How can the road haulage sector best approach ESG change?
December 13, 2023
The road haulage industry has a significant environmental impact. The transport sector is responsible for more than a fifth of total global CO² emissions, of which road transport accounts for 15% of the total. Around 30% of transport emissions come from road haulage, or around 5% of all global emissions. It bears a heavy responsibility to play a part in fighting both pollution and climate change.
Not only this, but, as time goes on, the expectation of thorough environmental, social and corporate governance (ESG) practices across all sectors and sizes of businesses grows. Those left behind may find they pay the financial cost in the long run. This is a necessary, but certainly not an easy, task for the UK’s Road Haulage industry to take on. So, what measures and approaches can the UK Road Haulage industry put in place to tackle the task at hand?
Introducing sustainable practices
Regular vehicle maintenance
Well-maintained trucks run more efficiently, consume less fuel and emit fewer pollutants. Ensuring optimal tyre pressure, replacing air filters and using high-quality engine oil will significantly improve a vehicle’s fuel efficiency.
Regular checks can also help spot potential issues before they escalate, reducing the risk of breakdowns and keeping trucks on the road. By prioritising regular maintenance, haulage companies can reduce their carbon footprint, save on fuel costs, and extend the lifespan of their lorries.
Route optimisation reduces fuel consumption
Advanced GPS and mapping software enables haulage firms to plot the most efficient routes for their deliveries, not only reducing distances travelled but also avoiding traffic delays. The benefits are reduced fuel consumption and faster delivery times. Shorter distances lead to fuel savings and a corresponding reduction in CO² emissions.
Consolidating multiple smaller shipments into a fewer larger one is a good means of servicing multiple clients, who require less than a full truckload for their consignment. This groupage approach maximises the use of available space and reduces the number of trips required, leading to lower fuel consumption and emissions, as well as a more cost-effective service for their customers.
Enhancing fuel efficiency and using alternative energy
Transition to electric and hybrid vehicles
Staying ahead of the curve means haulage companies moving away from fossil fuel-powered vehicles to electric and hybrid trucks. Though the speed of this change continues to be dictated by urgently needed improvement in battery technology and a much more rapid expansion of charging infrastructure. Cost is another significant inhibitor, as are the inadequate incentive packages provided by the government to encourage switching.
New fuels produced from organic materials present a promising solution for the haulage industry and are renewable. They can significantly reduce CO² emissions and can be used in existing engines with minimal modifications. As research continues and production methods become more efficient, biofuels may play a pivotal role in helping haulage firms become more sustainable.
Technological advancements can boost fuel efficiency
Technology is increasingly being used to enhance fuel efficiency. Advanced aerodynamics, tyre optimisation and engine management systems are just some of the ways to make freight transportation more fuel efficient. Telematics and real-time data analytics allow haulage firms to monitor fuel consumption, spot inefficiencies and make more informed operational decisions.
Environmental regulations governing UK haulage firms
The UK has been a leading player in the introduction of stricter environmental regulations in the transport sector. The Euro 6 standards set limits for exhaust emissions by new vehicles sold in EU and EEA member states. These standards are forcing hauliers to invest in cleaner engines and introduce measures to cut harmful emissions.
The UK’s Clean Air Zones such as the recently-expanded London ULEZ target areas with poor air quality, imposing daily charges on vehicles which fail to meet the required emission standards. This is compelling transport firms to redesign their fleet strategies and invest in cleaner vehicles.
Future legislative and regulatory changes
The UK government’s commitment to achieving net-zero carbon emissions by 2050 will undoubtedly lead to stricter regulation for the transport sector. Areas believed to be under consideration include mandatory minimum percentages of electric or hybrid trucks in vehicle fleets, even more strict controls on emissions and incentives for the adoption of alternative fuels and advanced engine technologies.
The risks of not embracing ESG change
Road haulage companies are very often part of complex supply chains, throughout which demonstrating ESG credentials is not just part of winning work, but is also becoming more and more essential in client and revenue retention.
Riding the environmental wave
The road haulage industry’s impact on the environment cannot be underestimated, whether it’s through carbon emissions, or air and noise pollution. Reducing that negative impact also offers opportunities for positive change and an improvement in the sector’s reputation.
In this ever-changing landscape, it’s crucial that hauliers proactively adapt to environmental challenges not least because it creates the prospect of a more sustainable and not only a more efficient, but also a more profitable future.
Approaching funding and business investment for ESG change
Seeking out new finding and investment opportunities is one effective approach for road haulage businesses looking to expand and implement the measures describe through this piece. With the growing interest and ubiquity of ESG across all sectors and sizes, many more avenues are opening for this kind of business funding. Working with a specialist can help you to access the investment you need to move your business forward and build growth in an environmentally savvy age.
If you are seeking professional advice regarding funding or investment for your road haulage business, Opus is here to help. You can speak to one of our Partners who can discuss options with you. We have offices nationwide and by contacting us on 020 3326 6454, you will be able to get immediate assistance from our Partner-led team.