FedEx prides itself for having a clear goal: to connect the world in responsible and resourceful ways. FedEx’s 2011 Global Citizenship Report, which was released on Monday, provides another indication that the second largest shipping company in the world continues to work hard to meet this goal. This shouldn’t come as a surprise – throughout the year FedEx generates a lot of green news about its constant progress, and this report does help to organize all the pieces of the puzzle to get a better understanding of the company’s priorities and strategies when it comes to sustainability.
Before we start highlighting FedEx’s achievements, it’s important to note that in this report, as in many others, we’re missing a general benchmark that would provide us better context for the data we read. In other words, when you read about better results or improved performance, it’s obvious that FedEx is less bad, but can you really tell if it is ‘good’ or ‘good enough’?
As Deloitte’s report Towards Zero Impact Growth showed, these are questions we can’t truly answer without a broader benchmark, such as the Zero Impact Growth Monitor. To be fair, it’s not just FedEx – it’s also true with regard to almost every other company not evaluated by Deloitte’s monitor or by other similar tools that provide some sort of a benchmark.
And now to FedEx’s achievements, organized in four key areas:
Economics & Access
This part relates to the essence of FedEx’s work – it sees itself as a company that powers the single largest economy – that of global trade and services. “Our digital and physical networks provide increased global access, giving people everywhere the means to connect with opportunity and innovation,” FedEx explains. In FY2012, the company’s revenues rose to $42.7 billion compared to $39.3 billion in FY 2011, and its capital expenditures rose by 17.6 percent to $4.0 billion compared to FY2011.
The company sees a direct link between increasing the access to the global economy and increasing global prosperity –“the more people, communities, businesses, and nations participate in the global economy, the more they prosper. Poverty rates drop, new markets emerge, and the global middle class expands.”
There’s one issue FedEx avoids referring to in the report – the risks involved in an unsustainable growth of the middle class. While it’s true that the surge in global middle class has a lot of positive elements, it also increases the risks for the planet – as KPMG’s report ‘Expect the Unexpected’ explains: “Billions more middle-class consumers will emerge over the next 20 years driving demand for water, energy, food and material resources. Resource supplies, infrastructure and ecosystems will come under increasing stress.”
So while FedEx strives to “connect the world in a responsible and resourceful way,” these connections can also translate into more resource-intensive diets and lifestyles. While it might not be fair to ask FedEx to take responsibility for that, there’s certainly a place to mention these risks in sustainability report that tries to connect the dots between the company’s operations and the surge in the global middle class.
Environment & Efficiency
Not surprisingly, FedEx is a champion of eco-efficiency. It reduced its aircraft emissions intensity by nearly 14 percent since 2005, and accordingly increased its target from a 20 percent reduction to a 30 percent reduction by the year 2020. It also made significant fuel saving strides with its vehicle fleet, increasing FedEx Express vehicle fleet fuel efficiency by 16.6 percent since 2005, with only 3.4 percent more to go to meet its 2020 fleet goal. FedEx Express has also increased the size of its alternative-fuel fleet by 18 percent in FY2012, with a total of 364 hybrid-electric vehicles and 118 electric vehicles in service by the end of FY2012.
People & Workplace
FedEx continues to have strong employee retention rates of over 90 percent. In addition, more than half of its management team has risen through the ranks of the FedEx Corporation. FedEx’s U.S workforce is racially diverse with nearly 50 percent minority representation. Almost a quarter of managers globally are women.
Community & Disaster Relief
FedEx puts a lot of effort in three core focus areas: Emergency and disaster relief – working with a number of international disaster response organizations that bring relief to victims of emergencies or natural disasters, child pedestrian safety – supporting organizations that help keep child pedestrians safe, and environmental sustainability – prioritizing philanthropic and volunteer efforts that benefit the environment.
In FY2011, FedEx donated space for 5.2 million pounds of charitable shipping to non-profits, more than 3,400 FedEx team members participated in FedEx Cares Week in 72 cities around the world and over a million participants worldwide participated in FedEx’s Safe Kids Walk This Way programs.
While these are great programs that also makes a lot of strategic sense, as they strategically align with FedEx’s business goals, the report doesn’t include even one employee’s story about them. Such stories can make the report more personal, more engaging and of course more interesting. And after all, FedEx might be an eco-efficiency champion, but it is its people that make a difference.
As Mitch Jackson, FedEx VP of Environmental Affairs and Sustainability once said in reference to developing non-proprietary technology for hybrid delivery trucks, the competitive advantage of FedEx is the driver of the vehicle rather than the vehicle itself.
Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the New School, teaching courses in green business, sustainable design and new product development.