Ryder published its Carbon Disclosure Project 2010 Report a few weeks ago (you can download a copy here). The small font and format of the report makes it a bit difficult to read, but if you plow through it, you’ll uncover some interesting bits of information. Here are two of my key takeaways from the report:
Climate change presents both risks and opportunities. It’s important to have processes and systems in place to identify and manage these risks and opportunities.
Ryder has established a governance structure to identify and respond to these risks. According to the CDP report, “Ryder’s Environmental Services team, led by Group Director, Environmental Services & Sustainability, has responsibility for identifying climate change-related risks and opportunities. This team reports through the Company’s Chief Legal Officer and annually evaluates environmental impacts, policies, and programs, including climate change related risks and opportunities, and provides a progress report to the Board of Directors Corporate Governance Committee, updating them on the status of these various initiatives.”
It’s interesting, though not surprising, that Ryder’s Group Director for Environmental Services & Sustainability reports to the company’s Chief Legal Officer. Of all the driving forces prompting companies to launch sustainability initiatives, none is stronger, in my opinion, than regulatory compliance. Another interesting insight is that Ryder uses “formal risk management systems designed to identify and assess risks, establish priorities, track performance, and handle emergencies.” Simply put, many companies learned painful lessons about risk management after 9/11 and Katrina, and many more companies still don’t have formalized risk management processes and systems in place. The fact that Ryder includes climate change risks in its process is a positive sign.
On the opportunities side, Ryder highlights increased interest in the market for environmentally-sound transportation solutions. In April 2009, for example, the San Bernardino Associated Governments (SANBAG) Board selected Ryder as its fleet partner for a heavy-duty natural gas truck rental and leasing project in Southern California. According to the report, “Ryder will use $19.3 million in state and federal American Recovery and Reinvestment Act of 2009 funding secured by SANBAG to implement the project. As part of the project, Ryder will purchase more than 200 heavy-duty natural gas powered trucks. Both liquefied and compressed natural gas (LNG and CNG) on-board fuel storage systems will be used…These ultra low-emission trucks will be deployed into Ryder’s Southern California operations network, where Ryder’s customers will be able to access them through short-term rentals, long-term leases, or through Ryder’s dedicated logistics services.”
But I wonder: If the government (via taxpayers) hadn’t provided the $19.3 million to fund this project, would Ryder or its customers have made the investment? Hard to say, but Ryder does state, elsewhere in the report, that “even when not faced with impeding regulatory risk, [the company] has recognized the value of making investments in equipment, technology, and processes to improve fuel economy, enhance safety, and reduce operating costs as part of an overall strategy to improve transportation efficiencies.”
Technology plays an important role in enabling and managing sustainability efforts.
Ryder is investing in “new and improved technology solutions such as onboard vehicle telematics and hybrid vehicles that reduce fuel consumption.” For example, Ryder has implemented new energy tracking software “that allows it to compute gas, water and electricity used at all U.S. and Canadian locations.” Also, the company’s RydeSmart telematics system is “a full-featured GPS vehicle tracking and performance management system that improves vehicle performance and efficiency, cargo routing and provides detailed idle time reports that improve driver patters and teach drivers techniques for reducing fuel consumption. Quantitatively, this program is designed to deliver up to 10-15% fuel savings and concomitant emission reductions.”
There’s a lot more interesting formation in the report, such as the company’s methodology for calculating Scope 1 and Scope 2 emissions. If you’re a logistics service provider and are “behind the curve” in terms of sustainability, Ryder’s CDP report, as well as the reports from other industry leaders, can serve as a useful benchmark.
(Note: Ryder is an ARC client)
