Executive Statement - Steve Leffin, Director Global Sustainability Loading...
Corporations have always used resources strategically. To be sustainable, they also have to use resources wisely and look ahead to see the potential of technology, policy, action, and operations to make a more sustainable world. This Report looks at all four. We chose the theme of “More of What Matters” to spotlight how UPS is using engagement, investment, innovation, and operations to increase sustainability in our workplace, the marketplace, the environment, and communities around the world.
Doing more of what matters means being constructively dissatisfied with what we do today, while continually seeking creative approaches to our challenges – even when it’s hard to find a solution that balances the social, economic, and environmental aspects of our business. Even when it takes years for the right solution to fully pay off.
An example of that for us was solar energy (see Additional Contextual Information). For years, we have been eager to make the economics work more sustainably in our favor. We wanted to own and operate the systems ourselves, rather than the usual model of renting our roofs to a third party in exchange for lower energy rates. In 2011, we refined our engineered solution that took advantage of declining prices for solar panels and equipment, and built our first solar installation using the new own-and-operate model. In 2013, we began to replicate the model with more solar installations, including two in the first quarter of the year in New Jersey.
Alternative fuel and technology investments are also a challenging area (see Practical Innovation). We operate a “rolling laboratory” of more than 2,600 vehicles that fall into the alternative category – one of the biggest such fleets in the industry. In 2012, we continued to add to our alternative fuel fleet, including biomethane. But we still want to make our ground fleet more sustainable. Unfortunately, there is no one best vehicle that meets our requirements. Each technology has limitations.
The challenge is even greater for our tractor-trailer fleet because the tractors need greater pulling power than a package delivery vehicle. In 2012, liquefied natural gas (LNG) vehicles finally became a viable option worthy of broad-scale deployment, and we made substantial investments (see Environment). LNG vehicles offer fuel costs almost half those of traditional diesel vehicles, with lower emissions of greenhouse gases. Domestic production of natural gas is increasing in our largest national market, the United States, and LNG vehicles are becoming more affordable as more of them are manufactured. We plan to have many more LNG tractors in our fleet in the near future. The return on investment may take years, but the benefits for the environment can begin immediately.
Sometimes the “more” that we do comes incrementally. UPS invests more than US$1 billion a year on technology and much of that is dedicated to making our operations more efficient. Telematics is a great example of a technology that we have had in operation for many years but which continues to generate more benefits as we take advantage of technological advances, better data, and more applications. We continue to install more telematics in our fleet and expect even more benefits in the future. It gives us unprecedented visibility into all the primary variables that affect fuel usage during every stage of our on-road delivery processes, and we use that visibility aggressively to dial in our vehicles and how we use them. The results include benefits in safety, customer service, fuel savings, and efficiency. We quantify those benefits beginning in Ground Fleet Efficiencies.
Data is a valuable yet often overlooked asset for sustainability, because it shows us both opportunities to do more of what matters and how effectively we are acting on those opportunities. The fact is, measurement is critical to improvement. Increasingly, we are sharing data with others, including customers and NGOs, to help them see and address sustainability opportunities. We are committed to more transparency so that our stakeholders are assured that we are environmentally, socially, and economically responsible.
Others are helping us to move forward with more of what matters. Over the course of a typical year, we engage with hundreds of organizations and individuals around the world to seek their ideas, to monitor their expectations, and to listen to their concerns. In this Report, we describe representative engagements (see UPS Collaborates with World Leaders in Sustainability) to show how we are joining with other organizations so that we can have more impact together.
The clear understanding we get from our engagements is that the our planet and our economic well-being will face more risks in the future which means there are ever more opportunities and more needs for collaboration. The world will see a growing population (rising from 7 billion people to 9 billion in the next 20 years) with increasing energy needs (increasing 40 percent or more over the next 20 years). There will also be abundant challenges with agriculture, food production, water and other things that are vital to the quality of life.
With greater demands than ever on our natural resources, it will take all of us to find more and better solutions than we have today. UPS is committed to doing more of what matters.