In our previous blog post, we introduced the major ESG challenges that the air cargo industry faces in a day and age that puts a strong emphasis on sustainability. We have also seen that ESG has three different dimensions: the environment, social responsibility, and governance. In this second blog post, we will focus on the environmental part of the ESG equation.
We will take a look at the main factors that come into play when dealing with environmental sustainability in the air cargo industry. We will also show you how air cargo companies can lessen their environmental impact and improve their sustainability reporting.
The current situation
In recent years, the air cargo industry has been heavily criticized for its negative environmental impact. Since the industry emits a significant amount of greenhouse gasses, air transport is often seen as a major polluter and contributor to global warming. Air freight produces around 10 times more CO2 than transportation by ship. Because aircraft emissions are released higher in the atmosphere than ship or truck emissions, they have a more profound effect on atmospheric chemistry.
To meet the spirit of the current age, air cargo companies are increasingly focusing their efforts on meeting more ambitious environmental goals. A couple of examples:
- More and more aircraft are using sustainable aviation fuel (SAF), allowing for significant CO2 reductions, up to 80% in some cases. Lufthansa Cargo and Air France KLM Martinair have already carried out CO2-neutral freight flights and adopted SAF programs for the air cargo industry.
- Several air cargo carriers have switched to more efficient aircraft. Winglets on plane wings improve aerodynamic efficiency, whilst improved in-flight navigation systems allow pilots to avoid unfavorable weather conditions. Continuous climb and descent operations can provide the best flight paths to decrease fuel consumption and emissions.
- Air cargo companies invest in carbon offsets, which are reductions in greenhouse gas emissions to compensate for emissions made elsewhere. Investing in tree planting and reforestation to compensate for emissions is a good example of this principle.
What are the main environmental factors?
Let’s now take a look at the most important environmental factors that air cargo carriers have to report on and should deal with.
CO2 emissions and fuel
CO2 emissions and fuel efficiency are two of the most important environmental factors for air cargo carriers, since the industry has the reputation of being highly carbon-intensive. How can we reduce our emissions? What role can SAFs play in reaching this goal? And what strategies, routes and novel technologies can we use to perfect the efficient use of fuel? These are all pressing ESG questions that air cargo companies have to answer and report on.
E-waste is a popular, informal name for electronic products (both consumer and business electronics) nearing the end of their useful life. The reliability of e-waste transportation across borders is one of the key challenges faced by transporters like air cargo carriers, especially since rules and regulations for this type of cargo have gradually become stricter in many parts of the world.
Every year, more than 1.25 million dangerous goods shipments (aerosols, lithium batteries, infectious substances, flammable liquids, radioactive material, corrosives, fireworks, dry-ice gasoline, lighters, paint) are transported by air. With the expected growth of air cargo volumes, the number of dangerous goods shipments will rise significantly. Transporting these goods in a sustainable and safe way, and following the proper ESG reporting guidelines, is incredibly important for modern and responsible air cargo carriers.
Environmental sustainability reporting
Achieving maximum sustainability is a long and arduous journey for many air cargo carriers. Proper measuring and reporting are key when it comes to adhering to the environmental components of ESG. If you want to build a long-term environmental strategy, sustainability reporting is an absolute must. Sustainability reporting is the disclosure of environmental, social and governance (ESG) goals. It also includes the communication of progress towards these objectives. It encompasses more than just describing and should also lay out a clear action plan to improve sustainability.
A good environmental sustainability report should include:
- details concerning the company’s competitive positioning in the emerging sustainability space;
- a thorough overview of initiatives tied to the utilization and conservation of environmental capital.
Reporting frameworks for the air cargo industry
But how do you practically arrange your sustainability reporting activities? Luckily, air cargo carriers can use several excellent reporting frameworks. The best-known and most widely used one is GRI. Many companies use the GRI standards to design their sustainability reports, especially because these standards include a wide range of disclosures and are able to provide information to a large panel of (inter)national stakeholders. IATA has a special handbook that helps airlines and air cargo carriers deal with (GRI) sustainability reporting standards.
SASB standards are another option. These are available for 79 different industries (including air transport) and are mainly geared towards identifying material sustainability factors that are likely to impact the financial performance of a company.
Why is environmental sustainability reporting important for air cargo carriers?
There are several reasons why environmental sustainability reporting is important for air cargo companies. Let’s take a quick look at the most important ones.
- Environmental sustainability reporting helps you manage risks and improve your organization’s resilience. That’s very important in a world where climate change is real and resources are finite.
- Developing adaptive strategies that benefit the environment also improves your business model. Thinking sustainable allows you to identify key optimization points, giving you the opportunity to cut costs, make savings and improve your natural resources management.
- Sustainability reporting helps you make more informed decisions.
- Increased transparency about sustainability goals and actions increases the engagement of employees, customers, investors and business partners.
How Be Informed helps
Environmental sustainability reporting can be a challenge, but it has a lot of benefits, too. Be Informed’s intelligent automation platform (which uses model-based intelligent automation to rapidly capture and automate processes) and ITTS help air cargo carriers to consolidate and orchestrate systems and data, making it easier for air cargo operators to improve the quality and consistency of their environmental sustainability reporting.
Would you like to know more about the Be Informed automation platform and ITTS? Then don’t hesitate to contact us.
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