Greening a Worldwide Fleet with UPS’ Scott Wicker

December 27, 2013

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored to have with us today Scott Wicker, the Chief Sustainability Officer of UPS. Welcome to Green is Good, Scott. SCOTT WICKER: Yes, thank you. Glad to be here, John. JOHN SHEGERIAN: Hey, you know, Scott, before we get into your great iconic brand, UPS, and all the great things you’re doing in sustainability there today, you’ve got a great personal journey starting in 1977 at UPS leading up to today and where you started and how you’ve evolved into the first Chief Sustainability Officer there. Can you share with our listeners first the Scott Wicker journey before we get into the UPS story? SCOTT WICKER: Yeah, sure. Well, it was back in 1977. I had just graduated from high school and I’m on my way to college and my father made a deal with me that if I could get a part time job and help pay the bills that he would make sure that I was able to afford to go to college, had transportation, had a place to live, so my very first day of school, college in Detroit area, Henry Ford Community College, is where I started, found that UPS was there advertising, looking for part time help. I applied for the job and got the job and was lucky enough that it paid well enough that my dad got a break and I was able to pay my way through school while working at UPS and paid for everything myself so I’m very proud of that and glad that my dad actually didn’t have to help me so as I worked my way through school at UPS, of course, I never had a thought in my mind that I would be at UPS when I graduated because I was going to school to be an electric engineer and it just turned out that as I was about ready to graduate from college, UPS was in a big growth spurt at the time. We were in the early ’80s now, and they needed engineers and I certainly knew the company well enough at that point to say yeah, I want to stay at UPS. I thought a lot of the company, knew it was a good place to be, and was very excited about then going on full time and became a project engineer for the company and worked to build their facilities in the Midwest and then the northeast parts of the country, did that and just slowly moved up in the ranks of management and began managing different districts and regions for UPS in the plan engineering group, which was Plan Engineering, is the group at UPS that really does everything to do with facilities. We design, construct, and maintain our facilities and our conveyor systems but we also have inside the Plan Engineering Group our Environmental Compliance group and we really got that section of the department running in the early ’90s, so I’ve been focused on environmental compliance for many, many years and out of Environmental Compliance, our Environmental Affairs Group, came sustainability around the year 2000 and that was the point in time where some smart people that were running our company here in Atlanta, one of them is Kurt Kuehn, who is our Chief Financial Officer today, they made a decision that we were going to get serious and take on sustainability because we felt that it really helped define who we were, something that we felt we did really well, so by 2002, we collected the data. In 2003 we put out our first sustainability report and we’ve just matured that organization over the last decade until today. I’m sitting here now as our Chief Sustainability Officer. JOHN SHEGERIAN: So, wait a second now, Scott. This is fascinating. How many employees are today, give or take, at UPS? SCOTT WICKER: I think we’re just up under about 400,000. JOHN SHEGERIAN: Four-hundred-thousand employees, so your company could have chosen anyone out of that 400,000 pool, plus they could have also done an outside hunt, and you were the person chosen. There will never be another first Chief Sustainability Officer at UPS. You’re the person. SCOTT WICKER: I feel very fortunate, that’s for sure. JOHN SHEGERIAN: What an honor and so well deserved. You worked your way up from the bottom as an unloader and what a great journey and what a great story and then to be chosen as the first Chief Sustainability Officer so let’s talk a little bit and for our listeners out there, I’m on your website right now and it is so full of great information. For our listeners out there who want to follow along while we talk to Scott Wicker, who is the Chief Sustainability Officer at UPS, go to www.ups.com/sustainability. There is so much great information here, videos and PDF files and so many subsections and layers of sustainability that UPS is involved with. It is just a rich, rich, rich, rich example of how sustainability can be done. Let’s get into that a little bit so let’s talk a little bit about the why and the how and the uniqueness of UPS’s approach to sustainability. Can you share that with our listeners, Scott? SCOTT WICKER: Yeah, absolutely. I’m not so sure that we’re necessarily unique but I can tell you what really makes sustainability something that is a strength for us at UPS and I would really, I guess, sum it up this way. When you look at our sustainability initiatives, the things that we’re doing in the sustainability area, they’re not just sustainability initiatives. They’re also our corporate initiatives. In other words, the initiatives that we take today to improve our business, that will bring more value to our customers, that will make us a better corporate citizen, will also make us more sustainable so it’s one in the same. When we look at sustainability, it’s not something that we’re trying to bolt on to the organization. It may sound a little cliché but it is truly who we are and what we do. We’ve been around since 1977 and we’re a transportation logistics provider and making ourselves more efficient is one way that we can provide more value to our customers and we’ve been working on it for many years. JOHN SHEGERIAN: So, it’s not an uncomfortable bolt on? It’s actually part of the culture and DNA naturally speaking. SCOTT WICKER: Absolutely, and again, I don’t think that’s unique. It may not be with all companies but I think it can be there with a number of companies. If it really truly is what you do, if you really do fully try to do things that protect the environment and improve your communities and strengthen your company, I think it all falls together. JOHN SHEGERIAN: That’s so interesting. So, you make some great points, around since 1977 and you’re really primarily a logistics company so talk a little bit about what goes into logistics. It’s obviously energy and fuel and leveraging advanced technologies. How does that fit into your sustainability message and to the vision and execution of what you’re trying to accomplish? SCOTT WICKER: Certainly, being a large transportation logistics provider, we have a large ground fleet. We have almost 100,000 ground vehicles globally. We’re the ninth largest airline, so we have a big impact with our fleets and so today, we’ve put a lot of emphasis on looking for ways to make both of those fleets not only more efficient, but more environmentally friendly. We all know about the issues around climate change and so when we work with our alternative fuel vehicles, we have a strategy today where we basically look at our fleet as a rolling laboratory so we’re working to try out all the different types of technologies that we feel can move us away from petroleum based fuels and get us into the alternative fuels that are cleaner and more stable in price than gasoline or diesel. JOHN SHEGERIAN: Got it, and I’m on your website here, and again, for our listeners out there that would like to follow along and learn more and do a deeper dive during or after this interview, it’s www.ups.com/sustainability. So, I’m on your website and I love it and there’s something here that’s like a did you know fact: Since 2000, UPS’s alternative fuel fleet has collectively logged more than 246 million miles. Unbelievable; so this is both your air and your ground vehicle fleet that has logged that many miles? SCOTT WICKER: That’s actually just our ground fleet, and by the end of 2012, we were actually at 295 million and more exciting than that is the fact that we now have a goal by the end of the year 2007, to have taken our alternative fuel fleet to a billion miles, and the way we’re going to do that is to continue to grow that fleet. Recently, we announced that over the course of this year and next year, we’re going to bring in another thousand liquefied natural gas tractors into our fleet. Those vehicles drive approximately 600 miles per day so it’s going to do a lot with respect to lowering our greenhouse gas emissions because we’re going to burn a heck of a lot less gasoline and diesel. diesel, in this case and the emissions are quite a bit less when you move into natural gas and get away from the diesel. JOHN SHEGERIAN: Is plane technology already at the point where planes can also run on alternative fuel options now too? SCOTT WICKER: They can. There is aviation biofuels today. The technology is there. They can make the biofuels. It’s a drop-in fuel that you can put in aircraft today and we watched it very closely and we’re very, very much in tune with aviation biofuels because we’d like nothing more than to be able to purchase all that we need to run our aircraft on them and unfortunately today, although the technology is there and the standards are there to produce the fuel, the feedstocks to make that biofuel, whether it’s coming from algae or there’s many different sources, it’s just not at scale at price yet today but we’re watching it closely and when it becomes available, you can bet we’ll be using it. JOHN SHEGERIAN: That’s so interesting. A lot of people think sustainability equals environment and it’s absolutely linear. Talk a little bit about UPS’ sustainability mission beyond environment. SCOTT WICKER: Yeah, that’s a great question because you know, a lot of people actually think that sustainability is focused just on the environment and we can all get caught up talking, sometimes too much, about the environment because there are some big issues in the world today. Other things I’d like you to know is for instance, this month is Global Volunteer Month. October is a month when we put a lot of focus with our employees about volunteering. I’m proud to say that last year, we broke a new record with our employees at UPS and our employees volunteered 1.8 million volunteer hours around the world, employees, their families and friends working with charitable organizations and it’s just a great thing we do there at UPS. This month, we have a goal of 250,000 volunteer hours from our employees so very excited by that. JOHN SHEGERIAN: Wow, so it goes beyond environment. It goes into also volunteering time and becoming part of the cultural experience of becoming a UPS employee is giving back to the community and doing good for others who are more in need potentially? SCOTT WICKER: Absolutely, and another example that I think makes us all very proud here is the work that we do when natural disasters strike. They happen. You have devastated communities and we jump in and our humanitarian relief efforts spanned 35 countries in 2012 and we aided those in need with $6.5 million as well as an additional 2.6 million kind of in donations and so the UPS Foundation gets very involved in this and so we like to be very active. We know that our expertise in logistics is certainly a skill set that we can bring into a devastated area and make some very good impact. JOHN SHEGERIAN: I also see here as part of the Global Forestry Initiative, UPS has also planted trees to help the environment and help reclaim our environment and the air, which is so important to all of us around the world. Can you talk a little bit about that initiative? SCOTT WICKER: Yeah. Last year, we set an initiative for 2013 to globally plant over a million trees around the world in a number of countries around the world. Matter of fact, we’ve reached that goal. We’ve already got 1.3 million planted for this year and we’ve just expanded that goal and we’re going to carry it on to next year and plant a million trees next year and the reason for that is if you look at what we do, one of our impacts to the environment is the fact that our fleets emit a lot of carbon and the good thing about trees is they absorb that carbon so for us, it’s just a natural way to give back to the planet and help to offset some of that environmental impact that we have. JOHN SHEGERIAN: That makes sense, and for our listeners out there who have just joined us today, we’re having a fascinating conversation with Scott Wicker and we’re so honored to have him on. He’s the Chief Sustainability Officer for UPS and if you’d like to follow along to some of what we’re discussing or look further into what we’re discussing today, you can go to www.ups.com/sustainaility. Scott, a couple things: Your company’s known for the brown trucks and the brown uniform and for delivering boxes and in so many instances, those boxes are boxes of happiness and things of that such and it brings people so much fun and excitement when the UPS driver and delivery guys come on to their doorstep. Talk a little bit about other environmentally sustainable options that are available to your clients and customers around the world that you’re able to move the needle. One thing we’ve learned from this show is that when iconic and big brands with a global reach such as yours decides to do something, you guys really move the needle. You guys can really make a massive difference on a global scale so share a little bit beyond what we’ve talked about already, the alternative fuel and some of those other things, what else are you doing with regards to your relationships with some of your clients out there? SCOTT WICKER: Yeah. One of the things that we do that I’m very proud of is as we worked a few years ago trying to get a really good handle on our data so that we could accurately put together our rendering of our carbon footprint. What we realized is in time, with such accurate data on our carbon footprint, that we could then begin to offer this information to our customers, We had a lot of customers that began to ask us how much carbon was associated with the goods that we were moving for them so initially, we were doing these calculations on Excel spreadsheets and those spreadsheets got so big that finally, we spent the time in 2009 and we developed an automated carbon calculator that uses all the details associated with how a package moves from point A to point B within our system. That gave as very accurate carbon data. That led us into the ability to offer our customers carbon neutral shipping so today, you go on to our website. If you would like your package to be moved and have the impact from carbon mitigated through the purchase of carbon offsets, so the carbon offsets are derived from certain projects around the world, certain reforestation projects that are certainly reducing the carbon levels so for instance, if you have a ground package and you want it to go carbon neutral, you click carbon neutral. It will cost you an extra nickel. It’s only a nickel and we will take that and purchase carbon offsets so that your package actually the carbon associated with it is mitigated so that’s something that a lot of our customers use. To take companies that are very sustainability minded and to give them the ability to offer their customers packages coming to the door where the carbon has been mitigated has been a good thing. One other product that I’ll mention to you that our customers really enjoy today is something we call UPS My Choice and if anybody listening today has not signed up for My Choice, I would encourage you to do so because it’s such a great product. You can go on to our website and you can sign up for My Choice and the basic service is free and what it will do is any time a UPS package is being shipped to you from anywhere in the world and from anybody that’s shipping it, once we’ve got the information and we know we’re going to be bringing a package to you at your home or business, we will give you an email notification the day before and we’ll give you a four hour window when it’s going to be delivered. That helps our customers be at the right place. We also give them the ability to redirect that package if they know that they’re not going to be where it’s headed to and that certainly saves us a lot of redirection extra trips. Instead of having them come back to your house twice or three times, you may just direct that package to your place of business and you get it on the first trip. JOHN SHEGERIAN: Oh my gosh, and I get your packages every day and I send packages via UPS every day. Never heard of My Choice and this is just amazing, so for our listeners out there, in terms of sustainability, My Choice tracks right back to sustainability because it makes the whole process that much more efficient. SCOTT WICKER: Absolutely, and for a small fee, you can get that window narrowed down to two hours of when the delivery time will be, so it just gives you even more control and our customers really love My Choice for that control that it gives them. JOHN SHEGERIAN: Well, we’re going to sign up for it after we finish today’s interview. This is great news and carbon neutral shipping is also great news. Another thing I want to share, over the years I’ve talked to a lot of your drivers and they’re always so happy to be working for your company. Another great fact, I’m looking on your website now and for our listeners out there, it’s www.ups.com/sustainability. Talk a little bit about with regards to sustainability is running a great company on behalf of your employees and keeping them safe and here’s a great fact I’m just reading off of your website. More than 6,00 UPS drivers have driven 25 years accident-free. SCOTT WICKER: Absolutely, and we put them into what we call a Circle of Honor and we certainly honor our employees that reach those levels and safety, of course, is always first here at UPS and we put a lot of time and effort into training our drivers. We have very specific training courses that we put them through so that they can learn how to walk on snow and ice with packages and not fall and how to do things safely, how to load vehicles, how to unload vehicles, how to make those deliveries safer and it really pays back and it’s not just the walking part of it. It’s obviously the driving and a lot of time is spent teaching our drivers safe methods of driving and it’s paid back and we’ve seen our accident frequency go down year over year for the last five years, and so we’re very excited by that. JOHN SHEGERIAN: You know, Scott, one of the key things now, and you touch on it, both with My Choice and especially with carbon neutral shipping, is transparency. Explain how transparency is so important with regards to sustainability and your great brand, UPS. SCOTT WICKER: We see transparency as really just a core competency, something that’s so vital in sustainability and the reason is today, sustainability is, in large part, something that’s not regulated here in the U.S. very much so when a company makes a claim about something they’re doing, it’s just a claim by a company. A lot of people are saying a lot of things and the last things you ever want to be accused of is greenwashing. You want people to take what you’re saying that you’re doing and have complete confidence in it and so when you’re transparent about what you’re doing and you put things into context, it helps people so we not only want to make sure people can understand what we’re doing. We go to a lot of effort to tell our story in depth so people can understand but we also reach out to credible third party organizations to validate and assure our work. For instance, we were the first corporation in the U.S. here to have Deloitte assure our sustainability report. They had been assuring our financial annual report for many years but to have them assure our report, I think, gives our stakeholders a whole different level of credibility and understanding of what we’re saying and helps bring that credibility and transparency together. JOHN SHEGERIAN: Got it, and how about the business value? A lot of people talk about this but the interrelationship between sustainability and the bottom line. Can you share with our listeners, listeners who own business or even in their own home or who are in government; local, city, state, or even federal government, who are afraid to step off and really dive into some sustainability initiatives because they are afraid it costs more money, Can you describe the interrelationship and intersection of where sustainability intersects with the business and the bottom line at UPS and how that greatly affects the future success of your company? SCOTT WICKER: Yeah, and that happens in a number of ways but I can sum it up in a couple words and it’s acting responsibly. We’ve always been a company that acts responsible in everything that we do so if you think about sustainability, it’s about acting responsibly. It’s about doing the right thing for the planet, for your communities, for your people, and certainly for the business so that’s one way to sum it up but I’d say sustainability, we certainly understand that it is and can be brand enhancing. For our customers to be able to look at us and to know much more about us. We talked about being transparent so they can read our sustainability report and they can understand that we take climate change seriously. They can understand that we take our communities and we value them and we take it seriously so sustainability is something that we believe is important to our customers and to our stakeholders and if we’re viewed highly in our customers’ minds and our stakeholders’ minds in terms of sustainability, we think it can only help grow the business. JOHN SHEGERIAN: You know, Scott, we’re down to the last four minutes or so. There are some very important highlights and facts about your responsible packaging, how you handle waste management, and how you also are very concerned about water conservation and lighting. Can you just touch upon how you’ve moved the needle in those segments also? Because we’re all used to your packages and I know you’ve taken special care to engage in responsible packaging and the associated topics. SCOTT WICKER: Yeah well, in terms of responsible packaging, we work with our customers to make sure that it just makes sense that if you look for the right size package, that you package it properly, that you’re not wasting material on the inside, that you’re using the right environmentally friendly material for packaging inside and it’s extremely important to us that we pick up a package from one customer to deliver it to another, that that package is able to travel through our system and be received on the receiving end in the exact same way that we picked it up. It’s very important to us. We’ve put a lot of effort into that so responsible packaging just makes obvious sense form a business standpoint but it also has a sustainability impact as well because the last thing we want to do is to have somebody have to have something shipped out twice and it’s obvious that that’s not the way we want to go. JOHN SHEGERIAN: And, your UPS packages are made from 100% recycled fibers. SCOTT WICKER: Absolutely, and you’ll notice things like our next-day air packaging, our letters are reusable, so you can send me something. I can take a document out and reuse that same packaging to send it on to its next stop, so all of that’s very important. JOHN SHEGERIAN: Scott, we’re down to the last two minutes. I would be remiss if I didn’t mention that you’ve been ranked on the Carbon Disclosure Leadership and the Global 500 as far as DOW Jones Sustainability Index. In the last two minutes or so, what does those awards and recognition mean for your great brand, UPS? SCOTT WICKER: Well, certainly we think it brings credibility to what we’re doing. Carbon Disclosure Project, certainly one of the most credible organizations collecting climate change data today, they gave us a score of a 99 on disclosure and they gave us a rating of an A- on performance and those are both very, very good scores coming from the Carbon Disclosure Project and I think for those who follow this sort of thing and this sustainability world, they understand that that means that we have a lot going on in this area and that we’re certainly serious about it. JOHN SHEGERIAN: Any final thought? We’re down to the last minute. Any final thoughts for our young people out there who are looking to become the next Scott Wicker? SCOTT WICKER: You know, in terms of sustainability is certainly a growing area in both colleges and certainly businesses today and I would just say that it’s a great field to be in. It’s a lot of fun. It’s all about doing the right thing and being more efficient and at a company like UPS, it really takes two things: It takes a lot of knowledge about the company. You’ve got to understand how the company works and then knowledge about sustainability and how to find ways to make that company more efficient. JOHN SHEGERIAN: Hey, thank you so much, Scott. You’re really an inspiration. For our listeners out there, sign up for My Choice, and incredible neutral shipping at www.ups.com/sustainability. Scott Wicker, you are a sustainability superstar and truly living proof that green is good.