The global transportation industry could have a major long-term impact on climate change and world energy usage, if strategic investments are not made. Transport firms lag behind Global 500 companies in mitigating greenhouse gasses and setting targets, according to new research by the Carbon Disclosure Project (CDP).
Only 36% of transportation companies have set carbon and energy reduction targets, compared to 51% of the ‘Global 500 Index’ of companies across all sectors.
The news comes at a time when the transportation sector is set to experience significant growth, increased dependence on oil and risk of an escalation in greenhouse gasses, CDP says. The transport industry now accounts for 13% of global emissions and is one of the fastest energy-demand sectors, responsible for 60% of oil consumption in high-income countries (OECD[3] countries).
CDP says its report is the firs of its kind on the transportation–surveying 291 of the largest transport companies which include road, rail, sea and air transport. Key findings revealed:
- Just 9% report information on current investments in emissions reduction and alternate low-carbon options and only 4% on future investments
- Road transportation accounts for 80% of the sectors total CO2 contribution, followed by air (13%) and sea transportation (7%)
- 53% of transport companies surveyed responded to CDP’s request indicating a lower level of engagement compared to the ‘Global 500’ with an 82% response rate
Transportation is a major contributor to the U.S. economy. In 2008, transportation-related goods and services contributed $1.38 trillion to U.S. GDP (9.5%). Despite this, only half of the transportation companies surveyed report having a clear understanding of the risks and opportunities associated with regulations. Compare this to almost 70% of Global 500 companies, that are turning risks into opportunities for growth, innovation and competitive advantage.
The report also highlights key geographical trends, with European countries still leading the way, alongside South America, with respect to putting emission reduction plans in place:
- 60% of South American companies and 52% of European companies have set emissions targets and reduction plans, compared to 47% in the US
- Of companies reporting on investment in low-carbon alternatives Asia represents the highest number of companies (48%), Europe (36%), compared to just two companies in the US (8%).
Although reporting on investments for reducing emissions and greener technologies is still in its infancy, $31.93 billion has already been committed or invested into low carbon initiatives and innovations in the transportation sector worldwide.
A minority of companies are reporting significant investments including Air France-KLM (AF.PA), Easyjet (EZJ.L), Canadian National Railways (NYSE: CNI), Toyota (NYSE: TM), and UPS (NYSE: UPS).
New technologies include installation of renewable energy systems; developing more efficient transport routes, low carbon fuels, and innovative vehicle design; or product innovation into hybrids or electric powered vehicles.
UPS is one company proactively mapping a course to minimizing its dependence on fossil fuels through improving operational efficiencies and advancing new technologies. "We use multiple approaches to reduce our carbon output, including the use of technology to cut the miles we fly and drive, leveraging telematics and routing technologies to improve the efficiencies of our drivers, investing in alternative fuel technologies for our fleet and minimizing redundancies in our delivery network," said Bob Stoffel, the UPS senior vice president who oversees sustainability programs. "Through the use of routing technology alone, we avoided driving more than 20.4 million miles, with an associated emissions avoidance of 20,000 metric tons in 2009."
Zoe Tcholak-Antitch, vice president and head of Investor CDP said: “As the first real glimpse into the transport sector’s impact on climate change, I’m pleased to see that there are some clear leaders making good progress in setting targets and making investments in low-carbon alternatives. The overwhelming conclusion, however, is that the sector as a whole needs to transform and realize the opportunity to make a profound impact on the environment and the business benefits to reducing emissions. Those companies which are already investing in that transformation will be better positioned for a carbon constrained world.”
For a full copy of the report is available at the link below.
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