UPS’s economic sustainability starts with helping other businesses become more sustainable. We do that by handling our customers’ shipping and logistics activities more costeffectively and resource-efficiently than they could do it themselves. Then we do more. We create additional direct economic value by compensating our employees well, paying out a share of profits to shareholders, directing a growing percentage of our procurement spending to small and diverse businesses, and contributing to our communities in the form of funding for The UPS Foundation and matching funds for our employees’ donations to United Way charities. A thriving global economy makes UPS more sustainable in every way.
What drives our economic value creation is our world-class logistics capability. Our integrated logistics network—and people who operate it—makes us efficient and careful with resources by habit and inclination. It also inspires creation of new products aimed at helping customers become more efficient right along with us. The less we waste, the more we are able to share with others. And the more we can successfully expand our business by satisfying customers, the greater the positive impact we can have.
- Our global logistics network is a nimble giant: able to handle all kinds of services without duplicating time or energy.
- We use our vast network and IT capabilities to optimize transport that satisfies our customers, whether it’s on the ground, in the air, over water, or in any combination.
- We equip, load, and route every vehicle and airplane we own for maximum efficiency: minimizing the miles we travel while maximizing the amount of shipping we accomplish.
- We operate a large, diverse, and expanding fleet of alternative fuel and advanced technology vehicles, to reduce our emissions and help society test new automotive technologies.
- We design and maintain our distribution facilities for maximum efficiency. We also operate multi-client facilities that help everyone minimize energy, water use, and waste.
- We systematically teach, train, and promote our employees so they, and UPS, can reach our full potential.
- We have invested considerable resources over many years to understand our environmental impact, and we’re using our knowledge to help our customers manage their emissions, too.
- We share our logistics assets and expertise to help other organizations—both commercial and non-profit—become more efficient and effective.
The economic sustainability of UPS is inextricably linked to the sustainability of the global economy, because we play a key role in facilitating trade. In 2012, we delivered an average of approximately 16.3 million packages each business day, for an average of 8.8 million customers per day. Because our work is connecting individuals and organizations in more than 220 countries and territories each day, we have a clear understanding of how far globalization has progressed, and how it plays out in different circumstances. We know from first-hand experience how global trade has improved people’s lives and increased cooperation among nations. We can also see the consequences of unsustainable actions and decisions taken by people, corporations, or governments.
The reality of our interconnectedness drives our management approach to economic sustainability—when the global economy thrives, we thrive. Therefore we strive to deliver value for customers, shareholders, and stakeholders in a responsible manner, including products and services that help customers meet their sustainability objectives.
We report on our actions and results transparently, so that customers and other stakeholders can compare UPS to other companies. This Report, and its application of the standards of the Global Reporting Initiative (GRI) is just one example of that transparency. We also conduct a vigorous investor relations program for shareholders and publish comprehensive annual and quarterly financial reports.
We steadily expand our international business outside the U.S. in order to facilitate global free trade. The flexible, multimodal design of our logistics network is a direct response to the fact that we must connect all types of participants in the global marketplace, from rural sole proprietors to urban multinationals. The scale of our robust network is designed to increase the flow of goods and services traded within the global economy.
At the same time, we continually strive to increase the energy and emissions efficiency of our network, so we can leverage that efficiency into the value chains of our customers. We offer logistics consulting services for the same reason. We know from direct experience how an inefficient value chain can limit a customer’s growth and profitability, while adding to the carbon footprint. We are managing and expanding our business internationally to help address these two issues on a global scale.
We use our purchasing power to create sustainable opportunities for others. Given the choice, we choose to source from businesses that offer more sustainable options for the goods and services we need. We also direct our procurement spending to small and diverse businesses. UPS was founded by an entrepreneur more than a century ago, and remained a small business for years. Furthermore, we have seen the power of small business formation improve the lives of people all over the world. Among other factors, small-business formation in many countries is a powerful opportunity for women to increase their economic and global literacy and, with it, the well-being of their families and their communities.
Policy, Goals, Performance
Our Code of Business Conduct states our policies for how we operate in the marketplace. We publish the Code along with our strategy, mission, and values on our website (investors.ups.com).
Our financial goals and performance are documented extensively online and in our Annual Report (investors.ups.com). A summary table of financial highlights for 2012 and 2011 is in the "Company Snapshot" section
UPS’s pension and post-retirement plan obligations are discussed in detail in our Annual Report, primarily in Notes 4 and 5 to the Consolidated Financial Statements beginning in the "GRI Reporting 2012 Highlights" section. of the Annual Report on Form 10-K. In 2012, we made contributions totaling US$917 million to pension and post-retirement plans. We met the funding contribution requirements for all of the defined benefit plans that we maintain.
UPS does not receive significant financial assistance from the government. We do participate in public-private partnerships that may involve tax incentives, such as the Interstate Clean Transportation Corridor (ICTC) in the Western U.S. This is one of the most heavily traveled commercial freight corridors in the world, and UPS is working with numerous government agencies and other companies to build out the natural gas vehicle fueling and maintenance infrastructure necessary to support large fleets of low-emission natural gas trucks. The ICTC is an important contribution to reducing emissions associated with the U.S. freight industry, and a model for natural gas transportation corridors in other parts of the country.
Risks and Opportunities Related to Climate Change
We provide an extensive discussion of risks and opportunities related to climate change in “Environment— Risks and Opportunities”. The main economic risks are related to the possibility of regulation of greenhouse gas (GHG) emissions, if such regulation imposes new costs for transportation and logistics companies. The main opportunity related to climate change is to compete even more effectively under such regulation, because of our proven capabilities for measuring, managing, and mitigating GHG emissions.