Panalpina is meeting customers’ demands for more sustainable operations

Panalpina is meeting customers’ demands for more sustainable operations

The Panalpina Group is one of the world’s leading providers of supply chain solutions. It focuses on four core products – air freight, ocean freight, logistics and manufacturing – and operates globally with 500 offices across 70 markets and clientele spanning 12 different industries. For Panalpina, sustainability is a top priority.

“I think sustainability is absolutely the way the world's going. 14 years ago, these issues were never talked about and now it’s becoming a differentiator and a key aspect of business’ operations,” says Lindsay Zingg, the firm’s Global Head of Quality, Health, Safety and Environment. “We’re finding companies won’t work with us unless we are climate friendly and are willing to help them achieve their climate goals. It’s not just the right thing to do but it’s a core part of how we must do business.”

Over the past decade, Panalpina has fully embraced sustainability and, more importantly, the changes its customers, employees and shareholders expect.

“Honestly, we have now become one of the top companies for sustainability – it’s really been a massive transformation. Everyone from our management team in Basel to employees in the warehouses around the world have had to change their mindset and approach. It’s been really motivating to see,” Zingg says. “Sustainability is really important in our industry.” When it comes to ensuring the company is running its operations sustainably, Zingg attributes this to “defining clear goals, having a clear organisation with sustainability managers and allocating the necessary resources in terms of people, time and tools”.

Demands from customers, employee interests and regulation are the three key drivers of the recent shift in the logistics industry regarding sustainability. “We’re seeing that the retail and automotive industries – our big consumer-facing customers – are highlighting the importance of sustainability. Some of our customers want to be carbon neutral by 2020. For that to happen we must make sure that we, as their logistics provider, are reducing our own CO2 emissions.”

In response, the firm has deployed biodiesel trucks in Singapore to serve its customer L’Oréal. Last year, the company launched an agreement with CMA CGM to reduce carbon emissions caused by ocean freight. The goal focuses on the use of liquified natural gas (LNG) powered vehicles that will emit 25% less CO2 emissions, 99% less sulfur emissions, 99% less fine particles ad 85% less nitrogen oxides emissions.

Taking this even further, in 2015 Panalpina committed to a Science Based GHG emissions reduction target and was one of the first businesses in the logistics industry to have the approved targets. As part of this, the company has pledged to lower its Scope 1 and Scope 2 emissions by 20% by 2025 against a 2013 baseline. Scope 3 emissions, from business travel will be reduced by 25% from 2017 levels.

As another part of its effort to minimise its environmental impact, Panalpina has incorporated recycling into its sustainability transformation strategy, ensuring it recycles as many waste materials as possible, as well as sourcing new materials from recycled products. The company aims to use as many recycled products in its day-to-day operations as possible – including using 100% recycled plastic from Dubai for its polo shirts – the firm has also partnered with the Canadian firm Shred-it to sustainably dispose of its wastepaper. The business ensures as much of its cardboard and plastic waste is segregated and sold to recycling companies as possible to reduce the amount of waste going into landfill. Between 2013 and 2018, Panalpina used 38% less paper in its operations, as well as 28% less water, despite its employee figure remaining constant.

The company’s sustainability operations span across biodiesel trucks, LED lighting, tree planting, recycling, water conservation, the introduction of electric vehicles and less air travel, highlighting the scope of Panalpina’s dedication to helping the environment and meeting customer demand. As an employer of 14,500 people, the company has worked hard to encourage its staff to support the strategy, ensuring that every level of the business is producing as little environmental impact as possible.

But for Panalpina, sustainability is not just GHG emissions and environmental issues. It also includes the health and safety of employees, providing high quality services, conducting business in an ethical manner, innovation and thought leadership, and ultimately, helping customers achieve their sustainability goals. It has made great progress in all of these areas. In 2018, the Panalpina team set a new record for health and safety performance, the company’s best year yet. Its ethics and compliance programs are considered best-in-class, and the company is globally certified according to ISO9001 and ISO14001, the leading standards for quality and environmental management. Most important of all, customers are recognising Panalpina’s outstanding sustainability programs in their RFQ processes.

Panalpina partners with external agencies to help them achieve their goals.  Two Swiss-based firms, Sustainserv in Zurich and Sulytics in Basel, are essential partners who provide advice and tools to guide Panalpina’s sustainability efforts. Panalpina has deployed a tool from Sulytics, which it uses to collect data from all of its offices. The web-based platform has been developed with state-of-the art sustainability accounting capabilities, enabling the company to transparently assess its sustainability data and efficiently report to senior management teams and external stakeholders. Sustainserv has provided strategic guidance, including materiality assessments and support for sustainability reporting for Panalpina for almost 10 years.

With this support, Panalpina has been recognised as a leader in corporate sustainability not only by its customers but by several external groups.  For example, the Carbon Disclosure Project, the premier platform for corporate GHG reporting, gave the company a grade of “-A” in 2018 for its response to climate change issues. The business is one of only 12 companies in Switzerland to be ranked so highly by the organisation, with the average ranking for firms in the logistics industry at a C-level. Panalpina has also received a Gold rating from EcoVadis for its corporate social responsibility, placing within its top 3% performers overall and in the top 1% of its industry.

Panalpina engages all of its employees in these activities. In 2014, the firm launched Sustainable Action Week to encourage members of its staff to join forces and focus on the sustainability mission of the company. Since its start, nearly 1,500 initiatives have taken place globally, benefiting those most in need and improving the sustainability of Panalpina workplaces and the communities where it operates.  In 2018, more than 10 customers and 25 charities took part in over 400 activities in all of Panalpina’s offices. Charities supported this past year include the Basel Area Cancer Foundation and many local charities across Asia. Panalpina’s teams took part in activities including removing ocean-plastic waste from beaches, cleaning children’s schools, working with disadvantaged children, helping feed the disadvantaged
members of the community and working with a home for the elderly. The company also organises relief flights for UNICEF on an annual basis, targeting different nations in Africa each year and supplying relief goods to countries that require humanitarian needs.

Over the past 14 years, Panalpina has seen a huge transformation in becoming a global leader for sustainability. “We are looking for positive actions that benefit not only the company but also the communities where we operate,” comments Zingg. They have also found that using the UN Sustainable Development Goals (SDGs) as a framework has been helpful to structure its efforts. The company selected six SDGs from the 17 that are most important to its operations. “I structured the whole department around those goals and we measure per each goal how many initiatives we do for them. It’s really been the umbrella that we needed to bring this all together in one place,” says Zingg. “At the same time, I think the whole sustainability topic in five years will be on a completely different level again,” she adds.

As it becomes increasingly important for big businesses and their consumers to look at the environmental impact of every stage of the supply chain, Lindsay and her team will continue to ensure Panalpina remains at the forefront of the sustainability scene.

Lindsay Zingg