Business Review, Stakeholder Engagement, & Materiality Assessment. First, you can start off with a review of your business strategy, identifying the strategic risks and opportunities that global, national, or sector-specific sustainability trends may present to your business. For instance, companies like Yusen Logistics have set their own corporate targets in line with Singapore’s national target to become Net Zero by 2050.
Next, engage with stakeholders to identify, address, and mitigate the most material ESG issues to your business. In the Logistics sector, this could include carbon and waste management, as well as social factors like employee health and safety, employee engagement, and data security. Your management and board have a fiduciary duty to disclose and attend to these risks, and need to be thoroughly informed about these in order to ensure they spend adequate time on priority issues.
Measuring your Sustainability Footprint. You can progress to take stock of your sustainability footprint. Companies usually establish their reporting scope and boundaries based on the extent of their organisational control. Once you have established which activities in your operation that is under your organisation control, you can measure your sustainability performance.
Measuring sustainability performance will provide a baseline to benchmark the effectiveness of your future sustainability efforts, as well as help you identify areas for operational improvement to increase operational efficiency and reduce environmental footprint. For instance, understanding that Scope 1 emissions form the largest bulk of your carbon footprint may help you decide to focus on electrifying your diesel forklifts or trucks. On the other hand, if most of your emissions come from Scope 2, you might want to identify the asset that consumes the most electricity in your warehouse, such as the chiller system, and examine options such as energy efficiency, better insulation, or Cooling-as-a-Service in order reduce your footprint and save on your energy bill at the same time.
Communicating Sustainability Disclosures on Measurement, Reporting and Verification. As you mature in collecting sustainability data, you can consider proactively making disclosures in line with international standards, and eventually obtaining third-party verification for your sustainability reports by accredited third-party assurance bodies. Such transparency provides immense credibility with stakeholders, and would signal your commitment to sustainability to customers. Currently in Singapore, companies listed on SGX are compelled by regulatory compliance to produce a sustainability report aligned to an international standard. ACRA is expected to gradually roll out International Sustainability Standards Board (ISSB)-based disclosure requirements to non-listed companies as well.
The guide below lists several of the most popular international reporting frameworks to help you choose which best aligns with your different objectives. ISSB is currently developing a harmonised and comprehensive global baseline of sustainability disclosures which you should look out for. In addition, sector-specific disclosure metrics exist. Transport companies for example can refer to SASB Standards which prescribes Road Transportation-specific disclosure topics and metrics.
Do note that most sustainability reports presently published by logistics companies in Singapore have adopted GRI standards. If you find that your team lacks internal capabilities to conduct reporting initially, an external consultant could be helpful to provide an objective perspective and alignment to reporting standards and market expectations. The consultant could also contribute to building internal capacity by developing an initial reporting framework that your team can continually reuse after the engagement.
Crafting an Integrated Sustainability Strategy. As you prioritise the topics that offer the most material risk and opportunity to your company, you should ensure that you regularly keep your management and board informed, to secure the leadership commitment to sustainability. Sustainability should be embedded deeply into your corporate and business strategy. The needs of stakeholders, society, and the environment need to be integrated into your business goals and innovations. For instance, offering new green transportation services or energy management services on top of warehousing management can help boost your revenues. Your sustainability strategy should also include short-, mid-, and long-term goals and targets, accompanied with a detailed multi-year execution roadmap. In the short term, you might want to focus on low-hanging fruit with sustainable practices such as eco-driving or closing the warehouse door to prevent air-conditioning from escaping. In the longer term, you might then consider larger-scale investments such as electrifying your fleet.
Developing the Business Case for Sustainability Investments. To improve your sustainability performance, you will need to explore the state-of-the-art in sustainable investments, such as energy-efficient systems in warehouses, novel operating models such as shared fulfilment, or low-carbon technologies such as solar energy and electric vehicles. The investment quantum, Returns on Investment (ROI), risks, and carbon abatement potential of each solution need to be carefully evaluated, prioritised, and staged. There are numerous sustainable finance and grant options offered by local banks and the Singapore government to help improve the business case for investment. Some of these have been listed in the Appendix.