ESG is now a regulatory obligation with legal, financial, and operational consequences. Forwarders are being pushed to prove environmental, social, and governance compliance across global supply chains while operating in a market that remains cost-driven.
This gap between expectation and reality is where “net zero logistics” starts to break down.
ESG has become a compliance regime
Modern ESG requirements are no longer abstract. They demand evidence. Companies risk high penalties and customer backlash when they take shortcuts. ESG regulations for supply chain management have shifted from voluntary guidelines to mandatory, legally binding requirements, focusing on human rights and environmental due diligence.
In Europe, this shift is being enforced through CSRD (Corporate Sustainability Reporting Directive) and the CSDDD (Corporate Sustainability Due Diligence Directive). National regimes such as Germany’s LkSG (The Act on Corporate Due Diligence Obligations in Supply Chains) and France’s Corporate Duty of Vigilance law extend these obligations into supply chain oversight, including logistics service providers.
Supply chain demands focus on:
- Environmental (E): Rigorous tracking of carbon emissions, reducing resource waste, minimizing deforestation impact, and adopting circular economy practices
- Social (S): Ensuring compliance with labor laws to prevent child and forced labor, monitoring health and safety records, and promoting fair treatment of workers throughout the value chain
- Governance (G): Increasing transparency through supplier audits, risk assessments, and robust data reporting, particularly regarding third-party vendors and raw material sourcing
ESG demands are outpacing operational reality
In many industries, regulatory frameworks are tightening, making emissions reporting non-negotiable for forwarders. Data accuracy expectations are tightening, and penalties for misreporting are increasing. Companies are well aware of the cost of non-compliance across their supply chains.
However, data collection remains fragmented. Forwarders often rely on manual processes and inconsistent inputs from other parts of the supply chain, resulting in uneven data quality and inconsistent calculation methodologies.
For air cargo specifically, Scope 3 emissions (all indirect greenhouse gases generated in a company’s value chain) reporting remains structurally dependent on airline-provided fuel and load factor data, which forwarders do not control. Sustainability becomes a compliance risk, not a competitive advantage.
Countries resisting or delaying net zero in practice
Forwarders operating globally face additional regulatory and cost pressures. Rather than outright rejection, several major economies are de-prioritizing net zero in execution. Some key examples by behavior:
- China. While Climate Action Tracker considers the overall 2060 target a positive commitment, it rates China’s interim 2030 Nationally Determined Contribution (NDC) as “highly insufficient” to meet 1.5°C Paris Agreement limits. On 08NOV2025, the State Council of the People’s Republic of China released a white paper titled “Carbon Peaking and Carbon Neutrality China’s Plans and Solutions” mapping out and coordinating key actions to ensure the safe reduction of carbon emissions. The document addresses green and low-carbon transport; however, it’s too recent to assess its impact.
- India. Prime Minister Narendra Modi announced the 2070 target at the COP26 climate summit in Glasgow in November 2021. While 2070 is the official target for net-zero, studies suggest that accelerating the transition in sectors like transport and power could achieve this goal earlier. The Climate Action Tracker gives an overall rating of highly insufficient, specifically noting that the outlines for action areas in transport don’t provide sufficiently clear policy guidance.
- The Russian Federation. The country approved its “Strategy of socio-economic development of the Russian Federation with low greenhouse gas emissions by 2050” in October 2021 and submitted it to the UNFCCC (United Nations Framework Convention on Climate Change) in September 2022. It later submitted an action plan designed to meet the 2050 target. While the action plan is detailed through 2030, it does not provide quantified emissions reduction targets for economic sectors or subsectors out to 2050 which could orient long-term planning across ministerial agencies.
- USA: The United States formally submitted net-zero targets to the UNFCCC in 2021 and updated them in 2024. Implementation, however, remains fragmented. This limits the consistency and enforceability of net-zero commitments across the logistics and aviation sectors.
These countries are not rejecting climate action rhetorically—but net zero is secondary to growth and stability.
South Korea shows what enforcement looks like
South Korea provides a clear example of how governments are forcing momentum. In September 2025, the Ministry of Land, Infrastructure and Transport (MOLIT) and the Ministry of Trade, Industry and Energy (MOTIE) announced a Sustainable Aviation Fuel Blending Mandate Roadmap and launched the SAF Alliance.
The key elements include a mandatory SAF blending of 1% from 2026, increasing to 3–5% after 2030.
SAF and the cost problem the industry avoids
Sources include the International Council of Clean Transportation (ICCT) and IATA industry reporting
The central flaw in many net-zero narratives is cost denial. A clear example is SAF (Sustainable Aviation Fuel), the flagship solution for aviation decarbonization – and its biggest constraint.
- SAF costs two to five times more than conventional jet fuel
- In Europe, mandate-driven compliance has pushed airline costs to more than four times traditional fuel prices
- Under ReFuelEU Aviation, airlines may pay up to five times the price of conventional fuel, often without guaranteed supply or consistent certification
Availability is negligible:
- SAF usage in 2025 was expected to represent between 0.6% to 0.7% of total global jet fuel consumption
- In 2025, SAF output was expected to reach approximately 1.9 million tons (nearly double the ~1 Mt produced in 2024). In 2026, production growth is projected to slow, reaching around 2.4 Mt
Estimated 2050 demand exceeds 449 billion liters.
IATA considers that airlines faced a $2.9 billion premium for available SAF supply in 2025 alone. In air cargo, these premiums are passed through to shippers via surcharges or SAF contribution programs. Forwarders do not absorb these premiums. Either shippers pay—or sustainability commitments collapse at booking.
Other alternatives offer limited relief as green methanol and biofuels remain scarce and electric fleets work primarily for short-haul and urban transport.
The reality is blunt: most customers want greener transport only if it does not cost more. That position does not align with today’s fuel economics or infrastructure constraints.
Green Corridors Help—But They Don’t Fix the Math
Green Flight Paths in aviation are designed to concentrate SAF use on specific, high-volume routes. The logic is scale: create predictable demand, justify investment, and reduce unit costs over time.
These corridors:
- Focus on long-haul routes between major hubs
- Mirror “green corridor” concepts already seen in shipping
- Help de-risk early-stage SAF production
They are necessary—but they do not eliminate price premiums or supply shortages. SAF commercialization remains in its infancy.
Emerging corridors include Southeast Asia–Europe where SAF is becoming a tradable commodity, but only in regions with supportive policy frameworks.
Net zero promises vs. operational reality
Day-to-day logistics operations do not behave like sustainability models:
- Urgent shipments override emissions targets
- Route changes increase fuel burn
- Network inefficiencies erase theoretical savings
Net-zero commitments collide daily with service reliability, transit-time guarantees, and margin pressure. This is not a planning failure – it is how logistics actually works.
What Forwarders Can Do – and What They Cannot
What is realistic
- Improve emissions visibility and reporting discipline
- Optimize networks through consolidation and planning
- Have transparent, fact-based discussions with customers about trade-offs
What is not
- Absorbing green fuel premiums
- Forcing carriers to change fuel strategies
- Delivering net-zero outcomes at spot-market pricing
Forwarders that survive the ESG transition will be those that manage expectations and stop overselling what they cannot control.
Governance is the weakest pillar—and the most dangerous
Governance remains the least developed ESG pillar in logistics, even as its risk profile explodes.
Forwarders now control pricing and customer data, trade and customs documentation, as well as emissions and compliance records.
Weak governance shows up as poor data ownership, missing audit trails, and inconsistent reporting across regions. Under CSRD and national due-diligence regimes, these failures are no longer IT issues — they are governance breaches.
In many organizations, ESG accountability is still diffused across departments, with no single executive clearly responsible. That works in stable environments. It fails under regulatory pressure.
The real sustainability problem
Sustainability in logistics is now a core requirement, not optional, and the economics of decarbonization are already affecting carriers and supply chains; industry reporting shows that fuel inefficiencies and emission pressures are costing airlines billions and adding complexity and administrative burden across logistics networks, illustrating that current incentive structures misalign operational control with accountability.
