UPS Sustainability Practices and Philosophy Essay

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Background

United Parcel Service (UPS) was founded in 1907 and is the world's largest package delivery company. As a provider of transportation and logistics services, UPS operates globally, using airplanes and trucks to move goods around the world. The company's ground-based shipping business has long been its mainstay, but after the arrival of FedEx, UPS entered into the overnight courier business as well. This move began the company's transformation into more of an integrated logistics provider from being simply a package delivery company. It now has a retail operation, as well as package delivery and specialized logistics services.

Background of its Sustainability Practice

Perhaps the earliest component of UPS corporate social responsibility platform is the UPS Foundation. This is the company's charitable works foundation, and is focused on building communities, and on projects like the Global Forestry Initiative, both in terms of finances and in terms of volunteer work. It is worth noting that sustainability by definition does not include charitable works – that is corporate social responsibility – there are many types of good works that a company can perform and they are not all to be lumped under the same banner.

At its core, however, UPS cannot be a sustainable business. By definition, for something to be sustainable it needs to be an activity that can be replicated infinitely. That is simply not the case for UPS' business, because it is entirely dependent on burning fossil fuels. The company flies hundreds of aircraft around the world each night, and there is simply no way for air travel to be sustainable – and the negative contribution of the aircraft that UPS uses outweighs anything else the company does, leaving UPS with a negative impact on the planet, simply through the conduct of its daily business.

An examination of current sustainability practices where resource usage is concerned indicates that such activities are relatively new to the company. It has done little in the way of concrete action, which indicates that it might only have been thinking about this for a few years. As such, there is not much to talk about in terms of UPS' history of sustainability –that's never been a big part of its business and even now sustainability does not appear to be something the company takes all that seriously.

Current State of UPS Sustainability

The current state of UPS sustainability is captured by its Sustainability website. The highlight initiative is the research work that the company is doing with GreenBiz "to research the business challenges associated with growing cities." The study that UPS funded highlights the concerns that business leaders have with respect to operating in urban environments, including things like lack of critical infrastructure and insufficient collaboration across sectors. The study was mainly focused on the sentiments of business leaders, however, rather than devising and implementing actual strategies. That business leaders are aware of things like pollution seems perhaps not so mind-blowing; the report does not stand as a strong testament to any sort of commitment to sustainability.

The company also highlights on its website a pilot program in Hamburg where it uses bicycles as part of its delivery fleet. The bicycles have a storage area in the back for small packages, and can allow the courier to cover more ground than a foot courier, without incurring any added carbon usage.

The company's sustainability report discusses a couple of additional issues. These include energy, emissions and fuel supply. Under energy UPS makes the claim "We help the world grow more prosperous by providing transportation and logistics solutions that facilitate trade.

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" This says absolutely nothing about sustainability – growing more prosperous, sure, but not in a manner that is remotely sustainable given the fossil fuel intensity of the company's operations and thus its contribution to climate change. The company does accept that it is contributing to this problem, and has begun to implement a few policies and procedures to address its use of fossil fuels. Otherwise, the company has little to offer with respect to sustainability –its position is really to shrug its shoulders, and carry on business as usual. It offers that it has a target to reduce ground operations emissions by 12% in 2025 from a 2015 baseline. First, this is just ground operations, and the most egregiously unsustainable component of the company's operation is in the air. Second, 12% in ten years is a pretty low bar to clear – that savings can probably be achieved simply through attrition of older vehicles in its fleet, without any particular action on the company's part. And 12% is nowhere near enough to reduce the company's net negative impact on the environment.

Thankfully, the company has reported greater successes, including a 16.6% reduction in carbon intensity over ten years since 2007. Again, this might simply be fleet-related and would have happened anyway, but it does show two important things. One, it shows that the company is measuring its carbon emissions, which is a critical first step to eliminating them; and two, the company has targets to help motivate managers to make decisions that will reduce its overall carbon intensity over time.

The company has also set a goal to have 25% of its total electric energy use in 2025 come from renewable sources. It has invested $18 million in 8 US solar facilities in order to increase the amount of solar energy the company generates. UPS has also partnered with Tevva Motors on hybrid trucks, and this shows promise in terms of being able to reduce the carbon footprint of the company's ground fleet – surely by more than 12% by 2025 if electric or hybrid trucks can be implemented across UPS at scale.

Unfortunately, the company's sustainability report is light on specifics. Consider the following excerpt:

"UPS is actively engaged in developing collaborative solutions through the World Business Council for Sustainable Development’s Zero Emission Cities Initiative, the University of Washington’s Urban Freight Lab, and other organizations."

This is a pretty typical passage – it sort of indicates that UPS does some talking about sustainability, but there is nothing in here that says "We did X, and the outcome was Y." It's good that they are talking with stakeholders, but that's not the same thing as delivering actual results, and UPS management must know that.

Opinion

It seems evident that UPS' sustainability practice could use work. It is mediocre. There are a few reasons for making this assessment. First, the company only has a few marginal initiatives, and that includes the Foundation and its diversity initiatives. The partnership with Tevva Motors might be the most promising thing it does, though if it can implement bicycle delivery that might help, too. The reality is that a lot of what the company talks about in its sustainability report either does not pertain to sustainability, or it does not show evidence of sustainable activity. Yes, the company uses energy, but touting the fact that it contributes….....

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