Committing to ESG

Committing to ESG

As COP26 has shone a spotlight on the need for collective action to reach net zero, how is the logistics industry advancing in this changing landscape?

The pandemic intensified the UK’s industrial and logistics activity, with ecommerce driving demand for everything from regional delivery centres to big-box warehouses. As the market expands, ESG is emerging front and centre, a trend largely led by the changing expectations of occupiers, who are increasingly placing sustainability at the heart of their own strategies and looking for these standards in their choice of premises. Meanwhile, investors and developers are recognising that integrating ESG considerations into decision-making can boost competitive edge and value.

In logistics, we see a focus on instilling sustainable measures such as adopting LED lighting, solar panels and other renewable energy sources that enable self-generating power, energy-efficient heating and cooling systems and more. Those leading the way include SEGRO, which has introduced a range of measures to meet its target to reduce by 20% the embodied carbon on its developments by 2025, and DP World, whose multi-modal approach to its ports and terminals network – and reliance on smart technology – seeks to facilitate more efficient movement of cargo.

Covid-19 also accelerated the rate of digitalisation. By investing in fast-evolving, innovative technology – such as IoT, AI and the consequent advancements in data analytics – it’s possible for logistics players to gain better visibility on where automation can help to reduce waste and maximise energy efficiency, inventory tracking and route planning.

Future-proofing developments means incorporating energy efficiency by design and default and considering the whole lifecycle of a property – governance will become more stringent in this area.

The World Green Building Council, for instance, has updated its Net Zero Carbon Commitments with new accountability and reporting responsibilities for the real estate industry – not only is it responsible for 40% of the world’s carbon emissions, but 10% within that is from embodied carbon at the construction stage.

Another positive step is that developers are increasingly considering the potential climate implications of transportation in logistics, looking towards low-emission delivery fleets and introducing electric vehicle charging points. Research from Accenture shows that last-mile deliveries account for more than half of total shipping costs and, if steps are not taken to make the process more efficient and environmentally friendly, we could see 32% higher carbon emissions by 2030 from delivery traffic. One solution is to look at micro-fulfilment hubs that are closer to the end user, in local urban locations.

ESG will grow even more in its importance and, by committing to embrace more green practices, the logistics sector can play a major role in supporting wider economic growth and contributing to crucial global sustainability goals.

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