Authors: Leinemann, Schmidt, Voß, August 30. 2024
1 Definition
The air organisms breathe is the most critical natural resource essential for survival.1 The com-position of the air is subject to continuous fluctuations, influenced by both natural processes and anthropogenic emissions. The earth’s atmosphere, a layer of gases held in place by gravity, comprises several components. On average, dry air consists of approximately 78.09% nitrogen, 20.95% oxygen, 0.93% argon, and 0.039% carbon dioxide. In addition to these primary constituents, trace amounts of other gases such as methane (CH₄), ozone (O₃), sulfur dioxide (SO₂), nitrogen dioxide (NO₂), nitrous oxide (N₂O), carbon monoxide (CO), and ammonia (NH₃) are also present.2
The composition of air constituents, however, determines the air quality of an area and, thus, the categorization of air pollution. Almetwally, Bin-Jumah and Allam (2020) define that „air pollution is the contamination of the ambient atmosphere as a result of the presence of chemical sub-stances, gases, or particular matter” (p. 24815).3 The World Health Organization (WHO) further adds that this concentration causes detrimental influences to health, vegetation, yield of agricultural crops, properties, or to interfere with the enjoyment of properties.4 Substances considered as major air pollutants are nitrogen oxides (NOₓ), non-methane volatile organic compounds (NMVOCs), SO₂, NH₃, CO, and particular matter (PM2.5, PM10).5 Most pollutants naturally occur in the air composition, yet, a higher con-centration qualifies them as air pollutants. Other gases such as O₃, CH₄, and greenhouse gases (GHG) which can occur as pollutants in the air stand in close relation to air pollutants for causing harmful effects on the climate and ecosystems yet are excluded from the narrow definition of air pollution (see Wiki entry on “Climate change”).
Since the discovery of fire, air pollution has persisted as a significant environmental issue.2 Historical milestones indicate that by the 1280s, coal had become a common fuel source in various industrial processes, such as lime production and metalworking, contributing to air pollution.6 The late 18th century marked a pivotal period with profound transformations in manufacturing, agriculture, mining, and transportation. The shift to machine-based manufacturing during this time led to a substantial increase in fuel demand, further exacerbating air pollution. The industrial revolution significantly increased both the volume of primary pollutants and the number of contributing countries, with heavily polluted cities becoming a major concern, culminating in the Great Smog of London in 1952.6 Initially, Europe and North America were the primary emitters and bore most of the adverse effects until the late 20th century.7 As emission controls for SO₂ and NOx took effect in these regions, emissions in East and South Asia surged, leading global pollution by the early 21st century.
Air pollution presents unique challenges compared to other forms of pollution due to its inherent complexity. Unlike water, which can be contained and studied in a controlled environment, accurately replicating atmospheric conditions in a laboratory setting is difficult.2 Furthermore, the effects of air pollution often manifest gradually, with the full impact sometimes becoming apparent only after several years.8
The world’s major environmental challenges—air pollution and climate change—are closely interconnected.9 The impact of a GHG or aerosol on global warming and climate change is determined by its residence time in the atmosphere and its global warming potential. Climate change is driven by the emissions of air pollutants, climate-forcing GHGs, and aerosols, all of which are strongly correlated due to their shared sources and processes of formation. Major issues related to air pollution are evident in both humans and biota, with the effects being interrelated and mutually influential. Air pollution manifests in various ways within plant systems, including leaf discoloration due to internal cellular damage, reduction in leaf surface area, and the creation of entry points for pathogens.8 These effects can disrupt plant physiological and biochemical processes, leading to reduced growth and yield. Terrestrial ecosystems, such as forests, grasslands, and deserts, face significant challenges as soil—the foundation of these ecosystems—becomes increasingly degraded by air pollutants. This degradation adversely affects plant growth, which in turn impacts the animals that depend on these plants for sustenance. One type of air pollution is acid rain which can occur as wet precipitation (rain, snow) or as dry deposition (gases, dust).10 The effects include acidification of lakes, depletion of soil minerals essential for plant growth, release of toxic ions making water undrinkable, erosion of stone structures, and health issues from inhaling acid rain particles. There is a strong association between air pollution and the incidence of respiratory diseases such as chronic obstructive pulmonary disease, asthma, bronchitis, impaired lung function, and lung cancer.11 Air pollution not only exacerbates these conditions but also has a serious and adverse impact on human behavior, productivity, and overall well-being. It is estimated that air pollution is responsible for approximately 6.5 million deaths globally each year, with 9 out of 10 people living in urban areas affected by related health issues.12,13
The interconnection between firms, both as contributors to and victims of the problem, and air pollution is evident in the economic impacts of air pollution. The number of annual working days lost due to air pollution, which negatively affects labor productivity, is expected to increase from 1.2 billion in 2015 to 3.7 billion by 2060.14 The economic impacts of outdoor air pollution—encompassing labor productivity losses, increased healthcare expenditures, and reduced agricultural yields—are anticipated to escalate, potentially reaching 1% of global gross domestic product (GDP) by 2060. In 2018, air pollution imposed costs of USD 2.9 trillion on the global economy, equivalent to 3.3% of the world’s GDP.15
2 Sustainability analysis
In general, air pollution can be divided into natural and man-made pollution. Sources of natural pollutants include volcanic eruptions, forest fires, fog, and dust storms.3 These have little impact on the environment due to their ability to regenerate. Anthropogenic air pollution, on the other hand, is the result of human activities and is of great concern to humanity because most pollutants occur in or near human settlements.16 Traditional air pollutants come from combustion and industrial processes, transportation, solvent use, and agriculture.17 This article examines the contribution of companies, the measurement of corporate performance, various KPIs, and a best practice example of new developments in air pollution measurement and reporting.
2.1 The contribution of business
The European Environment Agency’s (EEA) Zero Pollution Monitoring Assessment Report shows that despite declining trends over the last decade, European industry remains one of the largest sources of pollution due to intensive production and consumption of products from other countries.18 Companies can contribute to air pollution through various activities in their value chain. Activities that contribute significantly are the consumption of electricity, the burning of fuels, the transportation of materials, goods or people, and the disposal of waste.19 Looking at different sectors, the energy industry produces large amounts of N₂O and SO₂, and small combustion plants in the residential, commercial and service sectors emit significant amounts of particulate matter and CO.17 Road traffic contributes to particulate matter through tire and brake wear, and fuel combustion produces N₂O and CO. Process-related emissions from industry include CO from metal production and total and particulate emissions from mineral extraction and bulk materials handling. In addition, the industrial use of solvents is the largest source of NMVOC emissions. Agriculture is the main source of NH₃ in Germany due to emissions from the soil and fertilizer industry; in the EU as a whole, about 75% of NH₃ occurs due to manure and 20% due to inorganic fertilizers.20 Harmful chemicals are also released into the air from the use of pesticides and insecticides.21 Small amounts of N₂O, NH₃, NMVOCs and dust are also emitted into the air through waste and wastewater.17 An EEA report on “Costs of Air Pollution from European Industrial Facilities 2008-2012” shows that 29 of the 30 industrial facilities that cause the most damage in terms of air pollution are power generation plants, mainly fired by hard coal or lignite.22 The report estimates the damage costs caused by the contribution to air pollution, and a review of all industrial sectors included in the E-PRTR register also shows that the power generation sector caused the largest share of damage costs in the period 2008-2012. The remaining estimated damage costs are largely due to production processes and combustion processes in manufacturing. The fact that selected facilities are responsible for the majority of air pollution was also shown in another study by the EEA, which looked at the period from 2012 to 2021 and found that just over 100 of the approximately 10,000 facilities examined were responsible for 50% of the total estimated damage.23
2.2 Measurement of corporate sustainability performance related to air pollution
“All businesses, regardless of size and location, contribute to air pollution and need to play their part in cleaning up the air. Measuring and assessing air pollution emissions is the first step for companies to improve air quality. Reporting those emissions is crucial for increasing transparency and accountability in the private sector.” (Clean Air Fund, 2023)24
The statement by the nonprofit organization Clean Air Fund highlights the significance of measuring and evaluating corporate sustainability performance with respect to air pollution. Furthermore, an increasing number of legal requirements are being introduced with regard to the measurement and documentation of air pollution emissions. In 2006, for instance, the European Union implemented the E-PRTR Regulation, which requires that companies in large industrial sectors with facilities such as refineries, substantial thermal power plants, extensive chemical industrial complexes, or substantial waste incineration plants that exceed specified capacity limits submit information on their emissions to their national authority if these exceed the specified threshold values for pollutants.18 This data is subsequently incorporated into the European Pollutant Release and Transfer Register (E-PRTR), which encompasses data from over 30,000 industrial facilities across 65 economic sectors. Furthermore, the European Sustainability Reporting Standard (ESRS), which establishes uniform disclosure criteria for environmental, social, and governance (ESG) data, now includes air pollution. Consequently, 50,000 listed companies in the EU will be required to disclose their impact on air pollution beginning in the 2024 financial year. Furthermore, a specific standard has been established that outlines reporting requirements regarding environmental pollution, which consequently encompass air pollution.25 In addition to providing information on strategies and resources for reducing air pollution and quantifiable objectives, companies are required to disclose the extent of air pollution they have caused.26 When disclosing the air pollution emitted, it is essential that companies take into account all emissions generated by facilities over which they have financial and operational control. The reporting should include the total amount of all air pollutants for which information is also required under the E-PRTR Regulation. Furthermore, information regarding the temporal change, measurement methodology, and data collection procedure must be provided. If a quantification method is used that is less precise than direct measurement, the company is required to present a justification. If an estimation method is applied, the standard, the sectoral study, the sources on which the estimates are based, and the potential degree of uncertainty or measurement uncertainty must be clearly stated.
Two different methods have been developed for quantifying air pollution.19 One method is direct measurement, while the other makes use of estimation techniques based on emission factors and activity data. Continuous monitoring systems (CMS) of various types can be employed for the direct measurement of emissions from stationary sources, such as a plant.27 Such systems include continuous emission monitoring systems (CEMS), which directly measure the actual emission values of relevant pollutants or those of a substitute pollutant that allows conclusions to be drawn about the relevant pollutant. In contrast, continuous opacity monitoring systems (COMS) quantify the light transmission of exhaust gas emissions, thereby providing insight into the particulate emission levels. A further type of continuous monitoring system is the continuous parametric monitoring system (CPMS). In this case, the operating parameters of the process or the air pollution control device (APCD) are measured, as these are important indicators of the emission values of the process or the control efficiency of the APCD. Such variables may include, for instance, temperature or pressure. These continuous monitoring systems are typically employed for the purpose of collecting data and information from a regulated facility, with the objective of verifying that regulatory requirements are being met and of informing the facility operator of the necessity for corrective action. Nevertheless, in order to assess a company’s comprehensive air pollution performance it is not feasible to directly measure all emissions.28 In such cases, where direct monitoring is not feasible or too costly, it is common practice to estimate emissions using data on the extent of human activity, known as activity data, and emission factors.19 Emission factors are coefficients that quantify the amount of emissions per unit of activity.
In the absence of a comprehensive guide outlining methodologies for identifying and quantifying business air pollutant emissions from a range of key sources across the entire value chain, the Stockholm Environment Institute, in collaboration with the Climate and Clean Air Coalition and the Inter IKEA Group, developed and published the “Practical Guide for Business Air Pollutant Emission Assessment” in 2022.19,29 Consequently, in 2023, the IKEA Group became the first multinational enterprise to publish a comprehensive, multi-year assessment of its outdoor air pollution emissions across the entirety of its value chain.24 In 2023, other companies, including GoTo, Bloomberg, Biogen, and Oracle, adopted a similar approach.29 As the guide encompasses not only Scope 1 and 2 emissions but also Scope 3 emissions, companies have encountered difficulties in obtaining data regarding emissions within their value chains. The reporting of air pollution therefore serves to normalize reporting in areas where data has not traditionally been collected. The guide is designed to assist companies and businesses of all sizes, products, services, and sectors in quantifying their air pollutant emissions.19 It includes appropriate methodologies and emission factors for determining emissions from six main sources. The primary sources of emissions considered are electricity consumption, stationary fuel combustion, transportation, industrial processes, agriculture, and waste. The guide focuses on the nine air pollutants classified by the WHO as the most harmful to human health: PM2.5 and PM10, black carbon (BC), organic carbon (OC), SO₂, NOₓ, NH₃, and others, such as CH₄ and NMVOCs, as well as CO. The direct, energy-related emissions of the company can typically be calculated by multiplying the quantities of fuel purchased, such as natural gas or heating oil, by the published emission factors. In the case of emissions associated with indirect energy consumption, the measured electricity consumption and the emission factors published by the relevant suppliers or local grid operators can typically be employed. In the case of all other emissions, the calculation may be based on fuel consumption or distance travelled, with the use of published emission factors. In order to achieve a higher degree of accuracy in the estimation process, the use of source- and installation-specific emission factors, if available, is recommended in preference to general ones.
The Tier 1 method is the most straightforward approach, relying on existing activity data and default emission factors that reflect typical or averaged process conditions. It is largely derived from the EMEP/EEA Guidebook, a widely used and scientifically robust document. The Tier 1 method is based on a simple linear relationship. Tier 2, in contrast, uses country- and/or process-specific and/or technology-specific emission factors that consider factors such as process conditions, fuel quality, abatement technologies, or the year of technology development. Tier 3 is the most granular of the levels. It uses plant-specific data and more complex calculations.
When estimating air pollution emissions using emission factors, it is important to recognize that there are uncertainties associated with these factors.30 In particular, the use of average emission factors, such as the Tier 1 method, must take into account that they are based on various assumptions, e.g. about operating conditions, regional differences or the heterogeneity of industrial installations, and that the effects of new reduction guidelines and technological improvements are not taken into account if the assumptions on which the factors are based are outdated. The use of Tier 2 or Tier 3 methods is considered more accurate and less uncertain.19 However, many companies do not have access to the detailed data required for Tier 2 or Tier 3 due to commercial sensitivity, lack of direct measurement, and high acquisition costs.
A more cost-effective alternative to conventional CEMS for direct measurement in many types of industrial processes with gas turbines and boilers can also be Predictive Emissions Monitoring Systems.31 This is a direct interface to a turbine’s control system that uses models based on process data and historical emissions data to estimate emissions of these pollutants in real time. The advantages of these Predictive Emissions Monitoring Systems are very high accuracy, superior reliability to CEMS, comparatively low cost, and comparatively low installation cost since no physical measurement infrastructure is required on the stacks.
Another system is the Portable Emissions Measurement System (PEMS), which measures emissions from internal combustion engines during real-world operation of vehicles or equipment.32 These systems combine advanced gas analyzers, exhaust gas flow meters, weather statistics, GPS, and vehicle network connectivity to provide comprehensive and accurate real-time measurement of pollutant emissions (such as hydrocarbon (HC), CO, CO₂, NOₓ, PM) and related engine, vehicle, and environmental parameters.33 PEMS testing is considered an effective and cost-effective method of verifying emissions from a wide range of vehicles. PEMS testing has been mandatory for heavy duty vehicles in the EU since 2009.32 The advantages of these systems are their realism, as they enable actual operating conditions to be simulated, leading to more accurate and representative results than laboratory tests, and their flexibility, as they can be used on different vehicles and mobile machinery.
3 Sustainability implementation
The implementation process for reducing measures and sustainable process in the case of air pollutants for a firm can be divided into different aspects. The importance of these can differ widely between companies depending on the constitution of the business model and many other factors. These different aspects are: 1. switching to cleaner energy sources; 2. sustainable choice of materials; 3. use of clean technologies and processes; 4. sustainable logistics and transport and 5. behavioral changes and training. The fulfilment of these steps can lead to significantly lower output of air pollutants for a firm that would, in an optimal scenario, be close to net zero.
This goal can only be achieved by engagement of the management, employees and overall stakeholders. A corporate culture that promotes sustainability and environmental protection can generate innovative ideas and measures to reduce air pollution. Rethinking products and services of the company itself, innovating product lines and services to align with sustainability goals, such as developing eco-friendly products or services that help customers reduce their carbon footprint is also part of the reducing process. This can also include those companies that might not be seen as big polluters because of their external corporate structure but because of their business model. Collaborating with peer alliances and partnerships can also be of advantage to achieve the final goal of an air pollution free world.34 Many companies join industry groups and partnerships focused on advancing clean energy, sharing best practices, and lobbying for supportive policies, thus potentially creating synergy effects and therefore boosting the process additionally. Transitioning is an ongoing process that requires commitment, innovation, and collaboration. Companies that successfully navigate this transition often find that it not only benefits the environment but can drive long-term business growth, as well. Achieving energy efficiency, for example through the use of modern technologies and the optimization of production processes, can reduce energy consumption and thus production cost but also emissions.
3.1 Switching to cleaner energy sources
The burning of fossil fuels such as coal and oil are one of the main reasons for emitting air pollutants. Therefore, the transition to renewable energy sources is a main target for the reduction of air pollution.35,36 Solar, wind or hydroelectric power are potential alternative energy sources to reduce the emission of air pollutants. The transition into “clean” energy sources for a company is a complex process that often involves several steps like strategic planning, investment, and adaptation to new technologies and business models to achieve long term security for the company.37 Strategic planning begins with the setting of measurable goals for reducing their use of fossil energy sources. The setting and the enforcement of set goals needs the commitment of the management. The measures to achieve set goals can include investments in energy improvements through which they can improve energy efficiency. Energy efficiency improvement are measures like implementing energy-efficient lighting, optimizing heating and cooling systems, transitioning fleet and logistics. and investing in energy management systems to monitor and reduce energy use of a company.
Other investment possibilities can include on-site clean energy production of the company itself. One option for this might be the installation of solar panels or wind turbines at the company’s facilities that can directly power operations. Purchasing green energy or renewable energy certificates is a common strategy for companies that are not able to produce sufficient energy on their own. While bigger companies can choose to invest in off-site renewable energy projects, such as wind farms or solar parks to reduce their pollutants output.38 These investments are especially for smaller companies oftentimes to expensive. A solution for this problem is the founding of cooperations with other peers.34 A rising number of cooperatives have been established in renewable energy supply to run wind parks, solar parks and local heat nets in the past years. One solution for this problem might be a cooperative investment.39 In practice the transition can lead to additional financial costs. Estimations of the financial burden of the global energy transition lay around 9.2 trillion US Dollar per year to achieve the set goal until 2050.40,41
Examples for the successful transitioning into cleaner energy are the measures of Google (Alphabet).42 The company had set itself the goal of completely gaining their energy through renewable sources. This goal was first achieved in the year 2017. But this was only the first step before transitioning the company to complete clean energy until the year 2030. This goal is to be achieved with the 24/7 carbon-free energy strategy. The strategy is focused on driving progress across mainly three areas. First the purchasing of carbon-free energy, second accelerating new and improved technologies, and lastly transforming the energy system through partnerships and advocacy. Holding on to this strategy, 64% of the needed energy was energy from clean sources in the past year.
3.2 Sustainable choice of materials
The extraction of resources often happens under the cost of emissions from air pollutants mostly through energy costs or the emission of pollutants through the extraction and refining process.43 Exploitation of resources may furthermore contribute to the severe local impact on the environment that reduces the environment’s capability on capturing free air pollutants.44 There are economic and environmental reasons supporting sustainable management measures for resources.45 Deeper insight into material cycles and their interconnection with technology is necessary to clarify this. The existence of cleaner resources is often dependent on the available technology and on society’s stage of development at the location of the demanded resources. The implementation of advanced technological progress at first comes often at a higher cost in comparison to those methods that are based on exploitation. This leads to higher prices in the market and companies deviating to the more polluting but cheaper forms of resource extraction. The problem is that the deposits of certain resources and production capacities are concentrated at just a few places on earth. This is the case for example for the rare elements needed to produce microchips that are almost exclusively being mined and refined in China. Some of the resources which are to be found only in politically unstable regions. Investing in such a region is always connected to a certain risk of defaulting and therefore must be taken into account.46
For a company an important factor is the availability of a resource. Availability means that resources are provided in time for production at a reasonable price. To manage the availability of materials and at the same time reduce air pollution through the usage of environmentally friendly materials in production is a key task of resource management. An opportunity for achieving such a goal is by organizing certificated resources.35,44 Doing this by implementing a certification process on its own or buying external certified resources are two possibilities for a company to gain cleaner resources. The certification can be chosen oriented to the company’s situation and goals. The companies can then choose between the confirmed mining sites and then allow to continue mining minerals from the region from those that have demonstrated to achieve their environmental responsibilities, as required by the certification system. In this way, responsible buyers can use their buying power to institute positive change by remaining engaged in the mineral supply chains. To ensure that the process and production methods at the mine site follow the whished ecological standards an independent third-party audit is obligatory.47
An alternative to the mining of so far unused resources and emitting air pollutants in the process might be the recycling of those resources that have lost their “first live” usefulness.43 There are many advantages for reusing resources for example the reduction of emissions through the transport, also through recycling most of the time, no greater refining process is needed. The optimal setting for such planning would be the circular economy. By recycling materials and reusing “waste”, companies can reduce the use of raw materials and reduce air pollution. Steps for companies that may want to adapt circular economy principles are reducing waste and reusing materials to minimize their environmental impact. The circular solutions for a company are to be understood as a replacement for the existing linear process at each level. A process like this involves different kinds of stakeholders of the company at a corresponding level. The main distinguishing feature of the concept is keeping resources within the company by retaining the added value in products for as long as possible. The extraction of the maximal value can be achieved by repeated use of resources. The main steps are the reuse, repair, refurbishment, remanufacturing, repurpose and, finally, recycling of resources. The smaller the application space of the loop process is, the more profitable and resource efficient the process becomes and emissions can be reduced.48 From the point of view of a company, building a circular process cannot just be an effective way to reduce the air pollutants output but also a way to increase the efficiency of production processes. However, implementing a full circular process in one company is not realistic so far since the needed processes to achieve a complete loop processing are not given yet and research suggests that it would hardly work on a one company scale.
An example for a company that has implemented sustainable resource programs to minimize their environmental impact and promote responsible sourcing is the sportswear producer Patagonia.49 Patagonia’s sustainable resource program includes the use of recycled materials in its products, including polyester made from recycled plastic bottles and nylon from fishing nets and support of regenerative organic farming practices that restore soil health, sequester carbon, and promote biodiversity. Through these projects Patagonia helps the nature to gain the capability of absorbing pollutants.
3.3 Use of clean technologies and processes
Reducing the output of pollutants and raising air quality can demand the adjustment of the business model and the management system of a company. This includes the adaptation of the air quality assessment, the assessment of environmental damage, the assessment of abatement options, cost-benefit analysis and optimum control strategy. Rethinking products and services of the company itself, innovating product lines and services to align with sustainability goals, such as developing eco-friendly products or services that help customers reduce their carbon footprint is also part of the reducing process. One possible measure for this is the environmental lifecycle approach.50 Defining a lifecycle of product is a powerful tool for making comparisons among possible or competing systems, as well as for optimizing an existing system. The eco-design of products is an essential part of optimizing the environmental performance of a company. A company can take measures at the stage of product design in the direction of energy-related products, as it is at this stage that the environmental impacts occurring during the lifecycle are predetermined. This directive aims to achieve a high level of environmental protection by minimizing the potential environmental impact of energy-related products, which will ultimately result in an environmentally friendly product including less emission of air pollutants. It may be necessary and justified to set specific quantitative eco-design requirements for certain products or their environmental aspects to minimize the environmental impact of the products.51 The design of a lifecycle of a product is highly individual and dependent on many factors like the materials used to execute a design in physical form. There are numerous impact categories to be considered and modelled, and some will be more relevant than others depending on the product and the company.52 A huge effort is required to conduct a lifecycle assessment and the results can be of questionable value.
At the moment, more than two thirds of the energy that is used worldwide is based on fossil fuels. These fossil fuels are mainly transferred in electrical energy through the usage of combustion engines.2 Additionally, there are certain chemical processes which tend to release pollutants. The advancement of combustion engines is one potential technological evolution that, as long the necessity of the usage exists, is like the further research of new chemical procedures, a potential measure for pollution reduction. Not only designing the engines more efficiently, also the measures that prevent the emission of air pollutants before they can be released in the environment, help to improve air quality. Those solutions can be low-tech like the building of filter systems or high-tech like electrostatic precipitators systems that can significantly reduce the amount of pollutants released into the air.53 To be as sustainable as possible, the chosen solution should be as low-energy and low-chemical reliant as possible. Many different methods are being used to reduce the output of pollutants. The equipment being used differs from source to source. The pollutants emitted from a thermal power plant have a different particulate concentration than those of a pharmaceutical company so identification of the pollutants and choosing the needed equipment or system is an important step for a company to acknowledge. Therefore, information about the quantity, concentration, physical and chemical properties of the pollutants as well as the available space, equipment location and statutory requirements are needed. Companies might need to implement different other Auditing systems to evaluate the efficiency of their measures and the pollution abatement.
3.4 Sustainable logistics and transport
Logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet customer requirements. Logistics cover several working areas including material handling, production, packaging, transportation, inventory management, and warehousing. Logistics contribute to an organization’s success by providing the right product, at the right price, at the right store, with the right quantity, to the right customer, at the right time. The logistics sector contributes to economic growth and international competitiveness. As the link between the company and the stakeholders, the transport and logistics chain cannot be excluded from environmental considerations as long as the usage of combustion engines in ships, planes and trucks is still common. Current logistics systems cause serious and in the long run unacceptable environmental damage due to hazardous emissions.54 With increasing freight volumes due to the growing population and internationalization of markets, there are measures and strategies of companies developing to increase the efficiency of freight logistics and improve supply chain sustainability. One adapted concept is sustainable logistics management.55
Sustainable logistics management aims to improve the supply chain sustainability in logistics systems and enables the organizations to fulfil market demand at the same time. A company which aims to improve its sustainability performance in the field of air pollution, first, has to assess its operations, assuming that the economic key performance indicators are already known.56 The packaging waste occurred, and the used energy divided into renewable and fossil sources are examples of environmental key performance indicators for sustainable logistics management which must be defined in the beginning. The assessment of such figures would allow a company to identify the main environmental indicators. The final challenge is to achieve a more sustainable balance between the company’s other goals like the economic and the environmental ones. Solutions for influencing the emissions from transportation and logistics vary widely. One solution that is already mentioned in the form of sustainable resources and clean energy is the implementation of sustainable supply chain management. Companies work with suppliers to ensure that their entire supply chain is aligned with clean energy to reduce air pollution. Transport optimization is, as long as there is no sufficient alternative for fossil fuels, another step to ensure a lowering of the emitted pollutants by planning efficient transport routes and reducing empty runs.This includes the optimization of activities within expedited processing, such as the creation of shipping orders, negotiation of freight rates, optimization of vehicle utilization, the selection of the mode of transport or means of transport. The selection criteria for different modes of transport are transit time to the destination and costs, those can be optimized by taking the urgency and value of the goods into account. There are often conflicting objectives between these selection criteria and the use of environmentally friendly means of transport.57
The entire processing organization must be continuously optimized to the needs of the company, for example the adaptation for the volume of goods and changes to the goods that are being transported.58 But also, the optimization of the production process to minimize waste and emissions is part of the sustainable logistics and transport process, one solution being lean manufacturing. Lean practices are focused on eliminating all waste within the system by improving resource utilization, minimizing human effort, and ensuring on time delivery to a client. A lean process helps to resolve the different types of waste that occur through transportation, inventory, motion, waiting and other processing related events.59 The goal being improving day-to-day operations and making economic and environmental goals more compatible. A logistics company that seeks to improve supply chain efficiency and become more environmentally sustainable is DHL.60 The DHL group is one of the biggest logistical companies in the world and follows a sustainable logistics initiatives. The DHL Group follows a GoGreen initiative with the aim to achieve zero emissions by 2050. The company invests in green technologies, such as electric vehicles and alternative fuels, to reduce the environmental impact of its deliveries also they offer carbon-neutral shipping options, where the company offsets the carbon emissions of shipments through various environmental projects and environmentally friendly packaging solutions, including the use of recycled materials and optimizing packaging sizes to reduce waste.
3.5 Behavioral changes and training
The reduction of air pollution is a project that also needs to include multiple parts of the stakeholders. Training of the employees in environmentally friendly practices and awareness of the impact of air pollution can lead to proactively seeking ways to reduce emissions in their work areas.61 For these reasons, including the employees is an important step for a company in achieving the goal of sustainability. In practice, the company can engage its employees with training measures on energy efficiency practices and the importance of sustainability to create awareness. Establishing internal sustainability teams or counsels to include every part of the company is also a valuable measure. The goal being not just to educate certain measures but a new way of thinking that the employees shall adapt and through this help changing the company. A company that adopts such measures is Siemens.62 The Siemens AG established a variety of measures to ensure that behavioral changes of their employees can take place. The measures include the implantation of a sustainability academy that provides employees with comprehensive training on sustainability topics. Siemens also encourages employees to participate in sustainability initiatives through programs and train energy-saving measures and sustainable practices. Siemens also promotes a “Green Culture” across its operations, where employees are encouraged to share ideas and participate in sustainability projects.
The customers and the surrounding community are also important to be engaged. Often companies only communicate with customers to promote their clean energy initiatives and enhance their brand reputation.63 But communication in the matter of air pollution to change public attitudes and behaviors is an important step to reduce further emissions. There are many ways to communicate a message and encourage people to change their behavior. In case of the actions of people towards air pollution, a company should try to target the individual automatic and reflective motivation of their customers and address barriers in the social and physical environment. To address all stakeholders, it is often necessary to work out a strategy and use a combination of approaches that tackle behavior. There are different measures that can be implemented from self-efficacy to social norms that can be most effective in bringing needed changes. Although in practice none of the following strategies have yet been evaluated in the context of air pollution. For a company that is committed to also change the behavior of their stakeholders, it is recommended to communicate and recognize these expectations and pose action on air pollution as a collective responsibility.64 A company should try to offer a range of solutions to increase self-efficacy and prevent disengagement. The communication channel should be appropriate to convey the message. Often there is a mismatch between the communication channels used and the content strategies that are proven to be more effective.63 The company should adapt its measures according to the individual preferences of its stakeholders, for example by emphasizing health in the case of a sportswear company. Providing information is an important and necessary step to create awareness and influence motivation. Current information-based approaches can be complemented by methods that activate social norms, appeal to emotions and elicit responses from a sense of collective responsibility. In addition, approaches that tell stories, engage people emotionally and put them at the center of communication are more likely to succeed.
4 Sustainability drivers and barriers
4.1 Drivers
On a political sphere, air quality standards, emission standards, and air quality bans are all regulatory tools used to manage and control air pollution. In 1979, 32 countries from the pan-European region agreed to cooperate in reducing air pollution by signing the UNECE Convention on Long-range Transboundary Air Pollution.65 This marked the establishment of the first international treaty addressing air pollution on a broad regional scale. Air pollutants cross borders, making international coordination essential. Ratifying and implementing the Convention and its protocols allows parties to address health and environmental impacts more cost-effectively than unilateral actions. Additionally, harmonized legislation across countries creates economic benefits by ensuring a level playing field for industry, preventing competition at the expense of the environment and health. The Convention, which came into force in 1983, set forth the general principles for international cooperation in air pollution control and established an institutional framework that has since integrated research and policy efforts.66 Over time, the Convention and its protocols have expanded to cover a wider range of pollutants, including ground-level O₃, persistent organic pollutants, heavy metals, and particulate matter. Initially, the Convention’s protocols focused on emission-reducing technologies, but by the 1990s, an effects-oriented approach was adopted, targeting the most cost-effective reduction methods. It was also recognized that various air pollutants interact, leading to combined impacts and often originating from the same sources. This realization led to the development of a multi-pollutant, multi-effect approach, first implemented in the 1999 Gothenburg Protocol, which aimed to re-duce acidification, eutrophication, and ground-level ozone.
Regulation on a European level includes the Ambient Air Quality Directives (2008) which sets binding air quality standards for 12 key pollutants such as NO₂ and particular matter, and take measures to ensure compliance with established standards.67 The National Emission Ceilings Directive (2016) establishes national reduction commitments for the five key air pollutants which have significant adverse effects on human health and the environment.68 Member states are required to monitor and report their emissions and outline strategies to meet the emission reduction commitments for 2020-2030 and beyond. The Industrial Emissions Directive (2010/75/EU) aims to reduce pollution from industrial sources through an integrated approach covering air, water, and land emissions, waste management, and energy efficiency.69 It requires industries to use Best Available Techniques (BAT) and obtain permits specifying emission limits and pollution prevention measures. The directive applies to around 50,000 installations across various sectors, setting binding emission limits for pollutants like SO₂ and NOₓ.
An economic driver can be a green finance opportunity for firms. Companies that demonstrate a commitment to reducing emissions are, generally, more likely to attract investors focused on sustainability.70 Firms under stronger external monitoring through effective government mechanisms benefit from lower yields and higher bond ratings.71 Companies with better corporate social responsibility scores also achieve more cost-effective equity financing. Additionally, bonds with high composite ESG ratings tend to have tighter spreads and outperform those with lower ESG ratings.72 Due to these reasons, firms can access, for example, green bonds or sustainability-linked loans with favorable interest rates. These investments encompass renewable energy sources, energy efficiency initiatives, sustainable business practices, and environmentally friendly technologies.2 Renewable energy sources positively affect air quality by emitting significantly fewer air pollutants compared to fossil fuels. For instance, solar and wind energy produce no direct air pollution, unlike fossil fuels. Consequently, investing in renewable energy sources can lead to improved air quality.73 A prominent example in the automobile industry is the green bond issued by Toyota Motor Corporation in 2014 worth $1.75 billion.74 The proceeds from this green bond were used to support the financing of loans and leases for customers purchasing Toyota’s hybrid vehicles, including the popular Prius model, as well as other low-emission and zero-emission vehicles.
A key social driver for firms to reduce their air pollution output is the growing public demand for corporate responsibility and environmental stewardship. As society becomes more aware of the health and environmental impacts of air pollution, there is increased pressure on companies to adopt sustainable practices and reduce their emissions.75 Public attention can limit the behaviors of high-polluting firms, such as energy consumption and emissions, incentivizing them to improve their environmental contributions.76 According to the legitimacy theory, this scrutiny encourages these firms to adopt environmentally responsible practices.77 By combining proactive motivation with passive pressure, the relationship among corporate social responsibility, public attention, and innovation performance becomes essential for enhancing innovation in high-polluting firms while addressing the conflict between environmental protection and degradation.76 A negative example of firms facing social backlash due to their air pollution impact is Volkswagen. Volkswagen faced severe social and legal backlash after it was revealed in 2015 that the company had installed software in diesel vehicles to cheat emissions tests, allowing them to emit NOₓ at levels far above legal limits.78 The scandal severely damaged Volkswagen’s reputation, leading to massive fines, a significant drop in consumer trust, and a long-lasting impact on its brand image.79 In addition to governmental entities, non-governmental organizations, private individuals, and local communities also engage in legal action against firms deemed responsible for air pollution. Firms that operate in or near communities are often held accountable by local residents for their environmental impact. Reducing air pollution can help improve a firm’s relationship with the community, leading to better support and less resistance to its operations. Successful resistance can be found in 2019, when thr environmental groups Clean Air Council and PennEnvironment sued U.S. Steel following a fire at the Clairton Coke Works plant that caused $40 million in damage.80 The lawsuit accused U.S. Steel of violating federal clean air laws by operating its facilities without desulfurization controls for over three months, resulting in the emission of sulfurous gases into nearby towns.81 U.S. Steel agreed to settle the lawsuit, resulting in one of the largest fines ever in a citizen-enforced case under federal clean air laws.
An ecological driver for firms to reduce air pollution is the preservation of natural ecosystems and the prevention of environmental degradation. Firms which operation is dependent on the health of ecosystems are driven to reduce air pollution in order to maintain their business in the long run.82 Firms in the agriculture sector need to maintain and enhance soil health and biodiversity.83 Excessive air pollution can lead to acid rain, which degrades soil quality by altering its pH and leaching essential nutrients.84 This can harm crops, reduce yields, and disrupt ecosystems. Additionally, pollutants like NH₃ and NOₓ can contribute to the formation of ground-level O₃, which damages plant tissues and reduces agricultural productivity. The dilemma of air pollution for agriculture firms is clear: on the one hand, the sustainable development of agriculture is crucial for global food security. On the other hand, however, agricultural practices can significantly contribute to air pollution.85 This includes the use of fertilizers and pesticides, livestock farming, the operation of heavy machinery, and the burning of crop residues. By reducing air pollution, agricultural firms do not only protect the environment, ensuring long-term sustainability and food security, but also maintaining their productivity as studies prove that an increase of air pollutants causes the agricultural total factor productivity to decline.82
From a technological perspective the development and availability of advanced pollution control technologies is critical. Innovations such as cleaner production processes, efficient emission control systems, and advancements in renewable energy sources enable firms to reduce their emissions more effectively.86 Adopting these technologies not only helps firms comply with environmental regulations but also enhances operational efficiency, reduces costs in the long term, and improves corporate sustainability, aligning with market demands for greener practices.87 An example are flue gas desulfurization (FGD) systems which are used in power plants to remove SO₂ from exhaust flue gases. Removal rates can be between 80 and 95%, meaning that systems can significantly reduce the acid rain potential from SO₂.88,89 Moreover, electrostatic precipitators are installed in industrial facilities to remove particulate matter from flue gases, removing over 99% of particulate matter from industrial emissions.90 Installing and adapting new technologies is not only a way for firms to reduce their air pollution and, thus, their impact on the health of biota and human beings, but also protects them from legal and economic backlashes through regulation and social pressure.
4.2 Barriers
A barrier for firms to introduce more sustainability in regard to their air pollution impact is regulatory uncertainty and weak enforcement as inconsistent or unclear environmental regulations can hinder firms’ efforts to plan and invest in pollution control technologies. In the U.S. automotive industry, for example, during changes to the Corporate Average Fuel Economy (CAFE) standards, a regulatory back-and-forth left automakers unsure about the long-term regulatory environment, complicating investment decisions in emissions-reducing technologies.91 Under the Obama administration, stricter fuel efficiency and emissions standards were set, encouraging firms to invest in cleaner technologies. However, under the Trump administration, these standards were rolled back.92 The rollback to lower standards allowed car manufacturers to produce cheaper cars, however, this meant that the U.S. vehicle fleet would increase its air pollution impact due to lower efficiency. However, Ford, Honda, BMW, and Volkswagen reached an agreement with California in 2019 to voluntarily adhere to higher fuel efficiency and emissions standards than those required under the Trump administration.93 These companies committed to producing vehicles that would meet or exceed the original CAFE standards, reflecting their long-term strategy to invest in cleaner technologies and reduce their environmental impact. Overcoming this barrier of potentially moving back to lower air pollution restriction but sticking to a long-term strategy strengthens the firms’ market consistency and thus potential long-term financial and reputational benefits.
Yet another obstacle is the availability of advanced technology which is necessary to reduce emissions without changing the business model of certain industries completely. The shipping industry, as part of the transport shipping being responsible for a considerable contribution to worldwide air pollution, is increasingly adopting cleaner fuels, such as liquefied natural gas (LNG), to reduce its environmental impact.94 LNG is seen as a more environmentally friendly alternative to traditional marine fuels like heavy fuel oil, as it produces significantly lower emissions of SO₂ and NOₓ. However, the availability of LNG is limited due to its current production capacity and the firms’ fleets are not yet fully compatible with LNG. Another dilemma needs to be mentioned: while LNG burns cleaner than coal or oil, the extraction and transportation processes can lead to methane leaks, a potent greenhouse gas.95 These leaks can offset the environmental benefits of using LNG.
One significant barrier to effectively addressing air pollution is the intense market competition that exists in various industries. In highly competitive markets, firms often prioritize cost-cutting measures to maintain profitability and market share. This focus on minimizing expenses can lead to a reluctance to invest in pollution control technologies and practices.47 An example for extraordinary market competition due to fast changing trends is the textile industry. The textile industry contributes to air pollution by producing organic chemicals, polymers and pharmaceuticals, which are large emitters of VOC.96 Looking at the full textile lifecycle, air pollutants are not only emitted during the production process but also at the end-of-life phase. It is estimated that 85% of used clothing ends up in an incinerator or landfill, the remaining part is technically being recycled, however, only a small portion is recycled into new clothing.97 Fast fashion trends in turn make firms in highly competitive markets maximize their production as it can be seen in the fashion industry, thus, the global textile manufacturing has doubled in the last two decades.98 To overcome market competition and producing only high quantity at the peril of increasing air pollution, Patagonia has implemented a strategy to focus more on sustainability and long lasting quality.99 The outdoor apparel retailer introduced solutions like the “Worn Wear” program, usage of recycled material, and focus on repair and care of products.100 By closing the lifecycle of garment, less air pollutants are released into the atmosphere. Patagonia’s business model shows that it can grow long-term in the textile industry without compromising environmental goals but building a strong customer base.
High initial investments and the need to restructure business models present significant internal barriers for firms when attempting to reduce air pollution. Transitioning to cleaner technologies or fuels, for example, often requires substantial capital outlay.101 Additionally, firms may need to overhaul existing infrastructure and operational practices, which can disrupt established processes and require new expertise. These challenges can deter firms from adopting environmentally friendly practices despite potential long-term benefits. A concrete example of a firm that overcame the barrier of high initial investment and restructuring to reduce air pollution is ArcelorMittal, a leading global steel manufacturer. The company invested in transitioning from traditional blast furnaces to electric arc furnaces and hydrogen-based steelmaking technologies.102 In 2020, ArcelorMittal announced its plans to build a pilot hydrogen-based DRI (Direct Reduced Iron) plant at its site in Hamburg, Germany, which production start is scheduled for 2025.103 This investment required significant capital and a shift in its production processes but allowed the company to substantially lower its air pollution footprint.
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