As climate change has been raised as an international social issue, responses at the corporate and national levels are becoming as urgent as individual efforts. As administrative regulations, such as the greenhouse gas Target Management System (TMS) and Emission Trading System (ETS), have been reinforced, and the energy paradigm has changed, companies are required to tackle climate change as an important task. CJ Logistics also participates in achieving the goals of the international community, recognizing the risks posed by climate change and sparing no effort or investment to transform into a low-carbon business.
CJ Logistics has released the ‘Climate Change Response Report (CJ Logistics Net-Zero Report 2022),’ which contains the company’s goals and core strategies to respond to climate change, for the first time in the logistics industry. Through the report, we announced “Net-Zero” pledges to achieve carbon neutrality by 2050 and announced a mid- to long-term ESG strategy for this. The ESG management slogan announced through the report is “We Deliver the Sustainable Future,” which contains CJ Logistics' aspirations to create a sustainable future in logistics.
'Net-Zero' refers to cutting real gas emissions to zero by minimizing the amount of the greenhouse gas being produced and absorbing the greenhouse gas remaining in the atmosphere. The first step for achieving net-zero emissions is to measure and analyze how much greenhouse gas is emitted.
A company's carbon emissions are classified into Scope 1, 2, and 3 depending on the scope and nature of the measurement. Scope 1 is a direct carbon emission on the production stage, Scope 2 is an indirect carbon emission from the process of using energy, electricity, power, etc. Scope 3 includes all carbon emissions issued in the entire process of the corporate value chain. In the past, the focus was only on carbon neutrality in scope 1, but as global companies, such as Google and Apple, join 'RE100 (a campaign to obtain 100 percent of the electricity needed for business activities from renewable energy),' carbon emission regulations also keep expanding to scope 3.
The domestic carbon emissions of CJ Logistics in 2021 announced through this report are at approximately 22.8 million tCO2eq (carbon dioxide conversion ton). As a result of analyzing the business areas where greenhouse gases are mainly emitted, due to the nature of the logistics business, carbon emissions from the use of transportation means, such as trucks (Scope 1), accounted for the highest portion, and carbon emissions from power consumption in facilities, such as logistics centers (Scope 2), were also found to account for a large proportion.
Carbon emissions were analyzed to be approximately 310,000 tCO2eq when expanding to indirect emissions (Scope 3) from the business value chain, such as raw material procurement, transportation and logistics, and product use and disposal. CJ Logistics is the first in the industry to measure and disclose Scope 3 and plans to continue to manage the entire supply chain value chain in the future.
CJ Logistics continuously plans to increase investment in buildings and vehicles to establish carbon reduction targets and is benchmarking various activities for reducing carbon emissions and building strategies for reducing greenhouse gas emissions based on the analysis. Starting with the external declaration through this net-zero report, we will establish a company-wide response system and strengthen our executive power to reduce carbon emissions by 37% compared to 2021 by 2030 and will have achieved carbon neutrality by 2050.
The main reduction targets are divided into vehicles and facilities. Transportation, which is a main source of emissions, will turn toward more eco-friendly methods, such as electric and hydrogen cars, establishing a carbon zero transportation system. Optimal transportation routes will also be added to improve delivery efficiency. In terms of facilities, renewable energy to reduce the carbon emissions, such as solar energy system, will be introduced to the distribution centers first and carbon zero buildings will be established. Also, the effort to reduce greenhouse gas emissions will be continued through innovations, such as smart architecture, using 4th industrial technologies, such as AI and IoT.
CJ Logistics has established the process to respond to the expected climate crisis when abnormal weather events occur due to the temperature rising based on global temperature change scenarios. To act beforehand on the risk due to climate change, such as heat waves, typhoons, cold waves, etc., a precautionary action system has been reinforced by distributing guidelines by topic and checklists for each worksite to use and introducing the EHS system to take steps about its results. Plus, when an accident occurs, a prompt follow-up measure is taken depending on the type and level of the accident through the Accident Report Sharing system, meaning that an immediate response is possible. After an accident, we strive to minimize any financial impact by establishing and implementing measures to prevent recurrence.
CJ Logistics newly established the ESG Committee under the Board of Directors in May of last year to make decisions on key issues related to overall ESG risk management and climate change response. In addition, a management consultative body and a working-level consultative body have been formed and are in operation under the ESG Committee, and efforts have been made to respond to climate change by carrying out ESG strategies and monitoring performance through regular reports four times a year. CJ Logistics' activities to respond to climate change are linked to activities to reduce carbon emissions and energy consumption, and major issues related to climate change responses are made at the board of directors.
So far, we have looked at CJ Logistics' mid- to long-term ESG strategy to respond to climate change. As an innovative logistics company shaping the future of logistics and a global SCM solution company, CJ Logistics will continue in its efforts to join the global community by achieving goals.
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