6 benefits of carbon accounting for logistics and transport companies

When you think of carbon accounting, the first thing that comes to mind is probably compliance reporting. But accurately calculating your carbon emissions can actually deliver a whole range of benefits for your business, from winning new contracts to reducing your opex. 

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There are also real risks and costs associated with not doing it. In a recent transport and logistics sector survey, over 32% of companies said they include ESG targets as obligations in their contracts with supply chain partners, and 13% of respondents admitted to losing existing contracts due to failure to meet ESG targets. In this article, we’ll walk through the 6 main benefits of carbon accounting. 

TL;DR: What are the benefits of carbon accounting for transport and logistics companies? 

Carbon accounting is more than just a compliance requirement, it also delivers real business value by enabling you to:

1. Gain a competitive edge in tenders by scoring well against ESG criteria and outperforming your competitors. 
2. Retain existing clients by providing transparent emissions data and sharing data in a standardized format to support their own sustainability reporting. 
3. Reduce your costs by identifying inefficient transport journeys or practices and making more informed investment decisions.
4. Easily comply with sustainability regulations that are mandatory for your company, as well as helping you to follow voluntary sustainability standards.
5. Access green financing and attract investors by showcasing your sustainability credentials in transparent reports and dashboards. 
6. Minimize your carbon footprint by identifying smart, cost-effective ways to lower your emissions over time. 

With carbon accounting software like BigMile, getting started is faster, easier, and far more accurate. We’ll now walk through each of these benefits in more detail, but first, let’s define what carbon accounting is. 

Benefits of carbon accounting for companies in the transport and logistics sector

From winning more contracts to reducing your carbon footprint, measuring your emissions can deliver many benefits to your transport or logistics business. Here are the 6 main benefits of getting started with carbon accounting. 

1. Gain a competitive edge in tenders

With at least 41% of LSPs, manufacturers, and retailers already including minimum ESG prequalification criteria in their tenders, calculating your CO2 emissions is now essential to winning contracts. Even if reporting emissions data isn’t a prerequisite, it’ll certainly give you an advantage over other bidders with sustainability metric weighting averaging at 5 - 20% of the total contract. 

Carbon accounting also makes qualifying for sustainability certifications and gradings much easier, as you’ll have trustworthy, accurate data that you can provide in a standardized format to organizations like CDP and CO2 Performance Ladder. 

And these certifications can be hugely beneficial in procurement processes, with many tenderers requiring certain certifications or at least a commitment to get certified from all of their suppliers and service providers. 

2. Retain existing clients 

As for your existing clients, reporting on your emissions data helps to build loyalty and show your commitment to transparency and reducing your emissions over time. While your long-standing clients may not have initially required any sustainability-related information before onboarding you, it’s likely that they now expect their supply chain partners to provide transparent sustainability data. 

This means it's better to get ahead of the game and start calculating your emissions to show your existing customers that you’re committed to helping them on their sustainability journey, and ensure you stay their service provider of choice. 

Plus, this will also help your clients with their reporting under the CSRD, VSME, or other frameworks, as you can quickly provide the required data without any hassle or complex, time-consuming calculations.  

3. Reduce your costs 

Many people still think of sustainability as a cost-driver, but did you know that it can actually help reduce your costs in both the short and long run by giving you better visibility of your operations. 

Reducing emissions can go hand-in-hand with reducing costs, as you’re essentially minimizing unnecessary journeys. It’s estimated that ‘empty miles’ account for roughly 20–35% of the logistics sector’s total miles in the US, which shows that there’s plenty of room for improvement in this area. 

To illustrate this, let’s use a simple example of transporting refrigerated goods from the factory to supermarkets daily. Using carbon accounting software, you’ll be able to see the carbon emissions for these journeys over time. 

With this data, you can identify ways to reduce emissions for this client, such as alternate routes, switching fuel type, or options for less-than-truckload shipping (i.e. sharing trucks with other clients if the truck frequently has a low load factor). 

And this often results in not only reduced emissions but also reduced costs thanks to more fuel-efficient routes, improved vehicle utilisation, and even less carbon taxes. 

Insights from carbon accounting software also help you to make smarter investment decisions. Rather than relying on gut feeling or cost estimates based on inaccurate data, you can use accurate emissions data to build a solid business case before making any investment in making your operations more sustainable. 

4. Easily comply with sustainability regulations 

As already mentioned, compliance isn’t the only benefit of carbon accounting, but it is definitely an important one for many companies. Think of the CSRD, which will require certain companies to report on their emissions and other sustainability data in the coming years. 

Carbon accounting makes collecting, analyzing, and reporting on emissions data much faster, simpler, and more accurate than trying to calculate this manually using Excel spreadsheets. It also means that you can avoid spending months compiling data in the lead up to the first reporting period, as carbon accounting software can do the legwork. 

If you’re not mandated to report on emissions data, it’s still quite likely that you’ll have to provide this data to some of your clients, especially if they’re large or public companies. Standards like the EU’s voluntary VSME standard provide a great framework for companies to follow, and surprise, surprise, they still recommend measuring your emissions data too.

If you want to learn more about sustainability-related regulations, read our blog, which goes through the top 5 most relevant regulatory requirements for transport and logistics companies. 

5. Access green financing and attract investors

At one time or another, you may want to raise funding, take out a loan, or secure a grant to help fund the next phase of your growth e.g. to purchase new electric vehicles. If you’re already transparently measuring and reporting on your sustainability data, including carbon emissions, then you’ll open a lot more opportunities. 

For example, a recent Deloitte study found that 79% of investors have a sustainable investment policy in place, up from just 20% in 2019. Banks are also prioritizing lending to companies that accurately measure their sustainability impact and invest in sustainability initiatives, with most leading banks like ING and Lloyds Bank now offering green financing options with favorable interest rates or terms.

In the EU, the EU Taxonomy classification system is an essential part of validating if an investment can be considered environmentally sustainable. This has a knock-on impact on whether an investment qualifies for tax credits, grants, or other funding programs. 

Guidance on what qualifies as a sustainable investment can be found in the EU Taxonomy Compass, but examples for LSPs and other companies in the transport and logistics sector include: 

• Purchasing electric vans to replace old diesel trucks
• Costs of installing electric vehicle charging stations at your facilities 
• Costs of using data-driven solutions for GHG emissions reductions (like carbon accounting software). 

Carbon emissions are often included in the assessments under the EU Taxonomy, so companies that are already measuring their emissions will be one step ahead in making their investments qualify.

6. Minimize your carbon footprint 

The transport and logistics industry emits a large amount of CO2 each year. Freight transportation alone accounts for 8% of global greenhouse gas emissions, and this rises to 11% if you also include warehouses and ports. This explains why there’s increasing pressure on LSPs, carriers, and freight forwarders to reduce their emissions. 

To start reducing your emissions, you need to know your starting point. And that’s where carbon accounting comes into play. You first calculate your emissions, then set your targets, then identify and implement strategies to achieve these goals, and finally you measure your progress. 

If you’re using carbon accounting software, it’s much easier to analyze your current emissions and identify the quick-win initiatives to reduce your emissions, as well as the more significant investments, such as replacing your transport fleet with electric vehicles. 

As Martijn Scheffers of De Rijke Group explains: “As I like to say, measuring is knowing. And with BigMile we make our results visible so that we can improve over time. Together with management, we have set a goal to achieve a 30% reduction in emissions by 2030 compared to 2021. And I think we are nicely on track now.”

Carbon accounting software also helps you explore and compare ways of offering more sustainable alternative transport modes, routes, or other options to your customers, which in turn helps strengthen customer loyalty and attract new customers. 

So by using carbon accounting software you can reduce your emissions, which is good for the planet, society, and your business. 

How to get started with carbon accounting

Whether you’re mandated to report your carbon emissions or voluntarily monitoring your emissions to attract new business, keep customers happy, reduce your costs, or to ‘do the right thing’, BigMile’s carbon accounting software will make the whole process simpler, faster, and more accurate. 

We also partner with leading software providers to add our Emissions API to their platforms, making carbon accounting possible in the same systems our clients are already using to manage their operations. 

Want to learn more about the benefits of carbon accounting? Join leading logistics and transport companies like RICOH, Murata, and Vanguard Logistics, who are using BigMile for their carbon accounting. Book a call with one of our experts to explore how our platform can help you get started.  

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FAQs on carbon accounting 

What is carbon accounting?

Carbon accounting is the calculation, analysis, and reporting on the CO2 emissions that a company directly or indirectly emits. This means that it includes scope 1 (direct emissions from your assets or activities), scope 2 (energy used), and scope 3 emissions (indirect emissions from your activities). 

Transparent reporting on carbon emissions is becoming increasingly important for companies in the transport and logistics sector due to demands from clients, pressure to reduce costs, regulatory requirements, and of course the need to ‘do good’.  

How do companies start carbon accounting? 

When the carbon accounting concept first emerged, it was mainly done using complex spreadsheets and calculations, however, in recent years more and more companies have been switching to carbon accounting software to simplify the process. 

This is especially important for LSPs, carriers, and freight forwarders who need to calculate emissions per shipment, transport leg, and customer. But when you’re choosing a carbon accounting software, make sure it's aligned with the GLEC Framework and relevant standards like ISO 14083. 

Is carbon accounting mandatory or voluntary? 

For most transport and logistics companies, emissions calculation is still voluntary. That being said, it’s quite likely that your customers, supply chain partners, investors and other stakeholders will require you to provide emissions data, even if you’re not directly mandated to report on your emissions.

That’s why we recommend that you get up to speed on which regulations apply to your company. Our guides on the most important sustainability regulatory requirements for transport and logistics companies and the differences between the CSRD and the VSME voluntary standard will help you understand whether your reporting requirements are mandatory or voluntary. 

In any case, we advise you to get started in advance to be ready for any future compliance requirements, as well as to gain a competitive edge in tenders, reduce your costs, and take action to reduce your overall emissions. 

Are there additional benefits of carbon accounting? 

Short answer—yes! Carbon accounting is still a relatively new concept for the transport and logistics sector, which means that many of its benefits haven’t even been discovered yet. Aside from gaining a competitive edge in tenders, reducing your costs, accessing green finance, and minimizing your carbon footprint, additional benefits of carbon accounting include: 

• Attract and retain top talent: this is especially true for Gen Z and other population groups who tend to prioritize roles in companies that are committed to making their operations more sustainable. 
• Improved collaboration across the value chain: when you start carbon accounting, you’re in a much better position to work with your supply chain partners on joint initiatives that can help reduce emissions across the value chain. ‍
• Minimize risk of greenwashing claims: with carbon accounting, you’ll be accurately measuring your emissions, meaning that you don’t have to worry about being accused of greenwashing or fudging your numbers.

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