Tom Fox welcomes back Aaron Nicodemus to the ESG Report. Aaron is a writer at Compliance Week, a magazine that provides the latest information in the ethics, governance, risk, and compliance space. He primarily writes about regulatory policy and compliance trends. In this week’s show, he and Tom discuss Aaron’s new article series about FedEx’s journey on ESG.
The Inspiration Behind The Articles on FedEx and Their ESG Journey
Justin Ross, CCO at FedEx, was dubbed the CCO of The Year at Compliance Week 2021. After he won the award, he and Aaron discussed the new efforts FedEx was venturing into. One of the initiatives that came up was FedEx’s environmental plan for the future. After extensive research, Aaron realized that “the extent of [FedEx’s] ESG initiatives went much further than I had realized”. This intrigued him and he decided to write the series based on his findings.
How FedEx Plans to Manage ESG
Tom asks Aaron how a delivery company, that spends exorbitant amounts on fuel and vehicle maintenance, could reframe that into an ESG issue. Aaron replies that those were the first questions FedEx asked themselves when it conceptualized its environmental initiative. They decided to focus on reducing their emissions; that worked well alongside their fuel reduction initiative for a time. They determined that they could be more efficient with their jets, by ensuring that the engine does not idle more than necessary. However, as Aaron points out, emissions and fuel reduction are not a linear process, “Their biggest problem with their emissions is that because they’re growing so fast, they’re making more deliveries, they’re making more flights through the air, and they just have trouble keeping their emissions down because they’re expanding so fast.”
Ebb and Flow of FedEx’s Environmental Initiative
Aaron says, “One of the biggest touch points for FedEx with its ESG initiative is transparency.” He explains that they want stakeholders to understand their goals and the journey to get there so that when they have setbacks, they’re all accounted for. For example, FedEx has ordered over 20,000 electric cars, to reduce exhaust emissions into the environment but only received five of them. He adds that they had another goal to increase an alternative source of jet fuel but they were having an issue with supply, and they ended up having to postpone the idea several times. However, since they are in constant communication with their investors, employees, and customers, they can comfortably discuss their failures, how close they got to achieving them, and why they did or did not achieve them.
Resources
Aaron Nicodemus | LinkedIn | Twitter
Compliance Week | Compliance Week Profile
