Kami Viswanathan, Senior Vice President Operations for FedEx Express in MEISA, highlights the importance of data-driven insights, innovation, and ethical practises in building a robust and adaptable supply chain that fosters connectivity and resilience.
Robert Swan, one of the world’s greatest explorers, rightly said, “The greatest threat to our planet is the belief that someone else will save it.”
Our environment’s current state is a stark reminder of the imperative need for collective action. Having said that, embracing sustainability is no longer a choice; it is the right thing to do.
Sustainability has emerged as a key value driver and plays a strategic role in propelling companies’ success. By embracing sustainable practices, businesses unlock innovation, attract purpose-driven stakeholders, cultivate resilience, and pave the way for a cleaner future where profitability coexists with the well-being of people and the planet. The detrimental environmental impact has raised concerns about the sustainability of industry operations and the urgent need to transition to green solutions.
At the ET SCM Summit 2023, Kami Viswanathan, Senior Vice President Operations for FedEx Express in MEISA, elaborated on the importance of transitioning to sustainable supply chains.
Edited excerpts
Growing logistics sector calls for sustainabilityIn India, the logistics market is expected to grow at an 8.36 percent compound annual growth rate (CAGR), reaching $650.52 billion by 2028, up from $435.43 billion in 2023. The logistics sector is responsible for 37% of global carbon emissions, making it one of the biggest decarbonization opportunities. With anticipated growth in GDP and the rise of e-commerce, the logistics sector is expected to grow significantly from a market value of USD 10.7 trillion in 2022 to USD 18.2 trillion by 2032.
A 2020 analysis by Climate Action Tracker reveals that India’s transportation sector, ranking third after the industrial and residential sectors, accounts for 13.5% of total energy-related emissions [1] and over 40% of final energy use in the transport sector. A study by the National Productivity Council (NPC) reveals that sustainable practices in logistics alone can reduce overall costs by 20-25%.
Sustainability is everyone’s responsibilitySustainability is more important now than ever before for corporates, suppliers, and regulatory bodies. According to EY’s survey on “just how important are sustainability and ESG in business today?”, 87% believed those initiatives were extremely important to their businesses and long-term success.
Investors are placing greater emphasis on ESG criteria when making investment decisions because regulatory bodies are introducing stricter ESG regulations and requirements. Rating agencies and indices are incorporating ESG factors into their assessments and benchmarks, such as the Logistics Performance Index (LPI).
Governments and international organisations are promoting ESG to achieve sustainable development goals through countrywide policies. The Indian government, in its strong commitment to a carbon-neutral economy, has launched several initiatives to promote sustainability in the logistics sector. Programmes like the Green Freight Corridor Project and the National Mission on Transformative Mobility and Battery Storage aim to incentivize the adoption of sustainable practices.
COP27 emphasised private sector responsibility and introduced the International Organisation for Standardization’s Net Zero Guidelines [2].
Moreover, as part of India’s domestic policy measures, the Securities and Exchange Board of India (SEBI) mandates the top 1,000 listed companies to disclose their environmental and corporate governance initiatives, compelling other companies to align themselves with international best practises [3].
Making sustainable consumption a conscious choiceThere is a shift in the mindset of Indian consumers towards demanding responsible products, which makes it imperative for companies to adopt sustainable solutions to help them grow.
ESG integration is now a critical mandate for companies as all stakeholders, particularly millennials and Gen Z consumers, demand sustainable products. The recent survey from Deloitte indicates that 73% of Gen Z consumers are willing to pay extra for sustainable products, and they prioritise working for companies committed to sustainability.
According to recent research commissioned by FedEx Express, 83% of Indian consumers demonstrate a higher inclination to purchase goods from companies that have a well-defined ESG strategy. This report highlights that fulfilling sustainable expectations is crucial for SMEs in India.
Driving sustainable success with ESGCompanies can enhance their organisations long term societal, environmental, and financial value by understanding their environmental and social impact, identifying opportunities to integrate sustainability into business strategies, and monitoring and transparently reporting outcomes.
As one of the world’s largest transportation companies, FedEx is committed to driving our efforts to reduce our carbon footprint. Through the Reduce, Replace, Revolutionise strategy, FedEx is taking bold actions to achieve the goal of carbon neutral operations globally by 2040. An initial investment of more than $2 billion has been pledged in three critical areas to help us achieve it:
Vehicle electrification: Recently, FedEx deployed 30 Electric Vehicles in New Delhi, in line with our global goal to achieve carbon-neutral operations by 2040 and an all-electric pickup and delivery fleet by 2040.
Sustainable energy: FedEx invests in initiatives to reduce emissions and waste. In FY22, 29 on- and off-site solar energy facilities globally generated 102 terajoules of clean electricity. That is enough energy to fully charge more than 14 million smartphones.
Carbon sequestration: FedEx pledged $100 million to Yale University to help establish the Yale Center for Natural Carbon Capture and accelerate research into methods of carbon sequestration at scale, with an initial focus on helping to offset greenhouse gas emissions equivalent to current airline emissions.
Revolutionizing industries with automation and technologyHarnessing the unmatched power of data insights is crucial to increasing sustainability throughout the value chain. FedEx Dataworks leverages machine learning and predictive tools to proactively monitor time-sensitive shipments and environmental factors.[1] Their recently developed FedEx® Sustainability Insights tool enables customers to directly access near real-time emissions data. The tool is designed to provide new levels of transparency to our customers and create a feedback loop for making our own operations more efficient.
Robotics and automation enable us to improve our operational efficiencies by providing energy-efficient solutions, improving workplace safety, enabling scalability and flexibility, and generating data that can be leveraged for data-driven decision-making and optimisation.
FedEx has recently launched an AI-powered intelligent sorting robot in Singapore, utilising automation, and harnessing AI technology. This innovative solution optimises operational processes and enhances service delivery to provide superior customer experiences.
By automating repetitive and mundane tasks, employees can focus on higher-value activities that require creativity, problem-solving, and critical thinking. This shift allows for upskilling and reskilling of the workforce, fostering career growth, and improving job satisfaction.
In conclusionEmbracing sustainable practices has never been more important than now. From reducing carbon emissions and waste to enhancing operational efficiencies to build resilient supply chains. It is important to act responsibly, and the logistics sector is a catalyst for our commitment to leaving a stronger, smarter, and better future for generations to come.
[2] https://www.skadden.com/insights/publications/2023/02/esg-in-2022-and-predictions-for-2023
