Transport sector showing slow progress to decarbonise: study

The road to climate action is long for the sector – only 7 per cent of transport firms globally have committed to phase out fossil fuels. Fewer have plans to ensure the energy transition leaves no one behind. Singapore-headquartered ComfortDelGro emerges top of a ranking of decarbonising transport firms.

A busy highway in downtown Jakarta
Only seven per cent of companies globally have committed to phasing out fossil fuels, according to a study by World Benchmarking Alliance (WBA) and CDP. Image: Robin Hicks/Eco-Business

The transportation sector is making slow progress to reduce its dependence on carbon-intensive energy and support global climate goals, a report of 90 road, rail, shipping and aviation companies finds.

While more than a half of the world’s biggest transport firms have set net-zero targets, only 9 per cent have their climate goals validated by the Science Based Targets initiative (SBTi), which aligns carbon-cutting commitments with the Paris Agreement on climate change.

Of those with climate commitments, most firms lack short-terms targets or detail on how they plan to transition to low-carbon energy sources, the report by World Benchmarking Alliance (WBA) and CDP released on Wednesday found.

Transport is responsible for 37 per cent of global carbon emissions among all end-use sectors, and has the highest reliance on fossil fuels of all sectors, with more than 90 per cent of the sector powered by crude oil-derived products.

The report analysed firms’ sustainability disclosure as well as the past and future performance of companies, which included 25 airlines, nine rail companies, six road companies, and 17 shipping companies.

It is no exaggeration to say the future of our world will be significantly shaped by how these companies translate pledges into action.

Vicky Sins, decarbonisation and energy transformation lead, World Benchmarking Alliance

Only 7 per cent of these firms have committed to phase-out fossil fuels, and the majority have no plans to quit dirty power sources, the study found.

Less than half of the firms (48 per cent) have a strategy to help customers to reduce emissions but none of the companies have set measurable targets to encourage low-carbon alternatives.

It also found scant interest among these companies to experiment with cleaner fuels or electrification. On average, 0.3 per cent of transport-related revenues have been invested in research and development into low-carbon solutions and power sources such as electric vehicles and sustainable aviation fuels.

Vicky Sins, World Benchmarking Alliance’s decarbonisation and energy transformation lead, said the report showed that the transport sector needed to “step up” climate action, which will require collaboration across the sector to scale up solutions.

“The large-scale change needed cannot be achieved without every company getting actively involved across their business – from research to customer advice to support for low-carbon policies and regulation,” she said.

“It is no exaggeration to say the future of our world will be significantly shaped by how these companies translate pledges into action,” she said. 

Top transporters

A ranking of carbon reduction progress made by transport firms was topped by an Asian firm, ComfortDelGro.

The Singapore-headquartered bus, taxi, rail and car rental firm company has set multiple targets to align with 1.5 degrees Celsius of warming which cover all its emissions and developed a detailed plan to transition to low-carbon energy sources.

French postal service company La Poste ranked second. The firm has slashed its emissions by electrifying 38 per cent of its fleet.

British bus operator FirstGroup and Dutch rail company NS Groep ranked third and fourth, while Danish shipping giant Maersk was positioned fifth.

Maersk, which brought forward its net-zero target to 2040 at the start of this year, was one of the only firms with a policy to engage trade associations on climate issues.

‘Millions at risk’

Transport companies are arguably further behind on measures to protect workers as the sector decarbonises than cut emissions.

The report finds a “striking and systemic” lack of action to mitigate the social impacts of decarbonising, with every company in the study scoring zero on planning to ensure the transition to low-carbon transport is just and fair.

This places a workforce of around 10 million people who work for the firms featured in the study at risk.

The research finds a gulf between the commitments companies have made to respect human rights and provide decent work and the processes they have in place to ensure they are effective in practice.

While 43 per cent of firms have a human rights policy commitment, only 3 per cent have an effective human rights due diligence process in place.

Only one company in the 90 in the study, British bus operator FirstGroup, has made public commitments to provide training for workers displaced by the low-carbon transition. 

Sins said: “Transport companies are vital to connecting people and goods globally but they cannot thrive unless the places and people around them are thriving too.”

Eco-Business management sits on the board of ComfortDelGro.

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