Environment, Social & Governance” (or ESG) has taken the front seat for companies, reflecting their progress towards building an environmentally friendly, ethically just, and compliant business. And the Indian logistics sector is no exception.
Expected to hit the mark of $380 billion by 2025, with a CAGR of 10-12%, the sector contributes to a whopping 14.4% of the nation’s GDP, leaving a massive impact across numerous industry verticals and employment opportunities.
Thus, adopting sustainable logistics trends to meet ESG targets is crucial for revolutionizing the sector in terms of profitability, technological capabilities, environmental conscientiousness, and fair labour practices.
The Roadmap
Here’s how logistics companies can achieve sustainable practices within the sector and fulfil the ESG criteria for themselves, the investors and the planet:
EVs can be a game-changer against the backdrop of rising fuel prices and carbon footprint. They are more energy efficient compared to internal combustion engines and have lower ownership/maintenance costs.
Load optimization along with smarter fleet management can also go a long way in saving unnecessary trips and rolling down the carbon emissions.
Investing in renewable energy is synonymous with green logistics. Solar and wind power should be leveraged to the max for powering logistics operations.
Biofuels like ethanol, biodiesel, and biogas also play a key role in keeping the carbon footprint in check. Most of them can be used as direct replacements for fossil fuels, thus allowing logistic companies a smooth transition to greener choices.
Automation of business processes and digitization can facilitate robust, and efficient supply chains.
Logistics companies in India can leverage IT for route planning, data monitoring, sustainability reporting, and analyzing business trends for introducing better and foolproof digital supply chains.
Cybersecurity becomes the foundation of sustainable IT by promoting data protection and privacy, mitigating supply chain risks, ensuring data compliance, and so on.
One cannot forget the significance of infrastructure in uplifting a business’ efficiency and profits. Advanced logistic technologies go hand-in-hand with modal shifts for safe and structured transportation.
This includes establishing intermodal terminals and hubs for errorless and time-efficient freight transfers. Flexibility in the transportation mode paves the way for handling disruptions better, reducing environmental impact, and optimizing trade routes.
While the roadmap for ESG and sustainable logistics in India seems to be an ideal path, it is filled with obstacles that need more stress. These include:
While ESG and sustainable logistics are two interconnected spheres, bridging them is no walk in the park.
Before stepping on the accelerator, logistic companies must assess their current landscape, identify and establish clear goals and then lay down the best ways to meet them.
The Indian government continues to introduce schemes and policies for encouraging sustainable logistics like PM Gati Shakti National Master Plan (NMP), Logistics Efficiency Enhancement Program (LEEP), Freight Village Scheme, etc.
With all forces gradually coming together to revolutionize the logistics sector, businesses have to realize that patience, social awareness, and continuous efforts hold the key to the “green door”.
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