2017 GRI Content Index
Our Reporting Strategy
We are pleased to present UPS’s 16th annual Corporate Sustainability Report. Continuous improvement and leadership have been hallmarks of our reporting efforts through the years. For the 2017 reporting cycle, we have introduced a new storytelling format to better meet the needs of our stakeholders and readers. This format separates stories about new initiatives and other developments from the data requirements of the Global Reporting Initiative (GRI). The UPS 2017 Corporate Sustainability Progress Report chronicles our 2017 performance, initiatives, and engagements across the four pillars that comprise our Committed to More™ sustainability strategy. All GRI Standards disclosures for our comprehensive level of reporting are now located directly in the 2017 UPS GRI Content Index. Both documents can be found at ups.com/sustainability in interactive and downloadable PDF formats.
Note: Unless noted, data for UPS subsidiaries Coyote Logistics and Marken is not included in statistics of this Report.
General Disclosures
Organizational Profile
Report the name of the organization.
United Parcel Service, Inc.
Report the primary brands, products and services.
United Parcel Service, Inc. (“UPS”) was founded in 1907 as a private messenger and delivery service in Seattle, Washington. Today, we are the world’s largest package delivery company, a leader in the U.S. less-than-truckload industry and the premier provider of global supply chain management solutions. We deliver packages each business day for 1.5 million shipping customers to 9.0 million receivers (“consignees”) in over 220 countries and territories. In 2017 we delivered an average of 20.0 million pieces per day, or a total of 5.1 billion packages. Total revenue in 2017 was $65.9 billion. No UPS brands, products, or services are banned in markets where we operate.
Report the location of the organization's headquarters.
Atlanta, GA USA
Report the number of countries where the organization operates.
We serve more than 220 countries and territories around the world, along with domestic delivery service within 54 countries.
Report the nature of ownership and legal form.
Publicly traded company
Report the markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries).
UPS serves more than 220 countries and territories in the operating regions of USA, Americas, Europe, Asia-Pacific, and ISMEA (Indian Subcontinent, the Middle East, and Africa).
Report the scale of the organization.
| Total Number of Employees | 454,000 |
| Total Number of Operations | 2,500+ worldwide operating facilities |
| Net Revenues | $65.9 billion |
| Total Capitalization | $23.3 billion |
| Quantity of Products or Services Provided | 5.1 billion packages delivered in 2017 |
Breakdown of employee type.
See Disclosure 405-1—Diversity & Equal Opportunity
Describe the organization's supply chain.
See Disclosure 204—Procurement Practices
Report any significant changes during the reporting period regarding the organization’s size, structure, ownership, or its supply chain.
In 2017, we formed and received approval for a joint venture with SF Express, China’s leading small package company, which will ultimately provide millions of potential customers in China with improved access to buyers and sellers around the world. We acquired Freightex, Ltd. (“Freightex”) to extend our platform-based freight transportation capabilities into both the U.K. and European markets. The acquisition of Eirpost Group Unlimited Company (“Nightline”) vaulted UPS to a leading market position in Ireland. We added shipping centers and healthcare and distribution facilities in Mexico, Colombia and India. In 2017, we also acquired STTAS Global Holdings, Inc. (“Sandler & Travis Trade Advisory Services” or “STTAS”), the world’s largest dedicated global trade compliance management company. UPS continues to focus on growth, including $5.2 billion in capital expenditures to meet increasing global demand. Within our facilities, we are expanding capacity, driving greater efficiencies, and providing additional network flexibilities. We also continue to invest in our air network capacity through aircraft acquisitions. See 2017 Annual Report - Form 10-K, Item 1, pages 1-2.
Report whether and how the precautionary approach or principle is addressed by the organization.
UPS has not formally adopted the precautionary principle. Adoption of the principle would apply primarily to potential harm related to use of fossil fuels and emission of greenhouse gases. We are fully aware of these risks, we are deeply engaged with the stakeholders regarding them, and we manage our business to reduce, avoid, or mitigate them.
List externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or which it endorses.
Examples of major external initiatives we engage in—other than those aforementioned in this Report—include the following:
- The World Resources Institute’s Greenhouse Gas Protocol
- CDP’s climate change program
- The President’s Advisory Council on Doing Business in Africa, where UPS serves as Vice Chair
- The Business Roundtable, an association of CEOs promoting public policy in support of a thriving economy
List memberships of associations (such as industry associations) and national or international advocacy organizations.
- Green Freight Asia, a transportation association addressing the climate impact of shipping
- The North American Council for Freight Efficiency, an association committed to doubling the efficiency of North American goods movement
- The National Clean Fleets Partnership, as part of the U.S. Department of Energy’s Clean Cities program, which works with large private fleets to reduce the use of petroleum-based fuels
- The International Air Transport Association’s Air Cargo Carbon Footprint initiative
- The Conference Board, which provides corporations with information to better serve society
- Corporate Eco-Forum, which provides a forum for leaders to strategize and exchange best-practice insights
- BSR Future of Fuels, whose mission is to drive sustainable transition to low-carbon commercial road freight
- Airlines for America (A4A), which advocates and forms partnerships for airline safety, job creation, infrastructure modernization, and environmental responsibility
- World Business Council for Sustainable Development
- Low Carbon Vehicle Partnership (LCVP), a UK-based, public-private organization with the mission of accelerating the shift to low-carbon road fuels and technologies
Strategy
Provide a statement from the most senior decision-maker of the organization.
See Progress Report—CEO Message, pages 2-3
Describe key impacts, risks and opportunities.
- See Progress Report—Economic Enhancement Overview, page 10-11
- See 2017 Annual Report—Form 10-K, Item 1A Risk Factors, pages 9-15
- See Disclosure 102-46—Topic Boundaries
- See Disclosure 102-47—Material Topics
Ethics & Integrity
Describe the organization’s values, principles, standards, and norms of behavior such as codes of conduct and codes of ethics.
See Disclosures 205—Anti-Corruption
Report the internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to organizational integrity, such as helplines or advice lines.
See Disclosures 205—Anti-Corruption
Governance
Report the governance structure of the organization, including committees of the highest governance body.
We publish the governance structure for UPS, including the committees of our Board of Directors, committee charters, and committee membership, on our investor website. This website also includes detailed information about corporate governance at UPS, including structures, policies, and processes.
Report the process for delegating authority for economic, environmental, and social topics from the highest governance body to senior executives and other employees.
The Board delegates authority for day-to-day management of economic, environmental, and social topics to the Management Committee, which comprises the senior managers for all our major corporate functions. The Management Committee further delegates relevant authority for economic, environmental, and social topics—particularly including all the material aspects discussed in UPS Corporate Sustainability Report—to the appropriate organizations in the Company.
Report whether the organization has appointed an executive-level position or positions with responsibility for economic, environmental, and social topics, and whether post holders report directly to the highest governance body.
Our Chief Sustainability Officer regularly reports to the Board of Directors regarding sustainability strategies, priorities, goals, and performance.
Report processes for consultation between stakeholders and the highest governance body on economic, environmental, and social topics.
Consultation between members of the Board of Directors and outside stakeholders occurs formally and informally throughout the year. Among the formal processes are reports to the Board by our CSO as described above. Stakeholders who wish to communicate directly with a member of our Board of Directors, with our independent lead director or with our nonmanagement directors as a group, may do so by writing to UPS via our Corporate Secretary at:
- UPS, c/o Corporate Secretary
- 55 Glenlake Parkway, N.E.
- Atlanta, Georgia 30328
Advertisements, solicitations for business, requests for employment, matters that may be better addressed by management, or other inappropriate materials will not be forwarded to our directors.
Report the composition of the highest governance body and its committees.
We publish the governance structure for UPS, including the committees of our Board of Directors, committee charters, and committee membership, on our investor website.
Report whether the Chair of the highest governance body is also an executive officer.
David Abney, UPS Chief Executive Officer, currently serves as Chairman of the Board. The Board believes that Mr. Abney, who has primary responsibility for managing the Company’s day-to-day operations and has extensive knowledge and understanding of the Company, is best positioned to focus the Board’s attention on the issues of greatest importance to the Company and its shareholders.
The Board also has a Lead Independent Director and a majority of independent directors who meet regularly in executive session. Independent directors chair the Board’s Audit, Compensation, Risk, and Nominating and Corporate Governance Committees. Other than our Chief Executive Officer, all UPS directors are independent and have no material relationships other than as a UPS director. A complete discussion of our Board leadership structure can be found in the 2018 Annual Proxy Statement Summary.
Report the nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting highest governance body members.
The Nominating and Corporate Governance Committee of the Board nominates directors based on their independence, as well as their experience and expertise in a variety of areas, including economic, environmental, and social topics. In evaluating each candidate, the Committee considers factors such as personal character, values and disciplines, ethical standards, diversity, professional background, and skills. Shareholders may nominate director candidates in accordance with our bylaws. Director nominations are presented to our shareholders as part of our Annual Meeting process, which, because of the nature of UPS shareholding, means stakeholders with a broad range of views and interests are able to influence whether nominees become directors.
Report processes for the highest governance body to ensure conflicts of interest are avoided and managed.
Our investor website, specifically our Code of Business Conduct, includes processes and policies for avoiding or managing conflicts of interest.
Report the highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value, or mission statements, strategies, policies, and goals related to economic, environmental, and social impacts.
We have two governance bodies dedicated to sustainability at UPS, a Sustainability Leadership Council and a Sustainability Steering Committee, both of which support the Management Committee and Board of Directors. The Sustainability Leadership Council has primary strategy-setting responsibility for sustainability at UPS. It comprises representatives from most major corporate functions, as well as representatives from each of our international regions and UPS Airlines. This Council, chaired by the Chief Sustainability Officer, brings critical issues and decisions to our Sustainability Steering Committee, which includes members of the UPS Management Committee and other senior executives. The chairperson of the Sustainability Steering Committee is the Chief Information and Engineering Officer, who is also a member of the Management Committee.
Report the measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental, and social topics.
Our Board of Directors continually develops and enhances its knowledge of economic, environmental, and social impacts through activities such as:
- Reviewing economic, environmental, and social impacts regularly at Board meetings and Board committee meetings.
- Receiving regular reports from our Chief Sustainability Officer (CSO) and other governance bodies regarding sustainability strategies, priorities, goals, and performance.
- Overseeing efforts by UPS management to develop, approve, and update our vision, values, strategies, policies, and goals related to economic, environmental, and social impacts.
- Reviewing the contents of the UPS Corporate Sustainability Report each year, and the Board’s Audit Committee oversees our process of securing third-party assurance and verification for the Report’s contents.
- Overseeing strategic risk management efforts at UPS, including identifying and managing risks and opportunities associated with economic, environmental, and social impacts.
Report the processes for evaluation of the highest governance body’s performance with respect to governance of economic, environmental, and social topics.
The Board’s Nominating and Corporate Governance Committee coordinates an annual self-evaluation of the Board of Directors and each committee, with the exception of the Executive Committee. The evaluation includes a review of performance with respect to governance of economic, environmental, and social topics. The Board and each committee review the results of the evaluations and take appropriate actions to address any areas of concern. While this is an internal self-assessment, all members of each committee are independent directors.
Report the highest governance body’s role in the identification and management of economic, environmental, and social impacts, risks, and opportunities.
See 102-26—Governance Body's Roles
Report the highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes for economic, environmental, and social topics.
See 2018 UPS Proxy, page 14, Risk Oversight
Report the frequency of the highest governance body’s review of economic, environmental, and social impacts, risks, and opportunities.
See Disclosures 102-26—Governance Body's Roles and 102-27—Governance Body's Knowledge
Report the highest committee or position that formally reviews and approves the organization’s sustainability report.
UPS’s annual Sustainability Report is provided to the UPS Board of Directors for review and comment.
Report the process for communicating critical concerns to the highest governance body.
Should a critical concern arise regarding sustainability, the Board of Directors would receive a report via the Management Committee, which communicates with all major corporate functions and is responsible for addressing and resolving such concerns.
Report the nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve them.
Should a critical concern arise regarding sustainability, the Board of Directors would receive a report via the Management Committee, which communicates with all major corporate functions and is responsible for addressing and resolving such concerns. In 2017, no such critical concerns arose.
Report the remuneration policies for the highest governance body and senior executives.
The Compensation Committee of the Board of Directors sets performance criteria and compensation for the CEO, and also reviews and approves compensation for other executive officers. These policies are spelled out in our 2018 Proxy Statement. The Compensation Committee annually engages an independent compensation consultant to make recommendations concerning executive compensation, including input on trends that may be important to investors. Additionally, the Committee keeps itself well-informed regarding compensation practices and policies within our industry and among companies of similar size in other industries.
Report the process for determining remuneration.
UPS offers competitive hourly wages, salaries, and total compensation plans to both full-time and part-time employees. The primary process for setting compensation levels for our nonmanagement employees is contract negotiations via collective bargaining. Unions represent more than 75 percent of all UPS workers in the United States. Many of our workers in other countries are also represented by collective bargaining organizations. Through collective bargaining, unions have historically ensured broad equality in remuneration for union workers.
UPS provides for equal remuneration policies with regard to women and men and complies with all applicable laws and regulations. UPS currently does not report further on the ratio of basic salary and remuneration of women to men by employee category, or by significant locations of operation. The U.S. Department of Labor is in the process of establishing rules to require reporting of average female salary and average male salary by employee level. UPS will report this information in accordance with the final regulations.
Report how stakeholders’ views are sought and taken into accountregarding remuneration.
Our most recent “Say on Pay” vote took place in early May 2017, and shareholders approved our proposal by more than 88 percent. “Say on Pay” allows shareowners to vote, on an advisory basis, on whether they approve the compensation of the executive officers disclosed in our proxy statement. Our next “Say on Pay” vote will occur in May 2020.
Report the ratio of the annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median annual total compensation for all employees.
See 2017 UPS Proxy, pages 50-51, Median Employee to CEO Pay Ratio.
Report the ratio of percentage increase in annual total compensation for the organization’s highest-paid individual in each country of significant operations to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual) in the same country.
Due to confidentiality constraints, UPS does not report ratios based on individual compensation or make pay decisions based on these ratios. We consider this data confidential.
Stakeholder Engagement
List of stakeholder groups.
- Customers
- Active and Retired Employees
- Policymakers
- Government Officials
- Investors
- Communities
- NGOs
- Suppliers
Report the percentage of total employees covered by collective bargaining agreements.
More than 75 percent of our employees in the U.S. are covered by collective bargaining agreements, including almost everyone who handles or transports packages.
Report the basis for identification and selection of stakeholders with whom to engage.
We consider stakeholder engagement an essential aspect of UPS corporate governance. We are one of the world’s largest private employers; we serve millions of customers in more than 220 countries and territories; and hundreds of thousands of investors include UPS stock shares in their portfolios either directly or via mutual funds. Regular dialogue with employees, customers, investors, community leaders, universities, public officials, suppliers, and third-party providers through formal and informal channels is essential to conducting our business, as well as developing and implementing our sustainability strategies.
Report the organization’s approach to stakeholder engagement.
We maintain ongoing dialogue with a broad array of stakeholders—even those who may be critical of us.
We stay in regular contact with stakeholders on emerging sustainability issues and trends, and periodically receive inquiries and requests for engagement from stakeholder groups. We are also open to initiating new stakeholder engagement activities to help inform our strategy. For example, a cross-functional group of internal stakeholders who have responsibility for our material issues helped to develop a framework to focus current engagements and identify new opportunities.
Report key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns.
The table on the following two pages summarizes the highlights of our stakeholder engagement on sustainability issues during 2017. More in-depth discussions on many of these topics may be found throughout the Report.
Summary of 2017 Stakeholder Dialogue & Outcomes
| Stakeholder Group | Mechanisms for Engagement | Stakeholer Expectations | Actions Taken |
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| Policymakers, Government Officials |
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Reporting Practices
List all entities included in the organization’s consolidated financial statements or equivalent documents.
See 2017 Annual Report—Form 10-K, Reporting Segments and Products & Services, pages 2-5. This Sustainability Report includes data from UPS subsidiary Coyote Logistics in our financial data and greenhouse gas inventories, but not in our employee counts. UPS subsidiaries Coyote Logistics and Marken are included in our health and safety data.
Explain the process for defining the report content and the Topic Boundaries.
Materiality is a critical input of our corporate sustainability strategy because it ensures that our initiatives and reporting are aligned with what is most important to our stakeholders with respect to their association with UPS. To determine this, we have worked with BSR (formerly Business for Social Responsibility) to conduct materiality assessments every two years since 2011.
Our most recent assessment began in 2015 at the regional level, where we interviewed representatives from stakeholder groups in areas of the world where we have significant and growing operations: Asia-Pacific; Canada; Europe; and the Indian Subcontinent, Middle East and Africa. An additional assessment was completed during 2016 in Mexico. To learn more about these regional insights visit https://sustainability.ups.com/media/UPS_Corporate_Materiality_2016.pdf.
In 2016, we built upon our regional assessments by evaluating approximately 30 international sustainability frameworks, standards, ratings, and ranking assessments; interviewing members of UPS’s Management Committee; reviewing stakeholder engagements around the world; and gathering feedback from regulators, NGOs, academics, and investors.
Ultimately, we examined more than 50 issues, including areas of significant organizational impact, as well as broader sustainability trends that affect UPS. BSR ranked each issue’s relative importance based on an assessment of the aggregate feedback from stakeholders and UPS executives and supported us in making final adjustments to the ranking before we presented it to members of our Sustainability Leadership Council. This Council then submitted the results of the materiality process for approval to our Sustainability Steering Committee, which includes members of the Management Committee and other senior leaders of UPS.
List all the material Topics identified in the process for defining report content.
UPS Materiality Content
| Material Issue for UPS | U.N. Sustainable Development Goals Alignment* |
Corresponding GRI Standards Material Topic |
| Workforce Diversity | 5, 8 | Diversity and Equal Opportunity, Equal Remuneration for Women and Men |
| Employee Health, Safety & Wellness | 3, 8 | Employment, Occupational Health and Safety |
| Safe Driving | 3, 8 | Occupational Health and Safety |
| Recruitment & Development | 4, 5, 8 | Training and Education |
| Labor Relations | 3, 4, 5, 8, 10, 16 | Labor/Management Relations, Freedom of Association and Collective Bargaining |
| Ethical Conduct | 12, 16 | Anti-Corruption, Anti-Competitive Behavior, Socioeconomic Compliance |
| Package Contents Responsibility | 12 | This issue arose during the materiality process but does not map directly to a GRI Standards material topic. |
| Economic Performance** | 1, 2, 3, 5, 7, 8, 9, 10, 11, 12, 13, 17 | Economic Performance, Market Presence, Indirect Economic Impact, Procurement Practices |
| Management of Third-Party Representatives | 8, 16 | Supplier Environmental Assessment, Supplier Assessment for Labor Practices, Supplier Human Rights Assessment, Freedom of Association and Collective Bargaining, Anti-Corruption |
| Data Privacy | 16 | Customer Privacy |
| Digital & Physical Asset Security | 16 | Customer Privacy |
| Humanitarian Relief & Resilience | 1, 2, 3, 5, 7, 8, 9, 10, 11, 17 | Indirect Economic Impact |
| Greenhouse Gas Policy | 3, 12, 13, 14, 15 | Energy, Emissions |
| Emissions & Fuel Supply | 3, 7, 8, 9, 11, 12, 13, 14, 15 | Energy, Emissions |
| Congestion | 11 | This issue arose during the materiality process but does not map directly to a GRI Standards material topic. |
| Transparency & Reporting | 12, 16 | This issue arose during the materiality process but does not map directly to a GRI Standards material topic. |
| Description | ||
| Global Trade | 1, 8, 9 | This trend arose during the materiality process. We provide additional information in the Report to explain its significance to UPS. |
| Emerging Markets | 1, 8, 9, 10 | This trend arose during the materiality process. We provide additional information in the Report to explain its significance to UPS. |
* Please visit sustainabledevelopment.un.org/sdgs to identify corresponding goals.
** Our Materiality Matrix implicitly recognizes that our economic performance is a material influence on our business success, so it does not appear in the matrix as a separate issue or aspect. We fully discuss our economic performance, in line with GRI Standards guidelines.
Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.
We have made no material restatements of information provided in previous Reports.
Report significant changes from previous reporting periods in the list of Material Topics and Topic Boundaries.
There have been no significant changes to material topics. Reference 102-45 for Topic Boundaries.
Reporting period for information provided.
The report presents data for the 2017 calendar year.
Date of most recent report.
Our previous report presented data for the 2016 calendar year.
Reporting cycle.
We issue our Corporate Sustainability Report on an annual basis.
Provide a contact point for questions regarding the report or its contents.
Please send comments or questions about this Report to sustainability@ups.com, or in writing to:
- UPS
- Attention: Sustainability Report Editor
- 55 Glenlake Parkway N.E.
- Atlanta, Georgia 30328
Report the ‘in accordance’ option the organization has chosen.
This Report has been prepared in accordance with the GRI Standards, Comprehensive option. UPS has voluntarily followed GRI reporting guidelines since 2003.
Report the GRI content index, which specifies each of the GRI Standards used andlists all disclosures included in the report.
This document is organized by GRI Indicators and serves as our GRI Content Index.
Describe the organization’s policy and current practice with regard to seeking external assurance for the report.
We engage with experienced and respected third parties to assure and verify our sustainability reporting. Authorization for these engagements, and approval of the providers we select, comes from the Audit Committee of our Board of Directors, which is our highest governance body.
For this Report, we engaged Deloitte & Touche LLP to conduct a review, in accordance with attestation standards established by the American Institute of Certified Public Accountants, to provide a limited level of assurance on our 2017 Corporate Sustainability Report.
We also engaged Deloitte & Touche LLP to conduct an examination, in accordance with attestation standards established by the American Institute of Certified Public Accountants, to provide a reasonable level of assurance on our Statement of Greenhouse Gas Emissions for the year ended December 31, 2017.
Independent Accountants' Examination Report
Independent Accountants' Review Report
Topic Specific Disclosures - Economic
201 Economic Performance
Management Approach
See also UPS 2017 Sustainability Progress Report, Economic Enhancement Overview
We report on the structure of our organization, changes in structure and financial performance primarily through our Annual Report and at www.investors.ups.com. In our Corporate Sustainability Report, we focus on economic performance as it relates to sustainability. Our economic success ensures our long-term viability and enables us to execute our sustainability strategies. For this reason, we consider economic performance our most material aspect and a reference point by which we define all other material issues.
UPS contributes to sustainability by making logistics as resource-efficient as possible, and our scale allows us to reduce the emissions intensity of global supply chains. This capability will grow and become even more important as emerging markets develop, global population increases, and the flow of goods and services expands. In addition, we believe our ability to operate even more effectively will increase because of our proven capabilities for measuring, managing, and mitigating greenhouse gas (GHG) emissions, support of the emergence of new technology innovations, and ongoing collaboration with stakeholders.
Tax Policy
UPS’s fundamental tax policy is to ensure the tax results for our global entities are properly reported in accordance with applicable laws, rules, and regulations. We operate our business where our customers are located. While tax management is important to the Company, how and where we conduct business activities aligns with our goal of providing superior customer service and shareholder value. We consider UPS’s reputation, brand, and corporate responsibility when we evaluate our tax positions. Accordingly, we enter only into structures or transactions designed to further our commercial purpose. We believe in transparency and work to develop positive relationships with tax authorities based on trust and professional interactions. Where appropriate, we proactively seek agreement with tax authorities on positions taken on our tax returns.
Direct economic value generated and distributed.
UPS Financial Highlights
| (In US$) | 2017 | 2016 |
| Revenue | $65.9 billion | $60.9 billion |
| Operating Costs | $58.3 billion | $55.4 billion |
| Employee Compensation & Benefits | $34.6 billion | $34.8 billion |
| Taxes Paid* | $2.8 billion** | $3.6 billion |
| Long-Term Debt Repaid | $3.9 billion | $3.8 billion |
| Dividends Paid to Shareholders | $2.9 billion | $2.8 billion |
| Payments to Small & Diverse Suppliers | $1.2 billion | $989.0 million |
| Total Charitable Contributions | $118.3 million | $116.6 million |
| Retained Earnings | $5.9 billion | $4.9 billion |
* Due to U.S. tax reform, some values contain provisional estimates at time of publication.
** Increased additional payments funding our employee benefit plans, which were tax deductible for income tax purposes, resulted in continued lower tax liability in 2017 compared to 2016.
Financial implications and other risks and opportunities due to climate change.
- See 2017 UPS Sustainability Progress Report—Economic Enhancement Overview
- See 2017 Annual Report—Form 10-K, Item 1A Risk Factors, pages 9-15
Defined benefit plan obligations and other retirement plans.
We provide detailed disclosures and discussions about our pension and postretirement plan obligations in our Annual Report, primarily in Notes 4 and 5 to the Consolidated Financial Statements beginning on page 78 of the UPS 2017 Annual Report Form 10-K.
Financial assistance received from government.
UPS does not receive significant financial assistance from the government. We do participate in public-private partnerships that may involve tax incentives, such as the Interstate Clean Transportation Corridor (ICTC) in the United States, or certain incentives related to our purchase of alternative fuel vehicles.
202 Market Presence
Management Approach
See Disclosure 201—Economic Performance Management Approach
Ratios of standard entry-level wage by gender compared to local minimum wage.
The ratio of our standard entry-level hourly wage to local minimum wage varies from location to location around the world. This variation is necessary to comply with local conditions and with national wage minimums in countries that set them. In the United States, which represents 82.3 percent of our employee base, we comply with local minimum-wage laws in each state and pay no less than the local minimum wage or the federal minimum wage. We do not vary entry-level compensation by gender. We do not have a significant proportion of other workers (excluding employees) performing the organization’s activities that are compensated based on minimum-wage rules.
Proportion of senior management hired from the local community.
We hire nearly all senior managers within their home country. More than 99 percent of full-time management employees worked in their home country in 2017. Because UPS serves more than 220 countries and territories around the world, it is extremely difficult to define “local” and “significant” operations.
203 Indirect Economic Impacts
Management Approach
See Disclosure 201—Economic Performance Management Approach
Much of our indirect economic impact is provided through the global Humanitarian Relief & Resilience program by The UPS Foundation (our corporate philanthropy arm). This effort is organized around building more effective publicprivate partnerships to catalyze innovation and enhance community disaster risk reduction and preparedness efforts, supporting urgent response and speeding post-crisis recovery.
Every year, natural disasters and global crises create devastating human suffering that demands coordinated, swift relief efforts. Humanitarian crises can disrupt businesses, destroy infrastructure, and bring most forms of productive commerce to a halt. It’s important to us that our employees and customers live in strong and safe communities that are well prepared for and equipped to recover from disasters in a timely manner to minimize long-term social and economic impact.
As a global leader in logistics, we are ready to leverage our extensive global assets and logistics expertise to speed relief and recovery to those in need when a natural or man-made disaster strikes. At the core of our preparedness, response, and recovery efforts are the strong relationships we have developed with the world’s leading humanitarian relief organizations. In addition, we often have people on the ground who are ready to help. UPSers around the world are empowered to volunteer and provide relief assistance to their local communities during sudden-onset disasters.
The breadth and depth of talent among UPS employees provides a valuable platform to help speed disaster response and recovery. UPSers work side-by-side with our strategic partners and play an integral role in our humanitarian relief program. The UPS Humanitarian Experts on Mission Program places UPS logistics professionals on long-term assignment to our partner organizations. We also participate in formal programs such as the Logistics Emergency Teams (LET), which provide proficiency and response services to the Global Logistics Cluster of the United Nations led by the World Food Programme. LET companies, which are large global logistics and transportation businesses, provide pro bono assets and services and deploy highly trained experts to join the United Nations staff in disaster areas.
The key performance indicator for indirect economic benefit is the sum of our charitable contributions by UPS; The UPS Foundation; and UPS employees, retirees, and their families.
Infrastructure investments and services supported.
Our business generates a wide range of indirect economic benefits, including charitable contributions, access to markets through our local points of presence in the form of retail outlets, procurement activity throughout our supply chain, and venture capital funding. We provide more than 150,000 entry points where customers can tender a package and access our network, including our drivers, drop boxes, UPS Access Point™ locations, The UPS Store® locations, authorized shipping outlets, and UPS facilities. These local entry points help small and diverse businesses participate more fully in the global economy. UPS’s support of and advocacy for free trade around the world benefits businesses, communities, and countries of all sizes. Similarly, continual investments in our global logistics network—rather than infrastructure and specific services—benefit all of our communities by facilitating commerce and providing jobs.
We also use our scale to stimulate the markets for alternative fuels and advanced fleet technologies. Our continued investments help drive supply and demand for these promising sustainable solutions.
Significant indirect economic impacts.
Solely funded by UPS, The UPS Foundation provides cash and in-kind contributions to organizations that promote its four focus areas: Diversity and Inclusion, Global Volunteerism, Community Safety, and Environmental Sustainability. In-kind donations are primarily transportation services, including ground, ocean, and air shipments. For example, we donated flights to and from 61 countries for humanitarian relief and resilience efforts in 2017. Charitable contributions also include a 15 percent match of employee pledges to United Way, a major nonprofit provider of community-based social services.
In 2017, total charitable contributions were US$118.3 million, an increase of US$1.7 million over 2016. In addition, UPSers contributed 2.9 million volunteer hours in 2017, which had an economic value of US$81.4 million, based on the U.S. Bureau of Labor Statistics’ valuation of volunteer time.
Total Charitable Contributions
| Program Area (Year Ending December 31, 2017) | Allocation (US$ In Millions) |
| Local Grants | 9.8 |
| Corporate Grants | 25.0 |
| In-Kind Services | 5.8 |
| Internal Scholarship Programs | 2.3 |
| United Way Corporate Contribution | 8.5 |
| Charitable Contributions and Sponsorships | 9.5 |
| The UPS Foundation Contribution Total | 60.9 |
| United Way Employee Contribution (active and retired) | 57.4 |
| Total Charitable Contributions | 118.3 |
204 Procurement Practices
Management Approach
UPS has a highly distributed and diverse supply chain, with providers ranging from global multinationals to local small businesses. As a service provider, the UPS supply chain is primarily dependent on goods and services that are highly regulated or commodity based, such as transportation, brokerage, and energy. Therefore, UPS considers our supply chain to be resilient and at low risk against problems related to the environment, labor practices, and human rights.
At the same time, we are entering into more contractual relationships with third parties, such as agents, providers, outside service providers, and authorized service contractors, who may interact with government officials or outside parties on behalf of UPS. It is vital that all third-party representatives convey UPS’s integrity and commitment to compliance when they represent our brand, products, and services in the marketplace. We consider effective management of such representatives as material to the sustainability of our business.
Since UPS is a service provider, our supply chain partners tend to be other service providers, rather than raw material or finished goods suppliers. Support of locally based and diverse suppliers has also been a core part of UPS procurement processes since 1992. Supply chain partners can be broadly grouped into three categories:
- Production Suppliers represent the majority of total procurement spending. They provide purchased transportation services and energy to operate our global logistics network. At the region and country levels, we contract with suppliers of transportation services, such as airlines, trucking companies, railroads, and ocean carriers, as well as fuel suppliers. We also contract with third-party representatives that provide domestic delivery services in certain countries and territories.
- Capacity Suppliers provide the equipment and facilities we purchase, build, and maintain. Our supply chain includes a number of suppliers of strategic, high-value assets that we purchase in limited numbers in select years, such as jet aircraft and alternative fuel or advanced technology vehicles. We work on a continual basis with original equipment manufacturers to design and develop our ground and air fleets in a way that minimizes their environmental impacts.
- Support Suppliers provide standardized products and services that support our business, such as marketing, advertising, human resources, shipping materials, and other professional services.
During our assessment of potential suppliers, we survey the market and analyze supplier risks, including those related to economic, environmental, and social issues, if deemed necessary. We require suppliers with access to sensitive UPS data to execute a security agreement to ensure compliance with UPS privacy and security standards. Procurement professionals are located in our corporate, regional, and local offices to help suppliers understand and meet our requirements.
The UPS Code of Business Conduct, which applies to UPS entities globally, governs our relationships with third-party representatives. We direct them to the Code as part of the Supplier’s Principles Agreement provided during the proposal process, and they must certify they have read the Code and are aware that compliance with the Code is both expected and subject to audit. To ensure the requirements of the UPS Code of Business Conduct are clear, we produce an Anti-Corruption Compliance Manual for Third-Party Representatives. This manual, available in 20 languages, further explains our expectations and requirements, including the need to report actual or suspected compliance violations.
Collaboration and engagement are other vital components of supplier management. We work with many governmental and nongovernmental organizations, as well as with suppliers, to develop and integrate sustainability best practices in our supply chain.
UPS uses a risk-based due diligence process to assess potential suppliers’ ownership, financial transparency, local licensure status, compliance record, labor practices, environmental practices, and more. This information is recorded in a proprietary global database to enable more effective ongoing monitoring and auditing of these third-party relationships.
Proportion of spending on local suppliers.
Omission — Information unavailable. We are developing a methodology to define and track spending with local suppliers, and plan to have an update in our 2018 Sustainability Report.
UPS seeks to extend opportunities to small businesses, as well as minority-, women-, veteran-owned companies, among other diverse suppliers. Since 2015, we have conducted an annual third-party study to measure the economic impact of these investments. In 2017, the study found that UPS contributed more than US$2.9 billion to the U.S. economy (U.S. GDP) and sustained more than 18,100 jobs in the supply chain and local communities. A breakdown of that US$2.9 billion includes US$1.1 billion in direct economic benefit from suppliers’ operations and activities; US$780.3 million in indirect impact from the economic benefit and employment supported in the suppliers’ respective supply chains from procuring goods and services; and US$952.7 million in community impact from the wider economic benefits that arise when the suppliers’ employees and those in their supply chains spend their earnings.
205 Anti-Corruption
Management Approach
UPS is a company of honesty, quality, and integrity. This legacy is fundamental to our ability to earn customer trust, support the communities in which we operate, and protect our reputation. Ethical business practices enable us to take proven compliance practices and core values with us when we enter new markets; identify suppliers that align with our approach to compliance; and successfully identify, acquire, and integrate businesses that fit into our culture of integrity.
The UPS Code of Business Conduct sets out the behavior we expect from our employees, the processes available to them for raising concerns about ethical conduct, and the channels we use to respond. The Code is available in 22 languages so that our employees, agents, and third-party representatives in other countries and territories can fully understand our guiding principles.
Our policy is to comply with all applicable laws, rules, and regulations in the more than 220 countries and territories where we operate. The Code includes policies and procedures that prohibit UPS employees, and others acting on our behalf, from engaging in anti-competitive behavior or any unlawful activities, including violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other applicable anti-bribery laws, rules, and regulations.
We ensure understanding of these regulations with refresher courses and job-specific courses on compliance and ethics to employees, using a risk-based approach to identify the most appropriate audiences. Anti-corruption training is required for management, including management committee members.
We encourage employees to raise concerns about compliance, ethics, or business conduct with their direct supervisors or human resources representatives. Employees may also submit a report to the UPS Help Line online or by phone. Both of these channels are monitored by an independent service provider and are available 24 hours a day, 7 days a week, and reports may be anonymous. Translators are available to assist when needed. Our policy is that employees will not face retaliation if they report any violation or suspected violation in good faith. In 2017, UPS received more than 10,000 reports of employee concerns through the UPS Help Line and other reporting avenues. We investigated these cases and took corrective or disciplinary action where appropriate.
A focus area for UPS is package contents responsibility, or the policies and protocols related to UPS shippers who tender regulated goods into our system. UPS requires that shippers only tender packages for shipment that comply with all applicable laws and regulations, and prohibits shipments that are unlawful under applicable federal, state, or local law. UPS may also, at its discretion, determine that carriage of a particular commodity is not feasible.
We follow a multilayered process to ensure that compliance is continuously improving within our U.S. Domestic Package, International Package, and Supply Chain & Freight business entities. Our global compliance team facilitates this process for employees around the world.
UPS managers and select nonmanagers receive training on compliance matters. We regularly review the UPS Code of Business Conduct with these employees, and we periodically conduct comprehensive training on ethics and compliance.
We analyze our business units for compliance risks. One of our primary tools is our Business Compliance and Ethics Questionnaire, which we use to survey our management team each year to identify events, situations, or relationships that could pose ethical or legal risks. 47,480 employees completed the 2017 questionnaire.
Beyond training, we conduct systematic risk assessments of UPS sites, auditing methodically for evidence of fraud, corruption, and other process risks. As part of our audit process, we also pay particular attention to significant changes in a UPS business entity or its regulatory environment that could increase the risk of unethical practices or inadequate controls.
The information we generate through these activities goes to our senior management, up to and including the Management Committee, for prompt review and response.
Operations assessed for risks related to corruption.
This information is unavailable. UPS conducts a number of corruption-related audits but does not report on the percentage or significant risks due to confidentiality.
Communication and training about anti-corruption policies and procedures.
As part of our Director Orientation Program, new Board members are provided with the UPS Code of Business Conduct, which includes a section on our Anti-Corruption Program and sets forth standards applicable to all representatives of UPS.
Of more than 51,000 eligible employees, which includes all full-time managers, supervisors, and specialists, all employees of International Finance and Accounting, and all nonmanagement employees who may interact with non-U.S. government employees, 98 percent completed anti-corruption training as of the end of 2017. UPS also vets third-party providers worldwide and monitors their compliance with our ethical standards.
Our Nominating and Corporate Governance Committee of the Board of Directors maintains organizational responsibility for our business conduct and compliance policies, and our Chief Financial Officer holds administrative responsibility. In addition, the UPS Audit Committee of the Board of Directors oversees the Company’s compliance obligations related to auditing (both financial and operational), accounting, and financial reporting. The Chief Internal Audit and Compliance & Ethics Executive reports to this Audit Committee. The Board of Directors’ Risk Committee provides oversight for management’s identification and evaluation of enterprise risks, including the Company’s risk management framework and the policies, procedures, and practices employed to manage risks.
Confirmed incidents of corruption and actions taken.
We are not aware of any material incidents of corruption in 2017.
206 Anti-Competitive Behavior
Management Approach
See Disclosure 205—Anti-Corruption Management Approach
Legal actions for anti-competitive behavior, anti-trust, and monopoly practices.
All material litigation and enforcement matters related to competition law are timely disclosed to the SEC and publicly available in our SEC filings.
Topic Specific Disclosures - Environmental
302 Energy
Management Approach
We help the world grow more prosperous by providing transportation and logistics solutions that facilitate global trade. This role requires the use of substantial amounts of energy, primarily in the form of fuel and electricity for our vehicles, planes, distribution facilities, warehouses, and data centers. In addition to the energy used in our own network operations, we also rely on other third-party transportation providers who use fuel and energy on our behalf to transport goods via all modes of transportation, including air, ocean, road, and rail.
We take a comprehensive, global approach to reducing energy use and GHG emissions within our network, as well as major portions of our value chain, including customers and suppliers. We believe everyone shares responsibility to improve energy efficiency and to reduce GHG emissions in the atmosphere. UPS supports global efforts to mitigate the impact of climate change. Our full statement on climate change can be found on our website.
Our optimized global logistics network, combined with our global GHG strategy, helps improve our efficiency and reduce our environmental impacts. This strategy includes:
- Setting an ambitious goal to reduce absolute GHG emissions 12 percent by 2025 throughout our global ground operations, with supporting goals for fuel, energy, and alternative vehicles;
- Utilizing operational improvements through technology to create overall network and delivery efficiencies beyond reducing miles/fuel, (e.g., higher trailer utilization, decreased sortation time, increased safety, reduced errors/duplication of work, higher asset utilization/less waste, etc.) that reduce GHG footprint.
- Expanding our fleet of alternative fuel and advanced technology vehicles, known as our rolling laboratory, in order to reduce the proportion of conventional fuels we use;
- Reducing conventional energy use and increasing the use of renewable energy in our facilities and alternative fuel in our fleet;
- Providing customers with services that help them reduce their environmental impact; and
- Helping increase supplier awareness about GHG emissions and how to reduce them.
We also contribute actively to public discussions about environmental sustainability. This includes collaborating with leading NGOs, regulators, and industry consortiums to propel the cause of environmental sustainability forward. We also participate in public policy forums, where we advocate for prudent innovation and investment in new technologies and infrastructure development.
UPS measures the effectiveness of its energy and greenhouse gas emission strategy by tracking progress against a set of goals that are detailed on page 5 of our 2017 UPS Sustainability Progress Report.
Energy Consumption within the organization.
Energy Consumption Within the Organization
| Global Energy ('000 GJs) | 2017 | 2016 | % Change 17/16 | Base Year (2015) |
| Direct Energy | 180,656 | 178,904 | 1.0% | 173,665 |
| Indirect Energy | 6,036 | 5,913 | 2.1% | 5,861 |
| Total Energy | 186,692 | 184,817 | 1.0% | 179,526 |
Energy Consumption Within the Organization by Source
| Global Energy ('000 GJs) | 2017 | % TO TOTAL ENERGY | 2016 | Base Year (2015) |
| Direct Energy | ||||
| Direct Energy | ||||
| Airline Fuel | 111,315 | 59.6% | 109,154 | 104,279 |
| Ground Vehicle Fuel | 65,006 | 34.9% | 65,552 | 64,804 |
| Diesel | 39,998 | 21.4% | 42,165 | 46,240 |
| Gasoline | 13,945 | 7.5% | 13,299 | 12,096 |
| CNG | 4,662 | 2.5% | 3,410 | 751 |
| Propane/LPG | 1,181 | 0.7% | 1,194 | 1,101 |
| LNG | 2,042 | 1.1% | 2,725 | 3,109 |
| Renewable Fuel (Biomass) | 3,178 | 1.7% | 2,759 | 1,507 |
| Facility Fuel (Heat) | 4,335 | 2.3% | 4,198 | 4,582 |
| Natural Gas | 4,120 | 2.2% | 3,994 | 4,365 |
| Heating Oil | 62 | 0.0% | 53 | 72 |
| Propane | 153 | 0.1% | 151 | 145 |
| Direct Energy Subtotal | 180,656 | 96.8% | 178,904 | 173,665 |
| Indirect Energy | ||||
| Indirect Energy | ||||
| Electricity | 6,028 | 3.2% | 5,904 | 5,850 |
| Renewable Electricity | 8 | 0.0% | 9 | 11 |
| Indirect Energy Subtotal | 6,036 | 3.2% | 5,913 | 5,861 |
| Total Energy | 186,692 | 100% | 184,817 | 179,526 |
Energy Consumption Within the Organization by Business Unit
|
U.S. Domestic Package |
International Package |
Global Supply Chain & Freight |
Totals |
| Global Energy ('000 GJs) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | ||||
| Direct Energy | U.S. Domestic Package | 109,852 | 108,452 | 102,865 | International Package | 60,672 | 60,214 | 58,757 | Global Supply Chain & Freight | 10,132 | 10,238 | 12,043 | Totals | 180,656 | 178,904 | 173,665 |
| Indirect Energy | U.S. Domestic Package | 4,500 | 4,359 | 4,231 | International Package | 592 | 506 | 549 | Global Supply Chain & Freight | 944 | 1,048 | 1,081 | Totals | 6,036 | 5,913 | 5,861 |
| Total Energy | U.S. Domestic Package | 114,352 | 112,811 | 107,096 | International Package | 61,264 | 60,720 | 59,306 | Global Supply Chain & Freight | 11,076 | 11,286 | 13,124 | Totals | 186,692 | 184,817 | 179,526 |
Energy consumption outside the organization.
Energy Consumption Within the Organization
| Global Energy ('000 GJs) | 2017 | 2016 | % Change 17/16 | Base Year (2015)(1) |
| Upstream | ||||
| Upstream | ||||
| Purchased Goods and Services | Not Reported | Not Reported | Not Reported | |
| Capital Goods | Not Reported | Not Reported | Not Reported | |
| Fuel & Energy-Related (not incl. Scope 1&2) | Not Reported | Not Reported | Not Reported | |
| Transportation & Distribution | 111,005 | 104,813 | 5.9% | 104,276 |
| Waste Generated in Operations | Not Relevant | Not Relevant | Not Relevant | |
| Business Travel | 1,264 | 1,310 | -3.5% | 1,107(1) |
| Employee Commuting | 28,214 | 26,927 | 4.8% | 26,570(1) |
| Leased Assets | Not Relevant | Not Relevant | Not Relevant | |
| Downstream | ||||
| Downstream | ||||
| Transportation & Distribution | Not Relevant | Not Relevant | Not Relevant | |
| Processing of Sold Products | Not Relevant | Not Relevant | Not Relevant | |
| Use of Sold Products | Not Relevant | Not Relevant | Not Relevant | |
| End-of-life Treatment of Sold Products | Not Relevant | Not Relevant | Not Relevant | |
| Leased Assets | Not Relevant | Not Relevant | Not Relevant | |
| Franchises | 390 | 359 | 8.6% | 356 |
| Investments | Not Relevant | Not Relevant | Not Relevant | |
| Total Energy Consumption Outside the Organization | 140,869 | 133,409 | 5.6% | 132,309 |
(1) We previously reported in the FY16 published CSR that for the year ended December 31, 2015 we were responsible for energy consumption outside of the organization of 1,144 GJs for business travel and 26,558 GJs for employee commuting. This information was misstated and has been adjusted to accurately present the energy consumption outside the organization across business travel and employee commuting for the year ended December 31, 2015.
Energy intensity.
Energy Intensity Within the Organization by Business Unit
|
U.S. Domestic Package |
International Package |
Global Supply Chain & Freight |
Totals |
| Global Energy (‘000 GJs/$M Revenue) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | ||||
| Revenues in Millions | U.S. Domestic Package | $40,764 | $38,301 | $36,747 | International Package | $13,338 | $12,350 | $12,149 | Global Supply Chain & Freight | $11,770 | $10,255 | $9,467 | Totals | $65,872 | $60,906 | $58,363 |
| Direct Energy | U.S. Domestic Package | 2,695 | 2,832 | 2,799 | International Package | 4,549 | 4,876 | 4,837 | Global Supply Chain & Freight | 0.861 | 0.998 | 1.272 | Totals | 2.743 | 2.937 | 2.976 |
| Indirect Energy | U.S. Domestic Package | 0.110 | 0.114 | 0.115 | International Package | 0.044 | 0.041 | 0.045 | Global Supply Chain & Freight | 0.080 | 0.102 | 0.114 | Totals | 0.092 | 0.097 | 0.100 |
| Total Energy | U.S. Domestic Package | 2,805 | 2,946 | 2,914 | International Package | 4,593 | 4,917 | 4,882 | Global Supply Chain & Freight | 0.941 | 1.100 | 1.386 | Totals | 2.835 | 3.034 | 3.076 |
Reduction of energy consumption.
Reduction of Energy Consumption
| Energy Saved Due to Conservation and Efficiency Improvements |
Absolute Energy Avoided 2017 vs 2015 (gigajoules) |
2017 Energy Intensity |
2015 Energy Intensity |
Comments |
| U.S. Domestic Package: Absolute Energy Avoided | ||||
| U.S. Domestic Package: Absolute Energy Avoided | ||||
| Contributing factors/initiatives: Implementation of telematics, improved vehicle routing, conducting proactive maintenance on our vehicles, shifting travel to low-emission vehicles. | 1,828,000(1) | 26.61 | 27.03 |
|
| International Package: Absolute Energy Avoided | ||||
| International Package: Absolute Energy Avoided | ||||
| Contributing factors/initiatives: Miscellaneous initiatives in our airline, including lower flight speeds, computeroptimized flight plans, single-engine taxi. | 6,374,000(1) | 77.58 | 85.65 |
|
| Global Supply Chain & Freight: Absolute Energy Avoided | ||||
| Global Supply Chain & Freight: Absolute Energy Avoided | ||||
| Contributing factors/initiatives: Implementation of telematics, improved dispatching of drivers, consolidation of shipments, loading efficiency in ways that keep miles driven to a minimum. | 2,017,000(1) | 1.03 | 1.21 |
|
| Total | 10,219,000 gigajoules |
(1) Absolute energy avoided in 2017 was estimated from the energy intensity factor improvements from 2015 (baseline year) to 2017.
Reductions in energy requirements of products and services.
See Disclosure 302-4—Reduction of Energy Consumption
303 Water
Management Approach
NOTE: Water is not a material issue for UPS, but we provide some perspective in this report for those stakeholders who have an interest in this issue.
Over the next few decades, UPS, like many companies around the world, will see water scarcity and water stress issues that affect a significant number of locations where we have operations. While our own water needs are modest relative to other industries, water scarcity and water stress can be harmful to local communities. To address this concern, UPS has a global water stewardship strategy based on three pillars:
Transparency — Disclosing comprehensively measured water data for our domestic and international operations.
Conservation — Applying best practices for water conservation throughout the Company, focusing on the top 20 percent of facilities with the highest water use. These facilities represent 80 percent of our total water usage and cost.
Engagement — Collaborating with world leaders on water and reporting, by sharing our knowledge and helping them disseminate ideas and guidance.
Water withdrawal by source.
Total Water Consumption — Absolute (millions m3)
| Source | 2017 | 2016 | 2015 | 2014 | % CHANGE 17/16 |
| U.S. Domestic Package | 3.92 | 3.74 | 3.84 | 3.66 | 4.8% |
| International Package | 0.64 | 0.72 | 0.72 | 0.70 | -11.1% |
| Global Supply Chain & Freight* | 0.86 | 0.82 | 0.74 | 0.76 | 4.9% |
| Total Water Consumption | 5.42 | 5.28 | 5.30 | 5.12 | 2.7% |
* 2016 was the first year reporting water usage for Coyote Logistics.
305 Emissions
Management Approach
See Disclosure 302 — Energy Management Approach
Direct (Scope 1) GHG emissions.
Statement of Greenhouse Gas (GHG) Emissions
for the years ended December 31, 2017 and 2016
GHG Performance
| Global CO2e Emissions ('000 tonnes) | 2017 | 2016 | % Change 16/17 | Base Year (2015) |
| Scope 1 | 13,047 | 12,432 | 4.9% | 12,197 |
| Scope 2 (market-based) | 745 | 831 | (10.3)% | 814 |
| Gross Scope 1 & 2 | 13,792 | 13,263 | 4.0% | 13,011 |
| Scope 3 | 20,071 | 17,430 | 15.2% | 16,877 |
| Gross Scope 1, 2 & 3 | 33,863 | 30,693 | 10.3% | 29,888 |
| Voluntary carbon offsets for Scope 1 carbon neutral service (retired) | (77.9) | (95.7) | (44.9) | |
| Voluntary carbon offsets for Scope 2 carbon neutral service (retired) | (6.3) | (6.0) | (3.2) | |
| Voluntary carbon offsets for Scope 3 carbon neutral service (retired) | (10.4) | (9.0) | (4.8) | |
| Net Global CO2e Emissions | 33,768 | 30,582 | 10.4% | 29,835 |
| Biomass CO2 Emissions ('000 tonnes, not included in above totals) | 2017 | 2016 | % Change 16/17 | Base Year (2015) |
| Mobile Combustion — Biomass CO2 (e.g. ethanol, bio-diesel) | 292 | 216 | 35.2% | 108 |
| Stationary Combustion — Biomass CO2 | 0 | 0 | 0% | 0 |
| Total Biomass CO2 (reported separately as per GHG Protocol) | 292 | 216 | 35.2% | 108 |
| SCOPE 2 CO2e EMISSIONS ('000 tonnes)(1) | 2017 | 2016 | % Change 16/17 | Base Year (2015) |
| Scope 2 (market-based method) | 745 | 831 | 10.3% | 814 |
| Scope 2 (location-based method) | 745 | 831 | 10.3% | 814 |
(1) Location-based and market-based Scope 2 emissions are being reported as per the new GHG Protocol Scope 2 Guidance.
GHG Reporting Policies
The statement of greenhouse gas (GHG) emissions was prepared based on a calendar reporting year that is the same as the United Parcel Service, Inc. (UPS or the Company) financial reporting period. Organizational responsibility for our GHG Emissions reporting rests with our Chief Sustainability Officer.
Scope 1 and 2 GHG emissions information was prepared in accordance with the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition.
Scope 3 GHG emissions information was prepared in accordance with the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol: Corporate Value Chain (Scope 3), Accounting and Reporting Standard.
Scope 3 emissions include all relevant Scope 3 categories, nine of the 15 categories as defined by the GHG Protocol.
Collectively, the Corporate Accounting and Reporting Standard, Revised Edition and the Corporate Value Chain (Scope 3), Accounting and Reporting Standard are referred to as the “GHG Protocol” in this document.
The following includes information on GHG emissions by business unit and emission source, as well as intensity disclosures.
Base Year GHG Emissions
The GHG base year is set out below and has been prepared in accordance with the GHG Protocol.
The base year GHG emissions for Scope 1, 2, and 3 is 2015.
Greenhouse Gases
All GHG emissions figures are reported in metric tonnes of carbon dioxide equivalents (CO2e) and include four of the seven greenhouse gases covered by the GHG Protocol — carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs). Perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen triflouride (NF3) emissions were omitted from our reporting as they are not a material source of greenhouse gases for the Company.
The GHG Protocol defines global warming potential (GWP) as “a factor describing the radiative forcing impact (degree of harm to the atmosphere) of one unit of a given GHG relative to one unit of CO2.” By using GWPs, GHG emissions from multiple gases can be standardized to a carbon dioxide equivalent (CO2e). The global warming potentials used are:
| Gas | Global Warming Potential (GWP) | Reference |
| Carbon Dioxide (CO2) | 1 | Fifth Assessment Report (SAR) published by Intergovernmental Panel on Climate Change |
| Methane (CH4) | 28 | Fifth Assessment Report (SAR) published by Intergovernmental Panel on Climate Change |
| Nitrous Oxide (N2O) | 265 | Fifth Assessment Report (SAR) published by Intergovernmental Panel on Climate Change |
| HFC-134a | 1300 | Fifth Assessment Report (SAR) published by Intergovernmental Panel on Climate Change |
GHG Reporting Scope and Boundary
The Statement of Greenhouse Gas Emissions includes Scope 1 (direct), Scope 2 (indirect), and Scope 3 (indirect) emissions that were reported for operations within the organizational boundary described below. GHG emissions have been reported from the entities where the Company has operational control as defined by the GHG Protocol.
UPS is a global company operating in more than 220 countries and territories. Our three reportable business segments are U.S. Domestic Package, International Package, and Global Supply Chain & Freight.
- The U.S. Domestic Package business consists of air and ground delivery of small packages — up to 150 pounds in weight — and letters to and from all 50 states.
- The International Package reporting segment includes the small package operations in Europe, Asia, Canada, Latin America, and the Indian Subcontinent, Middle East and Africa. Europe is our largest region outside the United States — accounting for approximately half of our international revenue.
- The Global Supply Chain & Freight segment consists of our forwarding and logistics services, truckload freight brokerage, UPS Freight, and our financial offerings through UPS Capital. Supply chain complexity creates demand for a global service offering that incorporates transportation, distribution, and international trade and brokerage services, with complementary financial and information services.
Operational Boundary – Detailed Description Scope 1 & 2(1)
| Source | Scope | U.S. Package Operations | International Package Operations | Global Supply Chain & Freight |
| Jet-A (mobile) | 1 | All jet fuel used for UPS-owned aircraft (U.S. flights) | All jet fuel used for UPS-owned aircraft (International flights) | N/A — All Supply Chain & Freight moved on UPS-owned aircraft is captured in package operations (U.S. and International) |
| Diesel & Gasoline (mobile) | 1 | All diesel and gasoline used in UPS-owned/leased vehicles to transport, pick up, and deliver small packages |
|
|
| CNG (mobile) | 1 | All compressed natural gas used in UPS-owned vehicles to transport, pick up, and deliver small packages | All compressed natural gas used in UPS-owned vehicles to transport, pick up, and deliver small packages | All compressed natural gas used in UPS owned vehicles to transport, pickup and deliver freight or packages |
| Propane/LPG (mobile) | 1 | All propane fuel used in UPS-owned vehicles to transport, pick up, and deliver small packages | All propane fuel used in UPS-owned vehicles to transport, pick up, and deliver small packages | N/A — Fuel type is not a source of emissions from this business unit |
| LNG (mobile) | 1 | All liquefied natural gas used in UPS-owned vehicles to transport, pick up, and deliver small packages | N/A — Fuel type is not a source of emissions from this business unit | All liquefied natural gas used in UPS owned vehicles to transport, pickup and deliver freight or packages |
| Natural Gas, Heating Oil, Propane (stationary) | 1 | Natural gas, propane, and heating oil for facilities we own or lease | Natural gas, propane, and heating oil for facilities we own or lease | Natural gas, propane, and heating oil for facilities we own or lease |
| HFCs | 1 | Fugitive emissions from vehicle A/C systems | Fugitive emissions from vehicle A/C systems | Fugitive emissions from vehicle A/C systems |
| Electricity (stationary) | 2 | Electricity usage for facilities we own or lease | Electricity usage for facilities we own or lease | Electricity usage for facilities we own or lease |
(1) No Scope 1 or 2 activities have been excluded from this Report.
Operational Boundary — Detailed Description Scope 3
| Scope and Category | Emissions Included/Excluded (UPS Scope & Boundary) | Description of Methodology | % Emissions Calculated Using Data Obtained from Value Chain Partners |
| Upstream Scope 3 Emissions | |||
| Upstream Scope 3 Emissions | |||
| 1. Purchased Goods & Services |
The upstream extraction, production, and transportation of goods and services purchased by all UPS operations, not otherwise included in Categories 2-8 Exclusions: None |
Economic input-output life cycle assessment (EIO-LCA) model | 0% |
| 2. Capital Goods |
The upstream extraction, production, and transportation of capital expenditures purchased by all UPS operations. Includes buildings, aircraft, vehicles, and information technology Exclusions: None |
Economic input-output life cycle assessment (EIO-LCA) model | 0% |
| 3. Fuel- and Energy-Related Activities Not Included in Scope 1 or 2 |
Includes the upstream (well-to-pump) emissions from raw material extraction up to the point of (but excluding) combustion for the following global fuel sources: Jet-A, Diesel, Gasoline, CNG, LPG, LNG, natural gas, heating oil, and propane Includes the upstream emissions for the transmission and distribution losses of purchased electricity Exclusions: None |
The same primary data that is used to calculate the Scope 1 and 2 emissions for all energy usage is used to calculate the upstream emissions; the actual quantity of energy consumed is multiplied by the appropriate life cycle emission factor. | 100% |
| 4. Transportation & Distribution (Upstream) |
The emissions from purchased transportation (air, ground, rail, and ocean) for the pickup, transportation, and delivery of packages/ freight for our global operations includes emissions associated with: U.S. Package Operations
|
The primary method used to calculate the upstream emissions from purchased transportation is to multiply the actual weight and distance traveled for each shipment by the appropriate emission factor from the GHG Protocol. | 35% |
| 5. Waste Generated in Operations |
Includes the emissions that occur for landfilled, incinerated, recovery, and recycled wastes streams in the U.S. Exclusions: Emissions associated with wastes generated in operations outside of the U.S. Does not include any optional LCA emissions. Source has been excluded due to lack of means to measure emission source. |
Methodology used is actual waste disposed by waste stream multiplied by the appropriate LCA Emission factor. | 100% |
| 6. Business Travel |
Includes the emissions that occur from air and rail travel, rental cars, and the use of personnel vehicles for business-related activities for our global operations. Exclusions: Does not include any optional life cycle emissions from hotel stays. Source has been excluded due to lack of means to measure emission source. |
Travel agent provides a detailed breakdown of GHG emissions based upon actual travel activity | 100% |
| 7. Employee Commuting |
Includes the emissions that occur for the transportation of our employees between their homes and their workplace for our global operations. Exclusions: Does not include any optional emissions from employee teleworking. Source has been excluded due to lack of means to measure emission source. |
Actual number of employees multiplied by average gallons used per employee (UPS calculated this factor) multiplied by the emission factor for gasoline (8.81 kg CO2 per gallon). The UPS factor for estimated gallons per employee was created by combining a host of information from the U.S. Census data, Department of Transportation, the Federal Highway Administration, and other sources. | 0% |
| 8. Upstream Leased Assets | Not Relevant — We do not report on this category since the category as described by the WRI Guidelines is not applicable to our business because upstream leased assets are included in our Scope 1 and 2 emissions. | Not Relevant | Not Relevant |
| Downstream Scope 3 Emissions | |||
| Downstream Scope 3 Emissions | |||
| 9. Transportation & Distribution | Not Relevant — We do not report on this category since the category as described by the WRI Guidelines is not applicable to our business because UPS does not offer a sold product. For our sold service, emissions from non-UPS vehicles are reported in category 4 because they are purchased directly by UPS. | Not Relevant | Not Relevant |
| 10. Processing of Sold Products | Not Relevant — We do not report on this category since the category as described by the WRI Guidelines is not applicable to our business because UPS does not offer an intermediate sold product. | Not Relevant | Not Relevant |
| 11. Use of Sold Products | Not Relevant — We do not report on this category since the category as described by the WRI Guidelines is not applicable to our business because UPS does not offer an intermediate sold product. | Not Relevant | Not Relevant |
| 12. End-of-Life Treatment of Sold Products |
Includes the global emissions that occur for landfilled and recycled waste from UPS-branded packaging materials sold to customers. Exclusions: None |
Number of pounds of purchased UPS-branded packaging multiplied by the appropriate LCA Emission factor | 100% |
| 13. Downstream Leased Assets | Not Relevant — We do not report on this category since the category as described by the WRI Guidelines is not relevant because UPS does not have any significant downstream leased assets. | Not Relevant | Not Relevant |
| 14. Franchises |
Estimated electricity and natural gas usage for over 5,000 The UPS Store® locations serving the U.S. and Canada. Exclusions: Does not include any optional LCA emissions. Source has been excluded due to lack of means to measure emission source. |
Using square footage of The UPS Store™ franchises multiplied by an average energy emission factor established by the EPA Energy Star Program | 0% |
| 15. Investments | Not Relevant — We do not report on this category since the category as described by the WRI Guidelines is not relevant because UPS does not have any significant investments that fit this category. | Not Relevant | Not Relevant |
Uncertainty
As calculations of GHG emissions contain uncertainty for a variety of reasons, we conducted an uncertainty analysis to quantify estimates of the likely or perceived difference between the reported GHG emissions and a qualitative description of the likely causes of the difference such as uncertainty in data inputs and calculation methodologies; uncertainty associated with mathematical equations used to characterize the relationship between various parameters and emission processes; and uncertainty associated with quantifying the parameters used as inputs to estimation models. UPS continues to improve internal processes for primary data collection to reduce uncertainty in its GHG inventory reporting for Scopes 1 and 2. UPS continues to work with the third parties responsible for providing the data necessary to calculate Scope 3 emissions and will continue to work on improving the data management and the methodologies used to estimate these emissions to reduce the uncertainty in its GHG inventory reporting. Using the GHG Protocol “Measurement and Estimation Uncertainty of GHG Emissions” guidance and analyzing the collected data through Monte Carlo simulations by using the @Risk statistical analysis software at 95 percent confidence interval, we are able to estimate the uncertainty for our 2017 GHG inventory as follows:
| Scope | Uncertainty | Main Source of Uncertainty | % Change 17/16 |
| Scope 1 | +/- 1% | International Operations |
North America Operations (Small Package, Supply Chain & Freight) and UPS Airlines are our largest source of Scope 1 emissions and represent 97 percent of the total Scope 1 emissions. Well-established processes are in place to capture the primary data for these sources. International Operations represent 3 percent of the total Scope 1 emissions. |
| Scope 2 | +/- 3% | International Operations |
North America Operations (Small Package, Supply Chain & Freight) are our largest source of Scope 2 emissions, representing 88 percent of the total Scope 2 emissions. Well-established processes are in place to capture the primary data for these sources. International Operations represent 12 percent of the total Scope 2 emissions. |
| Scope 3 | +/- 8% | Use of secondary data |
UPS reports on all relevant Scope 3 categories described in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting & Reporting Standard. Calculations for Scope 3 use various sources of secondary data since primary data is unavailable. Examples of the type of secondary data used vary from estimated miles driven, number of packages picked-up/delivered to estimated shipment information (weight and distance per shipment). |
GHG Emission Factors
The carbon dioxide equivalent emissions associated with the activities described in the detailed description of our operational boundaries were determined on the basis of measured or estimated energy and fuel use, multiplied by relevant carbon emission factors.
Published emission factors were used to calculate emissions from operations.
| Emissions Source | Emission Factor Employed |
| Scope 1 — Global | GHG Protocol Emission Factors from Cross-Sector Tools, March 2017 |
| Scope 2 — U.S. | U.S. Environmental Protection Agency eGRID_2016 |
| Scope 2 — Canada | Environment Canada, National Inventory Report, 1990-2014 |
| Scope 2 — Other | CO2 Emissions from Fuel Combustion Highlights (2017 Edition © OECD/IEA) |
| Scope 3 — Global |
Category 1 & 2: GHG Protocol Scope 3 Evaluator Category 3: Argonne National Laboratory GREET_1 2014 Model Category 3: U.S. Environmental Protection Agency eGRID_2016 Category 4: EPA SmartWay Carrier Rankings and Emission Rates (railroad only) Category 6: EPA Emission Factors For GHG Inventories, Nov 2015 Category 4, 7, 14: GHG Protocol Emission Factors from Cross-Sector Tools, March 2017 Category 5 & 12: 2012 Guidelines to DEFRA/DECC's GHG Conversion Factors for Company Reporting |
Methodology
For Scopes 1 and 2, primary usage data is used to calculate GHG Emissions. The primary data is collected through various internal processes and data systems which are inputted into our sustainability performance management software that quantifies associated emissions through the application of the GHG emission factors described above.
GHG emission calculations for Scope 3 use various sources of secondary data since primary data is unavailable. The secondary data used varies from estimated miles driven, number of packages picked-up/delivered to estimated shipment information (weight and distance per shipment). The appropriate GHG activity factor is applied to estimate the emissions reported.
Carbon Offset Purchases From UPS Carbon Neutral Product
A carbon offset is a certified financial instrument aimed at a reduction in GHG emissions. The offsets we purchase meet the key standard of additionality, which means that the carbon reduction project in question (such as reforestation) produced a reduction in CO2e generation or sequestration of CO2e in addition to what would have been achieved by activities already planned or underway.
| Project Name | Project Location | Offset Standard | Project Type | 2017 Metric Tonnes Retired | 2016 Metric Tonnes Retired |
| Garcia River Forest | U.S. (California) | CAR | Reforestation | 36,165 | 52,557 |
| Big River and Salmon Creek Forests | U.S. (California) | CAR | Reforestation | 34,258 | 25,000 |
| Wolf Creek Landfill | U.S. (Georgia) | CAR | Landfill Gas | 10,000 | 10,000 |
| Chol Charoen Group Wastewater Treatment with Biogas System 1 | Thailand | VCS | Wastewater Methane Destruction | 14,105 | 13,257 |
| Bangkok Kamphaeng Saen East: Landfill Gas to Electricity Project | Thailand | VCS | Landfill Gas | 0 | 10,000 |
| Total Carbon Offsets | 94,528 | 110,814 |
Energy indirect (Scope 2) GHG emissions.
See Disclosure 305-1—Direct (Scope 1) GHG emissions
Other indirect (Scope 3) GHG emissions.
Scope 3 Emissions by Category
| Global CO2e Emissions ('000 Tonnes) | 2017 | 2016(1) | Base Year 2015(1) |
| Total Scope 3 Emissions | 20,071 | 17,430 | 16,877 |
| Upstream | |||
| Upstream | |||
| 1 Purchased Goods & Services | 2,739 | 2,478 | 2,533 |
| 2 Capital Goods | 3,914 | 2,175 | 1,746 |
| 3 Fuel & Energy Related (not incl. Scope 1 & 2) | 3,426 | 3,312 | 3,226 |
| Jet A (well to pump) | 2,149 | 2,016 | 1,926 |
| Diesel (well to pump) | 681 | 693 | 760 |
| Gasoline (well to pump) | 343 | 298 | 271 |
| CNG (well to pump) | 72 | 52 | 12 |
| Propane/LPG (well to pump) | 11 | 10 | 9 |
| LNG (well to pump) | 54 | 63 | 72 |
| Biomass (well to pump) | 25 | 70 | 63 |
| Natural Gas, Heating Oil, Propane (stationary) | 49 | 50 | 55 |
| Electricity (T&D losses/generation of) | 42 | 60 | 59 |
| 4 Transportation & Distribution | 7,903 | 7,468 | 7,417 |
| Subcontracted Air | 3,823 | 3,436 | 3,805 |
| Subcontracted Ground | 3,214 | 3,216 | 2,784 |
| Subcontracted Rail | 439 | 369 | 368 |
| Subcontracted Ocean | 427 | 446 | 461 |
| 5 Waste Generated in Operations | 25 | 22 | 19 |
| Landfilled, Incinerated, Recovery, Recycled | 25 | 22 | 19 |
| 6 Business Travel | 89 | 92 | 78 |
| Business Travel — Air/Rail/Car | 89 | 92 | 78 |
| 7 Employee Commuting | 1,909 | 1,822 | 1,798 |
| U.S. Domestic Package | 1,452 | 1,372 | 1,341 |
| International Package | 336 | 330 | 332 |
| Global Supply Chain & Freight | 121 | 120 | 125 |
| 8 Leased Assets | Not Relevant | Not Relevant | Not Relevant |
| Downstream | |||
| Downstream | |||
| 9 Transportation & Distribution | Not Relevant | Not Relevant | Not Relevant |
| 10 Processing of Sold Products | Not Relevant | Not Relevant | Not Relevant |
| 11 Use of Sold Products | Not Relevant | Not Relevant | Not Relevant |
| 12 End-of-Life Treatment of Sold Products | 10 | 9 | 9 |
| Landfilled/Recycled | 10 | 9 | 9 |
| 13 Leased Assets | Not Relevant | Not Relevant | Not Relevant |
| 14 Franchises | 56 | 51 | 51 |
| The UPS Store® — Electricity/Natural Gas | 56 | 51 | 51 |
| 15 Investments | Not Relevant | Not Relevant | Not Relevant |
(1) We previously reported in the FY15 and FY16 published CSR and GHG Emissions Statements unrounded sub-total figures. The relevant figures have been rounded and restated to ensure that all totals and sub-totals appropriately foot and cross-foot. There have been no changes to actual GHG emissions previously reported.
GHG emissions intensity.
Emissions by Business Unit
| U.S. Domestic Package | International Package | Global Supply Chain & Freight | Totals |
| Global CO2e Emissions ('000 tonnes) | 2017 | 2016 | Base Year (2015)(1) | 2017 | 2016(1) | Base Year (2015)(1) | 2017 | 2016 | Base Year (2015)(1) | 2017 | 2016 | Base Year (2015) | ||||
| Scope 1 | U.S. Domestic Package | 7,857 | 7,446 | 7,186 | International Package | 4,459 | 4,254 | 4,150 | Global Supply Chain & Freight | 731 | 732 | 861 | Totals | 13,047 | 12,432 | 12,432 |
| Scope 2 | U.S. Domestic Package | 567 | 627 | 602 | International Package | 67 | 63 | 71 | Global Supply Chain & Freight | 111 | 141 | 141 | Totals | 745 | 831 | 814 |
| Total Scope 1 & 2 | U.S. Domestic Package | 8,424 | 8,073 | 7,788 | International Package | 4,526 | 4,317 | 4,221 | Global Supply Chain & Freight | 841 | 873 | 1,001 | Totals | 13,792 | 13,263 | 13,011 |
| Scope 3 | U.S. Domestic Package | 10,987 | 8,811 | 8,287 | International Package | 2,790 | 2,692 | 2,552 | Global Supply Chain & Freight | 6,294 | 5,926 | 6,038 | Totals | 20,071 | 17,430 | 16,877 |
| Total Scope 1, 2 & 3 | U.S. Domestic Package | 19,411 | 16,884 | 16,075 | International Package | 7,316 | 7,010 | 6,773 | Global Supply Chain & Freight | 7,136 | 6,799 | 7,040 | Totals | 33,863 | 30,693 | 29,888 |
CO2e Intensity by Business Unit
| U.S. Domestic Package | International Package | Global Supply Chain & Freight | Totals |
| Global CO2e Emissions ('000 tonnes) | 2017 | 2016 | Base Year (2015) | 2017 | 2016(1) | Base Year (2015) | 2017 | 2016 | Base Year (2015) | 2017 | 2016 | Base Year (2015) | ||||
| Revenue in Millions | U.S. Domestic Package | $40,764 | $38,301 | $36,747 | International Package | $13,338 | $12,350 | $12,149 | Global Supply Chain & Freight | $11,770 | $10,255 | $9,467 | Totals | $65,872 | $60,906 | $58,363 |
| Scope 1 | U.S. Domestic Package | 0.193 | 0.194 | 0.196 | International Package | 0.334 | 0.344 | 0.341 | Global Supply Chain & Freight | 0.062 | 0.071 | 0.091 | Totals | 0.198 | 0.204 | 0.209 |
| Scope 2 | U.S. Domestic Package | 0.014 | 0.017 | 0.016 | International Package | 0.005 | 0.005 | 0.006 | Global Supply Chain & Freight | 0.009 | 0.014 | 0.015 | Totals | 0.011 | 0.014 | 0.014 |
| Total Scope 1 & 2 | U.S. Domestic Package | 0.207 | 0.211 | 0.212 | International Package | 0.339 | 0.349 | 0.347 | Global Supply Chain & Freight | 0.071 | 0.085 | 0.106 | Totals | 0.209 | 0.218 | 0.223 |
| Scope 3 | U.S. Domestic Package | 0.270 | 0.230 | 0.225 | International Package | 0.209 | 0.218 | 0.210 | Global Supply Chain & Freight | 0.535 | 0.578 | 0.638 | Totals | 0.305 | 0.286 | 0.289 |
| Total Scope 1, 2 & 3 | U.S. Domestic Package | 0.477 | 0.441 | 0.437 | International Package | 0.548 | 0.567 | 0.557 | Global Supply Chain & Freight | 0.606 | 0.663 | 0.744 | Totals | 0.514 | 0.504 | 0.512 |
(1) We previously reported in the FY15 and FY16 published CSR and GHG Emissions Statements unrounded sub-total figures. The relevant figures have been rounded and restated to ensure that all totals and sub-totals appropriately foot and cross-foot. There have been no changes to actual GHG emissions previously reported.
Scope 1 and Scope 2 Emissions by Source
| Global CO2e Emissions ('000 Tonnes) | 2017 | 2017 Percent to Total | 2016 | Base Year (2015) |
| Airline Fuel | 8,190 | 59.4% | 7,720 | 7,375 |
| Ground Vehicle Fuel | 4,361 | 33.6% | 4,496 | 4,587 |
| Diesel | 2,998 | 21.7% | 3,050 | 3,345 |
| Gasoline | 1,044 | 7.6% | 905 | 823 |
| CNG | 269 | 1.9% | 197 | 43 |
| Propane/LPG | 80 | 0.6% | 75 | 70 |
| LNG | 223 | 1.6% | 262 | 299 |
| Biomass (CH4 and N2O only) | 10 | 0.1% | 0 | 0 |
| HFCs (fugitive) | 7 | 0.1% | 7 | 7 |
| Facility Fuel | 226 | 1.6% | 216 | 235 |
| Natural Gas | 212 | 1.5% | 202 | 221 |
| Heating Oil | 4 | 0.0% | 4 | 5 |
| Propane | 10 | 0.1% | 10 | 9 |
| Facility Electricity | 745 | 5.4% | 831 | 814 |
| Grand Total | 13,792 | 13,263 | 13,011 |
Reduction of GHG emissions.
2017 Carbon Intensity Emissions Avoided Since Base Year (2015)
| Emissions Reduction Description: The Following Three Metrics Are the Components of the UPS Transportation Intensity Index | Absolute CO2e Emissions Avoided Since 2015 (Metric Tonnes) |
2017 CO2e Intensity |
2015 CO2e Intensity |
Comments |
| U.S. Domestic Package: Absolute CO2e Avoided (Ground Operations Only) | 385,000(1) | 2.23 | 2.36 |
|
| Global UPS Airlines: Absolute CO2e Avoided | (88,000)(1) | 1.41 | 1.40 |
|
| U.S. Supply Chain & Freight: Absolute CO2e Avoided | 202,000(1) | 0.17 | 0.19 |
|
| Total Water Consumption | 499,000 metric tonnes |
(1) Cumulative CO2e emissions avoided since 2015 are estimated from the Transportation Intensity Index improvements from 2015 to 2017.
2017 Intermodal Shift Emissions Avoidance
| Emissions Reduction Description | Absolute CO2e Emissions Avoided in 2017 (Metric Tonnes) | Total Absolute CO2e Emissions Avoided Since 2015 (Metric Tonnes) |
| Air to Ground Mode Shift (U.S. Package Operations) | 2,787,000(2) | 5,236,000 |
| Ground to Rail Mode Shift (U.S. Package Operations) | 1,004,000(2) | 1,940,000 |
| Total | 3,791,000 | 7,176,000 |
(2) Absolute CO2e emissions avoided in 2017, due to intermodal shifts that occur in the U.S. Domestic Package.
Emissions of ozone-depleting substances (ODS).
This indicator is not applicable since UPS does not produce, import, or export ODS.
Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions.
The EPA Motor Vehicle Emission Simulator (MOVES) model is used to calculate ground vehicle emissions.
Particulate Emission Reduction
U.S. Domestic Package & U.S. Freight Operations
| Emissions | 2017 | 2016 | 2015 | Base Year (2012) | 2020 Goal |
| PM2.5 Emissions per Ground Vehicle (kg PM2.5/vehicle) | 8 (58% reduction) | 9 | 10 | 18 | 75% reduction from 2012 baseline |
| NOx Emissions per Ground Vehicle (kg NOx/vehicle) | 216 (57% reduction) | 251 | 280 | 503 | 60% reduction from 2012 baseline |
306 Effluents & Waste
Management Approach
NOTE: Effluents and waste is not a material issue for UPS, but we provide some perspective in this report for those stakeholders who have an interest in this issue.
UPS is currently collecting and disclosing data for solid, hazardous, and nonhazardous waste for operations in the U.S., based on information provided by our waste disposal vendors. Because UPS is not involved in manufacturing, our management and mitigation of effluents and waste is limited primarily to solid waste disposal and recycling from supplier packaging, pallets, scrap metal, office paper, plastics, and mixed recycling, as well as generated waste from aircraft maintenance, vehicle maintenance, and facility operations.
Solid Waste Management
Efforts to improve our recycling programs and reporting at more than 1,200 U.S. facilities have led to an increase in reported tonnage of solid waste recycled. By expanding our recycling programs and fully utilizing national recycling vendors, UPS is better equipped to manage recycling efforts and report data more comprehensively. Following are some of our achievements to date:
- 2013—Increased solid waste management through a national vendor (solid waste recycling)
- 2014—First year reporting on scrap metal recycling from vehicle retirements (nonhazardous waste)
- 2015 and 2016—Increased pallet recycling program (solid waste recycling)
Hazardous and Nonhazardous Waste Management
The hazardous and nonhazardous wastes we manage come from aircraft, vehicles, and facility operations. These wastes typically include spent antifreeze, used oil, spent solvents, spill residues, paint wastes, used filters, batteries, e-waste, scrap metal, and leaking packages. We work with national vendors to recycle or dispose of hazardous and nonhazardous waste, and local vendors to recycle or dispose of nonhazardous waste.
Hazardous waste vendors are well-established, observe industry standard safety procedures, and are regularly audited by UPS and/or an external auditor to ensure compliance with laws and regulations. Our contracts with national and local vendors specify that we receive a “cradle to grave” certification letter that details responsible waste and disposal methods.
Waste by type and disposal method.
U.S. Waste Disposal & Recycling Trend (U.S. Tons)
| Waste Type | 2017 | 2016 | 2015 | 2014 |
| Solid Waste Disposal Total | 98,290 | 76,635 | 80,919 | 77,102 |
| Solid Waste Recycling Total | 256,077 | 242,325 | 210,908 | 138,166 |
| Hazardous Waste Total | 1,760 | 1,575 | 1,524 | 1,394 |
| Nonhazardous Waste Total | 62,071 | 44,534 | 50,856 | 54,875 |
| Total Waste | 418,198 | 365,069 | 344,207 | 271,537 |
2017 U.S. Waste Disposal & Recycling (U.S. Tons)
| U.S. Domestic Package, Supply Chain & Freight | Incinerated | Landfilled | Recovery | Recycled | Total |
| Solid Waste Disposal Total | 15 | 98,275 | 0 | 0 | 98,290 |
| National Vendors | 15 | 93,544 | 0 | 0 | |
| Local Vendors | 0 | 4,731 | 0 | 0 | |
| Solid Waste Recycling Total | 0 | 0 | 0 | 256,077 | 256,077 |
| Corrugated Containers — National Vendors | 0 | 0 | 0 | 23,609 | |
| Pallets & Wood Waste — National Vendors | 0 | 0 | 0 | 208,829 | |
| Metals — National Vendors | 0 | 0 | 0 | 8,125 | |
| Mixed Recycling — National Vendors | 0 | 0 | 0 | 15,033 | |
| Office Paper — National Vendors | 0 | 0 | 0 | 400 | |
| Plastics — National Vendors | 0 | 0 | 0 | 81 | |
| Hazardous Waste Total | 618 | 26 | 651 | 465 | 1,760 |
| Auto, Aircraft, Facility Maintenance, Damaged Packages, Etc. — National Vendors(1) | 618 | 26 | 651 | 465 | |
| Auto, Aircraft, Facility Maintenance, Damaged Packages, Etc. — Local Vendors | 0 | 0 | 0 | 0 | |
| Nonhazardous Waste Total | 867 | 151 | 2,609 | 58,444 | 62,071 |
| Auto, Aircraft, Facility Maintenance, Damaged Packages, Etc. — National Vendors | 612 | 90 | 1,565 | 7,362 | |
| Electronic Waste — National Vendors | 0 | 0 | 0 | 1,076 | |
| Batteries — National Vendors(2) | 0 | 0 | 0 | 13 | |
| Scrap Metal From Vehicle Retirement | 0 | 0 | 0 | 43,731 | |
| Auto, Aircraft, Facility Maintenance, Damaged Packages, Etc. — Local Vendors | 255 | 61 | 1,044 | 6,262 | |
| Total Waste By Disposal Method | 1,500 | 98,452 | 3,260 | 314,986 | 418,198 |
(1) Approved national vendor — approval process consists of vendor site visits, audits, and other internal controls.
(2) Rechargeable and nonrechargeable batteries, excluding automotive batteries.
Significant spills.
Number of Reportable Spills
| Type | 2017 | 2016 | 2015 | 2014 |
| U.S. Domestic Package | 62 | 58 | 69 | 73 |
| U.S. Supply Chain & Freight | 21 | 12 | 27 | 14 |
Volume of Reportable Spills (gallons)
| Type | 2017 | 2016 | 2015 | 2014 |
| U.S. Domestic Package | 2,721 | 2,346 | 1,656 | 2,106 |
| U.S. Supply Chain & Freight | 4,241 | 862 | 1,362 | 721 |
Transport of hazardous waste.
No hazardous waste generated within the U.S. is shipped outside of the United States. For waste generated outside the U.S., waste data is not available at this time.
307 Environmental Compliance
Management Approach
NOTE: Environmental compliance is not a material issue for UPS, but we provide some perspective in this report for those stakeholders who have an interest in this issue.
Through our Corporate Environmental Affairs Department, we have established site- and activity-specific programs for environmental compliance and pollution prevention. We continually evaluate new technologies and seek opportunities to improve environmental performance where possible. Everyone who is part of UPS is expected to support efforts to maintain a leadership role in protecting the environment.
Our management approach includes an Environmental Policy Statement and a set of Environmental Guidance Statements that specify how the policy is to be implemented. These Statements are available at https://sustainability.ups.com/resources/policies-and-procedures/.
Non-compliance with environmental laws and regulations.
Penalties as a Percent of Total Environmental Inspections
| Type | 2017 | 2016 | 2015 | 2014 |
| U.S. Domestic Package | 0.13 | 0.46 | 0.77 | 0.13 |
| U.S. Supply Chain & Freight | 0 | 0 | 1.35 | 1.29 |
308 Supplier Environmental Assessment
Management Approach
See Disclosure 204—Supply Chain Management Approach
New suppliers that were screened using environmental criteria.
Due to confidentiality constraints, UPS does not report specific numbers or percentages related to screening or impact assessments, as this information is subject to confidentiality constraints of our supplier contracts. In 2017, we were not aware of any significant environmental, social, or labor concerns related to our suppliers.
Negative environmental impacts in the supply chain and actions taken.
Due to confidentiality constraints, UPS does not report specific numbers or percentages related to screening or impact assessments, as this information is subject to confidentiality constraints of our supplier contracts. In 2017, we were not aware of any significant environmental, social, or labor concerns related to our suppliers.