Our Purpose at NZ Post is to ‘Deliver what people care about’.
We have a large group of stakeholders including our customers, people, shareholders and the communities in which we operate, each with their own requirements about what is important to them.
Our challenge is to deliver value to all our stakeholders and integrate what they care about into our business. One thing in common to all is sustainability and reducing carbon emissions.
We also know New Zealanders are enjoying shopping online, as we are seeing a parcel volume growth at over 9 % per annum as Kiwis order more.
Our parcels business is enjoying unprecedented growth, and we’re excited about what the future holds. But as volumes grow this impacts our carbon emissions, as we need to put on more capacity – trucks, vans and planes, to deliver these goods.
So how do we deliver on our purpose and continue to provide value to all our stakeholders which includes the physical delivery of products while reducing our carbon emissions?
To do this – we need to consider the sustainability of our role in New Zealand.
NZ Post has been an iconic part of the New Zealand landscape for almost 180 years and we’re proud of that. But we also want to be a community and an environmentally sustainable company that’s here for at least another 180 years.
So that’s got us thinking of what we want NZ Post to look like in 180 years’ time, and what we want and hope the country will look like too – a thriving low carbon economy. Thinking ahead to these horizons, and the scale of change needed, we saw the need to start acting now.
In the shorter term, we understand that we need to anticipate potentially higher fuel costs and other Emissions Trading Scheme related costs. And in the medium term, we can expect that there will be more disruption to our delivery networks from climate change-related weather events as well as changing customer preferences.
These might seem far enough away not to act but recent reports have shown the value of starting now, especially as the government starts to prepare the Zero Carbon Bill. To ensure we are prepared and are ready to make the most of the transition to a low carbon economy we have taken a step up in our decarbonisation plans.
Firstly we’ve set ourselves a goal to be carbon neutral from 2030. It’s an ambitious target, but we want to be leaders in this field and there are environmental, social and financial advantages in doing so. We also believe it will drive innovation and efficiencies across our business.
Secondly, we’ve created a decarbonisation fund to help drive emission reduction initiatives. This shows that we are serious about achieving our reduction goals. The annual fund value is linked to the cost of being carbon neutral now (i.e. purchasing voluntary carbon credits to offset our emissions). For the FY19 year, the value of the fund will be nearly $1.5 million and will be used invest in technology and innovation projects which will lower our carbon emissions.
We are aiming to reduce our emissions as much as possible through to 2030, and to purchase carbon offsets for any remaining emissions from that date. We will be measuring our reduction against the science-based targets.
We have made a commitment to reduce the carbon emissions of every parcel we deliver, but the management and reduction of carbon emissions from our business is a big challenge.
There are projects and actions we have planned and some that are already underway.
For instance, we know that deliveries attempted when customers aren’t home and item returns are key variables that can significantly increase the carbon footprint of e-commerce. That’s why first-time delivery and greater efficiency are key areas of our focus at NZ Post, something that helps us and our customers get their parcels first time.
We also need to provide more delivery capacity to deliver what New Zealanders want. Traditionally this capacity would be filled with petrol and diesel vehicles – meaning more tailpipe pollutants, noise and naturally an increase in carbon emissions. Instead, we are exploring new ways to reduce emissions whilst still growing our business.
The use of almost 500 electric Paxsters has allowed us to add desperately needed capacity into our network, with minimal increases in emissions compared to if we had used a traditional van fleet. These efficient vehicles have minimised the carbon emissions, pollutants and noise associated with delivery whilst still increasing delivery capacity.
We are also expanding our electric fleet and as a first step are piloting five new electric vans.
Purchased with help from Governments Low Emission Vehicles Contestable Fund, administered by the Energy Efficiency and Conservation Authority (EECA), we are assessing the vans on their suitability for use in the courier fleet.
We will test them under different loading conditions and operating environments to understand the potential for our metro network, which includes at least 750 vans. The new electric vans will also allow courier drivers to see for themselves what it is like to drive an electric van, so that they can consider purchasing or leasing their own. Initially based in Auckland, the vans will be used at courier depots and delivery branches at different locations around the country.
This allows us to continue to deliver what our customers care about but without the resulting growth in carbon emissions.
All this work builds on a strong foundation of action at NZ Post. Our commitment to sustainability was recently recognised at the EY New Zealand Procurement Excellence Awards, where we won the Supreme award, as well as the Sustainability Project of the Year. This highlighted our commitment to use procurement spend to buy goods and services from a minimum of three social enterprises over the following 12 months and support the growth of the social enterprise sector through our partnership with the Akina Foundation.
This follows being awarded the Supreme Award for the ‘Greatest contribution to a Sustainable NZ’ at the recent NZI Sustainable Business Network Awards.
Our journey towards sustainability is important to our people, customers, consumers in the communities in which we operate, and our shareholders (the Government).
NZ Post is an important part of our e-commerce customers value chain, and reduction in our carbon footprint is a reduction in theirs. We are therefore inviting them along on this journey and encourage our customers and other stakeholders to collaborate with us to create a better future.
NZ Post is here for the long run. We’re committed to our people and New Zealand communities and our sustainability goals are just another way of showing this.