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UPS continues its impressive record on reporting, though its latest edition fails to take seriously enough the glaring challenges that come with transport growth
UPS has created a comprehensive, detailed report that is admirable, and reflects the company’s drive to ship more while emitting less. Yet can UPS avoid confronting the global reality that transporting ever more will at some point be too much?
Seventeen million. That’s how many packages UPS moves around, every single day. Try to imagine it – you will hardly be able to, as just bringing to mind the physical mass of all those goods (never mind the logistics, people power, and fuel required to transport them) is mind boggling. And guess what? Though it is already one of the world’s largest private employers with 400,000 workers operating in more than 220 countries and serving 6 million customers every day, UPS’s motto is: “Committed to more”.
In one sense, “committed to more” is simply UPS’s attempt to reverse the “hair shirt” view of sustainability that it has to mean less of everything. And the slogan is not totally surprising, as every global behemoth corporation must be committed to more: more sales, more new markets. UPS is also committed to sustainability improvements, i.e. emitting less while it is shipping more. So far, so good: in 2013 the company reached a 2016 goal three years early, reducing its carbon intensity by 10% from the baseline year of 2007. Immediately the company set a greater goal, of getting carbon intensity from a 2007 baseline down 20% by 2020. In addition UPS shipped 3.9% more goods in 2013 than in 2012, yet total emissions went down 1.5%.
UPS has been doing sustainability reports for a dozen years, and over that time has grown to be a leader in its sustainability actions and reporting, bringing welcome frankness and transparency to the discussion of transport’s effects. The 2013 Sustainability Report certainly reflects this leadership – not only is UPS one of the first US companies to report with GRI’s G4 framework, but it is also embracing the most rigorous “comprehensive” reporting option.
One result of the rigor and detail is that UPS’s document at 113 pages is more like a reference encyclopaedia than an annual update. The G4 framework has an increased focus on materiality (UPS completed a new global materiality assessment last year) which should result in a more focused and shorter report. However, selecting the “comprehensive” route means that UPS decided to report on more than one aspect for each material issue identified, which does not make for a slender publication. For the readers who crave the numbers and the detail (the sustainability geeks) as well as any stakeholder looking for the complete story on the aspect of UPS’s performance that interests them the most, it’s perfect.
UPS is also rigorous when it comes to external assurance of its report. Companies are increasingly turning to external assurance (nearly half of reporters in the 2013 reporting year) but UPS undertook a noteworthy three external third-party reviews in which the report itself is assured as well as separate assurances by two different third-party reviewers of the global Statement of Greenhouse Gas Emissions. Since G4 recommends but does not require the use of external assurance, it’s clear that UPS does not shy away from the auditors’ lens.
Delivery vehicles are not the most carbon-intensive slice of UPS’s shipping activities: airline emissions constitute 53% of the company’s global CO2 inventory. To reduce the carbon intensity of the air fleet, UPS is pursuing multiple techniques, including flying slower, adding “winglets” to aircraft, and phasing out older, less efficient planes.
Efficiencies, of course, can only push reductions so far, and UPS is aware some of its goals are harder than others to reach, especially while pursuing growth. As the report drily but succinctly explains: “[Remaining] goals are more challenging. In some cases this is due to our international expansion, which introduces new variables into data gathering and performance results for global metrics. In other cases, marketplace or technological factors are not developing as we expected, such as with biofuels for jet aircraft.”
A look at this year’s report shows that UPS will have to keep the pressure on its “rolling laboratory”, its term for the company’s extensive testing of alternative fuel and advanced vehicle technologies. The company admits that biofuels haven’t “delivered”, and says it is working within several public-private partnerships to spur further innovation in fuel technologies. Given its global scale and reach, expectations are high for this package delivery leader to find and scale non-fossil-fuel technologies that can deliver transformational shifts in global logistics.
- Follows GRI? Uses G4 comprehensive framework.
- Assurance? Yes.
- Materiality analysis? Yes, extensive.
- Goals? Yes.
- Targets? Yes.
- Seeks feedback? Yes, though a real person’s name and address are not supplied and readers must use an email form.
- Key strengths: Detailed, data-driven, yet reader friendly. Great materiality analysis. Good use of graphs.
- Chief weakness: The report could more clearly define the challenges faced in each of its most material issue areas; as it is, reference to challenges is incidental rather than central, and the overall impression can be one of “problem solved”.
- Pleasant surprises: Detailed indicators reporting – delightful for report nerds. UPS has a global “privacy officer” – a commendable approach to a topical issue.
- Level of integration: (1 to 5): 4