After seven months working with a leading transport consultancy as a junior consultant, one thing has become abundantly clear to me: logistics companies need to stop blowing hot air about how climate friendly they are and get on and cut their emissions.
In 2022, the United States experienced more than 18 ‘Billion Dollar Weather and Climate Disasters’ according to the National Oceanographic and Atmospheric Agency (NOAA). Meanwhile, in Europe there were nearly 63,000 excess deaths associated with 2022’s heatwaves and it looks like 2023 is going to be even hotter. There is no ignoring climate change now – as things get worse, this is going to start hitting logistics companies’ bottom lines.
Laughable Rhetoric from Amazon and DHL
Working from home, my neighbours already think I’m a ranting nutter as it is without me loudly guffawing over the statements below from Amazon and DHL.
Amazon
Amazon’s Scope 1,2 and 3 carbon emissions grew by almost 40% between 2019-21 to 71.54 million tonnes of CO2e. They state in their 2021 Sustainability Report that in their Leadership Principles, “We must be humble about even the secondary effects of our actions. Our local communities, planet and future generations need us to be better every day.” An 18% hike in emissions hardly conforms to that statement – I’d go as far as suggesting Amazon’s board need to read their own words here because they clearly haven’t.
DHL
Meanwhile, DHL has the third highest carbon emissions among logistics companies in the world. In DHL Group’s online article “What’s Next for Sustainable Logistics”, they made me laugh out loud at their sheer hypocrisy in stating, “As the winds of environmental sustainability grow stronger around the world, merely flying the flag of sustainable business will undoubtedly lead to a shipwreck”. Unlike Amazon however, their total Scope 1,2 and 3 emissions fell by 7.4% year over year to 36.46 million tonnes of CO2e in 2022.
Scratching the Surface Gently
Amazon’s propaganda on climate is hot air of the worst sort. Page 97 of their sustainability report, hidden behind pages and pages of PR, shows that their carbon intensity (grammes of CO2e per USD of Gross Merchandise Sales) fell by 1.9% y-o-y to 100.8g/$. Meanwhile Amazon’s global revenue grew by 9.87% y-o-y to $513.988bn, far outstripping the gains made in their carbon intensity blarney.
DHL Group have admittedly made inroads into their carbon emissions. Where Amazon have been blatantly greenwashing, DHL Group still could do a lot better. In 2020, the then CEO Frank Appel grandly announced that the logistics giant would spend €7bn over 10 years on reducing their carbon emissions. That sound a lot? In 2022 their revenues hit €94bn and will likely hit €100bn in 2023. If they continue growing at a similar rate in revenues, the €7bn will be less than 1% of their total revenues over the decade.
Good Management Practice: Don’t Soil the Nest
At the beginning of this article I raised two ugly statistics – deaths in Europe and the billion-dollar climate/weather disasters affecting the USA. Climate Change is upon us and is killing tens of thousands of people in rich countries even now – yes, rich countries. Where DHL Group is less exposed overall to Europe and the US (49.7% of its revenues in 2022), a whopping 86.4% of Amazon’s revenues come from the US, Japan, Germany and the UK.
Karl Marx famously said that ‘capitalism will eat itself’. In destroying the climate, it seems that the excesses of global giants in logistics is doing just that. Almost solely focused on their revenues, these companies aren’t doing enough to avert climate disaster and ultimately their bottom lines. Unless logistics giants – DHL and Amazon just an example – start taking things seriously, they will ultimately be badly affected by the changing climate in terms of their own revenues.
Put simply, good management practice involves not soiling the nest for future management to deal with. That doesn’t just mean making money, but taking the climate catastrophe seriously and reducing carbon emissions now. These companies are global entities – there is no other planet for them to generate revenues from!
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