Episode 31 | The Catalyst Series: How DSV Scales Freight Decarbonization Through Data and Partnerships

95% of DSV's emissions sit in Scope 3. No single company can solve that alone.
In the latest episode of the Smart Freight Conversations: The Catalyst Series, Andy Golding, Director Strategic Services at SFC sits down with Natalia Lykova, Senior Director of Group Sustainability Insights at DSV, to share how one of the world's largest logistics providers is turning emissions data into real decarbonization decisions.

Key insights from the conversation:

- Why data only matters when it drives action, not just reporting
- How engaging procurement early reshaped DSV's Book and Claim process
- Why trust and standards are essential to scaling credible decarbonization
- What multimodal decarbonization looks like in practice, from electrification to SAF
This episode is a practical look at how sustainability, data, and business intersect at one of the industry's largest logistics providers.
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Transcript

SPEAKER_01 0:08

Hello and welcome to another episode of Smart Freight Conversations, where we share interesting and important insights and updates on freight decarbonization and the drive towards a zero emissions logistics industry. I'm Andy Golding, Director of Strategic Services here at Smart Freight Center, or SFC as you'll hear us call it, and I'll be your host for today. Today's episode is exploring how data, insights, and measurement are really shaping decarbonization across global logistics networks and how companies are turning emissions visibility into actionable decisions across multimodal supply chains. Joining me for this episode is Natalia Likova, the Senior Director of Group Sustainability Insights at DSV. Natalia, welcome. Let's drive into today's episode. To start us off, could you tell us a little bit about yourself, about DSV and your core activities and your role within the organization? Happy to.

SPEAKER_00 1:11

So DSV is a global logistic provider. We work across basically every um transport mode, road, air, sea, rail, um, practically with engaging with all the industry players and across all the industries as well. So at DSV, I'm heading group Sustainability Insights, uh, and my role, my position uh comes in the intersection of sustainability data and business. So in uh in simple terms, um in my role, I'm not only setting the decarbonization ambitions, but I'm also there to uh convert them into practical tangible uh measures coming from all the way from carbon emission uh accounting down to our decarbonization products. So it's really cross uh a cross-dynamic of uh sustainability uh intersections these days.

SPEAKER_01 2:12

What an interesting role and what an important place to sit at that intersection of sustainability, of data, and of business, because what we know more and more is that we can't have sustainability as a nice add-on. Sustainability really needs to be deeply integrated and embedded into every decision that a business is making. But in order to make good decisions, we need good data. And in order to track our progress, we need good data, but we also have a business to run at the end of the day. So we have to make sure that we're hitting our targets, we're driving profitability, but also making good decisions for the future, not just of the planet, but also of our business and our supply chains. Absolutely. Very, very interesting. So then maybe looking at some market and customer insights as a global logistics services provider operating across all modes, as you've shared. What has been maybe some of most some of DSV's most meaningful achievements in reducing emissions across your logistics services to date?

SPEAKER_00 3:13

It's a very good question and a little bit also fundamental question to ask, I think. So I will stick to the fundamentals. I think that was the most complex but also most important things that we have done is establish that foundation. And of course, it starts, as you put it, uh, really rightfully. So with the right data foundation, um, emission calculations. We work a lot with uh Smart Fright Center um on this as well, with the clean cargo, um, with the primary data, of course, and access uh through that, and many other players, uh, like Ecotransit, for example, and others. Um and that sets us in a good sweet spot for um emission calculations, but obviously it's only the beginning. We we cannot data for the sake of data is uh is the wrong way of uh looking at the problem, right? We need to use this as a leap forward to actions. So we actually uh connected that with our book and claim uh um process and our products. So then we are taking uh the decisions based on the right uh foundation, and then we are beginning to decarbonize. And then the conversation actually shifts also on the on our customer side. Instead of asking the questions, can they deliver the uh CO2 report to us? Um, it will also pull them into a conversation, what can we actually do to decarbonize?

SPEAKER_01 4:43

And what an amazing way to stimulate that conversation and to drive demand both ways across the market. You know, if you as you say, data for the sake of data is well, what do we do with it? But when we're using it strategically, it presents a lot of meaningful opportunity. I have a question for you, and that is why? So beyond regulation, beyond compliance, beyond the necessary box that we have to tick to be able to operate in this market, what motivates DSV to be a leader in freight decarbonization? Why?

SPEAKER_00 5:19

Of course, regulations play a part, an important part, but it's not the only thing, right? Um we have first and foremost a business. Um and also having that dialogue with the customers that have an ambition as well to decarbonize. We have set quite ambitious targets ourselves, um 50% reduction in scope one and two, and 30% reduction in scope three. We cannot do that alone. Uh and that also underpins the uh the not just the urgency of action, but uh the complexity of it as well. Um more than 95% of our emissions is in scope three. We know that we are not the only ones uh that have that uh the challenge in front of us. There's many, especially manufacturing companies that uh have the same thing. Um so having that uh not just uh push but also a backing from uh from the industries across us. Um and we in DSV we put our customers' needs first in many ways, and this is also one of the business uh um strategies for us to also offer them a sustainable logistics, not just uh conventional logistics, but also the logistics that will help them to deliver on their sustainability ambitions.

SPEAKER_01 6:43

Yeah, and I suppose procurement comes into that as well, you know, when your customers are looking to procure logistics solutions, it's uh you have to make yourself an option, you have to remain a viable player in the game. Um, and I suppose it's a good thing because we know that this needs to happen. But then getting really practical, um, could you maybe share a concrete example of how, you know, you sit you said already that you sit at this intersection between sustained sustainability, data, and business. Maybe you could share an example of how you've brought those together to really move the needle or to help DSV or your customers to really better understand or reduce emissions?

SPEAKER_00 7:25

It's a very good question because I see procurement not just uh a transactional thing anymore. Um, procurement is a vital piece of the puzzle for us. So if I am to give an advice to our listener listeners today, is engage your procurement process uh early and also spend time on working with them. That's exactly what we did actually when we in the very beginning of our journey in the book and claim uh process, um, the first counterpart that I invited to the table was our procurement team. Because that's where we start designing the process together, because uh that helps not only um smoothing the uh uh the potential attractions early, but uh also empowers our colleagues to have a strategic lens when they're talking to the supply chain, but also to the customers, because they can also establish that long-term lens when they're talking with the uh with the partners and not only uh have a transactional approach to uh to the process. Um in book and claim, we're talking various complexities, we are talking uh regulatory requirements like we have in Europe with the Renewable Energy Directive, where we're sprinkling that in the procurement process. So we're embedding sustainability into a normal procurement uh uh process with the RFIs and so on and so forth. Um, but we are also asking them to be on the lookout for potential uh partnerships for potential good deals, uh, and that also enables us to unlock the cost element because that's one of the roadblocks that uh exist today in scaling decarbonization.

SPEAKER_01 9:23

Oh, there was so much juicy stuff in that answer. Um, you spoke about engaging the procurement process early, taking this long-term lens, leveraging procurement as a strategic lever, and I think it's so critical. It's procurement is uh kind of where it all starts, and it's such a point of opportunity. So if we're making that our departure point, let's use it wisely, let's make good decisions at that at that juncture.

SPEAKER_00 9:51

Yeah, exactly. And actually, now reflecting a little bit even further on this. Um if we are to start um treating our suppliers as our partners, you can also start the engagement programs and build and co-develop and co-invent things together. And I think this is also the value chain partnerships uh within sustainability are becoming more prominent and more vital for us to move forward because we we can't do it alone. Scope three is many players combined, and only together we can unlock that potential and also make it uh business viable. We can also remove some of the risks that we see today. We can also cut the costs, optimize the production processes and so on and so forth.

SPEAKER_01 10:39

And uh that treating suppliers as partners is so critical because we know that, as you said, no company can decarbonize alone. You're relying on suppliers, partners, your entire value chain. And if we really want to make scalable change in decarbonization and really reduce emissions, then we absolutely have to be collaborating. And it is one of the things that I do think is the magic of Smart Freight Center is Smart Freight Center is able to bring all of these different parties from across the logistics value chain together to have these conversations where it may not otherwise be so easy to stimulate partnerships. But I think that this is a really nice practical one-on-one example of okay, we know that we can't do this alone. So we're gonna come to our market, to our partners, to our suppliers, and we're gonna say, okay, guys, how do we do this together? And how do we drive this forward as a united front? Because it's not gonna work if we all try to do this in single lanes. Exactly. Looking at decarbonization across modes, DSV operates across modes. You are multimodal. From your perspective, what are some of the biggest opportunities and the biggest challenges when it comes to reducing emissions across multimodal logistics?

SPEAKER_00 11:53

That's a good question. And there are so many things that uh pop to my mind, which is uh uh let me pick. Um, I think the opportunity, as we uh just also to emphasize this one more time, collaboration is one of the biggest opportunities. I think that's uh something that we need to unlock more, um, and we also need to work more across the value chain. So I think that's that's clearly one of the first opportunities. Scaling the technology is another opportunity. We have so many uh technologies out there, um, much more than we had in the past when we had fossil fuels. Um, but we also need to make the right picks. So now, with the, for example, with road, um, we used biofuels for some time as a transition fuel. We also, with open eyes, recognize this as a as a transition fuel. It also comes with the risks, also sustainability risks, um, feed stocks, um uh global fork versus fuel um um dilemmas and uh the way we produce, the way we uh use the land for uh for producing some of the feed stocks. Um we know that we would need to get away from that. Uh so now we have electrification as our core priority um for DSV for road. Uh scaling that and bringing this to a TCO parity will also become our core battle to uh to conquer. Yeah. Um and but we know that TCO parity is not far off, far long uh down the line as well. Um, so then that gives us focus. Uh that also uh challenges our operations to work towards that TCO parity. And we know in certain cases it is there. Um we need to learn to operate new vehicles, uh, it's a new technology, it's also a better technology in many ways. For example, it's uh also more comfortable for drivers to drive an electric truck because there's less noise. So also the social element of uh sustainability comes uh uh uh comes through this uh this innovation. Uh but obviously there's a lot of challenges too. Uh cost is one of them, risks uh we talked a little bit about the sustainability risks too. Um so those um bottlenecks would need to be resolved. Uh, if we take RNC, the dependency across the value chain is uh quite a lot higher. Um, difference in technologies is there as well. So the two industries would need to have a pick, uh, putting all the eggs in one basket or differentiating the portfolio across all the fuel types that now exists, uh, from ammonia to biogas and um methanol, yeah, and so on and so forth. So there's a lot of uh choices to make still. Um for air, we unfortunately do not have uh off-the-shelf solutions besides uh SAF that are scalable at this point of time, and that of course we are all in a lookout for those uh uh new technologies for air. So there's a lot of things that is uh happening, very dynamic environment, and um, to be honest, with excitement looking in the next 10 years, there will be a lot to unpack and uh a lot of uh dilemmas to resolve as well.

SPEAKER_01 15:21

Well, if you're looking at the next 10 years with excitement, given that you are working at that intersection of data sustainability and business, then I'm excited because you have a really good viewpoint of the possibilities that exist. And also from what you've just shared, there is so much possibility for change that already exists, so much opportunity for action that exists. But a lot of these solutions are facing barriers to scale. A lot of them are new, we're lacking uh market demand, they're expensive. There's a number of different ways that we can look at the negative sides of them. What needs to change to remove those barriers, and how can we really accelerate adoption across the value chain?

SPEAKER_00 16:08

Such a good question. Um we should uh begin to treat sustainability uh as an integral part of the business. It's not something separate and it's not something that lives in PowerPoint somewhere and uh and discussed once a year. Um, it needs to be part of everyday decision-making process. That's why speaking about the data is actually quite important to equip our teams uh with the right uh systems, with the right tools, with the right knowledge. So they are taking the decisions and taking sustainability-relevant decisions when they're making their normal business uh decisions. So if you take a fight forwarder uh when they're designing a route uh from uh um from China to US, for example, they have the right information uh that will tell them the lead time, they will tell them uh the schedule, uh, they will tell them the price, but it will also show the uh emissions they will call uh CO2, potential uh ways to decarbonize. Uh so those need to come uh hand in hand. Um and at the same time uh also look coming back a little bit on um to the topic of collaboration. Um, I think that that is also something that uh needs to be unlocked. Uh um we we have talked um within the space of Smart Freight Week uh also how we could do that uh and remove some of the barriers that uh exist today, cost production, uh production risks, because those are the bottlenecks now. Um so uh with the right um partnerships along the value chain, those risks can be either reduced or removed. Uh so the good example from DSV could be uh partnerships that we uh that we had on SAF with Microsoft, where we have managed to have a four-party collaboration system that allows us to reduce the cost because we are optimizing the production that is driven by the volume demand, because of course that gives a security at the very beginning of the uh the chain where the fuel is produced. And that also um calls for those mechanisms, financial mechanisms, um, that companies need to build and work into their decision-making process, but also in the in their financial uh processes. We use um internal carbon pricing that uh also helps us to channel uh our investments in the right uh processes and the right uh products and the right projects that would either address our scope one and two emissions or um our scope three emissions. So those when finance, uh sustainability data, and sustainability innovation come together, I think the right decisions uh can happen better.

SPEAKER_01 19:13

And when you opened, you said that you know we really need to treat sustainability as a part of the business, and that's so important that it is part of the nuts and the bolts of the decisions that we make, not something that we just paint on top. And that bringing that collaboration also when we when we in this context talk about collaboration, it's easy to default to thinking that collaboration is actually across the value chain, but we need that collaboration internally as well, between the finance, the procurement, the operations, the planning, all of the teams need to actually be sitting together to look at all right, we as an organization have decarbonization targets, we have goals, we have commitments that we've made, ambitious as they may be. How do we put our heads together? How do we work together to actually drive this forward and make it happen?

unknown 20:01

Yeah.

SPEAKER_01 20:02

And I think you know, you mentioned also partnerships, this working together that's at absolutely the core of this whole topic. What about the role of standards and we've spoken quite a lot about collaborative initiative initiatives, but what about what is the role of standards playing in increasing and creating the transparency, preventing double counting, and most importantly, building trust in freight emissions reporting?

SPEAKER_00 20:33

I will pick one critical word out of your question. Creating trust is essential here because the credible reductions is the pathway for us to give uh credible decarbonization as well. So for that, uh sustainability is a little bit guilty of uh having uh an evolving landscape of uh standards, yeah. And this is uh a little bit uh of out-of-body experience for uh for some of the leadership, because uh if we take uh financial systems, for example, they have been evolving for hundreds of years. The uh foundation of financial systems is not changing year on year. That's not the luxury we have in sustainability, it's definitely not the luxury we have in carbon accounting. Um, and I think that uh that is also part of the translation that we need uh to be able to make as sustainability professionals, um, we need to be able to translate that uncertainty um both towards our management, towards our customers, um, but also work on removing some of those uh uncertainties uh away. And here where Smart Freight Center is also playing a key role by helping us to stabilize and Shape um the landscape of those standards that are um needed. Booking claim is one of the uh uh um good examples where MBM framework became a reality that is now uh going into a step deeper, into SPTI standards, into GSG protocol, and uh allows us to scale, impacts the actual uh decarbonization uh scalability too. Yeah. So that's the big kudos to Smart Trade Center to actually enabling that uh uh intersection of sustainability with regulations. And of course, uh at some point of time it will transition from being uh uh a soft law into an actual hard law as well. Yep.

SPEAKER_01 22:47

And uh I think you you know you said this is a developing story. It is so much of the freight decarbonization world is a developing story because freight is developing, it's you know, so we're constantly having to do the work. It's and we're doing the work whilst the goalposts are shifting as well. So, but that's no excuse to not get going and to not be taking action and managing this uncertainty. We're we're already managing some uncertainty of supply chain, uncertainty of the climate, and that impacts the way that we can work, where we can work, how we can move our goods, where we can't move our goods, needing to find new ways to move our goods. And so that managing uncertainty almost needs to become baked into our standard way of operating so that we have that resilience. We're building resilient organizations, but we're also building organizations that are helping to create a resilient future, not just for the planet, but for us as well, for that we can keep operating and keep operating at the levels that we want. Yeah, precisely. To wrap this episode, I want to ask you a lightning round question. You've been in this space, you've seen, you've been around the block, you have a good view on how far we've come, how far we still have to go. What are you most excited about in the next three to five years of decarbonization?

SPEAKER_00 24:13

Scaling our product offering, I think that's the most exciting uh process. It's connecting what we have been building on, um, connecting the knowledge, that intelligence uh on carbon with the actual very tangible uh decarbonization uh processes and bringing it further down to the customers. I think that's uh that's a key um key opportunity for uh for us going forward and scaling that process. Uh there's still uh a long way to go. Um it's maybe a daunting uh challenge, and uh I really want to give a word in a word of encouragement to all that are listening to this podcast. Um the light is is there. We are closer and closer of connecting the business value, collecting our products uh to decarbonization. And uh yes, disruption happens and it sets us back. Uh, but we are also more resilient, as you put it, uh, to bounce back when uh when the time is a little bit calmer.

SPEAKER_01 25:17

Yeah, and uh I think you hit the nail on the head when you said it can be daunting, but it's okay, we can be daunted and do it anyway because other people are doing it. We have some really concrete, practical, amazing examples of decarbonization in action. And I think if anyone listening is not sure where to get started, I would say just start. You know, join organizations like Smart Freight Center, join conversations like this, because don't let being daunted stop you from taking action. Natalia, thank you so much for joining us on this episode. You're very welcome. If you enjoyed this episode and if you'd like to learn more about freight decarbonization, head to academy.smartfreightcenter.org where we have a host of courses and free educational media resources available to help you accelerate your decarbonization journey. If you enjoyed this episode, and if you have a colleague or a partner or a supplier who you think could benefit from the listen, please consider sharing it. Thanks for listening to Smart Freight Conversations. Until next time, uh