In 2013, HEC – a University in Paris that offers a MBA – did a study on sustainable procurement. One hundred thirty-three large multinational companies were surveyed. Ninety-three percent of the procurement professionals surveyed considered sustainable procurement “a critical or important objective for their companies.” Further, 91 percent of companies were formally integrating corporate social responsibility into their supplier selection process.
Based on these findings, one would expect that 3PLs that provide warehousing services would face pressure to prove that they provide sustainable distribution. And to a certain extent, they do. One industry contact, for example, told me they are seeing an increasing number of RFPs looking for 3PLs capable of providing warehousing services with zero landfill impacts.
But apparently, what 3PLs are not facing is pressure to become LEED certified. ARC examined the LEED website and did a search for warehouses undergoing certification under the new LEED Version 4.0 classification schema. This version has specific criteria for warehouses that make the certification process for warehouses less complex than it used to be.
I also did a search using the word “warehouse” on the LEED project directory. This directory contains a list of the 78,000 plus certified buildings. Usually, the project name contains the name of the company that owns the building. This search shows no major 3PL undergoing a LEED certification under the newest standards. Further, you only find three large, well known, 3PLs with certified warehouses. All were certified under version 3 of the standards. Those warehouses include a Kerry Logistics Singapore site, a Kuehne + Nagel warehouse extension in Dubai, and a new YCH port warehouse in Xiamen, China. All of these sites were certified at the Gold level, a higher and more exacting certification level.
LEED certification, which is focused on buildings, is the sustainability initiative most applicable to warehouse services. When I talked to Corey Enck, Vice President of LEED Technical Development at the U.S. Green Building Council, I was under the mistaken impression that a LEED certification was focused on energy efficiency. It is, but the sustainability focus is broader than that.
The sustainability categories, with a brief listing of a few of things contained in that category, include:
- Location And Transportation – Is the warehouse near public transportation? Is it located in such a way that it does not damage endangered species?
- Sustainable Sites – During construction, was vegetation is maintained in its natural state? Are there rain water mitigation programs in place? Has the building minimized heat island effects (for example, by not having too much pavement)?
- Water Efficiency – Has irrigation for landscaping purposes been minimized? Is water being used efficiently inside the building?
- Energy and Atmosphere – Is the warehouse using energy efficient equipment? Minimizing energy demand? Using sustainable energy?
- Materials And Resources – Were renewable materials use to build a facility? In an existing building, is the warehouse purchasing cardboard with recycled content for packaging? Is it purchasing materials for ongoing operations, like light bulbs, that are energy efficient?
- Indoor Environmental Quality – Is this a comfortable environment for employees to work in?
LEED certification can apply to buildings that are being newly constructed or existing buildings. There are different criteria for the two different situations, Corey believes both paths to certification are equally stringent. However, my search of the site showed large 3PLs were much more likely to have version 3 certification for new construction, and these sites tended to be in warm climates where presumably energy efficiency has a higher ROI.
To achieve the lowest level of certification, a company must score 40 points. Corey pointed out that this involves tradeoffs. For example, a warehouse in a hot and humid climate could be using fans to attempt to cool the warehouse on some of the hottest days of the year. This would improve their Energy and Atmosphere score. But it would adversely impact their Indoor Environmental Quality score.
If a shipper’s procurement team did value LEED certification, but what they most cared about was energy efficiency, they could examine how many of the 40 points were based on the Energy and Atmosphere category.
But, based on the fact that no major 3PL is undergoing this certification, one possible explanation would be that few procurement professionals are aware that the newest LEED certification schema has created a category for warehouses that makes this process easier.