Introduction to Green Logistics – How Carbon Reduction Can Provide SMEs with Business Opportunities

There is a bourgeoning popularity of green living due to technological advancement and increasing public environmental awareness. As one of the four economic pillars of Hong Kong, the logistics industry also bears the compelling obligation to promote green logistics, in order to achieve sustainable development of the global supply chain. In this article contributed by FreightAmigo, we will talk about the basics of green logistics and its benefits.

Green logistics refers to freight solutions that can foster the goal of energy saving and zero-carbon emission. By selecting a more environmental-friendly freight mode and efficient freight routes, adverse ecological impact can be minimized.

Green Logistics Protocols

Green Logistics Corridors

The Clydebank Declaration is led by the UK at COP26 in Glasgow last November. It is an act of global move to promote green shipping to fight climate change. Signatory states declared their ambition and intent to support the establishment of green shipping corridors, i.e. zero-emission shipping routes between 2 ports.  Singapore is a recent signatory, joining the declaration in April this year.

Carbon Neutrality By 2050

According to the International Maritime Organization (IMO), the shipping industry is responsible for around 940 million tons of CO2 annually, which is at least 2.5% of the world’s total CO2 emissions. Therefore, a multitude number of countries called on the IMO to specify the 2050 carbon neutrality goal of global shipping and encourage countries to adopt green logistics as soon as possible.

Green Logistics Benefits

More Financing Opportunities

To encourage local enterprises to promote green and sustainable development, banks in Hong Kong are introducing green financial products and services, thereby propelling low-carbon and sustainable economic development in Hong Kong. When enterprises are investing on green projects such as green logistics solutions, they become eligible to apply for green loans under “Sustainable or Green Transport” category. Example offers include green assessment/certification or a cash rebate.

Attract Foreign Investment

According to a market survey, 85% of investors will consider environmental, social and governance (ESG) elements when investing. In Europe and the US which implemented ESG policies earlier than other regions, enterprises, especially multinational companies, are more willing to allocate extra resources to promote sustainable development policies. As a result, if an enterprise is willing to implement ESG, it will help attract foreign investment as well as strengthen its competitiveness.

Building a Green Supply Chain

Want to learn more about the applications of Green Logistics? Check out the upcoming Sourcing webinar, where author of this article, Ms. Ivy Tse, will share her experiences and insights on utilizing the latest technology like blockchain and big data to enhance efficiency with ESG in Supply Chain.

About the Author

Ivy Tse, Co-CEO & Co-Founder, FreightAmigo

Ivy has 15 years of regional management experience in several Fortune Global 100 companies, including ICT, cloud services & the logistics industry. Most recently held various leadership roles in program delivery, client implementations and compliance. She is also an ISO 9001 auditor, awarded as 2021 Deloitte Tech Fast Female Award Winner.

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