturing the EVs, it is important to note that the operation of EVs, powered by renewable energy, will have zero carbon emissions.

Investments in charging infrastructure are also crucial for the widespread adoption of EVs. The Global EV Outlook 2021 reports that there were over 7.3 million electric vehicle chargers worldwide by the end of 2020, including both public and private chargers. The growth of charging infrastructure supports the convenience and accessibility of EVs, further accelerating the transition to clean mobility.

Ticking the sustainability checkboxes

Why should companies adopt sustainable practices? It is not only an ethical choice but also a strategic decision, as embarking on the sustainability journey enhances long-term business resilience.

Companies that proactively seek out partners to address sustainability risks, such as resource scarcity and regulatory changes, are better positioned to adapt and thrive in an evolving business landscape. “Once partners have talked to each other, it is important to quickly act and roll out pilot programs to learn. Deploy an EV for a certain lane, use SAF for a particular destination, and the like,” noted Schwarz.

Beyond the economic aspect, taking the sustainability route has a positive brand effect for companies, especially with the increasing awareness of consumers. By embracing circularity, digitalization, clean energy, and clean mobility, businesses can make significant progress toward a more sustainable future.