Scott Wicker, UPS’s Vice President of corporate plant engineering, was named the company’s first Chief Sustainability Officer in 2011. Wicker has been deeply involved with the advancement of sustainability at UPS for several years, establishing a dedicated engineering group that manages global sustainability data for reporting. His team oversees a cross-functional Sustainability Working Committee and a Sustainability Directors Committee that establishes key performance indicators and goals for the company.
Interview by Alison Buckholtz
How did UPS come to focus so aggressively on sustainability?
UPS’s activities to mitigate its environmental impact have been going on for many, many years—long before the term “sustainability” entered the mainstream. This is because we have always been a company focused on reducing the energy it takes to deliver packages and provide logistics services. When you begin to focus on being more energy-efficient, as well as using a sustainable source of energy, you really start to reduce carbon. Reducing carbon is directly related to burning fossil fuels, which we do a lot of—after all, we have about 100,000 ground vehicles on the road everyday in over 220 countries around the world. We have a sizable environmental impact as a result of our high energy usage—we’ve always been focused on reducing that energy.
So becoming “green” isn’t a recent decision?
No. One of the key things that makes sustainability work at UPS is that it is integrated into our business model. It cannot be something a company does “in addition to” its regular business. Since UPS was founded on very strong industrial engineering principles, we have always been focused on trying to make our network more efficient. Sustainability at UPS is about improving our environment and social impacts while keeping a keen eye on the economic side of the business, and making sure the company remains prosperous. We are always balancing the three. This focus on the triple bottom line defines sustainability for us.
What is the connection between logistics and sustainability?
Our logistics service is about moving goods from point A to point B in a very efficient manner— and the amount of carbon we emit is reduced by having an efficient, optimized and integrated network. You might be shipping materials to another part of the world, moving goods to manufacturing facilities and back out to distribution centers, and on to ports around the world before these goods ultimately reach customers. The transportation piece is where the majority of the greenhouse gas emissions occur, so reducing the carbon associated with those moves is critical to sustainability.
How much of UPS’s sustainability effort is in response to customer demand?
Our customers started to come to us five or six years ago wanting to know the carbon output associated with the goods that we moved for them, so we had to get better and better at calculating carbon footprints and understanding exactly how we were burning carbon throughout our distribution network. As the customer requests became more prevalent and detailed, we had to move away from spreadsheets and automate. We built our own carbon calculator with all the relevant information. For example, if you ship a package from Atlanta to L.A., it tells us what type of vehicle was used for each segment of travel so we know how much fuel was used; it can account for which facility it went to, and the carbon footprint of the facility; and what mode of transport is used, whether train, plane, truck, or ship. All this information is critical to providing our customers with the data they demand.
What’s your advice to companies or governments that want to increase their sustainability efforts in the transportation sector, but don’t know where to begin?
It is about knowing your data. If you are looking to become more sustainable, you have to understand your impact: your environmental impact, your carbon footprint, and other impacts, such as water and air pollution. If you don’t know it, then that is where you start to figure out where you stand. At UPS, our model is to measure, manage and mitigate. If you measure your impact, then you can manage and mitigate to improve the situation. If you have rock solid information you can build from there. Our whole sustainability program came from that sound understanding, and having accurate data. Second, in the sustainability space, transparency is extremely important. In our sustainability report, for example, we are trying to meet the requirements of the global reporting initiative and we are trying to lay out the information that our stakeholders are looking for. We have to tell our story. Do not underestimate the importance of telling your sustainability story in a very transparent way.
This article originally appeared in Handshake: Road & Rail PPPs. Handshake is IFC’s quarterly journal on public-private partnerships, exploring innovative and successful approaches by governments that are tapping the private sector to improve basic public services. Copyright © IFC, a member of the World Bank Group.