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Why Walmart, Target, Amazon and Ikea need greener ships

Cargo ship on the sea

Why 'net zero' retailers should lead the push for greener shipping practices.

BusinessGreen

International shipping is big business. The world's shipping fleet has quadrupled in size since the 1980s as the economy became increasingly globalized and consumers became dependent on products manufactured overseas and transported thouands of miles in giant shipping containers. This trend is expected to run and run over the coming decades. The pandemic has driven a boom in container shipping, as billions of home-bound shoppers turn to e-commerce instead of high street shopping, and now some estimates forecast that ocean-going cargo volumes will grow by as much as 130 percent by 2050.

These predictions do not bode well for the climate. All 50,000 of the merchant vessels on the seas today are powered by fossil fuels, making the sector responsible for between 2.5 and 3 percent of global emissions. Meanwhile, regulation of the industry's emissions remain weak due the sector's exclusion thus far from many countries' national climate plans and the underpowered nature of the climate targets and regulations introduced by the International Marine Organization (IMO). Campaigners have long warned shipping is on track to strain the global emissions budget and harm efforts to cap global temperature increases by mid-century. This, of course, presents a challenge to retailers who increasingly rely on shipping as core to their operating model, but have also pledged to achieve net zero emissions across their supply chains.

The electrification of road transport is occurring at pace, with corporates around the world embracing 2030 fleet electrification pledges and making significant investments in electric vehicles that can deliver packages to customers, but if net zero goals are to be met then this progress must be matched with a similar effort to curb shipping emissions. The efforts from the likes of Amazon and Ikea to cast themselves as climate leaders could ultimately be jeopardized if they do not move to swiftly decarbonize their extensive maritime supply chains. Shipping networks may seem more or less invisible to consumers now, but this could change as scrutiny of companies' environmental practices becomes more pointed over the coming years amid escalating climate and nature emergencies.

It is against this backdrop that campaigners have this week published a pioneering study that aims to highlight for the first time the heavy toll soaring demand for maritime freight from big retailers is having on the climate and air pollution. The report, "Shady ships: Retail giants pollute communities and climate with fossil-fueled ocean shipping," aims to highlight the extent of corporate shipping emissions and encourage consumer goods giants to exert pressure on their shipping partners to embrace greener practices.

After cross referencing cargo manifests with a dataset featuring individual ship emissions, the researchers behind the analysis have concluded that 15 major U.S. companies, including Ikea, Target, Walmart, Amazon, Home Depot, Nike and Samsung, produced roughly 12.7 million metric tonnes of carbon dioxide through their shipping freight emissions in 2019, roughly equivalent to the annual emissions of three coal-fired power plants. The report calculates that Walmart alone was responsible for 3.7 million metric tonnes of carbon pollution that year through its shipping operations, more than the annual output of an entire coal-fired power plant. Collectively, the research shows the 15 companies are responsible for emitting more sulphur emissions than all on-road vehicles in the U.S. combined, and as much particulate matter and nitrous oxide emissions as the entire U.S. mining industry.

The environmental groups behind the report, Stand.Earth and Pacific Environment, have warned that so-called "Big Retail" has an "urgent responsibility" to address its shipping pollution. The report singles out Walmart, Target, Amazon and Ikea as having a key role to play in driving the decarbonization of the shipping sector, identifying those four firms as having "particular power and influence" over the global retail supply chain and, consequently, the maritime shipping sector.

"Major retail companies are directly responsible for dirty, dangerous air in U.S. port communities and millions of metric tons of climate pollution in our atmosphere," said Madeline Rose, climate campaign director for Pacific Environment. "We are demanding that these practices change."

The campaigners are calling on major retailers to take action to shift their products off fossil fuel shipping vessels as soon as possible, starting with a pledge to transition to 100 percent zero emission shipping by 2030. They are urging the consumer goods giants to demand carriers immediately adopt existing technologies and solutions that can make journeys less emissions intensive, for instance through slow steaming practices and the installation of wind assisted propulsion technologies. They have also called on retailers to sign contracts to ship goods on the world's first zero emission ships, a move they argue would send a powerful and much-needed demand signal to the market.

Gary Cook, global climate campaigns director at Stand.Earth, emphasized that decarbonizing shipping emissions could also benefit poor and disadvantaged communities. "In the face of record profits, major retailers and their shipping companies have no excuse to not invest in cleaner ways of doing business," he said. "Every year they stall, communities of color will remain saddled with the high costs of air pollution, and we miss the ever-narrowing window to address the climate crisis and ensure a livable planet."

Every year they stall, communities of color will remain saddled with the high costs of air pollution, and we miss the ever-narrowing window to address the climate crisis and ensure a livable planet.

Approached about the findings, a spokesperson from Target stressed that the firm intended to reduce its shipping carbon footprint as part of its efforts to achieve net zero emissions by 2040. "[Target's sustainability] strategy includes reducing our shipping carbon footprint as we work toward our goal of being a net zero enterprise by 2040, with net zero emissions across both our operations and supply chain," they said. "Additionally, we work to ensure our global carriers follow the guidelines of the IMO'S 2020 regulation to limit sulfur fuel for ships outside designated Emission Control Areas (ECAS) to help reduce emissions."

A spokesperson from Ikea said the company acknowledged that it had a responsibility to "positively influence the climate agenda in the ocean transport industry" as a large user of maritime shipping and pointed to a pledge to reduce the carbon footprint of its transportation by roughly 70 percent by the end of the decade. Ocean shipping accounts for 40 percent of the climate footprint incurred by the transportation of the firm's products from suppliers to warehouses and stores, according to company figures.

"Being a large user of ocean transport, we have a big responsibility and also an opportunity to positively influence the climate agenda in the ocean transport industry," the spokesperson said. "At IKEA we believe in close collaboration with our partners. For example, in 2019, in a collaboration with one of our service providers and along with other stakeholders, we were part of the first-ever pilot to test biofuels in a deep-sea ocean container ship. Today, we are in the process of assessing how to scale up the use of sustainable biofuels in our ocean transport, as we continue to focus our efforts on the decarbonization agenda for our ocean transport — an essential element of reaching our ambitious 2030 targets."

 Amazon and Target declined to comment on the report but pointed to their various in-house sustainability programs and the climate coalitions of which they are members.

Momentum is growing in the U.K. behind exploring pathways for how the shipping sector can decarbonize in the wake of the government's decision to include international shipping emissions in the U.K.'s carbon budget from 2035 onwards. The government's Transport Decarbonization Plan, published last week, reiterated the government's intention to "lead the transition to green shipping." And just this week, the Parliamentary Environmental Audit Committee published a call for evidence on how the shipping and aviation sectors can best reach net zero emissions. The MPs are seeking written submissions by Sept. 3 on a range of topics, including the most equitable policy mechanisms for reducing the economy's reliance on shipping, how the U.K. government can drive international climate action on reducing maritime emissions, and how the nation should define its ownership of international aviation and shipping emissions through its carbon budgeting. 

The call for evidence is launched just days after the maritime sector last week warned the government's plans for driving more sustainable shipping practices remained limited and called for ministers to set out a budget and more detailed policy framework for driving the sector's transformation. "Despite being bigger than aviation and rail combined, maritime has been largely overlooked in the government's net zero drive," said Maritime UK chief executive Ben Murray, following the publication of the Transport Decarbonization Plan. "No headline commitments and no money to get on with the task in front of us. Government has led the way in setting stretching targets, but as yet we have no clear path to meeting them."

Meanwhile, the shipping industry announced it will hold a conference at the COP26 Climate Summit in November to discuss its decarbonization efforts. The Shaping the Future of Shipping Conference will bring together politicians, shipowners, logistics giants and other industry stakeholders to discuss potential decarbonization pathways for the sector ahead of a crucial meeting of the International Maritime Organization's Marine Environmental Protection Committee later that month. Ebsen Poulsson, chairman of influential industry group the International Chamber of Shipping, hailed the meeting as a "major opportunity to garner the political leadership needed to advance the agenda on R&D and the creation of a global market-based mechanism to drive decarbonization."

Poulsson's sentiment was echoed by Jeremy Nixon, CEO of Japanese shipping giant Ocean Network Express, who argued it was "a critical time to seek consensus on a clear regulatory and technical roadmap."

Despite growing support from industry insiders and policy makers for the shipping decarbonization agenda, the new campaign to push the biggest brands that provide shipping companies with their business to demand faster environmental progress is a wise one. Many firms on today's report score card have committed to achieving net zero emissions by mid-century or earlier and will be aware that those headline climate targets depend on a transformation of all parts of their logistics and supply chains, not just the more visible last mile delivery. It is in companies' interest to be at the forefront of the push for greener shipping as demand for sustainable products skyrockets and their net zero deadlines draw closer.

Moreover, weak climate targets and regulations rubber-stamped by the IMO in recent years means that pressure from the downstream supply chain could prove a critical driver of the transformative change required across the emissions-intensive industry. While the shipping sector is nominally committed to delivering a 40 percent reduction in its carbon intensity by 2030 and halving the sector's absolute emissions by 2050, compared to a 2008 baseline, these goals have been slammed by campaigners and climate scientists as falling far short of the emissions reductions required to meet global climate goals. The Climate Action Tracker initiative has graded the targets as "critically insufficient" and aligned with a potentially devastating global temperature rise of 4 degrees Celsius. And last month the IMO formally adopted emissions regulation that campaigners have calculated will improve the annual carbon intensity of the sector by a mere 1.5 percent every year between now and 2026.

With regulators still guilty of dozing on the deck, pressure from retail companies could play a galvanizing role in plugging the shipping industry's climate policy gap and charting a cleaner future for this most vital of industries.

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