XPO Logistics has created an environmental, social and governance committee but has not yet set an emission-reduction target, according to a report released Wednesday.
Taking actions to improve ESG metrics is becoming increasingly important to freight and supply chain companies. XPO’s diversity, equity and inclusion and environmental efforts were shared in its fourth sustainability report.
“Our updated sustainability report shows how our performance in 2021 aligns with our core values — safe, inclusive, innovative, entrepreneurial and respectful. With the help of our team members across the world, especially those on the front line, we’re working continuously to improve our company in every way,” Brad Jacobs, chairman and CEO of XPO Logistics, said in a release.
XPO created an ESG committee in 2021 to make decisions about sustainability goals and programs. The sustainability committee is made up of people from different areas of the company who are accountable for implementing sustainability initiatives.
The company has not yet set an emission-reduction target. XPO is waiting until there is a better consensus about when future technologies will become available to make sure whatever emission-reduction target it sets through the Science Based Targets initiative is achievable, Emily Phillips, VP of advanced solutions and sustainability committee chair at XPO, said during an episode of FreightWaves’ Net-Zero Carbon show.
The report said XPO expects “to develop tailored action plans that establish net-zero goals by 2050 at the latest and science-based GHG reduction targets for each business.”
XPO aims to pilot projects enough so that when more sustainable solutions reach cost parity, it will be ready to adopt those solutions more quickly, Phillips said.
For now, XPO is focusing on reducing emissions by:
- Reducing empty miles.
- Experimenting with electric trucks in Europe.
- Making adjustments to tires, engines and aerodynamics to improve fuel efficiency.
- Using duo-trailers, which promise to cut emissions by up to 30% per trip.
- Relying on data to find optimization opportunities.
The report said XPO’s emissions from direct operations (scope 1), indirect operations (scope 2) and supply chains (scope 3) have decreased by 10%, 25% and 3%, respectively, since 2018.
About 55% of the company’s square footage in Europe uses “efficient lighting,” indicating an opportunity to reduce scope 2 emissions further by switching over completely to LED lighting.
“We aim to improve the efficiency of energy consumption, to reduce GHG emissions and to improve the overall efficiency of our consumption of related resources, such as water, packaging and other materials,” the report said.
It also disclosed that XPO’s water consumption in North America has risen by almost 7 times, from more than 103 million gallons in 2019 to more than 718 million gallons in 2021. Generated waste has also risen by 56% from 38,351 metric tons in 2019 to 67,892 metric tons in 2021, according to the report. But these numbers do not account for XPO’s expansion that occurred in those years.
XPO was recognized by Inbound Logistics magazine as a Green 75 Supply Chain Partner for its sustainability efforts for the sixth consecutive time in 2021.
“This is a sector that’s hard to abate, so there’s a lot of work to be done. We want to make sure that we’re good partners to our clients that have already set carbon goals to make sure that we have a road map and we can work with them on achieving their goals,” Phillips said.
The report included a matrix showing the importance of different ESG metrics to those inside the company as well as external stakeholders.
Among issues of high importance to both groups are:
- Health and safety.
- Employee engagement.
- Climate and greenhouse gas emissions.
- Data security and privacy.
- Talent management.
- Fleet management and innovation.
- Diversity, equity and inclusion.
Air quality, environmental compliance, water use, community engagement and waste management were of low importance for both groups.
The report’s 2021 sustainability data was prepared in accordance with the Global Reporting Initiative Sustainability Reporting Standards and the Sustainability Accounting Standards Board.
Diversity and inclusion
The Women in Trucking Association named XPO one of the transportation industry’s top companies for women to work for in 2021 based on its commitment to competitive pay and benefits for women, training and professional development, gender diversity and work-life accommodations, the report said.
XPO’s workforce is made up of 18% women, a 1% increase from 2020, the report said. Nearly 20% of new hires in 2021 were women, and they earned 35% of the company’s global promotions.
The company said it aims to hire people from all racial, ethnic, gender, socioeconomic and cultural backgrounds. Open positions are listed on various websites to get in front of groups such as veterans or people of color. XPO also holds career fairs in underrepresented communities.
To combat human trafficking, XPO partners with Truckers Against Trafficking to train truck drivers how to spot suspected trafficking activities and alert law enforcement agencies via channels such as the National Human Trafficking Hotline.
The U.S. State Department of State estimates that nearly 25 million people are victims of human trafficking globally at any given time.