Executive Briefings

Greener Skies Ahead: How Cutting Carbon Emissions Helped FedEx's Bottom Line

Last month, FedEx issued a report with much fanfare about the results of two initiatives that made them proud: They had set baseline targets back in 2005 and were already close to hitting their goals. All told, the two initiatives saved FedEx a combined $281m dollars in cost savings in fiscal 2016 alone.

But the dollar figures for the projects were buried under a lot of other statistics. It took several click-throughs on the website to find mention of these cost savings, which are substantial even for a multi-billion-dollar company.

So, what statistics did FedEx choose to promote instead? By purchasing new, more efficient aircraft and instituting operational improvements, the integrator had avoided dumping 1.47 million tonnes of CO2 into the atmosphere, on its way toward a company-wide objective of a 30 percent reduction in carbon emissions by 2020. The other project involved the use of alternative-fuel vehicles and more efficient driving methods that helped prevent more than 217,000 tonnes of CO2 from being released. For FY2016, the aircraft emission reduction is already a 22 percent reduction from the 2005 benchmark, while the alt-fuel project stood at an impressive 35 percent reduction, with eight years left to raise the figure to 50 percent by 2025.

These are, of course, admirable goals and noble achievements that help make our planet a little less filthy, and FedEx deserve all the credit it gets for these triumphs. Airfreight companies, in general, like to talk about reducing emissions and using alt-fuels, but that’s about as far as it goes. Many don’t like to talk much about holistic measurements, such as carbon footprints and CO2 emissions, because they know the numbers are not on their side.

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But the dollar figures for the projects were buried under a lot of other statistics. It took several click-throughs on the website to find mention of these cost savings, which are substantial even for a multi-billion-dollar company.

So, what statistics did FedEx choose to promote instead? By purchasing new, more efficient aircraft and instituting operational improvements, the integrator had avoided dumping 1.47 million tonnes of CO2 into the atmosphere, on its way toward a company-wide objective of a 30 percent reduction in carbon emissions by 2020. The other project involved the use of alternative-fuel vehicles and more efficient driving methods that helped prevent more than 217,000 tonnes of CO2 from being released. For FY2016, the aircraft emission reduction is already a 22 percent reduction from the 2005 benchmark, while the alt-fuel project stood at an impressive 35 percent reduction, with eight years left to raise the figure to 50 percent by 2025.

These are, of course, admirable goals and noble achievements that help make our planet a little less filthy, and FedEx deserve all the credit it gets for these triumphs. Airfreight companies, in general, like to talk about reducing emissions and using alt-fuels, but that’s about as far as it goes. Many don’t like to talk much about holistic measurements, such as carbon footprints and CO2 emissions, because they know the numbers are not on their side.

Read Full Article