From compliance to competitive edge, how can supply chain pressure drive decarbonisation? Jack Goodson (pictured, below), Senior Business Development Manager of Equity Energies, answers a key question.
When it comes to decarbonisation, for many in transport and logistics the convergence of regulation and customer expectations can feel like yet another operational headache, with the conversation often framed in terms of cost and complexity. But there is another way to look at it: as a catalyst for innovation and long-term competitiveness.
In today’s market, delivering at greater speed but at lower cost is no longer enough. Clients and supply chain partners increasingly expect operators to deliver cleaner too. Sustainability has shifted from being a ‘nice-to-have’ to a non-negotiable when winning and retaining contracts. That shift, driven by both regulation and the demands of downstream customers, is already reshaping the competitive landscape, and for those ready to adapt, it’s also opening the door to new opportunities.
Regulation and customer demand are aligned
The demand to reduce supply chain emissions is coming from two directions: top-down through government regulation, and bottom-up through supply chain pressure. Large UK companies are now required to disclose relevant Scope 3 emissions, the indirect emissions that occur in their value chains. That means the carbon footprint of a transport service provider is increasingly visible in the environmental performance of its customers. In addition, regulation requires suppliers on large public contracts to commit to Net Zero by 2050, while also presenting credible carbon reduction plans.
In parallel, major private sector buyers, everyone from retailers to manufacturers, are building sustainability criteria into their tenders, and in some cases deselecting suppliers who don’t align with their own Net Zero commitments.
However, rather than viewing this as a compliance burden, operators should treat these pressures as market signals. The demand for decarbonisation is real and growing, and the companies that can demonstrate credible progress will be first in line for the next wave of contracts. Indeed, as previously reported, every element of the supply and logistics chain is ultimately up for inspection.
A strategic, systems-led approach
The key is to avoid scattergun initiatives and piecemeal action. Isolated initiatives, like switching to a few electric vehicles or installing LED lighting in one estate location, can help, but to gain real traction, organisations need a systems-led approach that addresses multiple points of carbon impact and builds towards long-term targets.
That starts with understanding the baseline. Accurate data on current energy use, fuel consumption, and emissions across fleet and facilities, makes it possible to prioritise effectively. Once the baseline is set, companies can identify and act on the ‘low-hanging fruit’ first; measures that deliver quick wins from both a cost and carbon perspective. This might include reducing energy consumption across warehouses and depots, procuring better energy contracts, and switching to renewable electricity through green tariffs.
DPD made significant progress on its own Net Zero pathway through its warehouse estate, rapidly opening 16 new depots in just six months at the height of the pandemic. Working together, we future-proofed its sites for electric fleet integration, secured competitive energy contracts, and identified over £1.2 million in potential savings through energy capacity analysis. This not only enabled DPD to meet a surge in demand but also laid the groundwork for long-term carbon reduction, proving that operational growth and decarbonisation can go hand in hand.
All these efforts can further cut emissions while freeing up funds. The savings generated can then be channelled into the more capital-intensive parts of the transition, such as fleet electrification or investment in hydrogen-ready HGVs. Supplementary measures, such as advanced lubricants designed to improve EV efficiency and reduce maintenance requirements, can help maximise the return on these larger investments.
Innovation in fleet and facilities
Fleet decarbonisation remains a headline issue for the sector. While electric and hydrogen trucks are still in the early stages of adoption in the UK, targeted trials can identify where they fit best into operations; for example, shorter regional routes that can be reliably serviced by current EV ranges. Interim solutions such as biomethane or hydrotreated vegetable oil (HVO) can cut lifecycle emissions by up to 90% compared to diesel, offering a credible bridge technology while zero-emission fleets scale (source: Zemo Partnership).
At the same time, greener facilities are becoming a competitive advantage. Energy-efficient lighting, improved HVAC controls, automation, and on-site renewable generation not only reduce Scope 1 and 2 emissions but also lower operating costs. With customers increasingly looking for full supply chain visibility, being able to report improvements in facility emissions can strengthen your position in tenders.
In a market where environmental credentials are scrutinised as closely as delivery times, data is perhaps the most powerful differentiator. Tracking emissions per tonne-kilometre, fuel efficiency, and energy use, and being able to present that information clearly, allows operators to demonstrate progress, benchmark performance, and collaborate with customers on joint improvement plans.
Real-time monitoring can also identify inefficiencies, from under-utilised vehicles to energy waste in depots, enabling operators to make operational changes that deliver immediate savings. In competitive bids, the ability to provide accurate, verifiable environmental data can be the deciding factor.
Balancing cost and carbon
There’s no avoiding the fact that decarbonisation requires investment. The challenge is to integrate it into a sustainable commercial model. Grants such as the UK Plug-in Truck Grant can help offset upfront costs for zero-emission vehicles, and green finance options are expanding, offering preferential rates for low-carbon projects. In some cases, customers themselves may be willing to co-fund pilots or infrastructure if it helps them meet their own Scope 3 targets.
By sequencing investments; tackling efficiency and energy procurement first, then scaling into fleet transition, operators can spread costs over time while maintaining service competitiveness.
The direction of travel is clear: sustainability performance is becoming a prerequisite for participation in high-value supply chains. Taking action now will build a track record that not only meets regulatory requirements but also strengthens position as a preferred partner for environmentally conscious customers. Delaying progress risks being locked out of tenders, paying more for finance and insurance, and facing a steeper, more expensive transition later on.
By reframing decarbonisation as an opportunity rather than a burden, and by taking a strategic, data-driven approach, transport and logistics companies can use current market pressures as the push they need to innovate. The winners in this transition will be those who view supply chain demand for sustainability not as a box to tick, but as a catalyst for long-term resilience and competitive strength.
