Freight and logistics companies fail to deliver on sustainability front

A sustainability analysis of freight and logistics companies

The COVID lockdown induced closure of retailers has supported growth in demand for postal and courier services. In this scorecard we examine the world’s biggest transport, postal and freight processing companies to see how they ‘deliver’ in terms of sustainability.

Written by Victoria Kent, Senior Investment Specialist

“Clicking” and “adding to cart” has become an all too familiar exercise lately. With most Aussies in extended lockdowns unable to buy our non-essential items instore, we have had to increasingly rely on online retail and the logistics networks that support it.

Unfortunately, the demand for postal and courier services has placed a major strain on an industry already constrained by fewer passenger flights (meaning less air freight capacity) and temporary facility closures.

Australia Post has been so overwhelmed with demand that earlier this month they placed a temporary pause on parcel post collections from e-commerce retailers across NSW, the ACT and Victoria.

Disruptions like these cause huge inconvenience and frustrations for consumers and small businesses alike. More worryingly, there are real concerns that supply chain issues will continue into Christmas, the industry’s traditionally busiest time.

Tip: get your Christmas shopping done sooner rather than later!

Given our reliance on this industry that’s under pressure, in this scorecard we take a look at postal courier and freight services. Alas, as the Christine Holgate saga made us very much aware: Australia Post is a government business enterprise, and as such is not on the Sustainable Platform database (which includes 18,000+ listed companies).

We chose to examine the world’s biggest transport, postal and freight processing companies to see how they ‘deliver’ in terms of sustainability.

The postal and freight companies analysed scores higher in sustainability (67) than the average score of the Sustainable Platform database (of all listed companies across all industries) of 50. However, this is only if we exclude corporate violations. If we include corporate violations, the average score is much lower at 21.

Of those two companies that actually contributed positively to the Sustainable Development goals (SDGs), the leader was Danish transport and logistics company DSV Panalpina with a score of 56.

This was followed by re-useable pallet specialist Brambles Ltd (known in Australia through the brand CHEP), with a score right on the database average of 50.  

The next three companies, Deutsche Post AG, FedEx Corporation and United Parcel Service Inc all had Net SDG scores of 0 if corporate violations are considered. Each of the companies have a long list of violations, most of which are workplace safety or health violations.

Notably, FedEx was fined in 2015 for an environmental violation. If fines are not considered, the scores would be as follows: Deutsche Post AG: 57, FedEx Corporation: 78 and United Parcel Service: 82.

All of the companies analysed have slight controversial industry exposure via the use of fossil fuels, predominately oil. This is of course unsurprising given the nature of transport activity linked to population and economic growth.

According to Freight Australia, the transport sector is currently the second largest source of greenhouse gas emissions in Australia. Across non-road freight modes, emissions are projected to grow out to 2030, with most growth occurring in the domestic aviation sector.

The sector's largest contribution to sustainability by far is unsurprisingly to the basic needs of transportation, but also to communication as well as knowledge and education.

*All SDG score and data are provided by Sustainable Platform based on data as at 14 September 2021.

Top contributing goals

Of all the 17 SDGs, the listed recruitment companies analysed contribute most to these below goals:

• SDG 8: Decent work and economic growth

• SDG 10: Reduced inequalities

• SDG 11: Sustainable Cities and Communities

Find out more about the Sustainable Development Goals (SDGs).

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Sustainable Platform is a sustainability information service only to institutional investors and doesn’t provide general or personal financial advice.

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