The global logistics company is doing well on the environment, but needs to do a better job backing up its claims of positive impact
FedEx focuses on two main messages in this report: first its significant role, as a global company, in facilitating trade and growth in the SME economy, and second, as a logistics operator, its innovation in energy efficiency. These messages get through well enough. With 7,200 independent companies engaged to support FedEx operations, many of them women- or minority-owned, there is evidence of positive impact.
Steady progress is disclosed against environmental targets referencing a 2005 baseline, including a 33.5% rise in fuel efficiency and 21% cut in aircraft emissions intensity as well as a commitment to buy 3m gallons of jet fuel per year derived from waste woody biomass starting in 2017.
Nevertheless, there is something rather disjointed about the FedEx report that makes it a challenging read. It’s somewhere between a formal report and a glossy magazine and the two don’t mix all that well. The content zigzags between different topics and the linkage is not always apparent. The connection between the materiality matrix and the report content is not immediately obvious.
Performance against targets fails to disclose baseline levels, stating relative performance improvement instead, and biofuel commitments are stated in gallons rather than in percentage of fuel requirements. A quick calculation suggests that 3m gallons per year is a minor fraction of FedEx’s overall requirements – a long way from the 30% promised. The report is not externally assured except for greenhouse gas emissions reported under the EU Emissions Trading System.
The report is structured in three main parts – economy, environment and people – and a separate closing section called Deliver it Forward, which is a story of FedEx’s disaster relief efforts in Kathmandu. Each main section includes a community connections subsection for community investment. These may have been better collated in one section, as has been FedEx practice in the past, not least because there is a commitment to invest $200m in more than 200 communities by 2020 and it would be easier to appreciate the range and scope of these activities if they were not fragmented throughout the report.
FedEx has made an attempt to offer a different type of appeal, with in-depth case studies that comprise several full-page, first-person stories told from different perspectives. Each is introduced with a question, apparently designed to tease the reader’s imagination, for example: “What does a high school principal in South Africa have in common with a supply chain expert in Hong Kong?” or “What does a forester in Oregon have in common with aircraft mechanics students in Turkey?” While this is a nice idea, the stories themselves seem oddly out of place and the inferred connections a little forced.
Making a difference
The biggest question that the report raises is how FedEx can more effectively substantiate the way citizenship is making a difference through the core business. The fact that FedEx’s services are used by small businesses or e-commerce operations reflects positive impact, so FedEx’s claim of helping to reshape the global economy is plausible up to a point. FedEx says it provides logistics expertise to help small businesses reach new markets, and offers education and training for customers to export to different markets.
Similarly, FedEx lobbies for trade agreements, partnerships and treaties that eliminate barriers to trade and simplify cross-border commerce. Given FedEx’s claim to be a champion of small business expansion, however, a more explicit understanding of FedEx’s “citizenship” value in advancing sustainable development in geographies, sectors or among minority- and women-owned companies could add depth to its reporting.
CR report review Environment global logistics greenhouse gas emissions Global economy partnership sustainable development CSR