Sustainable warehouses prioritise energy-efficient design, incorporating technologies such as solar panels, LED lighting, optimised HVAC systems, and advanced monitoring systems
In a world at the crossroads of environmental challenges and industrial growth, the imperative to transform logistics and warehousing practices has never been more pronounced. The World Bank's report highlights a sobering reality - logistics costs in India are among the highest globally, accounting for nearly 14 per cent of the country's GDP, significantly surpassing the global average of around 8 per cent. This stark disparity underscores the urgent need for transformative change within the logistics and warehousing sector.
However, as India's population soars and its economy experiences rapid growth, an inevitable consequence emerges—escalating emissions. This upward trajectory has positioned India as the world's third-largest emitter of greenhouse gases (GHGs), standing shoulder-to-shoulder with global giants like China and the US. In the year 2021 alone, India contributed a staggering 3.9 billion metric tonnes of carbon dioxide equivalent (GtCO₂e) to the planet's collective GHG emissions—a formidable 7 per cent of the global total, according to a report by Statista.
At the heart of green logistics lies the integral role of warehousing. As an essential link in the supply chain, warehouses play a pivotal role in orchestrating the movement of goods, optimising inventory management, and minimising wastage. The shift towards sustainable logistics begins within the walls of these facilities, where innovative practices are transforming traditional warehousing into environmentally conscious hubs of operation.
Understanding the Need for Sustainability
With the ever-increasing demand for goods and services, the warehousing industry plays a crucial role in the supply chain ecosystem. Yet, this rapid expansion has not come without its environmental repercussions. According to the International Energy Agency, the industrial sector, including logistics and warehousing, contributes a significant 15 per cent of India's total CO2 emissions. As urbanisation and consumption patterns evolve, the urgency to adopt sustainable practices becomes all the more apparent.
As the demand for warehouses across India is projected to grow at a CAGR of 15.64 per cent and a market size of $35 billion by 2027, the industry faces a dual challenge. On one hand, it must accommodate the pressing need for efficient storage and distribution facilities, while on the other; it must mitigate the carbon footprint arising from this expansion.
The Pillars of Sustainable Warehousing
Sustainable warehousing is a multifaceted approach that is meticulously crafted to minimise environmental impact. This approach has various integrated eco-friendly practices that helps in shaping up the core of logistics operations. It has various factors like energy-efficient design, resource management, waste reduction and emissions control, which contributes in sustainable warehousing.
Energy Efficiency: Sustainable warehouses prioritise energy-efficient design, incorporating technologies such as solar panels, LED lighting, optimised HVAC systems, and advanced monitoring systems to efficiently manage water and energy usage, thereby reducing consumption.
Water Conservation: Rainwater harvesting systems, water recycling facilities, and water-efficient fixtures contribute to reducing water consumption and minimising the strain on local resources. In alignment with government initiatives such as the national water mission, aimed at water conservation, rejuvenation of traditional water bodies, watershed development, and promoting water-use efficiency across sectors including agriculture, industry, and domestic usage, underscoring the commitment of the logistics and warehousing industry towards sustainable water management practices.
Green Infrastructure: Integrating green spaces, rooftop gardens, and vegetation not only enhances aesthetics but also aids in air purification and temperature regulation. The adoption of eco-friendly construction materials plays a pivotal role. Moreover, the industrial buildings must be green building certified that shows their commitments towards sustainability.
Emission Reduction: The adoption of electric vehicles for intra-logistics transportation and the reduction of fossil fuel usage are vital strategies to curtail emissions. Regular audits and assessments, conducted to monitor and ensure effective emission reduction practices, help in identifying areas for improvement, measuring the progress of emission reduction initiatives, and maintaining compliance with established sustainability goals. These efforts align with global sustainability standards like the Global Reporting Initiative and Carbon Disclosure Project, where companies can assess and report their ESG performance.
Waste Management: Implementing proper waste segregation, recycling programs, and reduced packaging contribute to minimising waste generation. According to NITI Aayog, it is estimated that urban India generates between 1,30,000 to 1,50,000 metric tonne (MT) of municipal solid waste every day This adds up to roughly 50 million MT per year; at current rates, this will jump to some 125 million MT a year by 2031. In line with these concerns, warehouses must engage in proactive waste management by partnering with waste recycling agencies to effectively manage solid waste, hazardous waste, and e-waste.
Charting a Sustainable Path Forward
The journey toward sustainable warehousing is not without its challenges, yet it presents an opportunity for innovation and growth. The government's commitment to achieving carbon neutrality by 2070 reflects a resolute dedication to combating climate change. Initiatives like Gati Shakti, Multimodal Logistics Parks, and the National Logistics Policy underscore the alignment of sustainability and growth in India's trajectory. These endeavours aim to streamline transportation, optimise supply chains, and enhance connectivity, laying the foundation for a more sustainable and efficient logistics landscape.
The synergy between sustainable logistics and warehousing holds the promise of a greener, more resilient future. As industries unite under the banner of responsible practices, the transformational power of sustainable logistics can redefine the way goods move across the nation, driving economic growth while nurturing the environment. In this journey, warehouses emerge not just as storage spaces, but as key enablers of a more sustainable tomorrow.
(Ramnath Subramaniam is ceo, TVS ILP.)