Climate Change: Edging the UK towards its last letter?
Sending letters since 1516!
Royal Mail PLC is the UK’s largest universal postal service provider, supporting customers, businesses and communities across the UK. Royal mail operates under a “one-price-goes-anywhere”, six-days-a-week service on a range of letters and parcels to more than 35 million addresses across the UK – the Universal Service agreement. The Group delivers around 1.1 billion parcels and 15.6 billion letters. Royal Mail PLC is a key component of the UK’s economic and social infrastructure, providing services to private individuals, companies and communities and employing c.160,000 people. In October 2013, Royal Mail successfully floated on the London Stock Exchange and was subsequently admitted into the FTSE100. Around 700,000 members of the public bought shares in Royal Mail.1
The challenge: Rising costs and hazardous conditions
Increased flooding, rising sea levels, more intense weather events, and changes in temperature and precipitation patterns disrupts Royal Mail’s ability to provide mail service and increase costs for maintaining infrastructure. These issues jeopardise the universal service agreement and endanger the lives of the thousands of employees that work for the business. Operations are most affected by extreme weather events which can delay and disrupt mail delivery. 1 Given that 6.2 million people in the UK lives by the coast areas, sea level rise driven by climate change puts many of the service’s facilities and staff at risk.
Strengthening the operation:
Royal Mail’s existing planning for disruptions to mail delivery includes the preparation and response to these events. Climate change adaptation initiatives seek to identify how long-term planning and collaboration across functions can reduce the costs associated with extreme weather events. This includes infrastructure design, network configuration, and creation of common resources that help decision-makers take the changing climate into consideration. Further, Royal Mail’s climate adaptation planning must take into account not just the cost to rebuild a facility after a weather-related event, but also downtime, equipment loss, availability of backup processing support and other significant cascading effects. 1 2 3 The objective of Royal Mail’s adaptation process is to avoid or minimise these damages. Examples of key events include: changes in the severity of damages related to extreme storm events, sea level change, extreme rain, and temperature changes that lead to temperature-related health risks and infrastructure damage. 3
The key is to minimise operational downtime and to regain full site restoration and repair. Royal Mail’s action response plan provides standardised procedures for natural disaster planning, initial response, mitigation, and facility repair. Ongoing revision is informed by actual experience with such situations in order to learn from exteme weather conditions and fluctuating temperatures that pose difficulties to Royal Mail employees.
CSR at the forefront of company KPIs:
- Royal Mail’s managers’ bonuses are now linked to its Corporate Balanced Scorecard performance, which consists of 12 performance indicators. One of the metrics on the Scorecard is Total UK Costs. This includes the cost of energy and fuel used to power its buildings and vehicles. Royal Mail sets annual targets for cost reduction and links managers’ bonuses to achievement. 2
- Gas and electricity budgets are decentralised to local operations teams to help drive “accountability, empowerment and performance improvements”. 1
- A large proportion of managers’ bonuses are also linked to the number of delivery offices that undergo modernisation during a year. Modernisation includes removal of private and other support vehicles from logistics operations in favour of a more efficient, modern fleet. 2
- Environmental management forms one of the ten pillars in Royal Mail’s World Class Mail (WCM) programme. WCM is a system that delivers and defines efficiency, safety and quality in the workplace. All mail centres and delivery offices have now started using WCM, which is audited across the group. Audit points are awarded for carbon emissions performance, which is measured per km travelled in the Network and Distribution business unit. 1
- Royal Mail joined the Logistics Carbon Reduction Scheme to strengthen its commitment to reducing carbon from UK roads. The LCRS is a recording and reporting system for emissions from road transport. The scheme demonstrates the efforts of Royal Mail to cut carbon emissions and contribute to national carbon reduction. 5
Next steps in long term planning:
- The company needs to invest in weather management resources to better respond to more intense or far reaching events
- Employees need a high level of connectivity to emergency services, and to company disaster mitigation teams in the case of disaster
- Royal Mail’s building portfolio and individual facilities and equipment for climate change impacts need continual upgrades and evaluations (Flood barriers in York and wider North failed in December 2015)
- To further invest in sophisticated equipment to process and sort mail, currently Royal Mail is able to function during occasional weather extremes but this may change as conditions become more extreme 3
- Royal Mail annual report: http://ar2015-16.royalmailgroup.com/strategic-report-1.html
- Royal Mail Climate change; Investor sheet: http://www.royalmailgroup.com/sites/default/files/RMG%20CDP%20Response%202014.pdf
- USPS Green initiatives and strategies: http://about.usps.com/what-we-are-doing/green/pdf/CCAP_FINAL_2014.pdf
- S. Postal Service Is Worried About What Climate Change Will Mean For Mail: http://www.huffingtonpost.com/2014/10/31/mail-climate-change_n_6085108.html