United Parcel Service is a publicly listed company headquartered in the USA. In 2021 its revenue was USD 97.29 billion. UPS is a shipping, logistics and supply chain management company. As one of the world's largest package delivery companies, it provides services in more than 220 countries and territories and has a ground fleet of over 100,000 vehicles.
UPS has set a target for net-zero scope 1, 2, and 3 emissions by 2050. It has also developed a plan to increase its share of low-carbon vehicles (LCVs). The company is expanding its low-carbon fleet by purchasing up to 10,000 electric vehicles, expected to be delivered at the beginning of 2022. These investments will grow the share of LCVs in UPS’s fleet from 10% in 2021 to 18% in 2022, aligning the company’s own operations with the 1.5°C pathway. Furthermore, UPS has committed to using 40% alternative fuel in ground operations by 2025, compared to 10% in 2020.
UPS does not have a low-carbon transition plan and demonstrates no intention to produce one in the next two years. The company should establish a time-bound action plan that outlines how it will transition to a low-carbon economy. This should include medium- and long-term targets, verifiable and quantifiable key performance indicators and financial commitments. Further, the plan should be informed by scenario analysis to ensure that the company’s ambition is sufficient to align with a 1.5°C pathway.
As the company does not report its emissions activity or intensities in standardised metrics, it is not possible to assess its progress towards achieving its net-zero target. UPS can increase its credibility by transparently disclosing its emissions in standardised metrics for the reporting year as well as the previous five years.
UPS subcontracts its air, rail, road and sea activities through its Supply Chain Solutions wing. The company’s subcontracted activity accounts for 22% of its emissions and is reported under its scope 3 emissions. All of UPS’s emissions reporting is certified by a third party. However, UPS does not report its subcontractors’ strategies to reduce their emissions. Understanding this information will allow UPS to align with its 1.5°C pathway more easily and to successfully achieve its net-zero target.
UPS remains a member of some trade associations that are reported to have opposed climate policies. For instance, UPS is a member of Airlines for America (A4A) and The U.S. Chamber of Commerce, both of which oppose ambitious climate action in the United States. However, the company is also a member of climate-positive organisations and initiatives, such as the Zemo Partnership, to accelerate the transport sector’s transition to net-zero. UPS can increase its credibility by setting a clear position on climate policy and by implementing processes to withdraw from trade associations that oppose positive climate policies.
UPS receives a trend score of =. If the company were reassessed in the near future, its score would likely remain the same. The company does not disclose sufficient emissions data to meaningfully assess its performance and alignment with its 1.5°C pathway. However, in 2021, UPS set targets to reduce its emissions and increase the proportion of LCVs and alternative fuels it uses. The company aims to increase its LCV share to 18% of its ground fleet by 2022. It also aims to increase its low-carbon fuel mix in ground operations to 40% by 2025 and in air freight to 30% by 2035.
UPS has set a target to reduce its CO2 emissions per package delivered (for global small packages) by 50% by 2035 compared to 2010. The company has also set a net-zero target for its scope 1, 2 and 3 emissions for 2050.
UPS has an ESG strategy that outlines short- and mid-term goals. The company aims to have 40% of its total ground fuel comprised of alternative fuel purchases and to procure 30% sustainable aviation fuel (SAF) by 2035. However, the company has not published a low-carbon transition plan.
The company continues to expand its low-carbon fleet, having committed to purchasing 10,000 electric vehicles that will be delivered in 2022. The company’s investments will grow the share of LCVs in its ground fleet from 10% in 2021 to 18%.
The company does not disclose sufficient emissions data to assess its alignment with the 1.5°C pathway. UPS has been working with various companies to test and deploy alternative fuel and advanced technologies and LCVs. Furthermore, UPS is also investing in route optimisation and navigation technology.
UPS does not have a low-carbon transition plan in place, nor has it conducted scenario analysis to evaluate climate-related risks and inform its ESG plan. UPS recognises that many of its decarbonisation approaches rely on the availability of low-carbon technologies. The company discloses its research and development (R&D) collaborations. However, it does not disclose its R&D investments or planned actions past 2035, which limits the evaluation of its ambition.
No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.
No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue or engagement with stakeholders in its just transition planning.
No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.
The company discloses the actions it takes to provide training and education opportunities for workers and affected stakeholders. For instance, it offers a tuition reimbursement programme for its employees to attend school and it offers post-secondary education scholarships for Native American students. However, no relevant disclosure was found of the company embedding equality of opportunity for women in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.
No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.
No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.
The company commits to respecting human rights. However, the company’s Human Rights Statement does not disclose a commitment to respect all of the ILO fundamental rights at work. Furthermore, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders to report human rights concerns.
The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. Additionally, the company discloses that 46% of its board members are female, and it discloses the age, gender and ethnicity of its workforce by employee category. However, no evidence was found of a broader public commitment by the company towards gender equality and women’s empowerment. The company can also strengthen its disclosure on its living wage, working hours and collective bargaining practices.
The company commits to protecting personal data. However, no evidence was found of the company having a privacy statement regarding the collection, sharing and access to personal data of employees and customers. Moreover, there was no evidence within the company’s policy documents regarding its tax strategy. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. Furthermore, the company has a lobbying and political engagement policy. Yet, no evidence was found specifying that the company does not make political contributions, nor were there any disclosures detailing its expenditure on lobbying activities.