The latest analysis by the International Energy Agency (IEA) recently revealed that current government policies are not strict enough and will result in a 2.5°C rise in global temperatures and dangerous climate impacts.
More and more corporate CEOs are getting serious about setting environmental goals, and more international organizations are recognizing the importance of tightening their corporate sustainability requirements. The forthcoming change in US Securities and Exchange Commission (SEC) standards will require these companies to disclose climate-related risks such as Scope 3 emissions resulting from transportation in 2025. Now the International Sustainability Standards Board (ISSB) has decided to include Scope 3 greenhouse gas (GHG) emissions in its first global sustainability-related disclosure standards.
According to the Environmental Protection Agency (EPA), supply chains are responsible for more than 90% of a company’s emissions. Therefore, it is important that companies’ commitments to eliminate their Scope 3 emissions are translated into fully devised and implemented plans. Many companies in the transport and logistics industry are developing programs to reduce carbon emissions and reduce their carbon footprint. This planning may not only help shippers and carriers, but the entire supply chain.
“With ongoing threats to our global environment, more and more CEOs and CFOs are making reporting triple results an essential part of their public commitments. Until now, these executives have only had access to rough estimates of carbon emissions from transportation without the insights that would help them make decisions that improve the environment,” said Josh Bouk, President of Trax. “Environmental sustainability starts with data and how you can gain insight into the data. In this case, if you don’t have any data, or if your transport data is incorrect or incomplete, you cannot start planning to improve and reduce carbon emissions.”
Bouk, whose company tracks all Scope 3 emissions based on billing data, informs companies that all service charges and accessories must be imported into a system by a carrier to ensure the best data during the transportation spend and audit process and no charges as “Other” or blank.
Ultimately, in a quest to provide shippers with actionable insights to help them develop baselines for reducing their carbon footprint with a focus on greenhouse gas emissions, Trax offers shippers the ability to track greenhouse gas emissions with Freight Audit and Payment (FAP) to inform decision making in to improve cost, performance and sustainability in transportation.
Trax is a quality and data-driven company that annually audits $22 billion in transportation spend invoices for cost reduction and now uses this verified data to view every node and supplier in a company’s supply chain. Knowing that 43 percent of transportation emissions are related to the movement of goods, Trax’s goal is to help shippers create legitimate baselines on which to base their ESG goals. Trax’s Carbon Emissions Tracker helps organizations measure and manage data quality by service code across modes, lanes, vehicles, and regions, and provides visibility into required data quality metrics.
“With Trax’s Carbon Emissions Manager, transportation executives can see the detailed actual emissions emanating from each shipment based on vehicle, lane and mode,” said Josh Bouk, President of Trax. “The ability to track actual carbon emissions across a customer’s transportation network is phenomenal because it provides a metric that customers use to set clean air goals, track progress toward their goals, while also evaluating the cost of their transportation network through our freight audit – and further optimize the payment suite.”
The CO2 emissions are divided into three levels: production (Scope 1), electricity for operations (Scope 2) and all other uses (Scope 3). Tracking and reporting these emissions will be a challenge for many companies.
Scope 3 includes all emissions from transportation, logistics and other supply chains, which account for 27 percent of total global emissions. Until companies are required to issue their annual SEC reports for 2025, they must report full emissions data from all three sectors for all of 2024. That may sound like a certain lead time, but it really isn’t. To collect the data in 2024, companies need systems that can track the data in 2023.
It is therefore imperative that supply chain leaders start developing a method for tracking and reporting emissions now. Trax is spreading that need and also providing a needed solution that helps business leaders improve the environment and their bottom line.