Special Report: Green light for delivery

UK postal operators recognise that they need to address environmental concerns, but are they doing enough to help the DM sector reach its 'green' target? asks Kim Benjamin.

Postal operators' activities have far-reaching consequences on the environment - affecting a variety of issues ranging from carbon-emission levels, to paper wastage, to the ability to produce carbon-neutral mailings.

Consider that each working day Royal Mail collects letters and packages directly from its 113,000 post boxes, 14,300 post-office branches and some 87,000 businesses and the potential to harm the environment is not hard to see. Add to this the fact that Royal Mail alone uses more than 30,000 vehicles and 33,000 bicycles for distribution and it's clear that postal operators have an essential obligation towards environmental sustainability.

They are also key to helping the direct marketing industry reach its 'green' targets. Although direct mail material accounts for only two per cent of household waste, with 95 per cent of the paper used coming from recycled or managed resources, the DM industry has set itself a tough goal. By 2009, 55 per cent of direct mail material must be recycled.

"Not so long ago, the environment was a fringe issue for direct marketing, but now it's centre stage and the agenda is being driven by consumers. Recent reports point to a bleak future for the environment, and one that needs immediate action," says David Robottom, director of post consultancy D&S Consultants.

Postal operators are critical to this issue, as not only are they a fundamental part of the direct marketing industry, they also have a key role to play in terms of communication. It comes as little surprise then that the UK's major postal operators - Royal Mail; TNT Post; UK Mail, part of Business Post Group; and DHL Global Mail have not been shy to broadcast that they are placing increasing importance on the impact their activities have on the environment.

TNT Post, for example, says it is embarking on a carbon-management programme, first measuring and then reducing and offsetting carbon emissions. Part of this process will include the development of a carbon-neutral mailing product that will be offered to existing and prospective customers as part of TNT Post's range of products. It is also working together with the Direct Marketing Association and the Department for Environment, Food and Rural Affairs to develop a standard for environmental direct marketing.

"There are many challenges ahead, but we plan to develop a carbon-neutral direct marketing product to give our existing and future customers a wider choice in the market," says Simon Dolph, head of marketing and communications at TNT Post. He is also responsible for the company's CSR initiatives.

Royal Mail too has a carbon-management strategy that covers areas such as using renewable energy. It has also worked with firms seeking advice on how to minimise the environmental impact of their campaigns (see case study, page 10).

"We have set ourselves a target of being carbon neutral by 2015," says Ross Drake, head of new markets at Royal Mail.

UK Mail has pioneered environmental developments on the delivery front, with its design and use of double-decked trailers that have been modified to be more fuel efficient and less harmful to the environment. When compared with a similar trailer of standard design, it achieved a saving of fuel consumption of 20 per cent and an even greater reduction in C02 emissions.

"We are looking at making mail distribution as green as we can," says Ian Paterson, strategy and regulatory affairs director at UK Mail. "Environmental concerns are one of the key topics being aired at potential client meetings and included in tenders."

DHL has recently released its first sustainability report into its UK operations, which examines, among other areas, the way it has managed the impact of climate change from air and road transport. It has also developed a range of products and services entitled GoGreen, which enable business and retail customers in Europe to choose from a variety of carbon-neutral and low-carbon shipping options.

"Sustainability is very much at the heart of DHL's business," says Chris Muntwyler, chief executive of DHL Express UK and Ireland. "As a company, we know we have impacts on society and the environment."


While there's little doubt that UK postal operators have recognised the need to address environmental concerns, are they doing enough to help the direct marketing business reach the goals it has set itself? According to Neil Jackson, chief executive of postal services consultancy Triangle, one of the key ways postal operators can address environmental concerns is by increasing relevancy of message and improving data accuracy.

"Mail operators are trying to offer a range of services to their DM clients to ensure they have improved results from their campaigns and derive better value from mail as a medium," he says. "These services, including list sourcing and management of returns and gone-aways, will help reduce waste."

He also identifies transactional mail as an area that could be better utilised by the industry.

"There is still a lot of white space on statements that could be used to get a message across instead of separate inserts, which are often thrown away," says Jackson. "Postal operators could work harder with their clients to get them to use the white space more effectively, but any change would be more effectively driven by the client side.

Other initiatives too are afoot. Post-Switch, for example, a service which assesses postage budgets and identifies mailings that can be transferred to Royal Mail's rivals, can calculate the environmental impact of a campaign and levy a surcharge on the unit cost, which is then passed on to the Woodland Trust. This factors in the paper materials, quantity, and the national and international networks used.

Alex Walsh, head of postal affairs at the DMA, says it is imperative for the postal services industry to work together to produce a set of guidelines.

"There is a lot of confusion about the environment, so it has been difficult for those in the postal industry to come up with a consensus," says Walsh. "But their environmental stance will be key to attracting clients. If a supplier can provide, for example, a carbon-neutral policy, this is bound to appeal to brands, but it's important that this can be demonstrated throughout the supply chain."


Perhaps the biggest challenge postal operators face as they tackle environmental concerns is not whether they can meet set targets, but if they can justify the costs of doing so.

"Given all the concerns about the environment, it's not realistic to expect mail volumes to grow," says Walsh. "The challenge for postal operators will be to examine how they can make money out of lower volumes."

Consumer demands are also likely to be a critical factor in deciding just how far postal operators are prepared to go in the environment debate. Those businesses that don't adopt solid environmental policies or choose suppliers with 'green' credentials could see their customers drop off.

TNT Post, for example, says that for some of its customers, corporate social responsibility is already part of the decision-making process as to whether or not to use TNT Post's services.

"Our plans and approaches to CSR are detailed in presentations to clients, as well as contained in tender documentation," says Dolph. "The eco-mailing product we hope to offer in the future to new and existing customers will be communicated through tender documents and market-ing materials."

Others, however, are less convinced as to the extent to which environmental issues will influence a client choosing one postal operator over another.

"I doubt that environmental issues will ever be in the top two or three reasons when it comes to buying a mail service," says Neil Jackson of Triangle. "All the research we have carried out among buyers in the UK mail market suggests quality and price will be the driving forces for some time to come."

What is clear, however, is that environmental concerns are being pushed higher up postal operators' agendas than ever before. Whether they can meet their ambitious targets, however, and reconcile these to their bottom lines and to consumer demands, is a different matter.


- Stephen Bentley, chief executive, Granby Marketing Services

"There is the expectation that clients will look to work with companies who have strong environmental policies. Carbon offset will be a key feature of future part- ner selection."

- David Robottom, director, D&S Consultants

"The postal services industry is nowhere near where it should be in terms of tackling environmental issues. It has to consider how to deliver effective measures in a very short space of time without affecting profit levels."

- Olly Raeburn, managing partner, Liquid Communications

"Direct marketing as a channel has come under fire publicly for its lack of environmental-friendliness. The opportunity to positively affect opinion on the matter is going to be actively pursued by clients and agencies alike."

- David Burrows, planner, TDA

"It is still uncertain as to whether carbon-neutral mailings will take off, but what is clear is that many brands are concerned about presenting an environmentally-friendly image. Direct mail as a medium does not represent a significant element of wastage, but it is a very conspicuous channel."


Supplier: Royal Mail

Brand: Scottish and Southern Energy

Brief: To produce carbon-neutral mailings

Royal Mail has embarked on several initiatives to address the impact that direct mail has on the environment. It is helping clients improve their targeting to reduce unnecessary mailings and says it is also helping the industry develop recycled compostable mail.

Last year, Royal Mail worked with energy company Scottish and Southern Energy on a carbon-neutral mailing of its annual report to 400,000 shareholders. The carbon output of the mailing was evaluated, it was then minimised and offset against environmentally-friendly initiatives such as planting trees.

Parcelforce Worldwide, Royal Mail's express parcels business, is also taking steps to address clients' environmental needs, by giving customers the option to offset the carbon footprint emitted in the delivery of its parcels. The money will be invested in a programme run by woodland protection charity, The Woodland Trust.

"Our business uses renewable energy in our buildings, bio-diesel in our vehicle fleet and proactively seeks to increase energy efficiency where practical," says Vanessa Lesson, managing director at Parcelforce.

"While we would never force carbon offset onto our customers, many of them are telling us that they will choose the commitment."

CLIENT QUIZ: Are you swayed by a supplier's green policies?


- Which postal operator do you use?

We use DHL Global Mail and Royal Mail and we are in the process of moving all our direct mail onto recycled paper.

- Will your future choice of postal supplier be influenced by its environmental policies?

There are a lot of reasons why we choose one supplier over another, but it wouldn't be specifically based on their environmental policy - we work with companies that supply what we need. However, 'green' credentials will become an increasing factor in our supplier decisions.

- Would you like to see more environmental initiatives from postal operators?

There are lots of initiatives at the moment from postal operators. Our biggest responsibility is to make sure we only send mailings that are relevant.


- Which postal operator do you use?

Cancer Research UK sends tens of millions of mail items a year. We use Royal Mail as our postal supplier.

- Will your future choice of postal supplier be influenced by its environmental policies?

It is becoming increasingly important to assess environmental issues across our supply chain. Environmental policies could form part of our assessment criteria for postal partnerships. We are looking at implementing 'green' procurement policies in-house and have recruited an environment manager.

- Would you like to see more environmental initiatives from postal operators?

As our organisation is looking to improve its environmental performance, we would welcome any suggestions from our suppliers that will help minimise the environmental impact of our supply chain.


- Which postal operator do you use?

We use TNT as our mail provider and we send out about 200,000 pieces of direct mail a day.

- Will your future choice of postal supplier be influenced by its environmental policies?

It's key to work with a partner that has a corporate responsibility policy in place, which is one reason why we work with TNT, as it has outlined a strategy to address this. Environmental policies will have a bigger role to play when it comes to making a decision about which suppliers to choose.

- Would you like to see more environmental initiatives from postal operators?

Postal operators drive big trucks around the country, so they have a lot to do in terms of addressing environmental concerns.


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