Dr Martin Blake: Greening of Royal Mail

Dr Martin Blake is Founder of Carbon Zero Solutions and was responsible for the Carbon Management Programme at Royal Mail, UK’s biggest postal services company. As Head of Social Responsibility and Sustainability Team at Royal Mail Group Plc for eight years, he oversaw a multi-pronged CSR strategy in the areas of CO2 emission reduction, waste management, water conservation and workplace diversity.  Dr Blake has an MBA in Organisational Analysis and Strategic Management from Hull University and a Doctorate in Business (DBA) in Organisational Change.

BP: How did sustainability become important to Royal Mail?

MB: It started becoming important to Royal Mail when we started a group-wide Corporate Social Responsibility agenda about 7 or 8 years ago. We began to look at how to use CSR to improve the business performance of Royal Mail as well as by doing the right thing. Fundamentally, the CSR programme had to serve the stakeholders well – the customers, shareholders, employees, management board. Part of that CSR approach was environmental sustainability. We began to pursue that vigorously.

BP: How did an organisation like Royal Mail balance short-term pressures such as sales targets and shareholder earnings versus long-term sustainability issues?

MB: We didn’t do anything that didn’t have a good business case. Let’s take some win-win-win scenarios. One of the issues we had to deal with when we began the CSR program was sick absence. A lot of people were either becoming ill at work, injured or just pretending to be ill. That was a significant cost to the business. We put a program of sick absence management which reduced the problem and created significant benefits. Each 1% reduction in sick absence had a value of 40 million pounds a year.

In the environmental sustainability area, the reduction of energy led to very clear cost reduction. So in all parts of the CSR program, you have to be able to judge that there is tangible, and sometimes in a social policy area, intangible benefits apart from the peripheral benefits around branding, attracting and retaining staff, attracting and retaining customers.

How big is Royal Mail?

• One of the largest employers in the UK with around 185,000 employees
• Handles 83 million items every working day
• 113,000 collection points
• 28 million delivery addresses
• 33,000 vehicles travelling 1.8 million miles a day
• 145 million litres of diesel annually
• 14,000 retail outlets
• Turnover in excess of £8bn per annum

Annual impacts

• CO2 emissions would fill 99 billion party balloons
• Road mileage is equivalent to a return trip to Jupiter
• Diesel volume would fill 59 Olympic sized swimming pools
• Energy consumption would power 43,731 UK homes 1,152 GWh per annum
• Landfill waste is equivalent to 11,157 fully laden Ford Transits
•Water consumption equivalent to > 33 litres for everyone in the UK with 2 billion litres

Source: Climate Change Solutions

BP: What were the main strategies you implemented in Royal Mail with respect to energy?

MB: Under the banner of CSR, there were four main strategic pillars – Health and Wellness which encompassed workplace safety, Sustainability, Social Policy which included volunteering opportunities, and Diversity focussing on gender issues and workplace harassment.

The Sustainability programme covered energy, transport, water, waste and supply chain issues.

Royal Mail would consume roughly the same amount of energy in a year as about 45,000 houses. Now that’s a big electricity bill, a big oil bill and a big gas bill. It made sense that if that was managed appropriately we would reduce costs significantly. So we put in place a program that analysed the usage. With smart metering, we were able to disaggregate energy usage to identify what kinds of buildings had what kinds of profiles, and then begin to look at the kind of technologies that could be used to reduce usage.  We were able to do this successfully. The program won many awards and saved a lot of money.

BP: What were initiatives with respect to transport?

MB: Royal Mail has 35,000 vehicles. They do around 2 million miles every night. There are lots of vehicles on the road at night. In terms of scale and size, the Royal Mail fleet covers the same distance as the return trip to Jupiter in a year. It’s a very long way and the fuel bill is accordingly very large. There was a significant interest in reducing the amount of miles that we covered, and reducing the fuel that we used, making sure that we in no way compromised quality of service or the availability of the fleet. So we used a marginal abatement cost curve, to see where we can get the most savings in the fleet, and how that was to be achieved.

We also recognised however that even some of the more expensive technology which would sit at the far right of an abatement curve and which didn’t save very much in terms of carbon or cost a lot in terms of price per tonne – we had to work with those so we understood them, and we could be ready to move into those technologies as they became more mainstream.

So we certainly did play with hydrogen vehicles as we converted internal combustion engines vehicles to run on hydrogen. We had the first hydrogen fuel cell postal van in the world outside California.

Where we made big reductions were on the heavy fleet and double deck trailers. For each double decker trailer, we removed one of the big tractor units in the front, which made it much more efficient to move around as we only had one vehicle instead of two. The payback period of such steps was less than six months. So in terms of the business case, it was very clear that there was a very good reason to do this.

Sustainability targets

• Reduce absolute CO2e emissions by 25% by 2010
• Reduce normalised transport related CO2e emissions by 20% by 2010
• Reduce normalised building related CO2e emissions by 10% by 2010
• Reduce normalised quantity of solid waste sent to landfill by 25%
• Reduce fresh water consumption by 5%
• A carbon neutral Letters business in Scotland by 2012
• Zero tailpipe emissions in Inner London (LEZ) by 2012
• Reduce absolute CO2e emissions by 50% by 2015 (CN)

Source: Climate Change Solutions

BP. Did you face any challenges convincing the stakeholders?

MB: The first step is to do a stakeholder analysis and identify who your stakeholders are. Of course, the key ones are going to be the customers, the union as it’s a unionised environment, our regulators and our employees as Royal Mail employs just under one percent of the UK working population which is a significant number, the government and our competitors. How do you work with all of these people? First was to analyse who they were, and then identify what it was that they wanted and making sure you that you were talking in the language they wanted to hear, and the message was properly aligned with the overall direction.

BP:  Where you able to influence the system for example in the case of hydrogen cell vehicles in getting the infrastructure set up?

MB: Very much so. I was able to influence manufacturers to move more rapidly towards deployment of vehicles, and governments on the deployment of infrastructures and that was done through the supply chain.  For example, in the hydrogen agenda, I spoke to a number of postal authorities in Europe, and I started talking to manufacturers of vehicles, and told them that collectively as an industry we would like to move in this direction. This is the sort of numbers we are talking about, and would you be interested in working with us?

Interestingly at first they said no, and that they are going to continue to make the conventional vehicles, and that the vehicles we wanted were 20 or 30 years away. I said, “That’s interesting, then perhaps I’ll go to China.” We spoke to the Chinese and they said, “How many would you like and when would you like them?”

I announced this at an European conference, that it would appear that Europe is going to fall behind to be able to provide hydrogen vehicles of the future, and that the Chinese can, and that we are going to be talking to them about design specifications for the future. Within one month, there had been a MOU between between 8 or 9 major OEMs (Original Equipment Manufacturers), stating that by 2014 they would deploy hydrogen cell vehicles into Europe and two countries, namely Germany and UK would spend significant amounts of money.

BP: Carbon is a narrow definition of sustainability. Did you ever think about biodiversity and Royal Mail’s impact on it?

MB: Carbon is a narrow definition of sustainability. Carbon is one agenda but it’s an important agenda as it has critical mass now. So we focussed a huge amount of attention on carbon but that doesn’t mean we ignored the water, the waste and other issues. With regards to biodiversity, I think if we’re going to be truthful, what we are actually talking about isn’t so much biodiversity. Biodiversity makes it sound nice and pleasant. We’re actually talking about extinction rate or how many species we are eliminating from the planet on a daily basis and how can we manage that scenario. For me, I would say we need to be dealing with the extinction rate and in future, that is going to be a major issue. If you ask me, what’s going to be the issue of the next five years, it’s going to be water and that businesses, countries and regions, need very carefully at their water resources and how they can husband those resources very carefully.

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YouTube: A Low Carbon Best Practice Exchange Interview: Martin Blake, Royal Mail

Climate Change Solutions: Royal Mail, Hydrogen Future


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