The world's biggest logistics company races towards net-zero emissions
DHL is the largest logistics and express delivery company in the world. It’s not surprising that its carbon emissions are massive.
But those emissions have declined substantively in the last nine years, and those reductions will be tiny compared to what DHL will achieve if its aggressive projections are realized. Emily Davis, the sustainability program manager at DHL North America’s Supply Chain unit, discusses how the largest logistics company in the world will go about achieving its net-zero emissions goal by 2050.
Blaustein: Before we get to the particulars of what DHL might do to get from here to there, I’d like to find out how you got to DHL and its sustainability team.
Blaustein: What was the coursework like for an environmental management MBA?
Davis: Some of it involved the business of forest certification standards and marketing. And that, in part, led to my getting a job at International Paper in forest resources in Savannah and then with their sustainability department in Memphis.
Blaustein: What was it like to work in corporate sustainability there back in the mid-to-late 2000s?
Davis: Sustainability was important to a paper and packaging company as trees, the main raw material input, are a finite resource if not appropriately managed. But not too many companies were talking about sustainability, ESG (environment, social and governance issues), life cycle assessment and climate change in those days. Even though sustainability was important to the culture at International Paper, I still wanted to make more of a difference. So I took a sabbatical and traveled. At some point, I decided that I needed to work for a company that believed in environmental protection at the top of the food chain and that had size and scale such that, when environmental improvements were made, the impacts would be significant.
Blaustein: And that company was DHL? A company that ships stuff all over the world?
Davis: Yes, DHL North America it was. In 2011, they were looking for someone to run their North American supply chain and sustainability departments. And yes, we have a massive footprint. But that means, with a strong commitment, they — and I — could make a difference. At the time, I didn’t know much about the company. They are based overseas, headquartered in Germany. But I came to find out that they had ambitious sustainability goals. They believe deeply in environmental protection. And I thought to myself, "This is a company that has a chance to really make a positive impact on climate change."
Blaustein: So what did your job entail?
Davis: Meeting the company’s energy and fuel efficiency goals, which meant accounting for and improving the efficiency of warehousing, heavy-duty trucking, aviation, express shipping and supply chain operations.
Blaustein: Seems to me like express delivery, which is what I thought was DHL’s main business, plays a smaller part in the U.S. How does the company handle supply chain from a sustainability point of view?
Davis: DHL, which tracks Scope 1, 2 and 3 emissions, is the first logistics company to report CO2 emissions and to set targets, with 2007 as the base year. Our primary goal was to reduce carbon emissions by 30 percent by 2020. We achieved this in 2016, almost four years early.
Blaustein: Somehow I don’t imagine you and DHL are going to rest on your laurels.
Davis: You’re right. We announced a new goal, to be a zero-emissions logistics company, by 2050.
Blaustein: That seems impossible for a company that depends on flying and driving for a good chunk of its business. There have to be some assumptions of some serious technological advances over the next 30 or so years in terms of zero-emissions fuels.
Blaustein: Are there any interim targets?
Davis: I hear you. And we do have four interim sub-targets for 2025. The first is to make a 50 percent improvement on CO2 efficiency over the 2007 base. The second is to improve local quality of life; that will involve delivering 70 percent of our own first-and last-mile services with clean pickup and delivery solutions like electric vehicles. The third is an economic target: 50 percent of DHL sales will incorporate "Green Solutions," including carbon-neutral parcel delivery.
Blaustein: What is that percentage now?
Davis: About 10 percent. Finally, the fourth is a people target. DHL is one of the largest employers in the world, with approximately 454,000, including about 29,000 in North America. By 2025, we commit to having trained and certified 80 percent of our employees worldwide to be GoGreen specialists. Every division has a program, from express delivery to supply chain. And we have a target to plant 1 million trees each year by 2025. We’ve found, by the way, that our GoGreen initiative helps with employee retention.
Blaustein: My only nagging doubt is this: Many corporations take incredible sustainable actions but, when it comes to lobbying and political actions — like lobbying for a price on carbon — they’re silent or in opposition. DHL is walking the climate walk. Is it talking the talk where it counts?
Davis: It’s both. DHL is certainly talking the talk, sharing how we’re using scientific targets to do our part to keep global temperature increase to 2 degrees Celsius or less compared to pre-industrial levels, we report our emissions to CDP, have been a longstanding partner of the United Nations and promoter of Sustainable Development Goals, part of the UNEP and vigorously support the Paris Climate Agreement.
Blaustein: Let's about DHL’s involvement with Formula-E, the EV racing series.
Davis: DHL has been the official logistics provider for Formula 1 since 2012 and for Formula-E since its 2014 launch. Among other things, we are responsible for getting the vehicles and tires to the race venues in a timely, economical and environmentally responsible fashion.
Formula-E is a perfect fit for us, especially with our push on e-mobility and electric vehicles (EVs). And, to be clear, our push is not limited to electric cars. We’re working on electric trucks within our own operations [...] and also electric vans and scooters. So promoting the electrification of racing is a natural fit. To our way of thinking, eventually — say before 2050 — we hope that F-1 will move transition towards all-electric.
Blaustein: And so Formula E would no longer need to exist.
Davis: That is our goal. Also, one of our customers in Brazil was a sponsor of the Rio Olympics in 2016 — we weren’t, but they were. Our EVs were used by the sponsor at the Olympics — they were one of the first EVs to be used at an Olympics and certainly a pioneering event for Brazil.
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