Recent research from the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS) highlights the crucial role of CEOs and executives in companies’ efforts to decarbonize supply chains. These leaders can empower organizations and secure the mandate to pursue decarbonization agendas, embedding decarbonization targets and initiatives across the organization and linking these to financial budgets. In this article, we explore this finding further, outlining some key focus areas for business leaders looking to initiate and sustain effective emissions reductions across their companies’ supply chains.

This finding is part of a broader study seeking to understand the challenges and opportunities for freight customers working on supply chain decarbonization. The analysis is based on a combination of desktop research and independent interviews with stakeholders from shipping companies, logistics providers, and their customers spanning different sectors and business margins, as well as from knowledge organizations. For more information, see our recent ‘Freight customer framework for decarbonizing shipping and logistics’.1

Supply chain emissions are notoriously challenging for individual companies to reduce or eliminate. This category encompasses greenhouse gas (GHG) emissions that originate several tiers up or down the supply chain – for example, emissions associated with extracting and processing when sourcing raw materials as a manufacturer.

Against this backdrop, shipping and logistics can present a comparatively straightforward avenue for some companies to reduce their supply chain emissions. The share of emissions linked to shipping and logistics operations depends on the individual product – however, we know that supply chain emissions on average are more than 11 times higher than operational emissions.4 Bundled shipping and logistics emissions are estimated to make up more than ~10% of total end-product emissions for selected industries, such as apparel, automotive, and sporting consumer goods.5

The market for low-emissions shipping and logistics services is growing, albeit unevenly across cargo and transport segments and at an early stage of development (see info box for more information). ‘Low-emissions shipping and logistics’ means minimizing the GHG emissions associated with the transport and logistics of raw materials and goods. Examples could include optimizing supply chains, using energy-efficient vessels to transport goods, or adopting solutions like low- or zero-emissions alternative fuels or direct electrification of transport.

Shipping and logistics operators are increasingly offering bio-blended fuel solutions to help reduce GHG emissions, while also investigating next-generation alternative fuels for ocean transport. The adoption of bio-blended fuels has risen from 22% in 2022-23 to 46% in 2024-25, while adoption of methanol has risen from 3% to 6% in the same period.11 Our internal analysis at the MMMCZCS* indicates that low-carbon biofuel shipping services are currently widely available for container and car carriers – making this route to supply chain decarbonization especially relevant for owners of products shipped by these vessels.13

In interviews, participants in the MMMCZCS study highlighted various incentives that drove them to adopt low-carbon shipping and logistics services. Examples included decarbonization requirements and emissions reduction targets from customers (e.g., wholesalers and retailers), as well as the opportunity to strengthen brand value and attract customers and talent by demonstrating environmental stewardship.

Novo Nordisk, one of the world’s largest pharmaceutical companies, is currently transporting ocean cargo on services enabling the use of lower-emissions marine fuels. As part of its strategy to reach net-zero emissions by 2045, the company has set SBTI-backed goals to reduce its Scope 3 emissions by 33% by 2033 from a 2024 baseline, as outlined in their Annual Report.14

“It is part of our DNA that we want to make a positive impact and drive change,” explained Said Chayesteh, Director of Global Logistics and Distribution, Integration and Optimisations at Novo Nordisk.

* Based on research on the top 10 container and car carriers, using data respectively drawn from Alphaliner Top 100 (June 2025) 12 and Clarksons Research (April 2024).

So, if a company wants to decarbonize its shipping and logistics, what factors give these efforts the best chance of success? Interestingly, one of the strongest emerging themes from our research was the critical role of CEOs and top management. Across different industries and business margins, companies where leaders focus on prioritizing and integrating sustainability and decarbonization into both the corporate strategy and day-to-day operations can help foster a transformative culture that embeds decarbonization targets and initiatives throughout the organization.

“It starts with the CEO and executives understanding that decarbonization is their responsibility,” said Martin Jermiin. Jermiin is a Board member and former CEO of Flying Tiger Copenhagen, an international retailer of affordable living products and accessories. The company has set SBTi-backed goals to reduce its total GHG emissions by 30% by 2026, compared with a 2019 baseline.15 In the shipping and logistics sphere, Flying Tiger has already shifted 100% of ocean freight to a service enabling the use of lower-emissions fuels.

Martin Jermiin acknowledged that Flying Tiger’s status as a privately held company has smoothed the path to implementing this level of ambition. “Being a privately held company gives us the flexibility to balance cost and greener choices, including decarbonization,” he said. “Sustainability is also a moral commitment that is supported by our owners, allowing us to be ambitious and consistent in our approach.“

A clear sustainability mandate endorsed by boards and executives is crucial for resource allocation and embedding climate strategies in the organization.

One way for business leaders to boost their supply chain decarbonization is to focus on integrating goals and road maps into operations and aligning strategy and targets with long- and short-term financial budgets. Shipping and logistics companies interviewed in our study frequently reported a disconnect between sustainability and procurement functions within their customers’ organizations. While sustainability teams may set ambitious targets, procurement departments often continue to operate with a transactional, cost-driven mindset. Therefore, anchoring sustainability targets into the business’s overall operations is key.

Said Chayesteh explained how this works within Global Logistics and Distribution, Integration and Optimisations at Novo Nordisk: “We break down the department’s targets year by year and create roadmaps with initiatives and measures to help us reach the targets. We have governance and incentive structures in place."

“Implementing sustainability targets is not something we do on the side – it is implemented into our department and anchored in operational processes,” Said Chayesteh added.

This sentiment is echoed by Martin Jermiin, who emphasized that sustainability is “at the heart of the operation” at Flying Tiger Copenhagen. The organization’s sustainability department reports to Commercial Planning, reflecting a commitment to integrating sustainability into commercial operations from product development to delivery.

Interviews also highlighted the need to understand the company’s emissions baseline in order to develop an effective decarbonization strategy and roadmap. Mapping current GHG emissions enables companies to prioritize decarbonization initiatives based on factors including resource requirements, potential impact, and abatement costs. In this way, leadership can act strategically to allocate resources when and where they will deliver the greatest value (see our ‘Freight customer framework’16 for more information).

“Until you have the full fact base on Scope 3 emissions, you don’t know what you’re steering towards,” said Martin Jermiin. “It’s as if you are going onto a racetrack, but you’ve blacked out your front window.” He emphasized how early and granular mapping of the company’s Scope 3 emissions has supported operational decision-making for the company’s product teams.

Our findings suggest that companies and leaders who bring the entire organization on board with the strategy, and align targets and initiatives across functions, are better positioned to succeed. At Flying Tiger, for example, employees across different departments receive training on sustainability topics and how their work can contribute to meeting the company’s sustainability strategy. Initiatives like this can go a long way to solving the disconnect between sustainability and other areas of the organization.

“You need a consistent strategy, to create alignment and clearly communicate what you’re doing and help people understand that they need to contribute to this,” reflected Said Chayesteh.

Green Transition Illustration

While costs are an important barrier to supply chain decarbonization, interview participants in our study reported that increased costs are not necessarily a showstopper for decarbonization initiatives. Their experiences illustrate how the ‘true cost’ of decarbonization is more nuanced than the ‘cost gap’ between conventional and more sustainable practices.

From a big-picture perspective, this ‘true cost’ encompasses not only immediate financial costs, but also broader social and economic considerations. Climate change itself poses significant risks to business – with a 2024 report from the Carbon Disclosure Project concluding that the potential financial costs of climate-related risks to supply chains are 2.9 times greater than the cost of mitigating these risks.17 From this perspective, leaders may benefit from weighing the investments needed to decarbonize in the short term against the significant costs and risks of failing to act.

In his interview, Martin Jermiin explained that Flying Tiger does not directly compare the costs of conventional and lower-carbon solutions, reflecting a perspective that sustainability is simply the cost of doing business in the long term. “Sustainability is not an incremental business case – it is a general mandate.”

Moreover, sustainability is increasingly about finance. Regulatory requirements in the area of shipping and logistics, such as the FuelEU Maritime and the IMO Net-Zero Framework may see the costs of using fossil-based marine fuels rise; freight customers who proactively assess and implement low-emissions solutions at an early stage will be better placed to adapt to the downstream effects of these regulations.

Decarbonization can also bring opportunities for value creation and cost savings today. Investing in sustainable practices, such as low-emissions freight options, can yield strategic benefits – enhancing the brand or product’s image, helping to attract and retain talent, strengthening supplier relationships, meeting investor and shareholder pressures, and improving ESG ratings and overall company value. This last point is reflected in studies finding that higher ESG scores generally can be associated with increased company value, more stable revenues, and lower risk.18, 19 Moreover, solutions like optimizing logistics networks or modal shifts can often be a win on both decarbonization and cost.

Reflecting on his own experience, Said Chayesteh shared: “Sea freight is a great business case because we can save CO2 emissions and a significant amount of money by shifting air to sea freight. We have [marine] biofuels that are, on average, comparatively cheaper than one tonne of CO2 abated using sustainable aviation fuel or electric [road] vehicles. So, sea freight is actually a really good business case.”

Chayesteh added that shifting to sea may also come with other benefits, such as increasing the quality and resilience of the supply chain. In the same interview, he touched on the department’s approach to balancing the costs of decarbonization: “We have high ambitions, so we need to make sure that the solutions we’re investing in are delivering the best emissions reductions and the best impact for the planet.”

See our article 'From strategy to action: challenges and opportunities for freight customers decarbonizing supply chains' 20 for more details on finance and cost.

In summary, our study found that companies seeking to decarbonize their supply chains face different internal and external challenges – but there are also some encouraging examples of companies overcoming these barriers. It’s clear that achieving supply chain decarbonization will require a shift in mindset – from viewing emissions reductions as a compliance obligation and an expense to recognizing them as an opportunity for value creation, business development, and preparation for future regulations and risks. The good news is that, with the right approach, sustainability can also be a strategic driver of innovation and long-term growth.

As this list shows, CEOs and top management play a crucial role in companies’ ability to progress on decarbonization and sustainability more generally. Achieving large-scale change will require business leaders who are proactive, solutions-oriented, and committed to the sustainability agenda – leaders who can keep their company focused on its decarbonization objectives and refuse to let challenges become excuses for inaction.

“There will be changes and risks to the department both internally and externally," said Said Chayesteh. "You will have highs and lows, but if you can work in a consistent manner, you will move in the right direction and see the impact.”

“My advice to other CEOs is that it can be done with the right people, said Martin Jermiin. It is the right thing to do, and it will not destroy your profitability.”