Case study: How FedEx promotes sustainability among its suppliers
With over 5,000 operating facilities worldwide, FedEx connects the global economy through innovative technologies, pioneering approaches, and customer-focused solutions. FedEx is committed to promoting sustainability across its supply chain Tweet This! and, accordingly, all of its suppliers are expected to uphold the principles in FedEx’s Code of Conduct, and aspire to meet FedEx’s other CSR commitments.
This case study is based on the 2020 Global Citizenship Report by FedEx, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
As FedEx grows its business through acquisitions, it also works to embed sustainability principles among its suppliers through clearly articulated expectations, awareness raising, contract language, and evaluations. In order to promote sustainability among its suppliers FedEx took action to:
- use best practices and tools to improve supply chain sustainability
- promote sustainable purchasing
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With this case study you will see:
- Which are the most important impacts (material issues) FedEx has identified;
- How FedEx proceeded with stakeholder engagement, and
- What actions were taken by FedEx to promote sustainability among its suppliers
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What are the material issues the company has identified?
In its 2020 Global Citizenship Report FedEx identified a range of material issues, such as economic impact and access, ethics, integrity, bribery, and corruption, GHG emissions associated with the transportation fleet, workplace safety and team member security. Among these, promoting sustainability among its suppliers stands out as a key material issue for FedEx.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups FedEx engages with:
| Stakeholder Group |
| Supply chain workers |
| Customers |
| Shareowners |
| Team members |
| Government |
| Local communities |
| Media |
| Non-governmental organisations |
| Regulators |
| Suppliers |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics FedEx conducted phone interviews with representatives from academia, customers, industry associations, media, NGOs, and suppliers, along with an online survey.
What actions were taken by FedEx to promote sustainability among its suppliers?
In its 2020 Global Citizenship Report FedEx reports that it took the following actions for promoting sustainability among its suppliers:
- Using best practices and tools to improve supply chain sustainability
- FedEx’s SRM (Supplier Relationship Management) team leads efforts to improve sustainability in FedEx’s supply chain through a variety of best practices and tools, including the following:
- Sustainability-related questionnaires are included in FedEx’s requests for qualifications and proposals (RFx) in core categories. A database tracks adherence and supports a rigorous, consistent process.
- Sustainability-related contract language is included in 99.6% of FedEx’s key supplier contracts as of FY19. This language addresses supplier performance in environmental, social, labour, and human rights areas, including child and forced labour and is included in all new or amended supplier agreements.
- During FY19, sustainability criteria were included in 100% of scorecards used to evaluate suppliers.
- Training, awareness raising, and a focus on continuous improvement among SRM team members help to institutionalise sustainable supply chain practices.
- Mechanisms are in place to ensure sustainable products are used as intended to deliver the expected sustainability benefits. The SRM team provides FedEx operating companies with a convenient system to submit any sourcing concerns, such as receiving an incorrect item or a product that cannot be used as planned.
- Promoting sustainable purchasing
- In FY19, FedEx continued its involvement in the SPLC (Sustainable Purchasing Leadership Council), of which it is a founding member. FedEx is actively involved in the Strategic Advisory Committee and in promoting the use of SPLC guidance by other companies. FedEx’s best-practice sourcing criteria and metrics for sustainability are informed by SPLC and customised for its business. Leveraging external platforms for a more sustainable supply chain extends to FedEx Express International as well, where sourcing aligns with ISO 20400 guidance for sustainable procurement. The programme includes supplier risk screening to identify categories of goods and regions known to present inherent risks, along with training and guidelines for sustainable procurement. Future plans for FedEx’s international operations include providing buyers with a standardised set of RFx questions for sustainable procurement and information to support specialised purchases, such as electric vehicles.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
3) Disclosure 414-1 New suppliers that were screened using social criteria
4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
This case study is based on published information by FedEx, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://sustainability.fedex.com/FedEx_2020_Global_Citizenship_Report.pdf
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