Our key takeaway: As a major driver and facilitator of economic activity, not to mention a significant source of greenhouse gas emissions, the transport sector has a crucial role to play in meeting global net-zero emissions targets. However, the World Benchmarking Alliance’s latest benchmark finds that the sector as a whole isn’t pulling its weight. Many companies lack sufficiently detailed net-zero plans; companies are failing to use their expertise and industry platform instead being nudged along by other stakeholders; new technology in the transport sector is not being developed at the pace or scale needed to halt the climate crisis; companies are not applying a just transition lens to their efforts; and very few transport companies conduct effective human rights due diligence that underpins the just transition.
The World Benchmarking Alliance released the results of its latest study, the 2022 Climate and Energy Benchmark on the Transport Sector (October 2022). The Transport Benchmark assesses 90 keystone transport companies that have a disproportionate influence on achieving the Paris Agreement goals and the SDGs. Some key findings are below:
- Human rights due diligence and just transition are crucial underpinnings to achieving net-zero goals: The report finds that “a minority of transport companies demonstrate effective human rights due diligence – without adequate priority for human rights and decent work practices, a just transition will not be possible.” Decarbonisation should occur in a fair, just way that brings all people along, especially the most vulnerable. “Beyond the 10 million or so people estimated to be directly employed by the 90 assessed transport companies, millions more are likely to be affected through the operations and supply chains of these companies.” The benchmark shows that only 43% of the transport companies have a human rights policy commitment, and only 3% have an effective human rights due diligence process. The benchmark also reveals “a striking and systemic lack of action by companies to prepare for and mitigate the social impacts of decarbonising. Alarmingly, all companies score 0 on just transition planning, placing a workforce of around 10 million people at risk.”
- Not enough corporate leadership; meanwhile new technology is not a panacea: Transport companies should be driving leadership, instead of being pulled along by other stakeholders. The sheer market capture and economic reliance on the transport sector gives these companies plenty of leverage and a large field in which to explore innovative climate solutions. “66% (59) of the 90 assessed companies do not engage with suppliers on environmental issues beyond integrating climate change issues into the supplier code of conduct. A sector that is all about connection needs to show leadership in collaborating with other sectors and stakeholders which will enable its low-carbon transition.” The report also points out that we can’t rely on new technology—“current research and development investments in emerging, unproven technologies and new business models in the transport sector”—to close the emissions gap in time. WBA finds that, based on the available data "on average only about 0.3% of total transport-related revenues are reinvested in low-carbon technology and fuel R&D.” Far more investment would be required to reach the 1.5°C goal of the Paris Agreement.
- Net-zero plans lack sufficient detail: The benchmark reveals that, although more than half of transport companies have set long-term net-zero targets, “their low-carbon transition plans lack detail, depth and intermediate targets.” For example, while 51% of the companies have set net-zero targets, only four have 1.5°C targets validated by the Science Based Targets initiative (SBTi). In addition, “[o]f the companies with net-zero targets, 50% (23) have not conducted scenario analysis, 65% (30) do not include any financial details in their transition plans and 87% (40) have not set any targets between 2030 and their targeted net-zero year.” More detailed roadmaps are needed to set transport companies on the path to net-zero.