Geodis Targets Emissions Cuts and Digital Growth with Ambition 2027 Plan

French logistics firm Geodis has backed its business evolution linked to sustainability with its Ambition 2027 strategy, having climate-related quantifiable targets, digitalization, and operational efficiency improvements related to ESG. Specifics of the firm's strategy were part of its 2024 Activity and Sustainability Report released this week.

The hub of the plan features SBTi-approved climate targets that bear testament to the organization's commitment to the Paris Agreement. For the years between 2022 and 2030, Geodis aims to reduce Scope 1 and 2 greenhouse gas emissions by 42 percent and Scope 3 transport-related emissions by 25 percent.

Scope 1 is direct emission from company-owned vehicles and buildings. Scope 2 is indirect emission from electricity and heating purchased. Scope 3 is value chain emission through product usage, transport, and outsourced operations.

The company has also reported 9 percent reduction of Scope 1 and 2 emissions from 2022 and 1 percent reduction in Scope 3 emissions intensity of non-transport. However, Scope 3 air transport emissions rose by 5 percent, showing sector-wide difficulties for decarbonising aviation logistics.

Geodis has also expanded its low-emission delivery operations. The company's alternative energy fleet expanded to 463 vehicles, and green last-mile logistics services are running in 40 city centers globally, including Shanghai and some French cities. Geodis targets 100 city coverage by the end of 2025.

In addition to this, the company has also achieved a 7 percent reduction in diesel usage over two years, saving 60 million litres, and has enhanced its recovery rate for waste to 76 percent. Climate risk assessments have also been undertaken in high-risk locations, while energy efficiency initiatives are being rolled out in its building estate and freight networks.

The company's Ambition 2027 plan also includes spending 3.5 percent of its annual revenues on digital transformation. These include the adoption of artificial intelligence and automation to enhance logistics accuracy, lower emissions, and control operating expenses. The top digital advancements in 2024 include real-time routing optimization through machine learning support, a digital twin setup in Germany that lowered truck usage by 25 percent and cross-docking by 33 percent, and drone-powered inventory checks in the United States that cut stock-checking times in half.

Geodis currently has 80 automated warehouses and has implemented a safe internal ChatGPT platform to enhance employees' productivity and support AI upskilling initiatives.

The company maintained a Net Promoter Score of +36 in 2024, as an indicator of consistent customer satisfaction with its four key business activities: freight forwarding, contract logistics, distribution and express services, and the European Road Network. The company serves 91,000 customers in 166 countries and employs close to 50,000 worldwide.

As one of the government reforms, Geodis now links 25 percent of executive variable remuneration to non-financial performance targets. These include gender diversity, carbon footprint reductions, and customer satisfaction measures. The management board has 18 members, of which women make up 28 percent of the board and are of four different nationalities.

The company has also improved the control of business responsibility. The executive vice-president for sustainability now delivers monthly reports to the management board and yearly reports to the supervisory board, guaranteeing environmental and social indicators are included in decision-making at the leadership level.

Responsible suppliers and ethical sourcing are part of the areas of focus. In 2024, 63 percent of Geodis' strategic partners were rated by EcoVadis compared to 50 percent in 2022. The updated Business Partner Code of Conduct contains more stringent expectations regarding human rights, environmental sustainability, and ethical business.

Stakeholder awareness has also improved with 88 percent of the customers indicating that they are extremely aware of Geodis' sustainability efforts and 70 percent perceiving the company as an industry leader.

In Ambition 2027, Geodis is a low-carbon transport logistics partner, sustainable supply chains, and digitally empowered solutions. The company continues to strive for emissions reduction, innovation, and governance processes in accordance with global sustainability objectives.

Source: First broke Nirmal Menon 
Credit: Economic Times and Geodis (image credit: Geodis)