UPS CSR Report: Shipping More, Emitting Less

Last week, UPS released its annual sustainability report. The $53 billion logistics and parcel delivery service has long been a CSR leader, releasing reports year after year that are frank about the company’s challenges and therefore leading examples of transparency. Its 2012 report is no different: full of aspirational goals, of course, but also laden with data on the company’s successes and shortcomings.

To that end, I had a chat via telephone with UPS’ Steve Leffin, the company’s Director of Global Sustainability, and Kristen Petrella, a UPS spokesperson. We discussed one metric that caught my eye: a reduction in fuel use within the company’s air fleet while shipping volume rose almost 5 percent.

“You can have the most efficient vehicles out there, but if you’re driving them while empty, you’re not sustainable.” – Steve Leffin, UPS

UPS has a long track record of investing in its air and ground fleet in the name of fuel efficiency and the reduction of greenhouse gas emissions, from experimenting with composite trucks to investing in electric vehicles (EVs) and trucks running on biofuels. But while the face of the company is the brown delivery truck that drops off packages on your street, Leffin pointed out that 70 percent of the company’s carbon footprint is from elsewhere in the company’s transit network—as in air and rail. Only 17 to 19 percent of emissions are from UPS’ ground fleet. So how can this massive global beast of a fleet be tamed, or increase its energy efficiency? Similar to Southwest Airlines’ success over the years, at UPS it’s all about efficiency and data. Petrella noted UPS invests about $1 billion in information technology annually, and the result is the ability to scour through the company’s hub-and-spoke air network to optimize flights and delivery times.

The biggest key in tackling carbon from air transit is a metric called “block hours”: the time from brake release until the flight crew again sets the brakes at an aircraft’s destination. The company carefully totals those block hours and compares them to air shipment volume and fuel consumption. During 2012, block hours dipped 1.1 percent, while the total volume of shipments increased 4.8 percent—and fuel use decreased 1.3 percent. For a fuel- and carbon-intensive company such as UPS, that is a huge step in doing more with less.

Telematics also has a role in the company’s increased fuel efficiency and reduced emissions. There is software in many cars that tells drivers, or actually, mechanics, when there is a problem with the vehicle. UPS’ vehicles all have a “black box” that monitors just about everything, from idling time to braking to, of course,  engine performance. UPS mines that data along with the electronic boards its drivers carry, and as a result, mechanics can make any necessary repair after receiving a real-time alert—no waiting for a pesky service light on the dash to illuminate. If you follow UPS, you know about the “no left turn” rule—that is old school efficiency compared to what UPS’s IT staff reviews now. Add that all up, and UPS claims it avoided driving an additional 12.1 million miles, which translates into 1.3 million fewer gallons of fuel consumed and 13,000 less metric tons of CO2 emitted. If you have never seen a UPS driver text or talk on a mobile phone on the job—now you know why.

But, along with the other goals and achievements UPS outlines in its report, Leffin reminded me about the effort the company invests in its sustainability reporting. This is not an exercise to pacify a group of stakeholders: Deloitte audits all of UPS’ data, SGS verifies carbon data and in addition to following the Global Reporting Initiative’s (GRI) sustainability reporting guidelines, UPS engages the Amsterdam-based organization to verify the company’s disclosures. Why go through all this effort, which is time (and money) consuming? “Such transparency presents more opportunities for us to improve,” said Leffin, “and presents us the best opportunities as we measure, manage and mitigate our impacts.”

Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

[Image credit: UPS]