By Otto Nichols
“Voluntary offset buyers [businesses] are often driven by certain considerations such as safeguarding their reputation, ethics, and corporate social responsibility (CSR).” (Voluntary Carbon Market)
As part of my work this fall as a Green-e® Energy Associate, I looked at carbon footprint mitigators in the U.S. transportation sector. Specifically, I researched firms operating in the voluntary carbon offset space, with a concentration on customer-facing purchase mechanisms of verified and/or certified carbon offsets.
The post is segmented into an overview of our transportation sector, looking at its parameters and latest emissions breakdown, and an industry-wide analysis of firms utilizing voluntary carbon footprint mitigators in the transportation sector.
Overview of the U.S. Transportation Sector
As defined by the U.S. Environmental Protection Agency (EPA), “the transportation sector includes the movement of people and goods by cars, trucks, trains, ships, airplanes, and other vehicles.” Passenger cars, including light-duty trucks and minivans, account for over half of the transportation-related greenhouse gas emissions (GHG) from the transportation sector. This post focuses on the remaining GHG emissions emitted from freight trucks, airlines, maritime shipping, and transit (ride-hail and public).
In the United States, the transportation sector accounted for 29%—and consequently the highest share—of GHG emissions in 2017 (the most current year for this breakdown). In total, the U.S. emitted over 6,000 million metric tons (MMT) of GHG emissions in 2017, spanning all major sources. (EPA)
Industry-Wide Utilization of Voluntary Carbon Footprint Mitigators in the Transportation Sector
This section examines the sustainability efforts of firms that are utilizing voluntary carbon footprint mitigators in the transportation sector, including airlines, shipping, online retail, Amazon (a major combination of shipping and online retail), ride-hail, and transit.
The research surveys Alaska Airlines, Delta, United, and Air Canada, and finds that while these four airlines all offer verified carbon offsets, no pre-purchase checkout mechanism for customers to select certified carbon offsets is offered. Meaning, these airlines use blog posts and partnered webpages, such as United and Conservation International, to offer verified carbon offset products—but none are directly augmenting their main sales channels. To note, Alaska Airlines is partnered with Carbonfund.org as “Carbonfree” and Air Canada partners with Less Emissions to offer Gold Standard–Certified International Offsets and VER+ Standard-Certified Canadian Offsets. Delta publishes a webpage with carbon offset products, customized to the customer, but no verifier or certifier of these offsets is directly marketed.
Shipping and Online Retail
Shipping and online retail is predicated on the emergence and development of e-commerce. According to the U.S. Census Bureau, e-commerce sales as a percentage of total retail sales rose by 9.4% between Q1 2000 and Q1 2019. (Statista) While past trends are certainly not completely indicative of future trends, the trajectory of e-commerce appears to be rising. In the U.S. shipping sector, FedEx, DHL, and UPS are the main logistical players. FedEx publishes a comprehensive CSR Goals and Progress document, detailed with the company’s efforts at aircraft emissions reductions and increasing vehicle fuel efficiency.
DHL offers a “GoGreen” climate neutral service, where it consults with firms to help offset their logistics GHG emissions. DHL states, “Businesses who use our GoGreen Climate Neutral service receive a certificate once a year, which can be used along with the DHL GoGreen logo to share their commitment to the environment.” Projects supported through GoGreen are verified as at least “VER Gold Standard” credits and one of the projects, the Lesotho project, has been certified under the Fairtrade Climate Standard.
UPS has a proprietary process for calculating GHG emissions generated by shipping operations. These methodologies are verified by SGS and certified by Natural Capital Partners’ CarbonNeutral Protocol and include UPS small package, ground freight, air, and ocean forwarding. Under the umbrella of this methodology (which covers Scope 1, 2, and 3 emissions) is UPS’s carbon neutral option, which offsets the carbon impact of all shipments using its service. (UPS)
In the online retail sector, Etsy, partnered with 3Degrees, automatically offsets emissions from all shipping. A marketing blurb is shown at checkout, but no action is required from or offered to the purchaser. Target is partnered with EPA’s SmartWay program—which works to reduce freight-related emissions.
As the leader in today’s e-commerce market, Amazon is a unique study for both the shipping and online retail space. Focusing on transportation emissions, Amazon has an initiative they call “Shipment Zero,” which includes a goal to achieve 50% of all Amazon shipments with net zero carbon by 2030. The cited pathway to achieve this lofty goal includes electric vehicles, aviation biofuels, reusable packaging, and renewable energy. Starting in 2018 Amazon began publishing a transparent company-wide carbon footprint breakdown. Amazon’s overall sustainability goal is to reach net zero carbon across its entire operations by 2040 (“The Climate Pledge, Paris…10 Years Early”).
Lyft and Uber operate in a duopoly for ride-hailing services within the United States. Lyft, partnered with 3Degrees, began offsetting all rides globally starting in 2018, including emissions while the driver is en route to pick up. It is important to note that Lyft does not market these carbon offsets within the app’s user interface. Meanwhile, Uber promotes UberPool on the company’s sustainability webpage and has a couple electric vehicle initiatives in select international cities, but no voluntary carbon offset program.
Amtrak and Bay Area Rapid Transit (BART, the rapid transit public transportation system serving the San Francisco Bay Area), the two public transit firms studied in this post, both incorporate sustainability efforts. Amtrak, partnered with Carbonfund.org, allows passengers to offset the carbon emissions generated by their individual rail travel through Carbonfund.org’s Rail Calculator. BART utilizes green bonds under the Climate Bonds Standard Low Carbon Transport Criteria (qualified through servicing a fully electrified and high capacity urban transit network) to fund improvement and operations.
While many transportation-related firms are engaged in sustainability and carbon offset efforts, there still remains an opportunity for customer-facing voluntary carbon offset purchase mechanisms.
—Otto Nichols is a Fall 2019 Green-e Marketing Compliance Review Associate, currently studying for his Master of Science in Energy Systems Management from the University of San Francisco