… as Stephanie Hackenholt (SH) and Markus Flacke (MF) point out in this exclusive CargoForwarder Global interview. Both experts work for Lufthansa Industry Solutions, a member of the Lufthansa Group. The IT consultancy and system integrator supports customers across various industries in their digital transformation processes. Recently, the company widened its portfolio to also assist with sustainability transformation. This new strategic area includes the “Greening of IT” and “Environmental Footprint Reduction” technology, developed to improve its customers’ sustainability performance through intelligent waste reduction and energy consumption solutions. Both experts emphasize that the understanding of sustainability needs to go beyond the current focus on CO2 emissions. Stephanie and Markus use flowers as a particularly suitable example to illustrate Lufthansa Industry Solutions’ holistic approach.
CFG: Stephanie, roses are red, no matter if grown in Kenya or the Netherlands. But what about their carbon footprint, when sold in the European market?
SH: The first assumption might be that flowers from Kenya cannot be more sustainable than those grown in the Netherlands. We all know that air freight causes a lot of CO2 emissions, and this is how flowers from Kenya reach Europe. However, a study conducted by Fairtrade International, compared the environmental impact of roses, and the results are surprising. The carbon footprint of roses grown in the Netherlands is five times higher than of those grown in Kenya, which is mainly due to higher energy needs. So, when it comes to evaluating sustainability, we can't always rely on our gut feeling, but need to find ways to gather the necessary information that will allow us to make good purchasing decisions.
CFG: Lufthansa Industry Solutions’ sustainability approach goes well beyond greenhouse gas emissions. What other key components are you putting under the microscope to evaluate the
ecological footprint of flowers, for instance?
SH: Current discussions about sustainability focus on CO2 emissions, but sustainability encompasses more than that. The term ESG stands for the environmental, social and governance aspects that need to be considered when evaluating the sustainability performance of a company or product. This holistic view of various input parameters is challenging. In a recent article published in the Financial Times, many managers felt overwhelmed and under-equipped to provide comprehensive ESG transparency. Returning to our flower example, I can easily explain why this topic is so complex. A quick glance at the mere numbers shows that the carbon footprint is considerably higher in the Netherlands (see chart above). However, in Kenya, three times more water and six times more insecticides are needed to grow roses. This, of course, harms the environment and negatively affects wildlife. Which bouquet of roses would you choose now?
MF: What is becoming clearer these days, is that we are only at the beginning of a long journey. Currently, sustainability reporting is strongly fragmented and builds on disconnected data and KPIs: How high are your CO2 emissions? Are you meeting the requirements of the supply chain due diligence act? And so on. This is where IT and data analytics will play a bigger role in future, allowing for a comprehensive, automated ESG assessment. Looking at the looming auditing provisions of the EU’s Corporate Sustainability Reporting Directive (CSRD), this is certainly an area where we expect a lot of activity due to the required documenting and quantification of a company’s sustainability performance.
CFG: In a nutshell, can it be said that the production and air transport of Kenyan roses to Europe emit less CO2 than Dutch flowers, but cause lasting damage to the cultivated areas in
SH: That is certainly summarized correctly - at least, based on the results of the Fairtrade International study. Of course, there has also been progress in terms of heating the greenhouses based on renewable energy sources, which is why we are looking at a dynamic field. This underscores the need to keep sustainability data constantly up to date, for which the usefulness of IT comes into play, once again.
CFG: Isn’t your holistic sustainability scheme questioning and criticizing the fast-spreading greenwashing tendencies, where CO2 emissions have become the sole yardstick for climate-neutral acting of companies?
MF: It would be easy to insinuate that a lot of these activities are greenwashing. First, however, they demonstrate that the awareness for the topic is increasing and that a lot of companies seriously aim to reduce their CO2 emissions. Second, CO2 as a yard stick has been the key focus because it is very tangible and has been at the core of the sustainability debate for some time. Let’s put it like this: until recently, it was enough to show some voluntary and selected efforts to prove one’s engagement in sustainability topics. In future, this will no longer be sufficient. Regulators, investors, and customers will want to see permanent and auditable efforts which, as a result, will make products and companies comparable from a sustainability perspective. As a side effect, it will also become easier to identify those who promote their companies based on sustainability claims without substance.
SH: Due to legal regulations, it will become almost impossible for companies to make baseless sustainability statements. For example, the CSRD demands large corporations to disclose 1144 data points according to their materiality analysis from 2025 onwards. This certainly requires substantial efforts to collect and report the necessary information and to have it audited. Companies do not have much time left to prepare for this mandatory task, requiring a holistic view of their sustainability approach.
CFG: The crucial question is, what practical consequences result from your holistic sustainability concept. Are there illustrative examples where your research results have led to practical changes in growing or transporting flowers? The pure academic findings of your evaluation would probably not meet your strategic requirements.
SH: Our process model aims at supporting companies to determine their status quo, and to create transparency for all relevant stakeholders. We believe that this creates a solid foundation on which to make continuous progress. As an IT service provider, we are able to collect, structure, and interpret data quickly. According to a recent study, 99% of companies believe that IT tools are necessary for managing the respective data, and that investments must be made here. This matches our experience and consulting approach: IT technologies for more sustainability | LHIND (lufthansa-industry-solutions.com). IT tools can help companies to make good decisions based on current data, and to make success measurable, just like our EPACTO tool does, which you can also find on our website.
MF: We see ourselves more as an enabler. What has become clear, is that sustainability is a very broad topic, and often a very emotional one. Our solutions aim at a market segment where we provide our customers with data driven tools, enabling them to take more informed decisions. The CSRD is more like a starting point than a finishing line, and IT solutions help to turn assumptions about one’s environmental impact into measurable evidence. It is at this point where the hard work starts: taking decisions based on that information.
CFG: Thank you both very much for your insights.
Stephanie is a Business Psychologist and holds an MBA in General Management as well as a training certificate in Business Coaching. She has been working in consulting for 14 years, and for the past ten years, she has primarily been responsible for large, international digitalization projects at Lufthansa and external clients. Since the beginning of 2022, she has been building up the Customer Sustainability department at Lufthansa Industry Solutions, with the goal of supporting customers in the planning and implementation of strategic and operational sustainability projects.
Markus Flacke is an air cargo expert who has held various roles in the industry. Currently, he is responsible for the business development of Lufthansa Industry Solutions’ air cargo business unit. He prefers to be called a Solution Explorer.
Interview: Heiner Siegmund
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