|Liquid fuel consumption by end-use sector, 2006-2030. Source: CDP. Click to enlarge.|
The global transportation industry firms lag behind ‘Global 500 Companies’ in reducing greenhouse gas emissions and setting reduction targets, according to a new report from the Carbon Disclosure Project (CDP). As a result, the sector could have a major long-term impact on climate change and world energy usage, if strategic investments are not made, according to the research.
Thirty-six percent of transportation companies have set carbon and energy reduction targets, compared to 51% of the ‘Global 500 Index’ of companies across all sectors, according to the findings. CDP is an independent, not-for-profit organization, that serves as a scorekeeper and data-house for carbon emission and climate change information disclosed by businesses around the globe.
The transportation sector is set to experience significant growth, increased dependence on oil and risk of an escalation in greenhouse gasses. The transport industry now accounts for 13% of global emissions and is one of the fastest energy-demand sectors, responsible for 60% of oil consumption in high-income countries (OECD countries).
CDP drew on two datasets for the analysis. The trend analysis within the report focuses on the responses of 291 companies in the Transportation sector, drawn from the transportation companies featured in the major indices that received the CDP 2009 information request. CDP also undertook more detailed analysis of a smaller group (53) of the world’s largest transportation companies, drawn from the MSCI World Index, submitted to CDP in 2009. These 53 companies are among the largest in the sector in the world.
Key findings revealed:
- 9% report information on current investments in emissions reduction and alternate low-carbon options and 4% on future investments;
- Road transportation accounts for 80% of the sectors total CO2 contribution, followed by air (13%) and sea transportation (7%);
- 53% of transport companies surveyed responded to CDP’s request indicating a lower level of engagement compared to the ‘Global 500’ with an 82% response rate.
Transportation is a major contributor to the US economy. In 2008, transportation-related goods and services contributed $1.38 trillion to US GDP (9.5%). Despite this, only half of the transportation companies surveyed report having a clear understanding of the risks and opportunities associated with regulations, the report said. Compare this to almost 70% of Global 500 companies, that are turning risks into opportunities for growth, innovation and competitive advantage.
The report also highlights key geographical trends, with European countries still leading the way, alongside South America, with respect to putting emission reduction plans in place:
- 60% of South American companies and 52% of European companies have set emissions targets and reduction plans.
- Of companies reporting on investment in low-carbon alternatives Asia represents the highest number of companies (48%), Europe (36%), compared to two companies in the US (8%).
Although reporting on investments for reducing emissions and greener technologies is still in its infancy, $31.93 billion has already been committed or invested into low carbon initiatives and innovations in the transportation sector worldwide.
A minority of companies are reporting significant investments including Air France-KLM, Easyjet, Canadian National Railways, Toyota, and UPS.
New technologies include installation of renewable energy systems; developing more efficient transport routes, low carbon fuels, and innovative vehicle design; or product innovation into hybrids or electric powered vehicles.