As many corporate relocation teams reevaluate their policies, there a few emerging trends that have come to the forefront post pandemic. Cost control is top of mind for many as the economy teeters on the brink of unchartered territory; but flexibility, DE&I and sustainability are also part of the conversation.
With the focus on sustainability, many question if eliminating household goods shipping makes a relocation program more sustainable.
As investors pressure organizations to report on environmental, social and governance (ESG) metrics, mobility leaders have an increased focus on sustainability. The axiom that global mobility only touches 1-2% of the total workforce might suggest a greater imperative for companies to focus on more carbon intensive areas of its activities such as business travel. Nevertheless, teams supporting employee relocations are seeking to make a positive contribution to sustainability efforts in great numbers.
Household goods shipping, a staple policy provision for decades, came sharply into focus during the pandemic years as a result of steep escalations in international shipping costs compounded with delays in transit times. Corporate relocation specialists responded with agility, flexing policies to provide alternatives to household goods shipments.
Thriving in the live test environment, global mobility professionals have a strong case to make 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 imagery of 400 meter long, diesel-guzzling cargo ships reinforces the perception that a shipping provision damages the green credentials of any forward-thinking 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 demonization of household goods shipping as an enemy of budgets and sustainability has met with little challenge and even less scrutiny. Rather than making policy changes in the name of sustainability based purely on supposition, here we discuss the specific carbon contribution of household goods shipping and some solutions that can soften the environmental impact. Hopefully, it facilitates a more nuanced discussion that results in better informed policy formulation.
At surface level, household goods shipments seem to be a good place to start in reducing the carbon intensity of any employee relocation policy. In the wider global economy, the shipping industry is responsible for around 940 million tons of CO2 annually. Greenhouse gas emissions from international shipping activities currently account for 3% of global emissions. Currently, 80% 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.
Furthermore, few corporate moving professionals are aware of the positive changes already implemented by the International Maritime Organization (IMO) and the scale of their publicly stated future ambition. On January 1, 2020, a new limit on the sulfur content in the fuel oil used on board ships came into force.
Known as “IMO 2020”, the rule limits the sulfur in the fuel oil used by ships operating outside designated emission control areas to 0.50% m/m (mass by mass) –a significant reduction from the previous limit of 3.5%. The IMO’s goal is to reduce CO2 emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008.
A swathe of companies are choosing to pivot away from providing a shipment at all in favor of 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 around approximately 47 kilograms of CO2 equivalents.
Some organizations are seeking to mitigate this by providing rental furniture where products are rented anywhere from two to six times, for a total of three to four years on average. This is potentially a shorter lifecycle than many consumers would expect from their own furniture.
And it’s worth noting that these options don’t always provide the best employee experience as many household items provide a sense of comfort and familiarity when employees are moving their families to foreign lands.
If a company is serious about decarbonizing its policies, it needs specific solutions that can be easily incorporated into any global mobility program.
Many corporate relocation providers have recently been drawn to discard and donate services as a way to lessen the environmental impact of shipping. This involves hiring professionals to help sort, organize and remove household items prior to an employee relocation. Not only does it reduce the overall cost of a move, but it also lessens the overall carbon footprint of shipping by eliminating cardboard and packing material and saving fuel with reduced loads.
An initial consultation can be done virtually, which is often the preference for international household goods shipment surveys these days. When it’s time for the move, the discard and donate professionals arrange for unwanted items to be picked up and donated to charity. Any goods that can’t be donated will be disposed of appropriately.
The pre-assignment visit is one area where the carbon footprint can be significantly reduced simply because it eliminates the most carbon intensive activity of travel. This is certainly one area where a number of firms have already eliminated both carbon and cost from their program. 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 30 kg CO2e. Multiply that by a typical policy provision of 30 nights and you’re almost within 100 kg of a 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.
Over time, procuring relocation services has become a more complex process due in part to the greater demands organizations place on their suppliers to support them in meeting sustainability targets. Suddath forms part of the vanguard of corporate moving companies looking to make a positive change within our industry.
EcoVadis provides accreditation to organizations, like Suddath, who are 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 that the average shipment uses around 100 cardboard cartons with a carbon footprint of around 50 kg.
As of 2021, we have reduced waste by 18 tons and recycled another 130 tons of other materials. We also saved 335,451 pounds of carbon emissions by conducting more than 18,871 video surveys, and our commitment to lessen our environmental impact even more continues.
Global 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 both daring and visionary. Partnering with a household goods mover with well-documented sustainability initiatives is a great first step in making your employee relocations more sustainable. Suddath’s relocation experts are here to educate and guide you on best practices.
To learn more about our sustainability initiatives, read the Suddath CSR Brochure.