FedEx Misses Climate Target

By Maitane Sardon

FedEx Corp. said it struggled to meet the aircraft-emissions target it had set for 2020 as the pandemic forced it to put on hold plans to modernize its planes to cope with rising package volumes.

The news comes as the package-delivery giant works to decarbonize its business. Earlier this year, it pledged $2 billion to achieve carbon-neutrality in its operations by 2040 in a major strategy overhaul focused on vehicle electrification, sustainable energy and carbon sequestration.

However, in its annual environmental, social and governance report to investors, FedEx said it cut the emissions intensity of its aircraft by 27% since 2005, falling short of the 30% reduction it was aiming for by 2020.

Carbon intensity measures the amount of emissions companies add to the atmosphere for every dollar they make. Companies can reduce their emissions intensity by switching to renewable energy and improving the energy efficiency of their factories, offices and vehicles.

In its 2020 fiscal year, FedEx emitted 280.48 metric tons of carbon-dioxide equivalent for each million dollars of revenue it earned, up from 279.82 metric tons per million dollars a year earlier, according to its ESG report.

The company, which operates the world's largest cargo airline, said it had to keep some MD-10 freighters in service to handle the surge in e-commerce and business-to-business volumes during the pandemic.

"This fleet was critical to successfully handling growing volume demand and medical supply needs," a FedEx spokesperson said.

The company said it plans to retire its entire MD-10 fleet over the next two years and replace it with newer aircraft that produce less emissions, like the Boeing 777F and the Boeing 767F.

In addition, FedEx said it struggled with delays in its access to sustainable aviation fuel and that it had to put several fuel projects on hold to "help team members remain focused on safety during the pandemic." Despite the delays, the company said it saved more than 118 million gallons of jet fuel and prevented more than 1 million metric tons of Co2 equivalent emissions.

The logistics giant's challenges underscore how the pandemic has slowed environmental sustainability actions. Of 750 executives surveyed by Deloitte, 65% said their organizations needed to cut back on environmental spending due to the pandemic.

Write to Maitane Sardon at [e-mail]

(END) Dow Jones Newswires

May 18, 2021 12:17 ET (16:17 GMT)

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