FedEx is a worldwide network of companies, providing a broad range of logistical services. United under FedEx Corporation, the company has a team of more than 285,000 team members, and serves more than 220 countries and territories worldwide.
FedEx has been implementing a sustainability programme for the last decade and has, from its inception, focused on innovation.
This CSR case study focuses on the three key initiatives that make up FedEx's EarthSmart programme, which is helping the company work towards is environmental sustainability goals.
FedEx holds the central belief that the success of the business and the wellbeing of the environment are inextricably linked. The company recognises the services it provides as having a wider impact, not only on the individuals who work for the company but also the environment and communities in which it works. FedEx places an emphasis on the importance of gaining and maintaining the trust of team members, customers, shareholders and communities.
The company has noted that its stakeholders are increasingly interested in understanding what the company is actually doing. As a result, it published its first global citizenship report in November 2008.
The EarthSmart initiatives are a core element in the company’s environmental sustainability strategy. Specifically, EarthSmart provides a platform to communicate the company’s actions and “create a culture”, providing an umbrella to bring together/align global programmes and initiatives.
There are three parts to EarthSmart:
a) EarthSmart Solutions;
b) EarthSmart Outreach; and
c) EarthSmart @ Work.
The initiatives are designed to benefit the planet, customers and the business.
EarthSmart Solutions addresses the sustainability performance of the company’s services and physical assets, i.e. aeroplanes, trucks and facilities. It requires the services or assets to meet stringent, quantifiable standards for environmental sustainability that go beyond industry standards. It also requires them to deliver benefits not only to the business but also to the environment and stakeholders.
In order to achieve this, FedEx places a strong emphasis on the importance of innovation. Examples include FedEx being the first US-based company to purchase a Boeing 777F in 2009 (with the intention of owning a fleet of 40 by 2019); this has provided increased freight capacity whilst reducing fuel consumption by 18%. The replacement of narrow-bodied planes has resulted in fuel consumption being reduced by 47% overall. Further considerations such as flying direct between Asia and the US also reduce the demand on fuel.
FedEx also has the largest fleet of hybrid electric parcel delivery vehicles in the industry, achieved by investing in new vehicles and by converting traditional trucks. These measures extend the life of vehicles, whilst simultaneously making them more environmentally friendly. At present, FedEx is testing fuel cell and hydraulic hybrid vehicles and investing in zero emissions all-electric vehicles and hybrid-electrics vehicles. These initiatives contribute to the company’s “20 by 20” goal of reducing plane emissions by 20% and increasing vehicle efficiency by 20% by the year 2020.
In relation to its facilities, FedEx has been installing solar rooftop installations in an increasing number of its buildings. One such installation currently stands as the largest in the US. FedEx had a total of five solar arrays running as of the end of 2010.
EarthSmart Outreach aligns business priorities with community needs, such as investment in sustainable transport solutions for developing countries.
FedEx has worked in collaboration with EMBARQ – The WRI Centre for Sustainable Transport – in order to develop the transport network throughout Mexico. By supporting development of efficient public bus networks, FedEx contributes to a reduction in the number of cars on the road, and therefore also lower carbon emissions.
FedEx has also been working to increase child pedestrian safety, find ways to protect valuable ecosystems and provide disaster relief. The company provides this assistance using its core business strengths, such as logistical capacity to ensure that relief supplies reach the locations where they are most needed.
Coinciding with its “people first” philosophy, FedEx has been developing a strategy to support and enable the volunteering efforts of its employees. This has included the creation of a platform to engage individuals in volunteering opportunities. This volunteer management system has been integrated with the United Way giving campaign and FedEx Cares week – an annual event in which more than 16,000 hours of employee time was donated in 2010.
EarthSmart @ Work:
EarthSmart @ Work aims to engage FedEx employees actively in the company’s environmental sustainability goals and efforts.
The initiative is divided into three areas:
- Inform – the sharing of information and ideas (i.e. internal circulation of best practice and information on relevant topics), and enabling employees to contribute their own thoughts (e.g. using social media).
- Involve – enabling employees to share ideas and learn from one another; in addition, the company develops volunteering opportunities for staff to use their skills to assist in the wider community; and
- Innovate – integrates the ideas of FedEx employees into a formal submission process to help inform the review of strategic sustainability goals and strategies.
One of the key challenges for FedEx was to be specific about the usage of EarthSmart, to ensure all the initiatives were thoroughly vetted and to ensure that internal and external stakeholders understood the platform. Similarly there was the challenge and desire to ensure that all the programmes under the EarthSmart platform demonstrated customer, business and environment benefits.
The EarthSmart strategy is designed to provide not only environmental and social benefits, but also feeds back to FedEx’s business objectives. For example, efficiency measures have allowed the company to cut emissions by reducing fuel usage, which in turn has led to cutting costs, providing direct financial benefits.
Additionally, given the growing pressure for global emissions reductions and the translation of this into many national policies, the initiatives undertaken by FedEx to integrate cutting edge innovations into its operations are likely to enable them to remain sector leaders.
FedEx’s approach to environmental protection, international aid and philanthropic investment all work to enhance the company’s reputation and further assist in ensuring the company’s future operation and expansion.
Importantly, the activities also encourage the growth of stakeholder trust in the company – something of growing importance in an increasingly competitive market where corporate activities are coming under growing public scrutiny. In addition, suppliers are now approaching FedEx, with requests to participate in the programmes.
The incorporation of employee opinion into its strategy allows its approach to not only benefit from diverse ideas and therefore become more innovative, but also to make the company an employer of preference.
The company has received a number of international awards and rankings for its work including the 2009 W3 Awards’ Gold Award in the business category for its Citizenship Blog; Newsweek Greenest Companies Ranking Top 100; the FORTUNE Magazine’s “100 Best Companies to Work For”; the Ruben d’Honneur award for outstanding customer focus, considered one of the foremost corporate awards in Europe; and the 2009 Mohammed Bin Al Rashid Al Maktoum Business Award for Corporate Social Responsibility. This recognition enhances both community relations and support, and more broadly the reputation of the company.
Why is it CSR?
The EarthSmart programme provides both business and social benefits – namely it allows the company to realise efficiency savings and encourage sustained support and growth of business activities. In demonstrating leadership on matters of sustainability in the industry, FedEx hopes to stimulate the spread of good corporate citizenship, making the industry as a whole more sustainable.
Similarly, the programme has led to increased engagement and enthusiasm within local teams all leading to a stronger corporate culture.
For more information on FedEx's EarthSmart programme, please contact Brandon Tidwell or Maria Tomprou.
© Article 13 – CSR Case Study Series, February 2011
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