Challenge

Many sustainability-focused companies have committed to drastically reducing emissions in the next 10-20 years, but knowing where to focus your attention can be a challenge.

Founded almost 400 years ago, Posti is Finland’s largest delivery company and has a long history of sustainability initiatives, having first trialed electric vehicles in the 1980’s and achieved carbon neutrality via offsetting by 2011. However, before 2020, its total emissions were nearly 300,000 tonnes of CO2e per year and it recognised it still had a long way to go.

“Sustainability plays a central role in our strategy we renewed in January, and sustainable choices are part of our day-to-day work,” says CEO Turkka Kuusisto. “We do not settle for a good basic level when it comes to the climate; we want to set an example for others.”

After it succeeded in reducing total emissions as a proportion of net sales by 37% between 2017 and 2020, the company has since committed to even more ambitious objectives, in line with the Science-Based Targets Initiative (SBTI):

• By 2030, Posti will reduce its total emissions (scope 1, 2 & 3) by 50% from the 2020 level – this includes pushing all of its own emissions (scope 1 & 2) to zero, as well as having fossil fuel-free road transport – including for its subcontractors
• In the long run, Posti has committed, through the Climate Pledge, to be net-zero by 2040

With its initial focus on reducing its own carbon footprint, Posti set about pursuing a number of initiatives that would allow it to eliminate emissions from its buildings and delivery fleet that would put it on a path towards meeting its targets.

Approach

Posti’s sustainability governance structure

Sustainability is embedded within Posti’s corporate purpose and across its leadership structure. Those with a specific mandate to deliver on sustainability goals, including the emissions targets, include:

• The board of directors: Responsible for incorporating the sustainability program into the wider strategy of the business
• The executive board: Alongside the board of directors, the executive board annually monitors the progress of the sustainability strategy. One SVP on the executive board has a specific mandate for sustainability.
• Sustainability and Compliance Steering Group: A cross-functional group led by a member of the executive board, responsible for managing the sustainability function, monitoring the progress of the sustainability program and ensuring that sustainability is taken into account in Posti’s strategy and investment decisions.
• Head of climate and environment: Responsible for managing emissions calculation and reporting. This is done to coincide with the financial calendar. They work with the sustainability director to provide group-level guidance.

Identifying priorities and target-setting

In order to make meaningful progress in emissions reduction, Posti needed to first identify the sources of emissions within both its own operations and its supply chain, as well as setting ambitious but achievable targets based on the available data.

With the initial focus on scope 1 and 2, reducing emissions from Posti’s delivery vehicles was an obvious area of focus that would have a major impact. In a typical year, its fleet covers more than 100m km while making deliveries, with subcontractors covering roughly 119m km – resulting in emissions of 48,173  tonnes of CO2e in 2020, around two thirds of the company’s own scope 1 and 2 emissions.  The other key area identified in scopes 1 and 2 was facilities emissions.  Taken together, heating and electricity accounted for 23,594 tonnes in the same year.

In 2020, Posti undertook a materiality assessment, conducted by the sustainability consultancy Gaia Consulting Oy to identify opportunities to tackle emissions in scope 3, which accounts for 74% of all emissions. This found that:

• Roughly half of scope 3 emissions arose from subcontracted transport and deliveries
• More than one-third (37%) was caused by the procurement of products and services, ICT services and hardware, and other personnel-related services.
• 8% was attributed to fuels in their non-use phase
• 8% arose from commuting and business travel.

In keeping with the company’s wider objective, all of Posti’s five business units have a long-term target of reaching net zero by 2040, with the heads of each of these accountable for achieving emissions reduction in their P&L. They meet with the Zero Carbon Director and Sustainability Director on a quarterly basis to discuss their plans and progress.

Tackling emissions in scopes 1 and 2

Vehicles

Posti’s vehicle fleet includes a mixture of long-distance freight trucks and smaller vans, scooters, carts, bicycles and cars.

In 2020 it bought 10 liquefied biogas-powered freight trucks, the largest fleet of such vehicles in Finland, and it has plans to continue adding to this fleet regularly in the years to come, at a rough rate of 10 new trucks annually, with the aim of replacing its entire fleet within 10 years.  Investments are considered on a case-by-case basis, considering issues such as the availability of fuelling infrastructure on each route.

It has also been investing in its last-mile fleet, swapping all of its roughly 3,000 company-owned fossil fuel-powered delivery vans to renewable diesel and switching its smaller vehicles over to electric powered engines. Around 39% of all postal deliveries to private homes are now made by electric vehicles, which use 100% renewable electricity, with electric scooters covering almost 850,000 kilometres in 2020. In order to do this, Posti has had to consider how its routes are optimized for electric transport and ensure that enough electrical charging infrastructure is in place to keep them powered.

Properties

While all of the electricity in Posti’s company-owned Finnish and Swedish properties is already provided by renewables, it still has some work to do in this area. It is currently working on a plan to switch to renewables for its properties in the Baltics and working with landlords of its leased properties to encourage them to make the switch as well. Posti is also exploring options to move more of its heating over to renewables.

Tackling emissions in scope 3

While Posti has made much progress in tackling emissions arising within its own operations, to meet its SBTI targets it must also eliminate those arising within its wider value chain.

As a logistics company, subcontractors play a significant role in Posti’s operations so those emissions are included in the 2030 targets. Posti and the subcontractors have a common goal and need to work together to make emission free transportation possible, for example by supporting them with finding good deals on new vehicles.

While it doesn’t need to eliminate the remainder of its scope 3 emissions until 2040 to meet its targets, Posti isn’t waiting until 2030 to begin tackling these. The current focus is on establishing effective calculation models to determine where to focus its efforts, for instance using approved statistical modelling to determine the scale of commuting-related emissions. The company has also made some steps towards incentivising the right behaviours, for instance by providing higher allowances for those who choose electric company cars.

Outcome

Results

By making major investments in its fleet to convert a substantial proportion of vehicles over to renewable fuels, Posti has been able to substantially reduce its emissions in just one year, making major strides towards its 2030 targets.

Converting last-mile delivery vans to renewable diesel has saved 3,800 tonnes of CO2e, while the LBG-powered freight trucks will reduce annual emissions by a further 1,680 tonnes.  That all helped contribute to a 13% reduction in vehicle-related emissions in 2020 and a 14% reduction across the whole of scopes 1 & 2, to 71,767 tonnes.

Lessons learned

Posti’s team shared the following advice for others looking to tackle their own emissions:

• Match ambitions with purpose: Posti’s emissions are made because there’s always someone who needs to send something and someone who needs to receive it. The way to a sustainable future is not to stop living but to find a means to do things in a new way. In Posti’s case this means delivering what matters to people but without emissions.
• Long-term focus: Reducing emissions requires long-term and dedicated work. Posti’s first environmental program was implemented in the 1990’s, and this solid foundation has been key to enabling its current strategy and ambitious goals
• Look to collaborate: This is not a zero-sum game. Companies helping and accelerating each other is key

Next steps

Posti is constantly investing in new technology and automation as it aims to reach its objectives by 2030. While it beliefs that for light transportation, electricity is likely to be the way to go, for heavy transport, renewable fuels seem to be the best current option.

Posti is a member of the Sustainability Leaders community – a collaborative network where CSOs and their cross-functional teams come together to deep dive and share solutions on the most pressing challenges in corporate sustainability. Find out more about joining the community by contacting us at info@worldsustainabilityleaders.com.