The past few months have seen two big new pieces of legislation on climate disclosure and reporting for businesses: the EU Corporate Sustainability Reporting Directive (CSRD) and the US SEC climate disclosure regulation.
Legislation like this was inevitable, and we’re likely to see more follow – many countries have made commitments (sometimes legally binding ones) to climate targets and with businesses responsible for a big portion of emissions, they need to see action from companies in their jurisdictions.
But whilst it’s very much needed, starting a company’s climate journey – or adapting an existing one to fit new legislation – is never an easy task.
For a logistics business it can be particularly complex.
Logistics companies are deeply involved in the inherently emissions-heavy activity of transporting goods for other businesses.
All of the emissions from that transportation are scope 3 (indirect) emissions for the logistics sector. For a long time there’s been debate about how we determine responsibility for those scope 3 emissions, and how businesses should deal with them. With the introduction of both the EU Corporate Sustainability Reporting Directive and the SEC climate disclosure regulation, it’s highly likely that companies will be required to report on scope 1, 2, and 3 emissions.
This has big implications for all businesses, but there’s a particularly important additional consideration for logistics companies.
In this post we’ll cover the key details you need to know about the EU Corporate Sustainability Reporting Directive and the SEC climate disclosure regulation, what the implications of this upcoming legislation is for logistics companies, and what businesses can do to get prepared ahead of sustainability reporting legislation like this coming into effect.
This will have big implications for logistics companies – here’s everything you need to know.
In June 2022 the European Parliament approved new legislation, the Corporate Sustainability Reporting Directive (CSRD), replacing the 2017 Non-Financial Reporting Directive.
The important information:
More information will be published running up to the launch of the CSRD, so keep an eye on the European Commission’s CSRD webpage – and make sure you’re subscribed to our monthly newsletter too, we’ll share digestible updates as and when they arise.
In March 2022 the US Security and Exchange Commission (SEC) proposed rule changes on climate-related disclosure.
The important information:
Again, there will be more information to follow, so we’d recommend checking the SEC website regularly.
For logistics companies, there’s another big consideration to make – your customers.
In logistics, you provide other businesses with the service of transporting goods safely and efficiently to end-consumers.
For most businesses, the transportation and distribution of goods is classified as a scope 3 emission: any transportation or distribution done by company-owned vehicles would be scope 1 (direct emissions which the company itself is responsible for), but if transportation or distribution of goods to customers is done by an external logistics supplier, they would be scope 3 emissions.
And with businesses across the globe being required to report on and reduce their scope 3 emissions, you can expect your customers to be coming to you as their supplier asking for information on emissions from transporting their goods.
It’s a lot to consider and implement, and we know there’s been concern in the logistics sector about the time and resources needed to provide supply chain emissions data to customers.
The good news is that there are ways to make it easier, more efficient, and quicker to implement – such as integrating automated calculations and climate-friendly journey options into your existing logistics platform.
We’d recommend every business – including those in the logistics space – prioritise their sustainability journey sooner rather than later to get ahead and ensure the legislation isn’t disruptive to business when it does come into effect.
There are plenty of actions to get started with to put you in good stead for the changes:
Developing a sustainability strategy which lays out your approach and goals is always a good place to start – making sure you have a clear plan which everyone at the company is on board with and understands how their role contributes.
For support with developing a sustainability strategy with real impact, preparing you for this legislation, head to our previous blog: Why 9 out of 10 sustainability strategies make no difference to the planet (and how to make sure yours does).
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