Environment

Climate protection in the focus of our operations

The main environmental impact of our business activities is caused by logistics-related greenhouse gases (GHG), which contribute to climate change. The EU also classifies the transport sector as energy-intensive (high climate impact sector). Within the framework of our ESG Roadmap, we have defined measures and ambitious targets to minimize these effects, to realize opportunities and to avoid risks.

Medium-term target: We have set ourselves a target of reducing our logistics-related GHG emissions to below 29 million metric tons of CO₂e by the year 2030. In addition to our own GHG emissions in Scope 1 and Scope 2, we also include the Scope 3 emissions from upstream transportation and distribution (category 4), fuel- and energy-related activities (category 3) and business travel (category 6) in this target.

This target was developed based on the requirements of the Science Based Targets initiative (SBTi) and supports global efforts to limit global warming in accordance with the Paris Agreement of the United Nations. The SBTi verified the following subtargets in this regard and assessed them as aligned with limiting global warming to 1.5 degrees Celsius: using 2021 as the base year, DHL Group has committed to reducing its direct net GHG emissions from the use of fuels and the indirect emissions from purchased energy (Scopes 1 and 2) by 42% by the year 2030. Logistics-related Scope 3 emissions from fuel- and energy-related activities, upstream transportation and distribution and business travel are to be reduced by 25% by 2030. The interest rate of our first sustainability-linked bond is linked to these subtargets.

The use of sustainable fuels is a significant focus of our climate protection activities. The reduction effects generated through these measures offer us the opportunity to implement climate protection directly in the transport sector and in our supply chain in a targeted manner. As part of this, fossil fuels are replaced by either the direct use of certified sustainable fuels or the documented use thereof (book and claim). This makes a positive impact on our target calculation. To calculate the market-based effects, we use the guidelines of the Voluntary Market Based Measures Framework for Logistics Emissions Accounting and Reporting published by the Smart Freight Centre.

Long-term target: We want to reduce the GHG emissions of our logistics services to net zero by 2050. That means we will use active reduction measures to reduce these emissions (Scopes 1, 2 and 3) down to an unavoidable minimum, which is to be fully compensated for with recognized countermeasures (excluding offsetting).

DECARBONIZATION TARGETS

Million metric tons of CO₂e

1 Includes the effect from the acquisition of the Hillebrand Group in the 2022 fiscal year, recognized starting in the 2022 Annual Report. 

2 Market-based method.

3 Includes the Scope 3 categories 4 (upstream transportation and distribution), 3 (fuel- and energy-related activities) and 6 (business travel).

Implementing climate objectives

For achieving our goals by 2030, we plan to spend up to an additional €7 billion to expand the proportion of sustainable fuels and technologies in our fleets and buildings. We round out this package of measures with a range of specifically environmentally friendly products: GoGreen Plus enables our customers to make a conscious decision for sustainable transport solutions or the use of sustainable fuels. This approach allows us to uphold our responsibility to the climate and the environment.

The central climate protection activities are developed in the Department Chief Executive Officer and Group guidelines are adapted accordingly or drafted and implemented throughout the Group. The Department Finance collects environmental data, monitors progress toward goals, assesses opportunities and risks and carries out internal and external reporting, embedded in the internal control system.

Our orientation with regard to climate and environmental protection is set out in Group policies: in the Code of Conduct and the Supplier Code of Conduct, in the Environmental and Energy Policy and the internal policies for sustainable fuels and procurement processes. In the year under review, the Environmental and Energy Policy was completely revised and adapted in line with the ESG Roadmap.

In addition, together with our subcontractors, we work as part of a wide range of initiatives to develop sustainable fuels and technologies in order to reduce fuel consumption and lower GHG emissions. This also enables us to procure the consumption and emissions data necessary for subcontractor management. The Clean Cargo Initiative of the global shipping industry and our internal Green Carrier Certification for road freight are examples of this.

Risks arising from climate change

Opportunities and risks arising from climate change were assessed using a scenario analysis according to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This involved applying the Representative Concentration Pathways (RCPs) of the Intergovernmental Panel on Climate Change including average warming of the planet by less than 2, more than 2 or more than 4 degrees Celsius through the year 2100 to assess physical risks that could result from a rise in ocean levels, for instance. For transitory risks, we used the sustainable development scenario of the International Energy Agency.

Together with the respective Board of Management members responsible for the divisions, as part of the financial and nonfinancial risk assessment, we also analyzed and evaluated the possible effects of climate change on our business models, strategy and operational business as well as our mission of achieving net zero GHG emissions by 2050. Moreover, the assessment of locations with increased physical risk was confirmed.

This results mainly in transitory risks for the Group, particularly with regard to GHG emissions: operational limitations due to stricter regulation (carbon taxes and levies) as well as the lack of availability of sustainable fuels for air transport (sustainable aviation fuels) and energy from renewable sources.

Progress in decarbonization

The management of our measures is focused on the development of net logistics-related GHG emissions (GHG emissions) and the GHG emissions avoided by the company’s own decarbonization measures. Our calculation for this includes the entire process chain for generating and supplying energy for transport with the Scope 3 categories 4 (upstream transportation distribution), 3 (fuel- and energy-related activities) and 6 (business travel) of the GHG Protocol (well-to-wheel). The other Scope 3 categories not directly related to logistics are not taken into account as part of our medium-term target.

The calculation of Scope 1 GHG emissions takes the use of sustainable fuels into consideration on the basis of amounts purchased. For calculating Scope 3 emissions, we use an activity-based calculation model that also accounts for fuel amounts and reduction measures documented by transport companies. In the Scope 1 and 3 GHG emissions, reduction effects from market-based processes are also included that represent a substitution of fossil fuels – without direct physical procurement of the fuels – documented by means of certificates (book and claim).

The GHG emissions are the result of the modes of transport and are broken down as follows: 68% air, 24% land and 7% ocean (previous year: 69% air, 22% land and 8% ocean); buildings still contribute 1%. In the year under review, GHG emissions fell by 9.1% to 33.27 million metric tons of CO₂e. The Scope 1 net and Scope 2 (market-based method) GHG emissions decreased by 0.8% to 8.30 million metric tons of CO₂e; the net Scope 3 emissions decreased by 11.5% to 24.97 million metric tons of CO₂e.

The decrease in GHG emissions is primarily influenced by the declining development of shipment volumes. Realized Decarbonization Effects from our measures of 1.3 million metric tons of CO₂e (previous year: 1 million metric tons of CO₂e) made a reduction contribution, meaning we achieved our target for the year under review. As part of this, the use of electricity from renewable sources, the electrification of our pickup and delivery fleet and fueling with sustainable fuels and/or the voluntary blending in the distribution networks used had an emissions-reducing effect.

An additional reduction of 128 metric kilotons of CO₂e results from the statutorily mandated blending of biofuels (previous year adjusted: 140 metric kilotons of CO₂e) that is not included in our Realized Decarbonization Effects. The burning of biomass (biological material made up of carbon, hydrogen and oxygen) resulted in emissions in the amount of 787 metric kilotons of CO₂e (previous year: 538 metric kilotons of CO₂e) that are not attributable to Scopes 1, 2 and 3 under the GHG Protocol. In the year under review, GHG intensity was 407 grams of CO₂e per € of revenue (previous year adjusted: 387 grams of CO₂e per € of revenue).

Using sustainable technologies and fuels

The focus of our measures remains mainly on the modes of transport using the most fuel and generating the most emissions, namely air and ocean freight and road transport, and further increasing the electrification of our fleet of pickup and delivery vehicles. We also invest in technologies to design our own new buildings to be climate-neutral. The share of sustainable fuels is to top 30% in air and ocean freight as well as land transport by 2030. In pickups and deliveries, 60% of vehicles used are to be electric vehicles. We want to design all of our new buildings to be climate-neutral.

Sustainable technologies and fuels are often more expensive than conventional technologies and fossil fuels. In the year under review, the additional expenses for decarbonization measures as a result of this increased by 55.6% to €442 million. This enables a reduction of around 1.3 million metric tons of CO₂e (previous year: 1 million metric tons of CO₂e), including 127 metric kilotons of CO₂e from market-based mechanisms. The share of sustainable fuels increased by 1.1 percentage points to 2.8% (previous year: 1.7%). In pickups and deliveries, we increased the share of e-vehicles used in the reporting period to 37.6%; the number of e-vehicles was around 35,200 (previous year: 27,800). We therefore made significant progress toward achieving our goal of reaching a share of 60% by 2030. At 97%, the share of electricity from renewable sources used was well above the level of the previous year (previous year: 94%).

We are also driving decarbonization with our portfolio of GoGreen Plus products. We enable our customers to make a conscious decision for sustainable transport solutions or the use of sustainable fuels. We already offer sustainable alternatives for around two-thirds of our classic product range. We also launched the DHL GoGreen Dashboard, a digital reporting platform for our customers that enables them to consolidate their GHG emissions across all modes of transport, with various options for displaying and breaking down the data.

As a supplement to GoGreen Plus, we still offer our customers offsetting products to compensate for their GHG emissions. However, in accordance with the GHG Protocol and for the presentation of the Realized Decarbonization Effects, this offsetting is not taken into account as an emissions reduction for the calculation of our own GHG footprint. In the year under review, certificates in the amount of 1.0 million metric tons of CO₂e were retired for the 2022 fiscal year.

Divisions drive decarbonization

Express was able to conclude further delivery contracts for sustainable aircraft fuels. Moreover, the modernization of the aircraft fleet for use on intercontinental and regional routes was continued and the network of partnerships with transport subcontractors was expanded further. Furthermore, Express continued with the expansion of its fleet of e-vehicles.

Global Forwarding, Freight concluded additional partnerships for insetting with sustainable fuels. Our Green Carrier Certification for transport partners creates transparency regarding the sustainability of our subcontractors. Around 1,000 Freight users already receive emissions reports; via myDHLi, we offer Global Forwarding users reports containing real-time data on air and ocean freight. Our customers are thus supported in achieving their own sustainability goals.

Supply Chain is driving the decarbonization of its supply chains with a portfolio of state-of-the-art, sustainable products for carbon-neutral storage, transport and packaging. In the year under review, a guideline for sustainable transports for relevant subsidiaries was introduced that describes the effective use of sustainable drive technologies and fuels in consideration of economic aspects. In addition, the focus was on the further expansion of carbon-neutral warehouses and sustainable transport. Some of our fueling stations in the Great Britain were converted from diesel to HVO (hydrotreated vegetable oil). In Ireland, biogas production is being expanded by partners to enable fueling trucks with sustainably produced gas.

eCommerce continues to focus on the expansion of the fleet of e-vehicles and the increased use of electricity from renewable sources. Delivery and pickup in the Netherlands are being made more climate-friendly through the increased use of HVO.

Post & Parcel Germany continued the expansion of its fleet of e-vehicles. In addition, further measures were tested to make transport between our locations more sustainable. Using gas-powered trucks (sustainably produced compressed natural gas – CNG) for longer transport routes was identified as a solution. Moreover, the portfolio of sustainable products was expanded. The CO₂e Sustainability Report offers business customers additional transparency regarding the GHG emissions caused by the transport of their national goods shipments.

Energy consumption and efficiency

Air freight is the most energy-intensive mode of transport in our business model. With continuous modernization processes in our own fleet and at our locations, we can have a positive impact on our energy consumption. For this reason, we are increasingly shifting transports to our own more efficient fleet and continuing to train the pilots in the use of energy-conserving flight maneuvers.

In the year under review, Group-wide energy consumption (Scopes 1 and 2) increased to 35,056 million kWh, while the use of energy from renewable sources was increased by 35.1% compared with the previous year. The transport sector is among the most energy-intensive sectors, which is why the so-called energy intensity is calculated on the basis of Group revenue. In the fiscal year, this figure amounted to 0.43 kWh per € of revenue (previous year: 0.37 kWh per € of revenue).

In the year under review, we were able to once again increase the share of electricity from renewable sources, which now comes in at 97% (previous year: 94%). Use is largely documented by means of certificates. The resulting savings in GHG emissions are reflected in the Scope 2 emissions (market-based method). In addition, we use the electricity we produce and purchase electricity from renewable sources directly via power purchase agreements.

Progress report on the sustainability-linked bond

Our sustainability-linked bond has an issue volume of €500 million and a term through 2033. The interest rate of the bond is linked to our medium-term target of reducing Scope 1 and 2 GHG emissions by 42% and Scope 3 GHG emissions by 25%.

For the validation process of our medium-term target by the SBTi, we had already taken into account the effect of the acquisition of Hillebrand Group on our logistics-related GHG emissions in our calculations for the 2021 base year. The acquisition was completed in the 2022 fiscal year and, since then, Hillebrand has been included in consolidation.

Logistics-related GHG emissions are undergoing declining development, in line with expectations. This trend is primarily the result of economic developments and our decarbonization measures. In the year under review, Scope 1 and 2 GHG emissions amounted to 8.30 million metric tons of CO₂e, and 24.97 million metric tons of CO₂e in Scope 3. This corresponds to an increase of 10.4% in Scopes 1 and 2, as well as a decrease of 23.7% in Scope 3, compared with the base year of 2021. The increase in Scope 1 emissions is due primarily to the shift of transports to our own efficient fleet, while the decrease in shipment volumes is reflected in the Scope 3 emissions. Additionally, our decarbonization measures are making an impact across all scopes.

PROGRESS MADE COMPARED WITH THE BASE YEAR

Million metric tons of CO₂e

1 The calculation takes the use of sustainable fuels into consideration on the basis of amounts purchased and reduction effects from market-based measures.

2 Market-based method.

3 Includes the Scope 3 categories 4 (upstream transportation and distribution), 3 (fuel- and energy-related activities) and 6 (business travel). Calculation is carried out on the basis of an activity-based calculation model and contains reduction effects from market-based measures.