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As the EU Corporate Sustainability Reporting Directive (CSRD) raises the bar for emissions accountability, manufacturers must navigate the complexities of Scope 3 reporting. Logistics parks are emerging as a key solution and a holistic approach to decarbonising supply chains. David Ziller, vice president of Brookfield, explores how these hubs are transforming ESG practices while driving regional economic growth.

Today, food and beverage manufacturers operating in Europe are required to report on their Scope 1 and 2 emissions. Direct emissions from gas ovens and company-owned vehicles, for example, and indirect emissions that come from the energy that a company buys and uses, for example to power lights, heating and cooling or electric appliances.

However, the incoming EU Corporate Sustainability Directive (CSRD) is set to increase supply chain accountability for environmental risks, alongside social. There will be a new layer to emission reporting, with companies required to also report on their Scope 3 emissions.

The requirement for reporting on leased assets

Scope 3 emissions cover indirect emissions that occur in upstream and downstream activities from assets they do not own or control. So, while many food and beverage manufacturers own their own factories, this could include the emissions from leased assets such as storage warehouses and distribution centres. This means they will need to have a firm understanding of the green credentials of the logistics spaces they occupy and feel empowered to work with their landlords for improvements.

With businesses assessing the energy efficiency of their leased logistics infrastructure, there may be an initial focus on the retrofits – such as low-energy lightbulbs and solar power – that landlords can make to improve their EPC or BREEAM credentials.

While these are of course key performance indicators that should be improved, a true solution to minimise both indirect and direct carbon emissions requires a more holistic approach, not just focusing on the end goal of achieving certifications for premises as standalone structures.

The food and beverage sector needs to broaden its mindset around how its supply chain and logistics infrastructure can support wider environmental goals. As more stringent reporting measures come into force, this will be essential in remaining compliant and competitive.

Logistics parks power decarbonisation efforts

In Europe, we’re seeing a major shift in how food and beverage organisations run their logistics operations. One trend is the rise of regional logistics parks – major sites where multiple tenants operate in a cluster of warehouses that are strategically located close to transport networks and end-users.

Numerous tenants in adjacent warehouses can share the same energy-efficient infrastructure and resources. This may include efficient geothermal systems, on-site solar power facilities which feed excess energy back to the grid, and electric vehicle charging stations, as examples.

In addition to shared resources, parks create an ecosystem of tenants that fulfil different roles within the supply chain. If a company’s fulfilment warehouse is located near a transportation supplier, for example, they can reduce journeys for better Scope 1 and Scope 2 credentials.

AB InBev is an example of a business that is improving its environmental footprint through this considered approach to logistics. Last year the business took a nine-year lease on warehousing space at the e-Valley logistics park in Northern France which allows it to work closely with its third-party logistics provider, ID Logistics, also based on the park. The move to e-Valley has allowed AB InBev to shorten its supply chain to deliver faster and more efficient deliveries.

Operating on a logistics park with an investor partner can also unlock solutions beyond real estate such as technology or capital requirements for energy transitions through sister businesses to comprehensively support food and beverage manufacturers as they decarbonise supply chains.

Delivering social impact

Logistics parks not only enable businesses to reach environmental goals, but also support the social aspects of ESG principles.

Typically, parks are based away from major urban centres and are therefore an excellent driver of job creation and value in regional areas. As logistics roles are varied in hours, responsibilities and seniority, operating from a park creates diversity for the labour market and is invaluable for local communities. Additionally, logistics parks often have on-site recruitment and training services that tenants can utilise to source new talent and upskill existing roles easily.

Other amenities arise because of the high density of employees, such as restaurants and childcare, which makes employment with a park tenant attractive as an employer and improves the park’s surrounding areas. Businesses that operate from logistics parks also benefit from surrounding infrastructure, such as new public transport or cycling routes for the convenience of staff.

Logistics parks and the future of ESG

For food and beverage manufacturers looking to gain better oversight and control within their supply chains, logistics parks could be the answer. These neighbourhoods of warehouse infrastructure and shared services offer the bigger picture solution leaders need to decarbonise supply chains and are a must for a cleaner future of logistics compared to fragmented sites. They also deliver social impact for communities by boosting local employment and the economy.

As a result, we expect to see more businesses turning to these developments, which are expanding rapidly in Europe, as firms futureproof by committing to upholding high ESG standards and practices.