Analysis: How green is DSV's Green Logistics initiative?

Credit DSV

At the November Glasgow climate conference, COP26, the Danish government along with other states and carrier Maersk Line, agreed to push for zero emissions from shipping by 2050, doubling the maritime sector’s emissions target.

The maritime sector failed to build on this initiative during its own environmental meeting at the International Maritime Organization that same month, deferring decisions on emissions.

Copenhagen’s COP26 climate initiative has intensified the pressure on supply chains and logistics companies to shift further and quicker to sustainable solutions, and one of the world’s largest logistics companies, Denmark-based DSV has made an announcement that has put these proposals back in the spotlight.

The Loadstar asked DSV to clarify its use of 2019 as a baseline for measuring progress, because later years tend to mean higher emissions, making cuts to those emissions easier to achieve.

However, DSV pointed out: “Using 2019 as the baseline year was the natural and most up-to-date starting point for us, because we designed our science-based targets in 2020, and DSV has a growth and M&A track record which makes using earlier periods unrealistic. Our targets, including Scope 1, 2 and 3, are approved by the Science Based Targets initiative and therefore scientifically based and fully aligned with the Paris Agreement according to this framework.”

DSV acquired Panalpina in August 2019 and closed the Agility Global Integrated Logistics (GIL) deal in the summer of this year, making performance comparisons for periods prior to 2019 problematic.

Scope 1 emissions relate to company emissions including buildings and trucks operated; Scope 2 refers to purchased energy for heating and cooling and for a company’s own use; Scope 3 includes emissions from both upstream and downstream transport, and both shipping and aviation make up a large part of DSV’s emissions.

As the Scope 3 pollution is not in DSV’s, or other non-vessel operating companies’, control, it is not in a position to directly affect these emissions. And as such many companies have sought to offset these emissions, to offer a net zero option.

However, DSV denies that offsetting is a significant element of its Green Logistics strategy. It says it offers offsetting to those customers that cannot take advantage of its other green initiatives.

DSV said it is committed to “well below 2 degrees” science-based targets, which it says is ambitious for the logistics industry.

“We are in the process of reviewing this commitment and updating our targets to make sure we incorporate the newly acquired GIL business in our combined DSV targets and to make sure these targets continue to be relevant and ambitious,” added the company.

Moreover, DSV pointed out that its Green Logistics initiative is designed to reduce DSV’s Scope 3 emissions from subcontracted transport and, “at the same time, this will reduce carbon emissions from our customers supply chains”.

“Offsetting is only one of the solutions we offer within this framework. They vary from reducing emissions through green procurement and mode shifts, where there is huge decarbonisation potential, and sustainable fuels in co-operation with partner companies. These types of solutions make decarbonisation very real for our customers and in terms of our Scope 3 emissions, and they are not considered as offsetting.”

Offsetting is not being used to meet DSV’s own CO₂ reduction targets, the forwarder claimed. However, the company added: “For customers wanting to do the extra, or for those not able to utilise the other solutions, we are offering an offsetting solution. We believe the offsetting solutions provide benefits in addition to carbon reduction on areas such as biodiversity, education, jobs, food security and health and well-being in developing countries, and we have conducted thorough due diligence and research and have teamed up with the best partners on the field.”

DSV believes its Green Logistics initiative, and similar industry programmes, will help to drive the decarbonisation of the broader industry.

In earlier established initiatives, the company has also looked at Scope 1 and 2 emissions and launched programmes to deal with the company’s own emissions. However, The Loadstar pointed out that DSV’s competitor, DB Schenker, had recently announced replacing its fleet of trucks with Volta Zero electric vehicles, with an order of 1,470 16 tonne units.

DSV, for its part, has confirmed that green vehicles would form part of its climate strategy in the coming years.

“Previously, we have carried out a series of initiatives addressing our Scope 1 and 2 emissions. Sustainability is high on the agenda and, during the coming months and years, we will continue this journey by introducing new solutions and initiatives. Electric trucks or other green solutions are likely to be part of this journey, either in our own fleet or with the haulage companies we work with.”

COP26 has increased the pressure on major logistics companies to transform their operations into sustainable businesses with low airborne emissions and climate-friendly results.

According to DSV: “With Green Logistics, we have launched a series of solutions aiming at helping customers decarbonise their supply chains today with the technology and resources available within the industry. We are addressing the climate issues; we are actively engaging with customers to find better and less carbon-emitting supply chain solutions and we are offering insetting solutions with sustainable fuel across all transport modes.

“DSV has approved science-based targets and we are entirely following the Science-based Targets initiative framework, which is fully aligned with the Paris Agreement.”