IFRS Foundation

Air Freight & Logistics

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Current language: English
Air Freight & Logistics industry entities provide freight services and transportation logistics to both businesses and individuals. The industry consists of three main segments: air freight transportation, post and courier services, and transportation logistics services. Entities in the industry earn revenue from one or more of the segments and range from non-asset-based to asset-heavy. Transportation logistics services include contracting with road, rail, marine and air freight entities to select and hire appropriate transportation. Services also may include customs brokerage, distribution management, vendor consolidation, cargo insurance, purchase order management and customised logistics information. The industry is crucial to global trade, granting it a degree of demand stability.

Relevant Issues (6 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for: Air Freight & Logistics

GHG Emissions
  • Greenhouse Gas Emissions

    Air Freight & Logistics industry entities generate direct greenhouse gas (GHG) emissions that contribute to climate change. Emissions are generated from fuel combustion by both air and road freight operations. Given the altitude of the emissions from jet fuel, air freight makes an especially potent contribution to climate change. Management of GHG emissions is likely to affect air freight and logistics entities’ cost structure over time because emissions are tied directly to fuel use, and thus to operating expenses. Fuel efficiency and alternative fuels usage may reduce fuel costs or limit exposure to volatile fuel pricing, future regulatory costs and other consequences of GHG emissions. While newer aircraft and trucks are generally more fuel efficient, existing fleets may be retrofitted. Capital investments in more fuel-efficient aeroplanes or vehicles and emerging fuel-management technology may reduce fuel expenses and improve profitability. These investments also may help entities capture market share of customers seeking low-carbon shipping solutions.
Air Quality
  • Air Quality

    Entities in the Air Freight & Logistics industry generate air pollutants that may threaten human health. The industry’s primary air emissions include sulphur oxides (SO?), nitrogen oxides (NO?), and particulate matter (PM), which have localised negative effects on air quality. As regulators debate the most efficient mechanisms to reduce local air pollution from the industry, entities may be forced to increase operating costs or make investments to modernise their fleets due to regulatory pressure, customer demand, and rising fuel costs. Use of more expensive alternative fuels and mechanisms that filter emissions prior to release into atmosphere can also impact an entity’s cost structure, requiring upfront costs but decreasing exposure to regulation over the long term.
Labor Practices
  • Labour Practices

    The Air Freight & Logistic industry’s reliance on independent contractors, mainly for courier driving, has come under increasing regulatory scrutiny. Independent contractors may not be not covered under the same laws that protect employees, and entities may face regulatory sanctions for misclassifying employees as independent contractors. Entities may also face legal actions from employee and contractor claims regarding wage payments, benefits, and working conditions. This may also negatively affect their reputation and ability to hire and retain employees, reducing operational efficiency and increasing turnover costs.
Employee Health & Safety
  • Employee Health & Safety

    Employees in the Air Freight & Logistics industry may be exposed to dangerous working conditions, including accidents resulting from mechanical failure or human error. Additionally, moving packages manually is a physical process that requires special training in order to minimise injury. While the fatal occupational injury rate for trucking workers is higher than average, worker safety issues in aviation are highly regulated, which raises the risk of fines or penalties when an incident occurs. Health and safety incidents may result in work stoppages and a range of costs, from medical expenses to workers compensation. Such incidents can also reduce productivity, and thus revenues, if employees believe their safety and well-being are not being prioritised. Finally, entities with poor safety records may also face increased insurance premiums and higher costs of capital, as well as reputational damage that could reduce revenue and market share. An entity can mitigate these impacts by providing adequate protection and training for employees, ensuring mechanical equipment is safely functioning, and establishing a culture of safety within the workplace.
Supply Chain Management
  • Supply Chain Management

    Many entities in the Air Freight & Logistics industry contract with large, complex networks of asset-based third-party providers to provide freight transportation services to their customers. Contracting is common among entities providing freight forwarding, logistics, brokerage and intermodal services. Contractors range across all modes of transport such as motor carriers, railroads, air freight and ocean carriers. Entities must manage contractor relationships to ensure contractor actions that may have environmental or social impacts do not result in material adverse effects on their own operations, such as decreased brand value. At the same time, entities that offer low-carbon logistics solutions may capture market share from customers seeking to reduce the carbon footprint of their shipment.
Critical Incident Risk Management
  • Accident & Safety Management

    All modes of transportation pose safety risks. In some cases, mechanical failure or human error may lead to accidents with significant environmental or social consequences, including regulatory action and lawsuits from impacted communities or customers. While the stringency of regulatory requirements may vary by the region of operation, entities that maintain the highest safety standards throughout their global operations can minimise the risks of safety incidents that affect their reputation and profitability.

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Current Industry: Air Freight & Logistics

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