Voluntary programs to reduce emissions in logistics
Voluntary associations of businesses can have the aim of increasing logistic efficiency and reducing emissions. Such programs tend to be initiated by government agencies, but the main players are private companies. Emission reductions are achieved through the sharing of best practices, uniform tracking and accounting of fuel consumption and emissions, and increases in efficiency. They foster the adoption of specific measures such as eco-driving or vehicle improvements (e.g. aerodynamic retrofits and tyres with lower rolling resistance).
The two main reasons for private businesses to join are increased efficiency (and associated cost reductions) plus peer and public recognition of their efforts to decarbonize by granting awards and certificates. Companies that are leaders in these efforts can gain a competitive advantage over their peers. Examples include SmartWay in the United States, Lean & Green in the Netherlands, the Logistics Emissions Reduction Scheme (LERS) in the UK, Objectif CO2 in France and the Smart Transport Program in Argentina.
The CO2 impact of voluntary programs will depend on the measures that the participating companies agree to implement. Programs may also award companies when they meet a certain CO2 reduction target.
Setting up a program has a low cost that mostly involves the administrative costs of running it. Awards are generally non-monetary, focusing on recognition of efforts and distinguishing the companies in the eyes of the general public and their peers. Monitoring and accounting of emissions allows businesses both to better understand their operations and to identify practices that can reduce emissions and costs without investments (e.g. adopting better routing or reducing empty returns). However, certain specific measures, such as providing training for drivers or acquiring aerodynamic retrofits, do come with a cost for companies.
Such programs can have the co-benefit of raising awareness of the need for and benefits associated with reducing carbon emissions among private businesses. Freight and logistics is mainly a commercial business. Industry agents are the ones that ultimately define their operational procedures, supply chains and investments. Recognising companies that lead efforts to decarbonise is a low-cost, straightforward way to motivate businesses. While companies play an important role in the decarbonisation of the freight sector, it is important to design policies in a manner that makes financial sense for businesses to decarbonise.
These programs create credible, uniform tools for assessing the benefits of different emission-reduction measures and technologies (namely, retrofits and add-ons to existing vehicles) – which is critical to establishing a market for these measures and technologies.
Other major advantages for businesses include lower fuel consumption, increased asset utilization, improved safety (for goods carried and on the road), better monitoring of operations and more reliability.
Voluntary programs may potentially be seen as “greenwashing”.
If implemented at an industry-wide level, improved operations and lower costs can increase demand that will offset emission reductions obtained from increased efficiency.
ITF (2021) Transport Climate Action Directory – Voluntary programs to reduce emissions in logistics
https://www.itf-oecd.org/policy/voluntary-programs-reduce-emissions-logistics
Bynum, C., Sze, C., Kearns, D., Polovick, B. and Simon, K. (2018) An examination of a voluntary policy model to effect behavioral change and influence interactions and decision making in the freight sector. https://www.sciencedirect.com/science/article/pii/S1361920915302960
Connekt (2018) Lean and Green Logistics. https://www.connekt.nl/en/initiatief/lean-and-green-logistics/
Environmental Protection Agency (EPA) (2019) How SmartWay Advances Sustainable Transportation Supply Chains. https://www.epa.gov/smartway/how-smartway-advances-sustainable-transportation-supply-chains
International Transport Forum (ITF) (2018) Towards Road Freight Decarbonisation - Trends, Measures and Policies. https://www.itf-oecd.org/towards-road-freight-decarbonisation
Logistics Emissions Reduction Scheme (LERS) (2019) Logistics Emissions Review 2018. http://lers.org.uk/wp-content/uploads/2019/03/18166-LERS-Report-1118.pdf
Sharpe, B. (2015) Green freight programs and technology verification. https://theicct.org/publications/green-freight-programs-and-technology-verification
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