The next time you go to Walmart, you will be eyeing stuff that has been shipped from around the world. Shipping is the cheapest way for retailers to move stuff. But it is also one of the most heavily polluting forms of transportation—and it has quadrupled in volume in the past 40 years.
Maritime shipping is dirty
Maritime shipping accounts for 10-15% of all sulfur- and nitrogen-oxide emissions. These emissions create smog, trigger asthma, erode the ozone layer, and contribute to climate change. And maritime emissions are more insidious than most people realize. The bunker fuel that merchant ships use—essentially leftover sludge from the oil-refining process—produces huge volumes of black smoke that would horrify people if they saw it coming from a factory smokestack. Because the emissions happen at sea, they are presently invisible.
Walmart tops the list of retailers with maritime emissions
Yet, a recent report has put these emissions in full view. Released in July 2021 by Pacific Environment—an NGO that seeks to protect Pacific Rim communities and wildlife—the report identified the 15 retailers with the highest maritime-import emissions. Walmart tops that list. Ashley Furniture comes in second, with Target, Dole, and Home Depot rounding out the top five.
All of this may come as a surprise at a time when many major retailers are committing to net-zero-emissions targets. For instance, Walmart, the world’s largest retailer, issued a statement on in September 2020 that it was committing to zero emissions by 2040 and to restoring 50 million acres of land and 1 million square miles of ocean by 2030.
These commitments seem at odds with the fact that Walmart’s dirty shipping emits as much pollutant as a coal-fired power plant burning for an entire year.
Companies don’t often report their maritime emissions
You might wonder how organizations can talk about zero emissions when shipping their products creates huge volumes of toxic greenhouse gases. But there’s the dirty secret: Most companies don’t include maritime freight emissions. As indirect “Scope 3” emissions, they are outside what most companies hold themselves accountable for when reporting or giving targets for greenhouse-gas emissions.
In fact, according to research by Lisa Ellram of Miami University’s Farmer School of Business, in 2019 only 3.6% of Fortune 500 companies offered a specific target for indirect freight emissions in their supply chain. (Ellram’s research is under peer review.)
When retailers buy product to sell, they rarely ask about the greenhouse gases emitted to get the product to them. And if the retailers aren’t asking and customers don’t care, it is easy to hide freight emissions.
It is no wonder that 29% of total greenhouse gas emissions in the US in 2019 were attributable to transportation.
What’s a retailer to do?
The good news is that there is much progress to be made regarding maritime emissions. And retailers are increasingly recognizing the cost of transportation and starting to report their Scope 3 emissions.
For example, Ikea, which ranks 7th on Pacific Rim’s list of top 15 polluting retailers, is not putting its head in the sand. It publicly reports its climate footprint from product transport. As much to the point, it is replacing the fossil fuels used in transport with liquefied biogas produced from heavy-duty transportation, and has set specific targets to reduce its absolute greenhouse gas transport emissions.
Take, for example, tire manufacturer Michelin. It is reimagining itself not just as a tire company, but as a company committed to safe, clean, accessible, and efficient mobility. One way it is doing this is to hire Neoline, a French start-up that makes wind-powered, carbon-free cargo ships, to move its tires across the Atlantic. Here’s an article I wrote earlier on Neoline, and a video of an interview with its CEO, Jean Zanuttini.
Business leaders committed to tackling climate change can expect to read more about Scope 3 emissions in the coming years, and they will be increasingly pressured to report them. There are numerous tools to measure and control them, such as this guidance and evaluator tool from the US Environmental Protection Agency.
Even though maritime shipping has been largely hidden from view, it’s only a matter of time before the public starts to focus its attention on this dirty secret.
Source: Forbes