ESG Emission Calculation and Reporting

1.0 Introduction to OTM's ESG and Emissions Framework

As implementation consultants, we are increasingly tasked with helping clients navigate the complex landscape of Environmental, Social, and Governance (ESG) requirements. The core challenges are consistent: fragmented data, evolving regulatory ambiguity, and the difficulty of embedding sustainability metrics into operational planning without disrupting performance.

Accurately tracking and reporting on transportation-related emissions has shifted from a corporate responsibility initiative to a strategic and regulatory imperative. This document provides a comprehensive overview of the features introduced in Oracle Transportation Management (OTM) that directly address these pain points, focusing on the core calculation framework, specific use cases, and key reporting enhancements.

This briefing will begin with a detailed examination of the core framework for emissions calculation and reporting introduced in OTM release 25A.

2.0 The Core Framework: Emission Calculation and Reporting (Release 25A)

The introduction of the comprehensive emissions calculation framework in OTM release 25A provides us, as implementers, with a flexible and powerful tool to model a client's unique emissions profile. This allows us to move beyond industry-average estimates and configure calculations based on client-specific operational data, such as actual fuel types, equipment specifications, and transport modes.

Key Configuration Components

The framework is built upon three core configuration objects that work in concert to transform shipment data into calculated emissions values.

Emission Activity Types

This foundational object defines the scope of the emissions calculation. It links key shipment attributes to the specific emission types that will be measured, such as Carbon Dioxide (CO2), Methane (CH4), and Nitrous Oxide (N2O). Crucially, the Emission Activity Type connects the emissions calculation logic to OTM's Bulk Planning engine through its inclusion in Planning Parameter Sets, allowing emissions to be considered as part of the strategic planning process.

Emission Activity Rule

This component serves as the matching engine that links an operational shipment to the emissions calculation process. It uses Data Configuration to map specific shipment data—such as Fuel Type—from a shipment to create the foundational Emission Activity record. Leveraging Data Configuration is a key architectural strength, as it decouples the rule from the underlying shipment data structure, allowing for more flexible and maintainable mapping as business requirements or data models evolve.

Emission Rules

This is the final and most critical component, responsible for executing the actual emissions calculation on the Emission Activity record. It executes calculations by combining a Formula Expression—which defines the mathematical logic (e.g., (distance * fuel_factor) + (weight * weight_factor))—with specific values from the Activity Rule Emission Factors table, which holds the constants for different fuel types or equipment.

2.1 The Calculation Process: From Emissions to CO2 Equivalent (CO2e)

The framework employs a multi-step process to derive the final, standardized CO2e value, providing a universal metric for reporting. First, the system calculates the individual quantities of key greenhouse gases—CO2, CH4, and N2O—based on factors defined in the Emission Rules, such as distance, weight, and fuel type.

Second, these individual emission quantities are converted into a single, comparable unit: the CO2 equivalent (CO2e). This is accomplished by multiplying each gas quantity by its official Global Warming Potential Factor (GWPF). The framework utilizes the following standard GWPF values:

• CO2: GWPF of 1
• CH4: GWPF of 28
• N2O: GWPF of 200

The sum of these converted values yields the total CO2e for the shipment, which is then persisted for reporting and analysis. For instance, using the example values from the source, the final CO2e is the sum of these products: Total CO2e = 43.11 pounds (from CH4) + 273.75 pounds (from N2O) + 855.46 pounds (from CO2) = 1,172.32 pounds.

2.2 Integration with Bulk Planning

A key strength of the framework is its direct integration with OTM's Bulk Planning engine, transforming emissions from a post-hoc reporting metric into a key performance indicator that can influence planning outcomes. The CALCULATE EMISSIONS parameter within the Rates section of a Planning Parameter Set controls when and if these calculations occur during a bulk plan.

• During Rating: The emissions calculation is performed early in the planning process as shipments are being rated. This allows emissions data to be available alongside cost and service time metrics early in the planning process, potentially influencing carrier selection if downstream logic is configured to consider it.
• After Rating: The calculation is performed after shipments have already been built and rated.
• Do Not Calculate: Emissions calculations are skipped entirely during the bulk plan.

While this framework provides a comprehensive toolkit for custom emissions modeling, its architectural underpinnings were first proven in a targeted, regulatory-driven application, which we will examine next.

3.0 Practical Application: Canadian Provincial Rail Carbon Tax (Release 24C)

Before the release of the comprehensive ESG framework, OTM introduced a targeted solution in release 24C to address a specific regulatory requirement: the Canadian Provincial Rail Carbon Tax. This feature serves as a regulation-specific pilot that proved the viability of the core architecture for persisting emissions data and integrating it with financial settlement, thereby paving the way for the generalized framework in 25A.

The key functional aspects of this feature include:

Automated Tax Calculation

The feature introduces a Calculate Carbon Tax agent action that automates the complex task of calculating carbon tax for rail shipments. It determines the tax based on the distance a shipment travels within each individual Canadian province, leveraging distance data from PC*Miler Rail to ensure accuracy.

Financial Settlement

The system automatically generates Carbon Tax Accessorials based on the provincial calculations. This enables direct financial settlement of these ESG-related charges within OTM's standard financial workflows, bridging the gap between compliance and accounts payable.

Emission Data Generation

Concurrent with the tax calculation, the process creates an Emission Activity Record for the shipment. This record is populated with calculated CO2 and CO2e values derived from the distance traveled and two configurable properties: glog.esg.carbonTax.CO2EmissionPerMile and glog.esg.carbonTax.CO2eEmissionPerMile.

For clients operating in this lane, this feature drastically reduces implementation effort by providing an out-of-the-box solution that automates a complex, province-specific tax calculation and integrates it directly into OTM's financial settlement workflow. Having explored this specific application, we will now turn to a broader enhancement that improves the usability and reporting of all emissions data.

4.0 Reporting and Usability Enhancement: UOM Conversion for CO2 and CO2e (Release 25C)

A common business challenge in global emissions reporting is the need to present data in a specific, standardized Unit of Measure (UOM), such as kilograms (KG) or metric tons, which may differ from an individual user's system-wide preference for weight (e.g., pounds). The enhancement introduced in release 25C directly addresses this by decoupling the UOM for emissions from general user preferences.

The solution is implemented via a system property, glog.business.emission.emissionWeightUom. An administrator can set this property to a specific weight UOM (e.g., KG), which then becomes the standard unit for all CO2 and CO2e values across the entire system. This ensures consistency and simplifies reporting, eliminating the need for manual conversions.

This configuration has a system-wide impact, and the specified emissions UOM is consistently applied in all relevant areas of the application:

• Bulk Plan Results and Metrics
• Emission Activity Records
• Shipment Actions
• REST API

Conclusion: The Evolution of ESG in OTM

The evolution of OTM's ESG capabilities demonstrates a deliberate and maturing product strategy. It began with the targeted 24C rail tax feature—a tactical reaction to a specific regulatory need. This was followed by the 25A release, which delivered a strategic, foundational framework for comprehensive emissions modeling. The journey continued with the 25C UOM enhancement, an operational refinement that addresses the practical realities of global reporting.

This progression positions OTM not merely as a tool with disparate features, but as a strategic partner equipped to support a client's entire ESG journey, from regulatory compliance and financial settlement to emissions-aware strategic planning. The integration of these capabilities into the core transportation management workflow ensures that sustainability considerations become an inherent part of the decision-making process, rather than an afterthought.

As ESG reporting requirements continue to evolve and become more stringent, OTM's flexible framework provides a solid foundation for organizations to adapt and meet these challenges head-on, turning regulatory compliance into a strategic advantage.