Fostering sustainability in the industry

Driving our Net Zero Carbon Programme

Kuehne+Nagel released the Net Zero Carbon programme as the core pillar of its sustainability strategy. At the heart of it is the path to CO2 neutrality by 2030. As a pioneer in the industry, Kuehne+Nagel targets comprehensive CO2 neutralisation, i.e. direct CO2 emissions from Scope 1+2* that cannot be avoided have been fully compensated in 2020. Further, Kuehne+Nagel targets CO2 emission neutralisation (Scope 3* of GHG Protocol) by 2030. As a first step, all less-than-container load (LCL) shipments in 2020 were made CO2 neutral, new contracts with energy suppliers to increase renewable energy procurement and a biofuel concept for Sea Logistics operations is in place. GRI 103-2

*  Scope 1 – Direct emissions (owned controlled sources)
   Scope 2 – Indirect emissions (generated/purchases power, steam, HVAC)
   Scope 3 – All other indirect emissions in company’s value chain

 

The Net Zero Carbon programme sets the tone for the Group’s next decade will be focused on addressing its environmental footprint as defined by our Net Zero programme. After its first year of intense peer collaboration, the Group has reduced its CO2 emissions by 27 per cent from Scope 1, 2 and 3, clearly overachieving its own targets outlined in this Sustainability Report.

Kuehne+Nagel, as a member of Clean Cargo, the Sustainable Airfreight Alliance and the Global Logistics Emissions Council initiatives, is in working closely with all major sea, air and road carriers to discuss and collaborate on air quality and ecological impacts with the carriers to further reduce the pollution emissions based on the International Maritime Organisation (IMO) , the International Air Transport Association (IATA) and the Sustainability Accounting Standards Board (SASB) guidelines or standards.


Carbon emissions reduction goals  GRI 305-4

In the area of carbon dioxide (CO2) emissions, Kuehne+Nagel has met the proposed reduction goals established in 2020, a global target that is part of our 2030 environmental strategy to reduce absolute carbon emissions by 5 per cent per FTE and 5 per cent per 100 m2 from 2010 – 2020.

In 2020, Kuehne+Nagel reduced its CO2 emissions by 22 per cent per FTE and also reduced 24 per cent per 100 m2, total absolute emissions were also reduced by 18 per cent, partly affected by the COVID-19 pandemic. Reductions were accomplished by using effective emissions control technology. Kuehne+Nagel is currently working to establish carbon reduction goals until 2030 based on the Science Based Targets initiative. (SDG 13)


Performance review 2020

Kuehne+Nagel continued to improve its performance on environmental activities. 2020 performance is based on the global environmental data system GFCC. Annual sustainability targets support us to track progress. We plan ahead, with objectives set for the period up to 2030, ensuring that we have clear medium to long term goals.

Environmental targets for 2030:

  • 100 per cent of energy used will come from renewable sources
  • Zero waste to be sent to landfill
  • Reduce water consumption by 10 per cent
  • Use innovation & new technologies as enablers of sustainability efficiency
  • Achieve net zero carbon emissions across business and geographies.

The overall topic of greenhouse gas emissions is identified as very important on the materiality matrix influencing stakeholder assessments and decisions. See also the materiality matrix in this report.

Climate change reduction  GRI 305–1 GRI 305–2

Greenhouse Gas (GHG) emission reductions have been a priority for a long time at Kuehne+Nagel. Although the science of global climate change is evolving, Kuehne+Nagel has taken voluntary, responsible action to reduce and control its carbon footprint. In addition to managing direct emissions from our operations, Kuehne+Nagel has a track record of improving energy efficiency at its facilities and offers a wide range of innovative products to support customers to improve energy efficiency and reduce the company’s carbon footprint. This includes setting corporate GHG emission reduction goals and policies, which complement the efforts of the company 2030 environmental reduction plans.

Kuehne+Nagel understands that the impacts and reduction efforts associated with GHG emissions require a long-term commitment as the effects of both cannot be realised in only one year. Therefore, implementing reduction initiatives has been a key priority for Kuehne+Nagel. The company’s GHG Management Strategy includes a rigorous accounting system to generate an annual inventory of worldwide emissions. This process and the associated GHG emissions reported in 2020 were validated by an external third-party company. Since 2010, the global Kuehne+Nagel inventory has been developed, maintained and third party verified by Kuehne+Nagel’s accredited party in accordance with the Greenhouse Gas Protocol, the ISO 14064-3 and the European Norm EN 16258. The table in section Performance data shows the 2020 results. (SDG 13)

The total GHG inventory encompasses the company’s diversity and complexity. The current inventory accounts for a total of approximately 800 sites including ware-houses, offices and distribution centres within Kuehne+Nagel’s operational control. This includes both Scope 1 (direct) and Scope 2 (indirect) emissions as categorised by the GHG Protocol.

Based on the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Kuehne+Nagel now has a verified process to account and report Scope 3 emissions inventory. These emissions are calculated following industry standards and validated against the Science Based Targets initiative.


Net Zero Carbon programme by 2030

We enable our customers to achieve their environmental targets by using our sustainable and innovative supply chain solutions that both reduce and offset the carbon footprint of shipments. Our solutions range from carbon-free transportation to environmentally sustainable biofuels.

Kuehne+Nagel is actively addressing a reduction of CO2 in logistics worldwide. With its Net Zero Carbon programme, Kuehne+Nagel provides environmentally friendly and sustainable supply chain solutions, enabling like-minded customers to fully neutralise the CO2 emissions of their supply chains. To support these efforts and beyond, Kuehne+Nagel  provides customers with solutions for complete CO2 neutralisation of their supply chain including sustainable service offerings for Full-Container-Load and part-load shipments, transparent carbon emissions reports, CO2 route planning and offsetting of remaining emissions via certified carbon credits from investments in nature-based projects.


Innovation/alternative technology to reduce CO2 emissions in Sea Logistics

First step
Seaexplorer, the online solution for sea freight developed by Kuehne+Nagel, offers customers complete transparency for the first time about the CO2 emissions of each individual container ship, regardless of the shipping company. By selecting environmentally friendly services, customers can reduce their CO2 emissions, while also considering other parameters like transit times and reliability. The platform makes it possible to calculate up to 50 per cent CO2 reduction – thanks to much more detailed calculations compared to the common international standard calculations. These are based only on standard values, which, for example, do not distinguish between types of propulsion and ship sizes.

We also offer an emissions calculator for seafreight on the public webpage (Global Seafreight Carbon Calculator). Using a verified, neutral calculation method (developed by the Clean Cargo Working Group – the leading industry body), the emissions of ship transports including pre- and on-carriage data are calculated based on data from the industry association "Eco Transit". The actual emission values for sea freight are determined by AIS data and technical ship specifications or by data received directly from the carriers. This calculator allows customers to calculate and optimise their CO2 emissions per container and for their entire ocean freight supply chain.

The development of a global carbon calculator that includes all transport modes, started in 2020, will be finished in 2021. This enables a cross-business units calculation and comparison of CO2 emissions for different routes or transport modes. It will provide customers with standardised CO2 emission calculations across transport modes on transport offers and invoices and also via our online applications with a direct booking option. This calculator will replace the current Global Seafreight Carbon Calculator (GSCC) which only covers sea logistics.

Second step
We currently offer two completely climate-neutral seafreight solutions – KN Less Container Load (LCL) and KN Pledge. Biofuel is an effective way to reduce CO2 emissions in the seafreight industry instantly. Our Biofuel concept allows customers to avoid CO2 emissions from the entire supply chain. Our customers will get a written Proof of Sustainability about the volume of Biofuel which has been purchased and actually used on a respective vessel. The entire process is being monitored and audited by an independent third-party company on frequent basis. A fully traceable 100 per cent carbon free shipment is possible on the pure port–to–port transportation (Tank to Wheel). A 90 per cent carbon free shipment is possible even considering the production and product-transportation moves of Biofuel, the so-called Well to Wheel view. Kuehne+Nagel’s Biofuel concept is based on the 2nd generation of biofuel, also called “Used Cooking Oil Methyl Ester” (UCOME). UCOME doesn‘t require farmland and it doesn‘t interfere with food cultivation.

 

KN Pledge | KN LCL | eShipAsia

Since 2020, all LCL shipments in sea freight have been made CO2-neutral by Kuehne+Nagel. We achieve the CO2 neutrality via CO2 reduction and savings via CO2 reduction, savings, and CO2 offsetting sponsored by Kuehne+Nagel without additional costs for our customers. Furthermore, we work on CO2 avoidance and savings projects within KN LCL, with our partners and subcontractors. The concrete saved CO2 emissions are not only shown on the invoice, but also directly in the booking process via the verified online platform myKN. The full container load premium service KN Pledge has been automatically CO2-neutral for the customer since 2019. Kuehne+Nagel takes care of the necessary compensation. We also automatically make bookings via the regional booking portal eShipAsia CO2-neutral.

 

Third step
Our robust carbon offsetting programme allows carbon conscious customers to fully offset their CO2 emissions. Carbon offsetting is a recognised mechanism that allows companies and individuals to counterbalance CO2 emissions of a shipment that cannot be avoided through savings. This will be achieved by committing to a reduction in our collective carbon emissions through projects that protect and renew our planet by taking CO2 out of the atmosphere. Kuehne+Nagel partners with nature based redevelopment and protection projects around the world that help reduce greenhouse gas emissions while improving the livelihoods of local communities and preserving biodiversity and wildlife. These projects are verified by independent organisations with the internationally recognised Verified Carbon Standard (VCS) or Gold Standard (GS), and use the UN Sustainable Development Goals (SDGs) as guides toward impact.

How we prepared for IMO 2020
Since January 2020 all seagoing vessels have to consume fuels with a maximum sulphur content of 0.5 percent or use scrubbers. The IMO 2020 regulation was implemented smoothly thanks to intense information campaigns, and it has been fully accepted by the industry. After it came into effect, very few rule breaches have been reported. For more information on IMO 2020 please read KN Sustainability Report 2019, page 40.

Alternative innovation/technology to reduce CO2 emissions in Sea, Air, Road and Contract Logistics

Business cases