Green logistics: UPS lays out CO2 emissions reduction goals in new sustainability report
Jeff Berman, Group News Editor -- Logistics Management, 7/7/2009
ATLANTA—UPS said today it plans to reduce its airline carbon emissions by an additional 20 percent from 2005 to 2020, which would be a cumulative reduction of 42 percent since 1990.
This objective was disclosed in its annual UPS Sustainability Report, which noted that UPS Airlines has a firm position as an industry leader in fuel efficiency in the package delivery sector, with an efficiency factor of 1.42 CO2 pounds per available ton mile—and a goal to reduce that factor to 1.24 CO2 pounds per available ton mile by 2020.
UPS officials said the 2020 aircraft emissions target was made its first goal, because jet planes are the source of 53 percent of the company’s total carbon output. And they added that the company plans to meet these goals by investing in more fuel-efficient aircraft types and engines, fuel-saving operational initiatives, and the introduction of biofuels.
This year’s UPS Sustainability Report provides data on the company’s CO2 inventory from a direct (Scope 1) and indirect (Scope 2 and 3) basis for the first time, which the company said provides a level of reporting that is unusual for its industry. This data is comprised of data on the company’s CO2 footprint from various perspectives, including operations, infrastructure, transportation partners and service contractors, and supply chain, as well as by how its business is organized and how UPS sources the energy it uses.
UPS CEO Scott Davis wrote in the report that because its customers rely on the transportation and logistics industry as part of their supply chains, they need accurate information from the industry to calculate their own CO2 inventories and report them to the public, which he explained is the driver for UPS advocating full disclosure of its direct and indirect CO2 emissions for the transportation and logistics industry.
Some of the main takeaways of this year’s report include the following UPS sustainability-related efforts:
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expanding its Key Performance Indicators (KPI) to capture carbon footprint-related data, including metric tons and metric revenue per package and gallons of fuel per ground package;
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its plan to make its transportation networks as efficient and environmentally sound as possible;
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creating a Sustainability Steering Committee; and
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formalizing and documenting an enterprise-wide sustainability strategy, among others.
And some of the chief components of UPS’s plant to reach its 2020 CO2 emissions reduction goals include transportation network optimization to minimize the number of miles driven/flown, investing in fuel-saving technologies to reduce a dependency on fossil-based fuels, and energy conservation via facility design, operational practices, renewable energy, and retrofitting.
UPS Spokesperson Lynette McIntire told LM that the main drivers behind this plan center on customer needs.
“We know our customers are paying close attention to their environmental impact, and we know we are a big part of their supply chain,” she said. “As a responsible transportation partner, we want to tell them everything we are doing…in terms of full CO2 emissions disclosure and also what we are doing from a remedial standpoint to minimize the amount of miles we fly and drive and reduce CO2 emissions at the same time.
McIntire added that UPS also wants to be a reliable supply chain partner for shippers, which is why it now has transparency in its CO2 emissions reporting [Scope 1, 2, and 3] and emissions-reduction goals.”
“UPS has taken a bold step in terms of their willingness to provide data related to their direct and indirect carbon emissions, as well as their call requiring all transportation and logistics companies to report their direct and indirect emissions,” said Brittain Ladd, director of logistics and manufacturing at Cognizant Technology Solutions and a leading expert on green supply chains and logistics. “The challenge, however, is that not all transportation and logistics companies have an infrastructure in place or the tools necessary to accurately capture and report their carbon emissions.”
But with so many different consulting firms and 3PL's able to provide support to provide transportation and logistics providers—and shippers—with the expertise and tools to accurately capture and report their emissions, Ladd said he sees no reason why there won't be universal reporting of direct and indirect carbon emissions from all transportation and logistics providers within just a few years.
“The report from UPS is also just one more indication that the issue of carbon emissions and their impact on supply chains continues to grow in importance to businesses, customers and shareholders,” noted Ladd.
UPS is not the only large transportation and logistics service provider to herald emissions reductions goals. In May of this year, FedEx rolled out a plan to have one-third of its jet fuel come from biofuels by 2030 and reduce greenhouse gas emissions from its worldwide air operations by 20 percent by 2020 per available ton mile, among other endeavors.
In April 2008, Deutsche Post DHL introduced its “GoGreen Program,” which is focused on reducing the company’s carbon footprint by 30 percent by 2020.
For more information on the UPS Sustainability Report, go to www.responsibility.ups.com/sustainability.
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