UPS

RATING

SECTOR

Transportation

WEBSITE

CONTACT

55 Glenlake Parkway NE
Atlanta, GA 30328
United States
Tel.: 1(404) 826-6000

STOCK EXCHANGE

LISTING

  • Climate Change “A” List (CDP)
  • Climate Disclosure Leadership Index (Carbon Disclosure Project)
  • Dow Jones Sustainability World & North America Index (Dow Jones & RobecoSAM)
  • One of America’s Top 100 Most Sustainable Companies (Barron’s)

EMPLOYEES

495,000

CHIEF SUSTAINABILITY OFFICER

Suzanne Lindsay-Walker

AWARDS

  • Clean Air Excellence Award (United States Environmental Protection Agency) for their alternative fuel program
  • Sustainability Excellence Award (Cisco Systems)
  • Climate Leadership Award (U.S. Environmental Protection Agency)
  • Best Global Green Brand (Interbrand)
  • Promise to the Earth Award(National Arbor Day Foundation)

CONTENT SOURCE

FURTHER READING

Report created by Sagarika Deshmukh

UPS

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

United Parcel Service, Inc. is a logistics and package delivery company, which provides supply chain management services. Its logistics services include transportation, distribution, contract logistics, ground freight, ocean freight, air freight, customs brokerage, insurance and financing.

Its subsidiaries include: cargo airline (UPS Airlines), freight-based trucking operation (UPS Freight, formerly Overnite Transportation), delivery drone airline (UPS Flight Forward).

UPS has 10.6 million customers and 20.6 million packages daily. UPS operates over 120,000 delivery vehicles worldwide, as bicycles, delivery vans and tractor-trailers. UPS contracts with several railroad companies in the United States and has also a fleet of over 564 owned and leased aircrafts facilitating air shipments by the company in over 200 countries and territories worldwide.

The company operates its business through three segments: U.S. Domestic Package, International Package and Supply Chain & Freight.

  • The U.S. Domestic Package segment offers a full spectrum of U.S. domestic guaranteed ground and air package transportation services for letters, documents, and packages.
  • The International Package segment includes small package operations in more than 220 countries and territories worldwide in Europe, Asia-Pacific, Canada and Latin America, the Indian subcontinent, and the Middle East and Africa.
  • The Supply Chain & Freight segment offers transportation, distribution and international trade and brokerage services, as well as financial and information services. 

Company Sustainability Activity

UPS is making efforts to lower their carbon footprint by setting up specific targets. They’re working to reduce carbon intensity by 20% across their operations by 2020 (2007 baseline). They have already made an overall reduction of 16.5% toward this goal.

Despite these investments, their emissions in 2018 increased 6.2% over a 2015 baseline, primarily driven by skyrocketing growth in e-commerce.

From 2008 through 2018, they invested $1 billion in alternative vehicles, fuels, and infrastructure globally, with more than 10,000 of these vehicles in the fleet today.

The company has also taken measures to reach a lower carbon footprint in the air. They’re willing to reduce single-use packaging and for that, they have made a partnership with Loop.

Finally, they’re investing in renewable energies and rewriting the urban delivery with more than 30 projects to reduce congestion and pollution in dense urban centers through electric vehicles and a range of delivery solutions powered by bicycles and tricycles. 

Highlights

  • 1 million+ miles were driven every business day in UPS’s fleet of 10,300 alternative fuel and advanced technology vehicles
  • 1 million+ metric tonnes of emission will be avoided as a result of UPS’s 2019 commitment to purchase 250 million gallons of renewable natural gas (RNG) over the next several years.
  • UPS has 40,000 UPS ACCESS POINT® locations to help reduce missed deliveries and their associated fuel and emissions. 
  • UPS supported 3,500+ women owned businesses through the UPS Women Exporters Program, a global initiative that helps women cross borders, overcome challenges, and expand their businesses to global markets
  • UPS invested $1 billion in employee training and development programs in 2019.
  • 21.7 million volunteer hours were contributed by UPSers, their families, and their friends since 2011.

Targets

REDUCING ENVIRONMENTAL FOOTPRINT

  • UPS set the target to reduce their absolute greenhouse gas (GHG) emissions in global ground operations from the baseline of 2015 by the year 2025 → their goal is to reduce overall carbon intensity 20% by 2020 with a 2007 baseline.
  • UPS has set a target to plant 15 million trees from 2012 to 2020.
  • UPS aims to have 40% of their total fuel usage to come from alternative and renewable fuels to reduce absolute GHG emissions by 2025

RENEWABLE ENERGY

  • UPS strives to have 25% of their total electricity needs generated from renewable sources.

SAFETY AND WELL BEING

  • UPS aims to reach their annual charitable contributions to 117 million dollars by 2020.
  • UPS strives to have a cumulative of 20 million volunteer hours from 2011 to 2020.
  • In 2016, UPS set a goal to reduce the number of auto accidents from 9.04 to 8.77 per 100,000 driver hours, representing a 3% reduction by 2020.
  • In 2016, UPS set a goal to reduce their rate of lost time injury (LTI) incidents from 1.82 to 1.80 occurrences per 200,000 hours worked by 2020 ( 1% reduction).

Progress

REDUCING ENVIRONMENTAL FOOTPRINT

  • In 2011, UPS launched the Global Forestry Initiative to plant and preserve trees that help absorb carbon, prevent erosion, and provide wildlife habitat in urban and rural areas around the world. In 2019, they planted 2.8 million trees through employee volunteer projects and through grants to their environmental nonprofit partners, achieving their goal of 15 million one year ahead of schedule with 15.4 million trees planted.
  • In 2019, UPS’s absolute emissions decreased 0.8% over 2018 performance; however, total emissions remain 5.4% above the 2015 baseline. 
  • In 2019, UPS continued investing in alternative fuels for their ground fleet, purchasing 135 million gallons of alternative fuels, which represents 24% of their total ground fuel usage.
  • They committed to purchase 250 million gallons of renewable natural gas (RNG) over the next several years, including the largest-ever single U.S. investment in RNG.
  • By 2020 UPS aims to have 25% of the total vehicles purchased be with alternative fuels and advanced technology.
  • UPS’s fleet of more than 10,300 alternative fuel and advanced technology vehicles includes all-electric, hybrid electric, hydraulic hybrid, ethanol, compressed natural gas (CNG), liquefied natural gas (LNG), RNG, biodiesel, and propane vehicles.
    • In 2019, UPS continued expanding this specialized fleet; however, year-over-year investments slowed to 4% of new vehicles purchased.
    •  They made the commitment to purchase 6,000 natural gas-powered vehicles and planned vehicle purchases in the next three years in 2019.
    • 2020, UPS announced a significant investment in the U.K.-based startup Arrival, which will expand their fleet to include an additional 10,000 all-electric vehicles.
  • In October 2009, UPS became the first small-package carrier to offer customers the chance to buy carbon offsets to neutralize the greenhouse gas emissions generated by the transport of their packages.
  • UPS and Workhorse Group, Inc. are working together to design a fleet of Class 5 electric delivery trucks from the ground up. They will deploy these electric vehicles at various U.S. locations that will deliver by day and recharge overnight, providing a clean, quiet experience in urban areas.

SOCIAL IMPACT

  • In 2019, UPS reduced the number of auto accidents by 3.1% surpassing their 2020 goal. 
  • In 2019, the company’s LTI rate rose to 2.07, a 13.7 percent increase over the baseline, primarily due to a continued increase in new employees hired to meet capacity demands of e-commerce growth.
  • UPS’s annual charitable contributions reached $123.8 million in 2019, surpassing their 2020 goal one year ahead of schedule.
  • UPSers, their families, and their friends contributed 3 million volunteer hours in 2019, driving their cumulative total since 2011 to 21.7 million volunteer hours and surpassing their 2020 goal one year early.

RENEWABLE ENERGY

  • In 2019, UPS completed a 10MW deployment of rooftop solar arrays on facilities in New Jersey, Connecticut, and Massachusetts, and began procuring renewable electricity for more than 30 UPS facilities in Virginia. 
  • UPS operations in 10 European countries are achieving near-zero emissions through the use of renewable electricity. 
  • In 2019 3.9% of UPS’s total electricity needs were generated from renewable sources.
  • UPS is the largest consumer of renewable natural gas (RNG) in the transportation sector. Since 2014, they have used more than 28 million gallons of the fuel in their ground fleet, which reduces the need for fossil fuels by supporting the capture and use of harmful methane gas. They recently announced an agreement to purchase 170 million gallon equivalents of RNG through 2026 from Clean Energy Fuels Corp.” 

WASTE AND RECYCLE

  • UPS made a collaboration with their customer TerraCycle to reduce single-use packaging. The system they created is oop which provides a variety of consumer goods in reusable and returnable packaging.

Certificates

  • ISO9001
  • AS9120

UN Sustainable Development Goals

UN SDGs Compliance

SDG 5

  • UPS launched their Leadership Summit focused on increasing the representation and advancement of women in technology at UPS. The goal of the event, sponsored by Chief Information and Engineering Officer Juan Perez, was to unite information technology and engineering teams in an effort to develop strategies that will help cultivate an environment where women can advance their careers

SDG 9

  • UPS announced several service enhancements that not only improve convenience and control for consumers and small- and medium-sized businesses (SMBs), but also reduce the environmental impact of deliveries.
    • Centralized pickup and drop-off locations, coupled with route optimization technology, reduce the number of delivery stops their drivers make, which decreases fuel usage and emissions.
    • They have expanded the UPS Access Point® network, partnering with leading retailers across the U.S. to offer a secure location to drop off and receive packages. UPS Access Point locations are an ideal delivery option for customers to safely receive packages during convenient business hours if they won’t be home.
    • As the largest consumer of renewable natural gas (RNG) in the transportation sector, UPS is helping transform a waste product into a low-carbon alternative fuel. 

SDG 11

  • UPS and The UPS Foundation bring extensive experience helping communities prepare, respond, and recover from natural disasters and humanitarian crises and they’re applying these capabilities to help address this pandemic.
  • In addition, local UPS teams engage directly with local community organizations. They are supporting the COVID-19 response with their global smart logistics network and funding local, national, and international community partners with more than $21 million in funds, in-kind shipments, and logistics support.
  • As UPS builds new facilities, they are focused on environmental sustainability. For example, the new Paris hub is equipped with LED lighting, as well as rainwater barrels which collect water used for washing vehicles. During construction of the Atlanta facility, an on-site concrete batch plant saved approximately 8,700 truckloads from being driven through the streets of the city, and rubble from blasting activities was recycled back into site materials. A vehicle wash system using reclaimed water will save 29 million gallons of water per year, and energy management has been integrated with conveyor systems, stopping belts if no packages are detected. The facility earned Three Green Globes certification through the Green Building Initiative for these and other sustainable features.”

SDG 13

  • UPS continues to support innovation that will accelerate the development of lower-carbon fuels for aviation. In 2018, UPS was among the first companies to join the Sustainable Air Freight Alliance (SAFA) organized by BSR ( Business for Social Responsibility). SAFA is a buyer-supplier collaboration for shippers, freight forwarders, and air freight carriers to track and reduce carbon dioxide emissions from air freight and promote responsible freight transport. Through this new forum, member companies learn best practices, share data tracking tools, and leverage collective action to shape international standards. These activities are reinforced by BSR’s data-driven approach to measurement, reporting, and verification, enabling companies to chart a new course for sustainable air transport.
  • Thanks to years of collaboration with U.K.-based technology firm ARRIVAL, UPS will also soon have its first electric delivery vehicles in Europe purpose-built to their specifications. The vehicles will come equipped with Advanced Driver Assistance Systems that provide the driver with an intelligent, connected vehicle with zero tailpipe emissions. 

Evaluation

UPS’s business model is not based on sustainability, but they’re trying their best to be eco-friendly. The company doesn’t have significant certificates, but they’re on sustainable indexes and listings, and the company has received several awards.

UPS is transparent and has set clear objectives that they’re hoping to reach in the upcoming years. UPS has been given a C rating.

Analyst Outlook: Neutral

Even though UPS has set clear goals regarding the environment, they seem to lack improvement, and in many cases seem to be getting worse over the years as their business grows. For instance, UPS’s CO2 emissions decreased by 0.8% from 2018 to 2019, but in reality emissions have actually increased 5.4% since 2015.

The company needs to make more solid achievements in these areas to improve their score. This is why the analyst outlook is a C neutral.

Key Points

  • UPS employees has been reported to be involved with drug trafficking in 2019.
  • UPS set the target to reduce their absolute greenhouse gas (GHG) emissions in global ground operations from the baseline of 2015 by the year 2025.
  • In 2019, UPS continued investing in alternative fuels for their ground fleet, purchasing 135 million gallons of alternative fuels, which represents 24 percent of their total ground fuel usage
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