Panattoni report: sustainability still a challenge for logistics

Two-thirds of logistics occupiers plan to reach net zero carbon in the next five years but the industry may not be ready, as European supply chains continue to operate in challenging market conditions, according to the findings of a major report on sustainability in the Iogistics sector co-authored by Panattoni, Pledge, HFW and Analytiqa.

The report, which drew responses from 102 logistics businesses, including logistics service providers, manufacturers and retailers, working across 16 European countries, examines key ESG metrics and indicators for businesses operating within the logistics and supply chain sector, including the key relationship between financial costs and sustainability.

It finds that the most important factor driving sustainability activity for European logistics businesses is the desire to make a positive environmental impact. The need to meet regulatory and legislative requirements is less of a driver of action, acknowledging that logistics operators, retailers and manufacturers are much more in step and aware of the sustainability requirements being made of their companies.

The report shows that that there is a growing willingness among logistics businesses to operate out of green buildings and to pay a rental premium for a green building, but invariably with an eye on cost savings – 42% of companies would be willing to pay a rent premium equivalent to the total operating cost savings to move operations to a ‘green’ building from a standard ‘non-green’ building.

Almost two-thirds of logistics businesses remain challenged by the financial cost of sustainability solutions and more than half suggest that lower costs of implementing sustainability solutions would improve their company’s future sustainability efforts, the report adds. It is likely to be smaller companies, with fewer resources available to devote to sustainability, that are less likely to have sustainability programmes in place, or an understanding of their obligations to report emissions or the emissions associated with their products or services.

“The challenge of defining or measuring financial returns on sustainability measures has decreased, despite financial constraints and the fact that these efforts often lead to higher investment costs,” said Emilia Dębowska, head of sustainability Europe, Panattoni. “It may indicate progress in the ability to quantify the benefits of sustainability efforts or to understand the positive impact of the transition over the longer term.”

The availability of financial incentives, such as grants and subsidies, is seen as an important factor to encourage companies to improve their sustainability performance. Almost one in five companies state that they would be willing to pay extra for environmental certifications, because it adds value to their sales efforts.