spark15: driving for sustainability

Driving for Sustainability

Ed RogersSenior Director of Global Sustainability

UPS

Driving for Sustainability November 10, 2015

Edward M. RogersSenior Director of Global Sustainability

© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved.

Who We Are


UPS is Committed to More

Environmental Responsibility

Empowered People

Connected Community

Economic Enhancement


UPS’s Global Sustainability Principles

Sustainability DefinedThe business strategies and activities

that meet the needs of the enterprise and its stakeholders today while protecting, maintaining and enhancing the human

and natural resources that will be needed in the future.

Social Responsibility

Environmental Responsibility

Economic EnhancementConnect

Communities and Empower People

Preserve and Protect the Planet

Strengthen the Enterprise and

our StakeholdersAct Responsibly

Deliver“Eco-

Friendly” Services

Operate Efficiently

Reduce, Reuse, Recycle

Lead by Example

Conserve Energy Protect Natural Resources

Promote Wellness and Safety

Embrace Diversity, Inclusion

and Human Rights

Grow BusinessProfitably

Develop People

Build the Brand

Provide CompetitiveCompensation

Support Communities

Support Global Trade

Provide Value-Added Solutions

Focus on Customers


Click icon to add pictureMeasurement and ReportingAchieving Industry-Leading Reporting & Disclosure Standards

UPS’s second GRI “G4 Comprehensive” Report published this year• Transparent: Published one of the first “In Accordance-Comprehensive” Global

Reporting Initiative G4 reports in the United States in 2014

• Comprehensive: Global Report - Includes global Scope 1, 2 & 3 CO2e emissions (Scope 3: All applicable categories reported since 2013 report, 9 of the 15)

• Credible: 3rd party Assurance of Report & Greenhouse Gas inventory (Deloitte), GHG verification by SGS, GRI Checked with GRI’s “Materiality Matters” check

• Focused: Updated materiality analysis guides report content, mapping company interests with stakeholder interests to guide priorities and provide another level of transparency

8


What Matters MostMateriality Matrix


Greenhouse Gases and Logistics


“The UPS Rolling Laboratory”Alternative Fuel & Advanced Technology Vehicles


Alternative Fuel and Advanced Technology Fleet


Carbon Intensity of Alternative FuelsULSD

Ethanol

Biodiesel (Soy)

Renew. Diesel (Soy)

CNG

Hydrogen (NG)

Electricity

Renew. Diesel (Tallow)

Biodiesel (Grease)

Dairy CNG

Landfill CNG

0 10 20 30 40 50 60 70 80 90 100

Carbon Intensity (adjusted gCO2e/MJ)


Alternative Fuel Options Today

Propane

Natural Gas

(CNG)

Electric

Renewable Diesel

(RD) with subsidy

Availability

Energy CostLanded $MMBTU

Petroleum Fuels

Low availabilityWidely Available Today

Low Cost

High Cost

Renewable Natural

Gas with subsidy

Natural Gas (LNG)

Other Advanced

Drop-In Fuels

Biodiesel*Ethanol*

with subsidy

EV Fuel Cell(Hydrogen)

* Limited to blending with gasoline or diesel

RD and RNG are viable options


Capitalize on Renewable Natural GasUPS is in a unique position with CNG/LNG fleet to utilize RNG at scale.

• RNG is available. CA reserves could meet 25% of CA diesel fuel (CANGVC)

• Access requires gas quality upgrades and pipeline connections

• Current subsidy for RNG is better in transport versus electricity

• RNG lowers the carbon intensity for CNG, LNG, EV and future GTL fuels

Natural Gas(Methane)

Gas to Liquids (GTL) Diesel,

Gasoline, Jet

Renewable Natural Gas (RNG Bio-methane)

CNG, LNG

Transport Fuel Conversion Costs

Conversion and Pipeline Connection

Anaerobic DigestionLandfill, Waste Water Treatment,

Etc.

Electricity

EV Electric Vehicles

Natural Gas Grid

Future Fuel Cell Vehicles (Hydrogen)


14% Overall Carbon Intensity Reduction


B2C Deliveries


Sustainable Shipping Solutions

UPS My Choice™

Schedules a pickup only when needed

Allows customers to control delivery time

and location

Provides customers a centralized package pickup

and delivery location

Result: Fewer Trips, Less Fuel, Reduced Emissions

UPS Access Point™UPS Smart Pickup™


Manage | Shipping Materials

Right-sized boxes enables us to move more shipments

without adding vehicles and planes

• Eco Responsible Packaging Program certifies customer packaging materials and processes

• Packaging design and testing for enhanced sustainability

• UPS Express® Reusable Envelopes enable two shipments using just one envelope

• UPS Billing Center and UPS Paperless® Invoice allows secure online processing while reducing paper use


Mitigate | Carbon Neutral Shipping

UPS has purchased 175,000 metric tonnes of carbon offsets since 2010

• Available for UPS shipments to anywhere in the world

• Nominal fee covers the offset cost plus carbon calculation

• Flexible Options• Online option offers selection on a

per-package basis• Contractual basis provides set price based

on shipping history • SGS Verification & The Carbon Neutral

Company Certification


Mitigate | Carbon Neutral Offsets

• High Quality Projects:• Gold Standard• Verified Carbon Standard• Climate Action Reserve

• 2014 projects included the Garcia River, Big River, and Salmon Creek Forests in Northern California


Optimized logistics network

Intermodal shifting for energy conservation and emissions reduction• Network flexibility allows for UPS to shift to the most fuel-efficient mode of

transport• Use rail extensively to reduce carbon emissions for long-distance shipping

• With intermodal shifting, we avoided approximately 3.1 million metric tonnes of carbon emissions in 2014 while keeping service commitments

• Nearly 2.2 million metric tonnes avoided by shifting from air to ground

• 0.9 million metric tonnes avoided by shifting volume from ground to rail


ORION: On-Road Integrated Optimization and Navigation

• Analyzes stops for the day and identifies an optimized route

• 2014: Deployed to 23,000 U.S. Drivers; realized a six- to eight-mile reduction per route

• 2016: Deployed to all U.S. Drivers; annual Savings at Full Deployment:

• 100 million miles

• 100,000 CO2 metric tonnes

• 10 million fuel gallons


How many facilities,and where?

How much inventory, and where?

Which modes and routes?

Reduce negative impact, create positive good!

Network Optimization

Transportation Optimization

SustainabilityInventory Optimization

Customer Supply Chain Optimization

© 2015 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown and photos are trademarks of United Parcel Service of America, Inc. All rights reserved. 25

Solutions to Help Manage Climate ImpactUPS My Choice® service allows receivers to control delivery time and location, conserving fuel and improving experience

UPS SurePost™ service combines the consistency and reliability of the UPS® Ground network with “final mile” delivery often provided by the U.S. Postal Service

UPS Access Point provides customers centralized locations — such as convenience stores, gas or petrol stations, or businesses with extended hours — for deliveries and pickups

Eco Responsible Packaging Program enables a more sustainable approach to packaging, conserving resources by improving packaging materials and quality

UPS On-Demand Packaging produces a shipping carton exactly the size needed exactly at the point where merchandise is packed for shipment


Recognition

sustainability.ups.com

CNG … EV … Fuel Cells … Hybrids … LNG … Propane … RNG … Synthetic Fuels …