ZTO Express

ZTO Express has not set any emissions reduction targets, despite committing to the Science Based Targets initiative (SBTi) in 2021 and stating support for China’s carbon dioxide peaking and carbon neutrality strategy. ZTO Express’ transition plan commits to setting emissions reduction targets, but does not indicate when it will do this. The company should develop a long-term target that aligns with its 1.5°C pathway and covers its scope 1, 2 and 3 emissions. The company should also set intermediate targets at gaps of no more than five years to incentivise near-term action on longer-term goals.

ZTO Express does not disclose any activity or emissions intensity data. Without this data, it is not possible to assess the company’s past emissions trends or to assess the company’s alignment with its 1.5°C pathway. As a result, the assessment could not evaluate whether the company is projected to reduce its emissions intensity at a rate required by its 1.5°C pathway and whether it will remain within its future carbon budget. The company aims to increase the of alternative fuels in its new energy vehicles (NEVs) and increase the size of its green fleet with the aid of electric, hybrid and fuel cell delivery vehicles.

ZTO Express lacks robust data on the future emissions intensity of subcontracted transport services. Knowing this information will allow ZTO Express to align with its 1.5°C pathway more easily. The extent to which the company was aligned with its past carbon budget could not be assessed due to this lack of activity and emissions intensity data. Reporting this information would provide stakeholders (e.g. investors, subcontractors, project partners, etc.,) and the company with an understanding of how the company is performing and the rate of action required.

ZTO Express has no strategy or major initiatives to drive emissions reduction in its supply chain. The company has a “Code of Business Conduct and Ethics” which does not cover climate-related issues. However, it does not cover engagement with the company’s subcontractors and their environmental actions. ZTO Express should implement strategies to encourage subcontractors to reduce their emissions. This could include working on joint research and development (R&D) projects, encouraging its suppliers including subcontractors to set science-based targets and educating suppliers on emissions reduction opportunities.

ZTO Express has assessed the climate-related risks and challenges the company may face and as part of its transition plan, it is implementing an action plan. This action plan involves setting targets, exploring the use of hydrogen-powered vehicles and the installation of solar power generation.

ZTO Express’ transition plan aims to use or expand on the use of liquified natural gas (LNG) in its NEVs, use automotive grade urea, increase the scale of its NEVs, engage in transport optimisation and promote the use of high-capacity trailers. However, it does not disclose a timeline.

ZTO Express’ NEV fleet currently accounts for 66% of the company’s overall owned fleet of 10,900 self-owned heavy road freight vehicles (i.e. trucks). In 2021, ZTO Express committed to the Science Based Targets initiative (SBTi) and has committed to set an emissions reduction target.

ZTO Express is using LNG in its NEV fleet to reduce its emissions, is increasing the scale of its green fleet and is using drones in remote areas. The company disclosed insufficient emissions data between 2016 to 2021 to provide a meaningful assessment of its historic emissions intensity trend.

ZTO Express commits to low-carbon development and transport, but its transition plan does not provide supporting financial information or future objectives. ZTO Express claims to estimate its emissions data, reporting these are increasing, but the company does not publish this data publicly.

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 and 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.

No public commitment by the company was found stating its intention to re- and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

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.

No policies or commitments of the company related to respect for human rights were found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain.

The company discloses some indicators of workforce diversity, namely the age and gender of its workforce by employee category. However, no other policies or commitments related to key decent work issues were found in the public domain. These issues include the provision of secure, safe and healthy workplaces, where workers are fairly remunerated and have a meaningful say in decision-making.

The company commits to protecting personal data, has a policy prohibiting bribery and corruption, and prohibits making political contributions. However, the company can strengthen its disclosure on these subjects and other key ethical business topics including tax and lobbying and political engagement.