Customer Focus is missing piece in Sustainability

Customer focus obsession drives business growth, writes Erik Stadigh, co-founder and CEO of climate impact company, Lune. Businesses exist to solve their customers’ problems and, by doing so better than their competition, they win. We build a deep understanding of our customers, their behaviours, their needs, and their pain points. And we get out of bed in the morning to solve these pain points through innovative products and services.

Yet, when it comes to sustainability, we immediately turn inward. The focus becomes all about internal metrics: our own carbon footprint, our own net zero targets, our own ESG scores. While these are of course crucial, they’re one component of a much bigger equation. We are staring at the forest so intently, that we are completely blind to the trees.

Here’s why: the most powerful climate actions aren’t found by looking inward – they’re found by looking outward, at your customers.

Harnessing The Multiplier Effect

When a business helps its customers reduce their carbon footprint, the impact multiplies exponentially. A single logistics company might help thousands of businesses optimise their supply chains to drastically reduce emissions. A business spend management platform might help thousands of businesses optimise procurement and business spend to slash emissions.

This is the multiplier effect in action. Instead of focusing solely on reducing your own emissions – which might be in the thousands of tonnes CO2 – you can help reduce millions of tonnes CO2 by enabling your customers’ climate journey.

From Net Zero to Net Positive

Our goal is to reach global net zero (and eventually go beyond). There are many paths to get there but for companies to only focus on internal net zero targets is definitely not the fastest path.

The math is simple but powerful. Let’s say your business emits 50,000 tCO2 annually. You could spend years trying to reduce this to 25,000 tCO2 or potentially even to 10,000 tCO2. Or, you could do both: work on your internal reductions while helping your customers avoid or reduce hundreds of thousands tCO2, potentially even millions tCO2!

This isn’t about choosing one over the other. It’s about recognising where your impact can be greatest.
The Business Case is Clear

As with solving any customer problems better than your competition, it’s just good business. Companies that help their customers achieve their sustainability goals aren’t just doing good – they’re building competitive advantages:

– New revenue streams emerge from sustainability-focused products and services
– Customer loyalty increases when you help solve their sustainability challenges
– Brand value grows as you become known as a sustainability leader
– Market share expands as sustainability becomes a key differentiator

This is not some fairy tale, it’s already a reality. JAS Worldwide, a leading freight forwarder, has won several large RFPs thanks to their Green Solutions. They help their customers reduce their carbon footprint through consulting, monitoring, and implementing emission reduction solutions.

By taking a consultative approach and tailoring sustainability to their customers needs, the sustainable choice becomes the easy choice. For example, JAS Worldwide chose Lune as their carbon offsetting partner so their customers could fund the projects that aligned the most with their business goals, without compromising on quality. They can be confident their sustainable choices are having a positive impact on the planet.

How to put your customers at the centre of your sustainability strategy

Innovators know progress is never a straightforward process. But we can begin with a map:

1. Understand your customers’ pain points
Start by truly understanding your customers’ sustainability pain points. What are their emissions sources? What are their reduction targets? What’s holding them back? How much are they spending on expensive consultants today?

2. Innovate for impact
Develop products and services that directly address these challenges. This could mean adding carbon footprint insights to your existing products, helping your customers to make carbon-based decisions, or giving green rewards to customers.

3. Make sustainability the default
Use technology and automation to make sustainable choices easier, accessible, and the default. To maximise the positive impact, and allow them to “opt-out” if they don’t want it.

4. Measure and celebrate customer impact
Track not just your own emissions, but the emissions you help your customers avoid or reduce. This is your true climate impact and should be celebrated!

The Road after COP29

As we come out of COP29, it’s clear that business as usual won’t get us to global net zero. We need a fundamental shift in how we think about corporate climate action. The companies that lead this new era aren’t just those with the smallest carbon footprints. They’re the ones that help their entire ecosystem – customers, suppliers, and communities – accelerate toward a sustainable future.

The future of corporate sustainability isn’t about just getting to net zero individually – it’s about solving problems to get to a global net zero. By looking beyond our own operations and enabling our customers’ climate journey, we create the exponential change our planet needs. And capture the business benefits while we do so. Obsess about your customers and the planet will thank you!

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Biomethane Lorries for DHL’s Tesco Ireland Network

As part of its ongoing partnership with DHL Supply Chain, Tesco Ireland has taken delivery of 50 state-of-the-art biomethane fuelled trucks which will operate across its country-wide distribution network.

The trucks will immediately replace 50 diesel units, cutting down tailpipe carbon emissions by up to 90%. The biomethane fleet will be operated by DHL and used to transport produce to stores from Tesco’s distribution centres in Dublin. The new biomethane trucks are being introduced as part of Tesco’s comprehensive strategy to reduce its carbon footprint and enhance the environmental sustainability of its operations, while aligning with DHL’s own overarching strategy to reduce carbon emissions across its supply chains.

The renewable fuel for the trucks will come from Irish and European anaerobic digestion plants, and the trucks will refuel at the newly opened BioCNG refuelling station operated by Flogas at nearby St Margaret’s in north Dublin.

Each truck has a range capacity of 700 kms on a full tank of Biomethane Gas, which allows the Tesco business to reach any of its 177 stores and return without refuelling. Each tractor unit will complete an average of 15 to 20 truckloads of store deliveries across the country each week from Letterkenny to Kerry to Dublin.

DHL Supply Chain’s David O’Neill said: “This is such an important project to demonstrate the role biomethane can play in Irish commercial transport and a significant step towards decarbonising Tesco’s fleet. Our partnership with Tesco shows what can be achieved through a shared commitment to sustainability and we’re looking forward to continuing this journey together. DHL is fundamentally decarbonising a significant proportion of the retail transport sector in Ireland, and this partnership with Tesco Ireland is a big part of that story. This project is a great example of our Green Transport Policy, guiding the transition of 30% of our own fleet to a green alternative by the end of 2026, an important enabler in achieving our sustainability goals.”

Speaking about the switch to biomethane, Tesco Ireland Retail & Distribution Director Ger Counihan said: “Our network is one of the most sophisticated distribution networks in the country. More than 1,800 journeys are made from our distribution centres every week to our 177 stores. We have worked hard with DHL to prepare for the switch from diesel to biomethane trucks, and this move to cleaner energy will reduce the carbon emissions created by this fleet considerably.”

Tesco Ireland, Head of Sustainability Andy McGregor said: “This is a significant moment in our journey towards decarbonising our business. Transitioning to biomethane from diesel will significantly reduce our transport emissions and is an important step towards reaching our goal of net zero emissions across scopes 1, 2 and 3 by 2050.”

Speaking from Tesco’s Distribution Centre in Donabate, Darragh O’Brien, Minister for Housing, Local Government & Heritage said: “The commitment by Tesco to introduce 50 biomethane trucks into their national fleet is very welcome news. Ireland’s road haulage sector makes up 20% of the total road transport emissions in Ireland, so it is incumbent on companies like Tesco with their partners DHL, to play their part in helping to drive down our overall carbon emissions.”

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Biomethane used in Irish Truck Network

 

Quantifying Supply Chain Co2 Emissions

COP28, which begins today, will see global business leaders take stock of progress since the 2015 Paris Agreement, emphasising the need for action to drive forward net-zero goals. Efficio, a global procurement and supply chain consultancy, is working with business leaders to do just that – turning attention to the supply chain to make the biggest impact on ESG. That’s because supply chain emissions typically make up 40-80% of an organization’s total carbon emissions – sometimes even reaching over 90%.

According to Efficio research, 73% of business leaders (77% of C-suite) cite minimising or eradicating environmental impacts as a key priority for the next two years – but a clear line of sight surrounding ESG factors remains a barrier to success. Data needed to quantify carbon emissions within the supply chain can span multiple systems and suppliers. This can be difficult to gather, let alone analyse for future decision-making.

In response to this challenge, Efficio is working with businesses to implement the CarbonCube®, a tool that lets procurement teams efficiently measure and monitor supply chain emissions, set targets, and monitor supplier performance.

Today, CPOs from Kantar, a global data, insights and consulting company, and Permanent TSB (PTSB), a provider of personal financial services in Ireland, are among some of the organisations using the technology to deliver their sustainability strategies. Using the CarbonCube®, PTSB has been able to leverage spend data to identify priority categories with high greenhouse emissions, gain visibility over sustainability commitments made by its supply base, and support the business’s overall sustainability strategy through target assessment and supplier outreach.

Rachel Hollywood, Procurement ESG Manager at PTSB recently commented: “Efficio’s CarbonCube® enabled us to set a strong and realistic emission baseline from which to prepare carbon reduction initiatives, supporting the bank’s strategic agenda for its 2024 SBTi submission and fostering a culture of sustainability and environmental awareness throughout our value chain – from our employees through to our supply base.”

Meanwhile, Kantar is using the CarbonCube® to accelerate its carbon reduction strategy. In a recent interview, Steve Day, Chief Procurement Officer at Kantar, acknowledged that the supply chain is representative of a very significant part of any business’s carbon footprint. He sees this as an opportunity for procurement to own the topic and highlight the value the function can bring to the wider business beyond the traditional back-office function.

However, before this is possible, Day emphasised that work needs to be done, commenting: “I see a lot of people inflating their carbon strategies and thinking about net neutrality, but in truth, you must first get to a point where you can start to measure what scope three looks like. This is where the CarbonCube® comes into play – it has helped us accelerate our thinking and begin richer conversations around what categories of spending to focus on and what our category strategies are going to be.”

Commenting on the two projects, Edward Cox, Director and Sustainable Procurement Practice Lead at Efficio, concluded: “These projects are real-world examples of how procurement and supply chain teams can take the lead in driving sustainability impacts, and how trusted data sources can be used to simplify processes like quantifying carbon emissions.

“Supply chains are most organisations’ largest source of emissions, and procurement can and should be the engine for change. Procurement needs to be accountable for a growing set of metrics that have ESG at their core. Buying the right things from the right suppliers is more important than ever.”

Sustainability in Retail Transportation Management

In today’s retail landscape, sustainability is no longer just a buzzword – it’s a fundamental concern for consumers, that has an impact on retailers. The demand for eco-friendly products and environmentally responsible companies is on the rise. In fact, according to Descartes’ 2023 consumer sentiment study on home delivery sustainability, a sizable 41% of respondents indicated they regularly or always make purchasing decisions based upon the product or company’s environmental impact.

What is more, it’s no secret that freight transportation (i.e., over-the-road, ocean, rail and air) is one of the top causes of greenhouse gas emissions, representing 8% of global greenhouse gas emissions. Therefore, with an increasing spotlight on the environment, we wanted to know what companies were doing about transportation sustainability or not, and added it to Descartes 7th Annual Global Transportation Management Benchmark Study – the findings, of which, are useful to retailers.

To find out more, we divided transportation sustainability efforts into four categories, ranging from no action to a daily concern. The overall response showed that 31% of respondents indicated they did nothing, 19% reported on their transportation carbon footprint, 27% factored it into their strategic plans and 22% made sustainability a component of their daily transportation decisions.

In essence, we discovered that 50% of businesses are actively addressing sustainability in transportation, presenting an excellent opportunity not only to make a positive impact on the planet; but also to cater to a market hungry for sustainable choices. Chris Jones (pictured), EVP, Descartes explains more.

Taking this exploration further for retailers, we examined how management perceives the importance of transportation management and its correlation with company financial performance. We discovered that companies whose management regarded transportation as a competitive advantage (57%) were far more likely to take action compared to those who did not prioritise transportation management (48%). Similarly, in terms of financial performance, the numbers were compelling, with 58% of top performers taking action, contrasting with 44% of less successful companies. This then raises a question of retailers about the extent to which they can perceive how transportation could enable competitive advantage?

Additionally, differences in sustainability actions among businesses that recognise the value of transportation management and top financial performers, versus other respondents makes sense. In the benchmark study, we see these respondents more interested in strategies and actions that improve transportation management performance; and most transportation management improvement programs have a positive and measurable impact on the environment too – again, something which is important to consumers and, inadvertently, the retail sector at large.

Reducing CO2 footprint, fuel consumption and waste generated are all results of transportation management performance improvement programs that reduce distance per delivery, empty miles, and vehicle wait times and eliminate paper-based processes. So, if there is a perception that most sustainable transportation efforts result in less efficient supply chains, this needs correcting.

In fact, sustainable transportation programs are also an opportunity for organisations, including retailers, to capture more business. The home delivery sustainability study showed that consumers are more willing to buy from companies that can showcase sustainable supply chains, with 60% expressing a preference for environmentally-friendly delivery options. Equally important for B2B companies is the opportunity to gain more business from companies that are looking at their supply chains’ partners to help reduce Scope 3 Emissions, as defined by the United States Environmental Protection Agency and the Corporate Sustainability Reporting Directive (CSRD) initiated in January 2023. This standard requires more large businesses and SMEs that trade in the EU to conduct sustainability reporting to stricter standards from January 2024.

Conclusion

It’s clear, now more than ever, that retailers have a unique opportunity to distinguish themselves by embracing sustainability in their transportation management efforts. This not only meets regulatory requirements – but also aligns with the preferences of eco-conscious consumers and contributes to a greener, more sustainable future. As well as this, retailers who make this a priority will also simultaneously cut costs, boost customer satisfaction and grow their business. How many opportunities are there for retailers and businesses alike to create this kind of win, win, win, win situation?

Logistics 5.0 Opportunity to Improve Resilience, Sustainability

DANX Carousel Group’s thought leadership white paper, ‘Logistics 5.0: Strategy Beyond Data – Turning Uncertainty into Opportunity,’ concludes that adaptability, resilience, and carbon footprint reduction are the key areas for technology investment to focus on as the supply chain industry enters the next chapter of digital transformation.

The report, which surveyed supply chain leaders, acknowledges the leap forward brought about by digital transformation from Logistics 4.0, but forewarns how Logistics 5.0 will demand a broader approach to how technology is used.

“When deciding on new technology to support your business it is important, from a technology perspective, not to be overly excited by the new shiny toys out there,” said Thomas Wad Jelle (pictured), Chief Technology and Information Officer, Danx Carousel.

“Instead, focus on the business risks and customer requirements to understand what needs to be solved and how technology can be part of that solution. There is no silver bullet for bringing your data perfectly together across companies and supply chain.”

In a note of caution, the white paper highlighted concern among those surveyed over the worrying lack of talent needed to make successful digital transformation and development possible. The report revealed that 21 percent of organisations attributed their experienced disruption to a loss or lack of talent, while 15 percent are struggling to find the right people to lead their organisation into this new era of optimisation.

“Technology is the enabler, not the solution,” said Ulrik Find, Chief Operations Officer, DANX Carousel Group, adding that tapping into the talent pool and attracting the right people to a career in the supply chain industry is essential.

Find illustrated his point by pointing to the example of organisations that had the right tech during the pandemic, but lacked the “nimble, ‘fleet of foot’ mentality” embodied by many start-ups who thrived.

When setting out his three-point roadmap to transformation, Find also emphasised the need for a ‘mindset shift’ among industry leaders, calling for them to reinvent how they attract talent, who they do business with and why, how they build their strategy, and where they allocate their capital.

“The dawn of Logistics 5.0 has very much arrived – it marks a new phase in the supply chain, one that is heading toward an increasingly digital world, but this time with the incorporation of sustainability and learnt lessons from the past,” concluded Find.

 

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