Author: Dan Kalafatas

Dan serves as the chairman of 3Degrees’ board of directors, focusing on the company’s long-term corporate strategy and strategic initiatives.

Driving the Transition to Net Zero Emissions

sunrise over green hills and road

Across the OEM motor vehicle after-sales space, transportation is a significant spend – approximately 7-8%1 of sales. Further, the transportation sector has now surpassed the power sector as the largest emitter of greenhouse gases (GHGs) in the United States, responsible for over 29%2 of total emissions within the U.S., and 24%3 globally. This trend largely is driven by the growth of e-commerce, international and domestic shipping, and other activities related to globalization.

Many of the OEMs participating in Carlisle’s North American Parts Benchmark have released corporate statements committing themselves to reducing their climate impact, yet many organizations are early in the development of plans to address the greenhouse gas emissions associated with their transportation footprint. Fortunately, meaningful pathways to reduce transportation emissions are taking hold.

Where to Begin?

We’ve laid out our perspectives on how to pluck lower hanging fruit and to either start or accelerate the journey towards decarbonizing transportation-related emissions.

Since then, an increasing number of organizations around the world have been making net zero climate commitments and enlisting support in getting there. To date, more than 1,000 businesses are working with the Science Based Targets initiative (SBTi) to reduce their emissions. Meanwhile, 509 cities, 23 regions, 2,162 businesses, 127 of the biggest investors, and 571 Higher Education Institutions have signed on to achieving net zero carbon emissions by 2050 at the latest as part of the UNFCCC’s Race to Zero campaign. And over 800 B Corps including 3Degrees have pledged to reach net zero by 2030 (20 years ahead of the target set in the Paris Agreement).  

All of this activity around corporate climate commitments is an encouraging sign and is incredibly necessary. It is also not enough. We have to do more.

1. Calculating an Organization’s Greenhouse Gas Emissions Profile

Calculating an organization’s greenhouse gas emissions profile or “carbon footprint” circumscribes an organization’s emissions and creates a heat map for understanding where and in what size emissions are occurring. It is like tracking a person’s caloric intake over time for the purpose of designing a diet that gets results while minimizing disruption to their lifestyle. Ice cream every night or just on weekends?

2. Decarbonizing the Warehouse

Decarbonizing the warehouse can be a fertile ground for quick wins. Tried and true onsite energy minimization efforts — such as LED lighting, onsite solar installation, high-efficiency space heating, and cooling, or being paid to reduce energy use during periods of peak grid congestion — can offer attractive financial return profiles while providing greenhouse gas reduction benefits. When paired with backup battery storage systems, these efforts can also increase the energy resiliency of warehouse operations.

More recently, an increasing number of companies are deploying Material Handling Equipment (MHE) powered by lower-carbon fuels, such as electric or hydrogen-powered forklifts, and other non-road cargo equipment. Leveraging various sources of public funding for these vehicles, such as the Low Carbon Fuels Standards incentive regimes in California, Oregon, and a growing list of other states can deliver attractive additional revenue streams. These funds can further enhance total cost of ownership economics and help support more rapid electric vehicle deployment that lowers the GHG emissions of owned or leased mobile sources.

3. Transitioning to Low Carbon Shipping Fuels

The global transportation sector has begun integrating low carbon shipping fuels at an accelerated rate, in large part focused on last-mile delivery and supported by decision tools that identify economically attractive alternatives to internal combustion engine (ICE) transport. Natural vehicle replacement cycles — both within and outside the warehouse — present good opportunities for organizations to begin to pilot electric, hydrogen, CNG, and other lower-carbon fueled vehicles, again, especially for California and Oregon operations.

4. Targeting the Remaining Unavoidable Greenhouse Gas Emissions

Many companies mitigate the impact of the remaining unavoidable greenhouse gas emissions through the purchase of high-caliber verified carbon emissions reductions, otherwise known as carbon credits or carbon offsets, as a stepping-stone to complement, rather than replace, existing decarbonization strategies throughout their own operations.

5. Reducing the Need to Move Materials and People

Having said this, the best way to reduce greenhouse gas emissions in transportation is by reducing the need to move materials and people. A comprehensive review of your supply chain – including buildings, material flow, transportation modes, inventory deployment strategies, referral patterns, etc. will allow you to understand not only the cost/service trade-offs but the environmental tradeoffs as well. For example, increasing forward-deployed safety stock may increase inventory costs, but may also reduce parcel/air referrals. Ideally, this should be a positive financial trade-off. But if not, is your organization willing to pay for reduced carbon emissions?

 

Takeaways

Combined with policy advocacy, vendor negotiation, and peer collaboration, the above strategies can represent a comprehensive approach to reduce the largest source of emissions globally.

Carlisle and decarbonization partner, 3Degrees, have helped clients ranging from Rivian to Proterra understand and address the impact of their transportation-related emissions with a suite of solutions customized to meet their unique business needs and sustainability goals.

1. Carlisle & Company North American Benchmark 2. Bloomberg Sustainable Energy in America Factbook 3. IEA Tracking Transport Report

Co-authored by:

Harry Hollenberg
Managing Director of Carlisle & Company
Carlisle & Company is the leader in after-sales strategy and insights, partnering with a broad range of highly engineered clients to solve their most complex business problems, drive growth, and create value.

 
 
 

 

The Importance of Building a Mission-Driven Brand: Takeaways from [BLUE BOX] 2018

Conference image

Last week, a select group of up-and-coming and industry-leading beverage brands convened in Santa Monica, CA for the invitation-only [BLUE BOX] 2018 Conference; a full day of collaboration, storytelling, knowledge-sharing and inspiration. According to the organizers, “[BLUE BOX] was born out of a desire to produce a highly differentiated beverage industry conference…one that digs deep to discover the many factors at play in the innovation of new brands and the disruption of beverage segments.” Based on previous work 3Degrees has done in the beverage industry, I was pleased to receive an invitation to attend the conference to gain deeper insight into this fast-growing industry; 3Degrees also offset the full carbon footprint of the event.

There were several key themes from the conference, most of which revolved around identifying and exploring emerging trends in Beverage. Bill Anderson, Founder and CEO of First Beverage Group, the organizer of [BLUE BOX], acknowledged that traditionally the beverage industry has been slow-moving, conservative and entrenched. Old-guard beverage suppliers have not been keeping pace with emerging consumer trends and have done very little to shake up the industry. New market entrants and ‘disruptors’ in the beverage space, however, understand the importance of paying close attention to consumer cues. Following are some of my key takeaways.

CONSUMERS ARE BECOMING PART OF THE STORY

Ian Beacraft, vp, group director: digital strategy at the data-driven marketing agency, Epsilon, noted that by the year 2020, Gen Z will comprise 40% of total consumers. These young consumers are familiar and comfortable interacting with brands. In fact, 40% expect to communicate with brands 24/7, with social media being the primary, and in many cases, the only way to connect. With this kind of unfettered access to brands, consumers are now engaging at such a level that they are themselves becoming part of the brand story and are influencing the narrative.

BUILDING AN AUTHENTIC BRAND NARRATIVE

Given these insights, it’s no wonder that so many conversations at [BLUE BOX] revolved around brand storytelling. Younger, savvier consumers can recognize when brands are not being authentic, and they vote with their wallets. Now more than ever, brands are aligning themselves with a mission, story or emotion that is relatable, approachable and speaks to the values of their consumers. This is especially true for new market players.

According to the 2017 Edelman Earned Brand study,  “57% of consumers around the world will buy or boycott a brand solely because of its position on a social or political issue.” All this is to say, to succeed in a very saturated consumer packaged goods market, companies need to find meaningful ways to stand out and be relevant to an ever-growing and engaged market segment. Studies show that integrating an authentic mission into the very DNA of a brand can be an effective way to achieve this. Which brings me to my final takeaway, one that has been a foundation of my career and has developed into my life’s mission – advocating for sustainability in the fight against climate change.

SUSTAINABILITY’S ROLE IN STORYTELLING

Since co-founding 3Degrees over a decade ago, I have seen the motivations for addressing climate goals of the average corporate multinational shift towards proactive, voluntary action. Increasingly, companies understand that taking action to address their greenhouse gas emissions can positively affect every aspect of their business – from cost to resiliency to innovation.  And, consistent with both the research statistics above and the conversation among the [BLUE BOX] participants, consumer pressure is frequently a driving force for companies to decide to take action on climate change. In fact, 53% of CDP reporting companies listed climate-related reputation as an inherent risk to their business. By committing to sustainability goals and effectively communicating their action to address climate change, brands are able to build a reputation for social responsibility, which brings us back to that authentic brand narrative, one increasingly desired by today’s – and tomorrow’s – customers.

Participating in [BLUE BOX] 2018 left me inspired by the energy of these new and well-established beverage brands alike. It is reassuring to know that doing the right thing for the environment is not at the detriment of building a successful business. In fact, it’s quite the opposite. Companies today have to be about more than making money if they want any chance at building the defining brands of tomorrow.

Learn more about how two food and beverage companies addressed their sustainability goals:
VOSS Case Study
Multinational Food & Beverage Case Study