Stuart Jackson, account director at Sterling Lexicon, discusses the impact of mobility programme policy changes on the shipment of household goods – which may not be what you think
Policy revision is sitting close to the top of the list of 2023 new year’s resolutions for many corporate global mobility teams. No doubt much of the focus will be on the emerging trends in post-pandemic global mobility, chiefly: flexibility, cost control, DE&I, and sustainability.
Increasing pressure from investors to report on environmental, social and governance (ESG) metrics has led organisations to focus increasingly on many aspects of how they do business, with sustainability high on the list of priorities.
The axiom that global mobility only touches one or two per cent of the total workforce might suggest a greater imperative for organisations to focus on more carbon-intensive areas of its activities such as business travel. Nevertheless, many global mobility teams are seeking to make a positive contribution to their organisation’s sustainability efforts.
Household goods shipping, a staple policy provision for decades, came sharply into focus during the pandemic years because of the eye-watering rise in international shipping costs compounded by delays in transit times. Corporate global mobility responded with agility, flexing policies to provide alternatives to household goods shipments.
Thriving in the live test environment, GM professionals have a strong case that alternative options to household goods shipping should remain part of the policy suite. Among these arguments is the hypothesis that the alternatives to household goods shipping have a less detrimental impact on the environment.
The image of 400-metre long, diesel-guzzling cargo ships reinforces the perception that a shipping provision damages the green credentials of any forward-thinking global mobility approach, setting it squarely in the crosshairs of policy re-writers and a phalanx of thought leaders.
However, in the race to go green, the demonisation of household goods shipping as both costly and ‘anti-sustainability’ has met with little scrutiny. Making policy changes in the name of sustainability based purely on supposition risks unintended consequences, such as ignoring the carbon contribution of other relocation benefits or shipping alternatives.
In this article, we attempt to demonstrate the specific carbon contribution of household goods shipping and contrast it with that of other relocation elements. We hope this can lead to a more nuanced discussion with the aim of better informed and considered policy formulation.
The global impact of shipping
Household goods shipments do, superficially, seem to be a good place to start in reducing the carbon intensity of any relocation policy. In the wider global economy, the shipping industry is responsible for around 940 million tonnes of CO2 every year.
Greenhouse gas emissions from international shipping activities currently account for three per cent of global emissions. Currently, 80 per cent of global trade by volume is transported by ship; however, it is important to bear in mind that shipment of personal effects makes up a very small percentage of the total volume.
Few global mobility professionals are aware of the positive changes already implemented by the International Maritime Organization (IMO) and the scale of its publicly stated future ambition.
On 1 January 2020, a new limit on the sulphur content in the fuel oil used on board ships came into force. Known as IMO 2020, the rule limits the sulphur in the fuel oil used by ships operating outside designated emission control areas to 0.50 per cent m/m (mass by mass) – a significant reduction from the previous limit of 3.5 per cent.
The IMO’s goal is to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40 per cent by 2030, aiming for 70 per cent by 2050, compared with 2008.
Moreover, if global mobility is serious about decarbonising its policies, it needs to move from the general to the specific, which isn’t as easy it might seem. There is a wealth of different calculators available on the internet that can be used to estimate the carbon impact of a shipment, with results sometimes varying substantially.
In part, this can be caused by calculations looking at different noxious gases and measuring another part of the lifecycle of an activity (for example, well-to-wheel vs tank-to-wheel emissions where shipping is involved). This is what Mike Berners-Lee refers to in his enlightening book How Bad Are Bananas?: The carbon footprint of everything, as the distinction between ‘direct’ and ‘indirect’ emissions.
Shipping vs flying and the impact on home leave
For the purposes of this calculation, we’ve used Freightos as a reputable industry source. According to Freightos, the well-to-wheels impact of a 20ft container moving from London to New York is 543.82 kilograms of CO2 equivalent (CO2e). To put this into context, flying from London to New York and back generates around 2,863 kg CO2e. So, the carbon impact of the shipment is 38 per cent of the assignee flying to New York and back.
Assume that a couple go on a three-year assignment that, by policy, entitles them to two home-leave trips. The total flight impact reaches in excess of 17 tonnes CO2e.
Bear in mind that the average person living in a developed nation has a carbon footprint of somewhere in the region of 13 tonnes per annum. Surely then, the most impactful decision global mobility can make from a policy formulation perspective would be to remove home leave as a benefit in its entirety.
Similarly, because of the excessive impact air travel has on the environment, it would be appropriate to remove any air shipment provision from mobility policies, replacing it with an excess baggage allowance that would be relatively less impactful.
Clearly, the example being used here has been chosen to make a point. The carbon impact of moving a container by road across a continent is likely to be higher, while the travel impact will be lower, especially if the company travel policy promotes travelling by train rather than plane.
Incidentally, the CO2e impact of travelling in France on a train powered by nuclear electricity is 22g per mile compared with 80g for a standard-class intercity in the UK. Travelling from London to Paris by train therefore has an impact of around 9kg.
Nevertheless, organisations need to perceive whichever policy choices they make as a conscious reduction, preferably with some data attached to them, as any form of mobility and policy alternatives carry a carbon cost to them, as I go on to explain.
Discard and donate
Many organisations have recently been drawn to discarding and donating services to lessen the overall carbon footprint of shipping, and there is some merit in reducing the size of the shipment, if for no other reason than to reduce the quantity of packing materials required.
The weight of the shipment tends to become a greater factor when moving goods by road as opposed to ocean freight. The question global mobility professionals must ask themselves, however, is whether the carbon footprint of using this service is offset by any carbon it saves.
Clearly an initial consultation can be done virtually by video call, as is often the preference for international household goods shipment surveys these days. However, any discarded or donated items still need to be collected from the property by truck, sorted and categorised and then taken to their final destination to be donated for a future life or discarded at a recycling centre or into landfill, which has its own carbon impact.
There is, of course, a counter argument to suggest that even discarding into landfill has a lesser impact on the environment than shipping items, which will ultimately be dumped in the host location.
Furniture allowances
A number of companies now choose to pivot away from providing a shipment at all, instead offering a furniture allowance in its place. This brings some positive policy benefits from the perspective of employee choice and, to a lesser extent, cost (freight prices are falling from their pandemic-induced peak).
However, the environmental impact of acquiring new furniture shouldn’t be underestimated. A report conducted by My Tool Shed, suggests the average piece of furniture generates approximately 47 kilogrammes of CO2 equivalents. Sofas generate around 90kg of CO2e, sofa beds 88kg, desk chairs 72kg, wooden filing cabinets 48kg and armchairs 43kg. So, broadly speaking, 12 items of new furniture would exceed the CO2 impact of shipping goods one way in a 20ft container.
When we consider then that the assignee may need to purchase at least some new electronic goods, the impact continues to rise. Again, in general, the CO2 equivalent of manufacturing these goods is: TV 320kg, washing machine 250kg, tumble dryer 230kg, fridge 200kg, and a dishwasher 200kg.
Some organisations are seeking to mitigate this by providing rental furniture where products are rented anywhere between two and six times, for an average of three or four years. This is potentially a shorter lifecycle than many consumers would expect from their own furniture.
The pre-assignment visit and temporary accommodation
The pre-assignment visit is one area where a carbon footprint can be significantly reduced, simply because it eliminates the most carbon-intensive activity of travel. This is certainly one area where some firms have already eliminated both carbon and cost from their programme.
That said, there is a counter argument to suggest that any attempt to reduce the amount of time an assignee spends in temporary accommodation will have some impact. Berners-Lee indicates that a night in a hotel with average eco credentials has an impact of 30kg CO2e. Multiply that by a typical policy provision of 30 nights and you’re almost within 100kg of the shipment from London to New York and back. If an assignee can identify rental accommodation early in the process and move into it more or less on arrival, there is an opportunity to limit the overall carbon impact.
Leveraging the settling-in programme
Much of the discussion around making mobility programmes more sustainable centres on removing or replacing support services. This is a logical step as removing any human activity will, as a rule, create a carbon impact.
An alternative approach is to adapt an existing relocation service to purposely encourage behaviour change. Settling-in programmes have historically remained flexible to meet the interests and needs of the assignee, with a few notable location exceptions, where onerous administrative regulatory tasks soak up a lot of the time allocation.
Some innovative organisations with sustainability in mind have taken a more prescriptive approach to the settling-in agenda to ensure that the assignee and their family are provided with detailed information relating to sustainability. This might include: providing detailed information about what items can be recycled at home and which need to be taken to a recycling centre; information on recycling symbols; cycle hire; public transport routes; car share schemes; and so on.
What is your provider doing to help?
Over time, procuring relocation services has become a more complex process due in part to the greater demand organisations place on their suppliers to support them in meeting sustainability targets.
Sterling Lexicon forms part of the vanguard of relocation services companies looking to make a positive change within our industry. EcoVadis offers accreditation to organisations such as Sterling Lexicon which is taking proactive steps towards engaging in sustainable practices.
We are leading discussions on industry-wide schemes to re-use packing cartons, measure the impact, and certify this to our customers and clients. We estimate the average shipment uses around 100 cardboard cartons with a carbon footprint of some 50kg. If we multiply that up by the 30,000 shipments Sterling Lexicon manages in a year, we reach a total of 1,500 tonnes CO2e.
If just a quarter of the cartons we use in each shipment have been used before, we can reach an annual CO2e saving of 375 tonnes. Imagine the size of the reduction if every provider bought into the programme industry-wide.
We hope that the totality of the incremental changes we are working on will add up to make a big change.
Can we really measure the carbon impact of our programme to make informed decisions about policy changes and the impact of an individual assignment?
The good news for global mobility professionals is that we are now starting to see the emergence of specific tools developed to measure the carbon footprint of an international assignment. Having such data available might support organisations to make more informed decisions about the most effective use of workforce deployment to address a business need.
The test for such tools will undoubtedly be their effectiveness – or even transparency – in measuring all parts of the relocation or assignment process. For example, engaging with an RMC, immigration provider, tax provider, and so on, all generates a carbon footprint, as their staff commute to an office, send and receive emails, and use data centres to store information.
However, this incremental carbon creation needs to be set in the much broader context of the carbon footprint of an international assignment. Air travel is by far the most carbon intensive activity any mobile workforce undertakes and the extent to which global mobility can influence the volume of travel and mode of transport will have a disproportionately high impact on the carbon footprint of the organisation.
Global mobility can play a significant role in educating the business on the carbon impact of its activity and providing guidance on ways to minimise it. Unquestionably, the business and global mobility will at different points need to take tough decisions where the business requirement, employee experience and sustainability come into direct confrontation. For example, commuter assignments and hybrid short-term assignments (where an employee supplements international remote working with frequent business trips), need to be assessed for their carbon impact and compared with other options.
Supporting the business in understanding the innate carbon consequences of its activities and providing viable solutions to minimise the impact is a mantle global mobility must continue to grasp. Mobility has proven that it can be agile and flexible over the past few years, but the climate crisis presents an opportunity for it to be daring and visionary.
Dare it set an annual mobility carbon budget and still act as an enabler to the business? The starting point, inevitably, is to start adopting an evidence-based approach to assessing the sustainability credentials of a global mobility programme.
About the Author
As Account Director at Sterling Lexicon, Stuart focuses on working with clients to optimize their global mobility solutions. Stuart has worked in global mobility for 23 years. His broad experience of working with different programme sizes across a variety of industry sectors helps to bring success to clients’ programmes and wider business strategies. If you would like to discuss any of the points raised in this article or learn more about Sterling Lexicon, please do not hesitate to contact Stuart Jackson at stuart.jackson@sterlinglexicon.com
