Statement of Greenhouse Gas Emissions* Loading...

*for the years ended December 31, 2012 and 2011
* Recalculated 2010 and 2011 Scope 2 GHG emissions using updated emission factors enabling the ability to better compare results over time.


Notes to Statement of GHG Emissions for the years ended December 31, 2012 and 2011
Note 1: GHG Reporting Policies 


The statement of greenhouse gas (GHG) emissions was prepared based on a calendar reporting year that is the same as United Parcel Service, Inc. (UPS or the Company) financial reporting period. 

Scope 1 and 2 GHG emissions information was prepared in accordance with the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition. 

Scope 3 GHG emissions information was prepared in accordance with the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: Corporate Value Chain (Scope 3), Accounting and Reporting Standard. Scope 3 emissions for 2012 included seven of the fifteen possible Scope 3 categories whereas 2011 included six of the fifteen categories. 

Collectively, the Corporate Accounting and Reporting Standard, Revised Edition and Corporate Value Chain (Scope 3), Accounting and Reporting Standard are referred to as the GHG Protocol in this document. 

A summary of the key disclosure and measurement policies is set out below, together with an explanation of where changes have been made from policies in the previous year. 

Notes 2 – 7 below include information on the GHG emissions by business unit, emission source, gas type, as well as intensity disclosures. 


Base year GHG emissions 


The GHG base year applies to Scope 1 and Scope 2 emissions as set out above and has been prepared in accordance with the GHG reporting policies set out here. 

The base year GHG emissions were set as of 2010 as this was the first year the organization had assured the greenhouse gas emissions. 

A base year for Scope 3 emission has not been set, since this is the third year of reporting as per the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. A base year for Scope 3 will be set in the near future. 


Greenhouse Gases 


All GHG emissions figures are reported in metric tonnes of carbon dioxide equivalents (CO2e) and include four of the seven greenhouse gases covered by the Kyoto Protocol— carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and hydrofluorocarbons (HFCs). Perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen triflouride (NF3) emissions were omitted from our reporting as they are not a material source of greenhouse gases for the Company. 

The GHG Protocol defines a global warming potential (GWP) as “a factor describing the radiative forcing impact (degree of harm to the atmosphere) of one unit of a given GHG relative to one unit of CO2”. By using GWPs, GHG emissions from multiple gases can be standardized to a carbon dioxide equivalent (CO2e). The global warming potentials used are:
GHG Reporting Scope and Boundary 


The Statement of Greenhouse Gas Emissions includes Scope 1 (direct), Scope 2 and Scope 3 (indirect) emissions that were reported for operations within the organizational boundary described below. GHG emissions have been reported from the entities where the Company has operational control (as defined by the GHG Protocol). GHG emissions that fall within the organizational and operational boundaries were reported for the global operations described below. For 2012, UPS is reporting on the following seven of the fifteen Scope 3 categories described by the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting & Reporting Standard: fuel and energy related activities, business travel, waste generated in operations, employee commuting, transportation and distribution, end-of-life treatment of sold products and franchises. End-of-life treatment of sold products is a new disclosure for 2012. In addition, we expanded the waste generated in operations category to include all waste disposal methods due to improvements in data collection and emission factor calculations in 2012 that were not in place in 2011. 

UPS is a global company operating in over 220 countries and territories. Our three reportable business segments are U.S. Domestic Package, International Package, and Supply Chain and Freight. 

The U.S. business consists of air and ground delivery of small packages—up to 150 pounds in weight—and letters to and from all 50 states. It also provides guaranteed, time-definite delivery of certain heavyweight packages. 

The International Package segment provides air and ground delivery of small packages and letters to more than 220 countries and territories around the world. 

• Europe is our largest region outside the United States— accounting for approximately half of our international revenue. In Europe, we provide both express and domestic service, much like the service portfolio we offer in the U.S., and based on the same integrated network model. 

• Through more than two dozen alliances with Asian delivery companies that supplement company-owned operations, we serve more than 40 Asia-Pacific countries and territories. 

• Our Canadian operations include both domestic and import/export capabilities. We deliver to all addresses throughout Canada.

The Supply Chain & Freight segment consists of our forwarding and logistics capabilities as well as our UPS Freight business unit. 

• We focus on supply chain optimization, freight forwarding, international trade and brokerage services for our customers worldwide, which include a broad range of transportation solutions including air, ocean and ground freight.
 
• UPS Freight is a Less-than-Truck-Load (LTL) service, which offers a full range of regional, inter-regional and long-haul LTL capabilities in all 50 states, Canada, Puerto Rico, Guam, the Virgin Islands and Mexico. 

No acquisitions or divestments occurred in 2012 that materially affect GHG emissions. 


GHG Emission Factors 


The carbon dioxide equivalent emissions associated with the activities noted above were determined on the basis of measured or estimated energy and fuel use, multiplied by relevant carbon emission factors. 

Published emission factors were used to calculate emissions from operations.

Uncertainty 


As calculations of GHG emissions contain uncertainty for a variety of reasons, we conducted an uncertainty analysis to quantify estimates of the likely or perceived difference between the reported GHG emissions and a qualitative description of the likely causes of the difference such as uncertainty in data inputs and calculation methodologies; uncertainty associated with mathematical equations used to characterize the relationship between various parameters and emission processes; and uncertainty associated with quantifying the parameters used as inputs to estimation models. UPS continues to improve internal processes for primary data collection to reduce uncertainty in its GHG inventory reporting for Scopes 1 and 2. UPS continues to work with the third parties responsible for providing the data necessary to calculate Scope 3 emissions and will continue to work on improving the data management and the methodologies used to estimate these emissions to reduce the uncertainty in its GHG inventory reporting. Using the GHG Protocol “Measurement and Estimation Uncertainty of GHG Emissions” guidance and analyzing the collected data through Monte Carlo simulations by using the @Risk statistical analysis software at 95% confidence interval, we are able to estimate the uncertainty for our 2012 GHG inventory as follows:

Methodology 


For Scopes 1 and 2, primary usage data is used to calculate GHG Emissions. The primary data is collected through various internal processes and data systems which are inputted into our sustainability performance management software that quantifies associated emissions through the application of the GHG emission factors described above. 

GHG emission calculations for Scope 3 use various sources of secondary data since primary data is unavailable. The secondary data used varies from estimated miles driven, number of packages picked-up/delivered to estimated shipment information (weight and distance per shipment). The appropriate GHG activity factor is applied to estimate the emissions reported.

Note 2 – Carbon Offset Purchases from UPS carbon neutral product for the years ended December 31, 2012 and 2011 


A carbon offset is a certified financial instrument aimed at a reduction in GHG emissions. The offsets we purchase meet the key standard of additionality, which means that the carbon reduction project in question (such as reforestation) produced a reduction in CO2 generation or sequestration of CO2 in addition to what would have been achieved by activities already planned or underway.

Note 3 – Emissions by Business Unit for the years ended December 31, 2012 and 2011

* Recalculated 2011 Scope 2 GHG emissions using updated emission factors enabling the ability to better compare results over time.


Note 4 – CO2e Intensity for the years ended December 31, 2012 and 2011
* Recalculated 2011 Scope 2 GHG emissions using updated emission factors enabling the ability to better compare results over time.


Note 5 – Scope 1 and Scope 2 Emissions by Source for the years ended December 31, 2012 and 2011

* Recalculated 2011 Scope 2 GHG emissions using updated emission factors enabling the ability to better compare results over time.


Note 6 – Emissions by Greenhouse Gas Scope and Type for the years ended December 31, 2012 and 2011

* Recalculated 2011 Scope 2 GHG emissions using updated emission factors enabling the ability to better compare results over time.


Note 7 – Scope 3 Emissions by Source for the years ended December 31, 2012 and 2011

Note 8 - Operational Boundary – Detailed Description Scope 1 & 2*
*No Scope 1 or 2 activities have been excluded from this Report

Note 9 - Operational Boundary – Detailed Description Scope 3