Annual Sustainability Report 2016...1998/07/29 · 2016 Annual Sustainability Report, we engaged stakeholders in identifying areas that are critical to our success. This helps increase

SUSTAINABILITYAnnual

Report 2016

Key Performance IndIcatorsSustainability Trends

Indicator 2014 2015 2016

Distance traveled by postal vehicles (miles) 1,270,157,328 1,391,638,596 1,398,909,648

Total fuel used by postal vehicles (GGE) 1 161,500,749 172,431,310 182,841,261

Alternative fuel used by postal vehicles (GGE) 782,485 814,146 761,353

Waste recycled (short tons) 231,700 239,282 255,897

Solid waste diverted from landfills (%) 40.7 41.2 50.4

Purchases of environmentally preferable products ($ million) 236 273 3571 Gallons of gasoline equivalent

2016 Sustainability Snapshot

Focus Objective and Target Baseline FY2016 Progress Status

Controllable income Achieve controllable income of $0.1 billion by FY2016 ($ billion) N/A 0.6 600% On target

Customer service and satisfaction

Achieve a Customer Insights composite score of 86.7% by FY2016 N/A 87.6% 0.9% On target

Facility energy Reduce energy intensity 25% by 2025 (BTU/GSF) 1 73,235 FY2015 70,200 -4.1% On target

Greenhouse gas emissions

Reduce Scope 1 and 2 emissions 25% by FY2025 (million MTCO2e) 2

5.3 FY2008 4.3 -19.3% On target

Reduce Scope 3 emissions 30% by FY2025 (million MTCO2e) 2.8 FY2008 2.2 -23.6% On target

Scope 3 emissions including contract transportation (million MTCO2e) 3

8.1FY2008 7.9 -2.5% To be

determined

Reduce fleet-wide per-mile GHG emissions 30% by 2025 (g CO2e/mile) 4

1,133.6FY2014 1,165 2.8% Off target

Water Reduce water consumption intensity 36% by 2025 (gal/GSF) 5 17.5 FY2007 8.6 -50.8% On target

1 British thermal unit per gross square foot2 Metric tons of carbon dioxide equivalent3 While not required, USPS voluntarily reports contract transportation emissions as part of our Scope 3 emissions.4 Grams of carbon dioxide equivalent per mile 5 Gallons per gross square foot

ii 2016 sustaInabIlIty rePort

message from the Postmaster general and chIef sustaInabIlIty offIcer

F or more than 240 years the United States Postal Service has delivered on our mandate

to connect the nation. We are the face of public service to Americans as we deliver to their homes and businesses every day. We understand the importance of leading by example, and that is reflected in our ongoing commitment to sustainability.

By continuously working to improve our economic, environmental, and social practices, we are making a positive impact on our operations as well as the communities we serve. The U.S. Postal Service has long been recognized as a

sustainability leader among federal and industry peers. Last year we reached — and in many cases surpassed — corporate goals in achieving controllable income, increasing customer service and satisfaction, as well as reducing facility energy intensity, greenhouse gas emissions, and water consumption.

During 2016 we made strides in updating and improving our infrastructure and technology; and in optimizing delivery and network operations. We are investing in delivery services, enhancing digital and physical security, updating our analytical capabilities, and adding more efficient vehicles to our fleet while pursuing large-scale efforts to lower costs. Finally, we’re collaborating within the federal government regarding regulatory changes to Postal Service legislation.

As part of the process of creating this 2016 Annual Sustainability Report, we engaged stakeholders in identifying areas that are critical to our success. This helps increase transparency

throughout our organization and with customers, suppliers, employees, and other stakeholders.

We pursue environmental stewardship as part of our immediate and long-term strategic plans and policies. Our sustainability efforts support our core goals — providing outstanding customer service; accelerating the pace of innovation; investing in the future of mail; and equipping, empowering, and engaging our employees to deliver world-class service. These goals are the foundation to measure corporate performance, define corporate values, and achieve success in our sustainability initiatives.

Our customers depend on us to connect people and businesses. By pursuing sustainable practices that benefit our organization, our customers, and our nation, the Postal Service will continue to play a vital role in America’s economy and society — now and for years to come.

Megan J. Brennan

Postmaster General and Chief Executive Officer

Thomas G. Day

Chief Sustainability OfficerG4-1

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about thIs rePortAbout us

Since 1775, the Postal Service has united the nation by providing reliable mail delivery to

the American public. As a self-funded entity, we support our operations

through the sale of postal products and services. We do not receive tax revenues to support our business. Additionally, we’re governed by a presidential-appointed independent

Board of Governors. As an iconic and trusted brand, we’re committed to continuous improvement.

Who Are We?�� World’s largest post, delivering

47 percent of the world’s mail

�� 2nd largest civilian employer in the United States

�� Largest civilian employer of veterans

�� Most favorably viewed federal agency

�� If we were a private company, we would rank 39th on the 2016 Fortune 500

About sustAinAbility reportingAs part of our commitment to improvement we’ve developed this annual report on sustainability, including both quantitative and qualitative information about our impacts and initiatives. This report discusses how our operations affect stakeholders’ rights and expectations, explains our initiatives and progress in addressing sustainability topics, and describes processes in place to address performance and operational changes. This report presents a summary of our key sustainability impacts resulting from

our operations, influences on stakeholders and associated challenges and opportunities.

Our report follows Global Reporting Initiative (GRI) G4 guidelines, focusing on economic, social and

environmental aspects of our operations. GRI is an independent international organization helping entities better understand and communicate their impacts to customers, employees and other stakeholders. It provides a framework for organizations to report their key sustainability initiatives and track metrics related to established goals. Our approach to sustainability includes economic, environmental and social components. Every successful strategy or plan should take into account all three elements. A plan focusing on just one or two of these elements will not lead to sustainable success. This report showcases these elements in the following sections: Economic Viability, Environmental Stewardship and Social Responsibility. Additionally, this report highlights key initiatives managed by

the USPS Office of Sustainability. These initiatives include reduction of facility energy and water use, improvement of vehicle fleet efficiency, procurement of environmentally preferred products and incorporation of sustainability clauses in contracts. Quantitative data in the report is from fiscal year (FY) 2016, unless otherwise noted.

2016 stAkeholder engAgement processWe engage our stakeholders to determine which aspects — or key issues — of our organization are most important (material) to our operations. The 2016 Annual Sustainability Report stakeholder engagement process was refined from the pilot process used in 2015. We expanded the internal stakeholder group to solicit a

Worked at over

facilities32,000

227,000vehicles

operating more than to

156 millionaddresses

mailpieces

to deliver more than

154 billion

In performing our mission, this year nearly 640,000 employees:

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0 2 4 6 8 10

0

2

4

6

8

10

Signi�cance on USPS Success

Imp

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ance

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13

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1. Digital and physical security2. Customer service and

satisfaction3. Financial stability4. Optimize delivery and network

operations5. Government relations/legislative

and regulatory reform

6. Employee health, safety and wellness7. Innovation8. Brand image9. Employee engagement 10. Energy, fuel and emissions11. Environmental compliance12. Community engagement13. Climate change adaptation/

operational resiliency

broader range of opinions from several departments within our organization. We also surveyed a customer group to obtain external stakeholders’ opinions. As a result, the number of social, economic and environmental material aspects examined was reduced from 35 to 13 that best represent our current priorities.

These aspects serve as a foundation for this report. They’re ranked according to the likelihood and/or severity of an impact, risks or opportunities arising from the aspect, how critical it is for our long-term success, and opportunities to gain advantages or influence outcomes within our organization.

The stakeholder group score for each aspect was combined with customer survey results and is displayed on the materiality matrix.

Materiality MatrixThe materiality matrix below displays our stakeholder-identified aspects and the relationship between our business success (significance to USPS success) and our customer viewpoints (importance to stakeholders).

Of these 13 aspects, five were determined to be significant. They are: financial stability, optimize delivery and network operations, digital and physical security, government relations/legislative and regulatory reform, and customer service and satisfaction. These

significant aspects are displayed in the upper right corner of the materiality matrix.

While each aspect is important, only significant aspects are discussed in detail in this report. This year, we’re focusing on identifying measurable goals, objectives and targets to help manage our significant aspects, where appropriate, and within our direct organizational control. For example, metrics have been documented in this report for two of the five aspects — financial stability and customer service and satisfaction. In some instances, goals have not been established at this time, such as digital and physical security and government relations/legislative and regulatory reform.

We’ll continue to identify metrics for those aspects that are within our control and report progress toward the goals in future reports. The process for identifying and prioritizing sustainability aspects will continue to be refined by engaging a wider range of stakeholders, including service suppliers.

2016 USPS Materiality Matrix

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0 2 4 6 8 10

0

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Signi�cance on USPS Success

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contents

Key Performance Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Message From the Postmaster General and Chief Sustainability Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

About This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

About Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Who Are We? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

About Sustainability Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

2016 Stakeholder Engagement Process . . . . . . . . . . . . . . . . . . . . . . . iv

Economic Viability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Financial Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Optimize Delivery and Network Operations . . . . . . . . . . . . . . . . . . . . . 1

Digital and Physical Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Government Relations/Legislative and Regulatory Reform . . . . . . . . . 2

Customer Service and Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Environmental Stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Office of Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Environmental Compliance and Risk Management . . . . . . . . . . . . . . . 5

Energy Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Corporate Sustainability Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Sustainability Leader in Every Community . . . . . . . . . . . . . . . . . . . . . . . . 10

Social Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Community Connection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Human Resource Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Diversity Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

GRI Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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Our financial future depends on our ability to provide secure, reliable, affordable and

universal delivery. This portion of the report describes our economic status, programs and initiatives, and progress toward our goals.

($ million) 2014 2015 2016

Total revenue 67,830 68,928 71,498

Controllable income 1,357 1,188 610

Net profit - 5,508 - 5,060 - 5,591

FinAnciAl stAbility We aim to be innovative and price-competitive within the shipping and mailing industry. However, we face financial challenges from our expanding scope of operations and the absence of new Postal Service legislation.

Our revenue comes from sales of postal products and services. This year, our revenue totaled approximately $71.5 billion, an increase of nearly $2.6 billion over last year. Sales of our most profitable product, First-Class Mail, declined by 2.2 percent since last year. We’re running at a $5.6 billion deficit, which is attributed to increasing compensation and benefit expenses, additional labor hours to accommodate rising package volume, and restrictions on what postal products and services can be offered.

Due to these constraints, we’ve changed the way we view our income. Our focus is on controllable income — costs that are part of our core business and over which we have direct control. Our controllable income excludes costs influenced by universal service obligations and legally mandated costs

Annual revenue of

$71.5 billion

such as retiree health benefit expenses and the effects of price caps.

We’re working to respond to our financial challenges by consolidating operations, decreasing our workforce and improving productivity — saving $14 billion since 2008. This marks positive progress as we compete with expanding digital communication networks in a highly competitive global business market. We’ll remain proactive, flexible and responsive to anticipate customers’ needs while preparing for the financial impacts of new legislation and other external factors.

optimize delivery And netWork operAtions We’re optimizing our delivery and network operations by providing innovative and reliable services at affordable prices. In 2016, we provided universal service to 156 million delivery points across the United States, an increase of more than 1 million delivery points since last year.

While our primary service remains letter mail processing and delivery, the market has shifted toward packages. We’re committed to building our package delivery business to accommodate our customers’ demands. Using

economIc VIabIlIty

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improved digital capabilities and software innovations for automatic package sorting, we exceeded 2016 performance targets in Parcel Select and Marketing Mail services across the nation. We’re also improving our package sortation and delivery capabilities. By investing in and deploying these new technologies, we can improve operational performance and continue to provide consistent, predictable and reliable service for our customers.

Informed Delivery serviceWe continue to develop our Informed Delivery service. This mobile feature notifies users of mail expected for delivery that day, including images of the mailpieces. In 2016, over 78,000 households actively used early versions of the Informed Delivery application. Find out if your address is eligible for this service at https://informeddelivery.usps.com.

https://informeddelivery.usps.com

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digitAl And physicAl security Our customers and employees trust the Postal Service to ensure their privacy and keep their information secure. We continuously develop and implement risk management strategies to protect the mail system against criminal misuse.

“The real power of technology and information is how it

enhances the value of our people and our products.”

— Chief Information Officer Kristin Seaver

We rely on the U.S. Postal Inspection Service, the federal law enforcement arm of our business, to protect the mail system from postal-related crimes. Postal Inspectors and Postal Police officers investigate crimes such as mail theft, identity theft, terrorism and mail bombs. A state-of-the-art

National Forensic Laboratory employs highly trained scientists and specialists to identify, apprehend, prosecute and convict postal-related criminal offenders.

In addition to physical security risks, cybercrime has become a persistent threat. We’ve aligned our structure, operations and resources with cybersecurity best practices. The Postal Service Corporate Information Security Office (CISO) protects the organization from cyberattacks by monitoring threats to our network, detecting attacks, responding to incidents and sustaining operations during incidents. By enhancing our cybersecurity capabilities and managing risks, CISO supports our commitment to customer protection. Future plans for cybersecurity include streamlining systems and information, leveraging technology, developing integrated technical systems to further protect against cyberattacks and developing plans to exercise appropriate governances and incident response in the event of a data breach. There are no specific metrics reported for this aspect at this time.

government relAtions/legislAtive And regulAtory reForm Our Government Relations and Public Policy group serves as the primary USPS representative to Congress, executive branch and other government officials. It manages public policy and legislative issues at all levels, working with Congress and other key stakeholders to develop legislation that results in meaningful, beneficial reforms to improve our business model and help ensure long-term financial stability.

In the last session of Congress, postal reform legislation was introduced in both the Senate and House of Representatives. The Postal Service Reform Act, H.R. 5714, was approved by the House Oversight and Government Reform Committee in July 2016, before the 114th Congress ended. This legislation would make significant reforms in retiree health care, delivery efficiency, governance, innovation and accounting. While postal reform legislation was not enacted, we look forward to continuing these important discussions in the 115th Congress.

The Postal Service also plays a vital role in the U.S. political process. During the weeks before the 2016 presidential election, we delivered a total of 276 million pieces of Election Mail and 2.3 billion pieces of political mail.

Your security is our jobOur employees are trained to recognize and react to unusual behaviors. Retail Associate Kelly Haynes of West Alexandria, OH, became suspicious when a new customer inquired about the status of his expected Priority Mail Express package, stating that his address did not receive street delivery. Haynes, suspecting illegal activity, phoned the residents of that address who reported that they were not expecting a package. Haynes informed authorities, who detained two identity thieves when they arrived at the Post Office to retrieve packages containing items purchased with a stolen credit card.

Cybersecurity is a top priorityIn an effort to respond to cybercrime, the Postal Inspection Service’s cybersecurity unit recruits top talent to protect employees and customers. Their work includes teaming with Project Jamaican Operations Linked to Telemarketing (JOLT) to prevent foreign scams. In addition to training employees to spot fraud and hazardous materials, the Postal Inspection Service distributes scam alerts for broadcast on TV stations across the nation.

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customer service And sAtisFAction High customer satisfaction is crucial to our economic viability and aligns with one of our agency’s core goals — providing outstanding customer service. We calculate

annual performance metrics using data obtained from surveys and the Retail Customer Experience program in which “mystery shoppers” conduct transactions at our retail locations. Our overall retail experience score was 90.8, a reduction of 1.9 percent from the previous year. The Customer Insights composite score, which measures overall customer satisfaction, was 87.6 percent, exceeding both our score from last year and our target composite score. We also surpassed our Marketing Mail performance targets and achieved record-breaking service for our business customers. We’ve identified two future goals to help benchmark our progress on improving our customers' experiences.


This year, our website recorded 1.7 billion visits and generated over $1 billion in revenue from online sales.

Goal: Achieve a Customer Insights composite score of 86.7 percent.

Result: 87.6 percent.

Future Goal 1: Achieve a Customer Insights composite score of 89 percent by 2017.

Future Goal 2: Achieve a First-Class Mail letter and flats composite customer experience score of 96 percent by 2017.

Future Goal 3: Achieve a Marketing Mail and Periodicals composite customer experience score of 91 percent by 2017.

We’re working on new and innovative ways to engage the American public. This includes expanding our social media presence, offering innovative delivery services, reducing customer wait time and offering a variety of retail purchasing options. We continuously update and improve our website, www.usps.com, where customers can conveniently shop and mail online.

Future plans include investing in retail and digital platforms to deliver outstanding service. We’ll continue to provide training to our employees. We also plan to deploy Network Operations Control Centers across the nation to monitor and quickly react to operational issues. Initiatives such as these enhance our brand image, helping us retain and attract customers to support our financial viability.

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http://www.usps.com

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Our commitment to sustainability includes environmental stewardship. Proud of our

roles as public servants, we strive to minimize the environmental impacts of our operations, following best practices to conserve natural resources, eliminate waste and improve operational efficiency.

oFFice oF sustAinAbilityThe USPS Office of Sustainability is dedicated to minimizing the environmental impacts of business operations while reducing costs and promoting outstanding service. Our sustainability programs not only benefit our planet, but also our employees, communities and bottom line.

The Office of Sustainability consists of three teams: Environmental Compliance and Risk Management, Energy Initiatives and Corporate Sustainability Initiatives. The Environmental Compliance and Risk Management group creates and enforces environmental best practices, laws and regulations at our facilities. The Energy Initiatives group implements energy conservation programs and conducts greenhouse gas (GHG) reporting. The Corporate Sustainability Initiatives team implements agency-wide environmental programs as part of daily operations including electronic stewardship, green purchasing and recycling. Together, these teams promote sustainable practices for our organization.

“USPS is a leader in implementing environmental and socially responsible operations and services. With a presence in most towns and cities across the nation, we’re especially mindful of the impact that today’s actions can have on future generations.” — Thomas G. Day Chief Sustainability Officer

environmentAl compliAnce And risk mAnAgementEnvironmental compliance is fundamental to our sustainability success. We employ proactive programs and practices to ensure compliance with applicable federal, state and local environmental regulations.

Environmental Compliance ReviewsEnvironmental Compliance Reviews (ECRs) are conducted every three years at high-environmental-risk facilities. In 2016 there were 91 ECRs to help us monitor and enforce regulatory compliance for our mail processing, vehicle maintenance and petroleum storage operations. ECRs also help us ensure that our facilities remain in compliance and enforce applicable environmental permits, plans and training.

The data collected during the ECR process, along with feedback from our facility managers, is used to enhance existing regulatory compliance and improve overall environmental performance.

Storage Tank Program

Tanks removed or replaced from facilities

2014 2015 2016

14 6 58

This was the third year of our five-year underground storage tank removal and replacement program. It focuses

Continuous improvement

Management systems approach

Planning

Environmental risk assessment

Standardized corrective actions

Environmental toolkit

Management and program reviews

Continuous improvement drives our approach to environmental compliance.

enVIronmental stewardshIP


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on improving tank infrastructure in order to reduce environmental risk, improve emergency fueling planning, reduce regulatory compliance costs, repair storage tank systems and conserve fuel costs. It also establishes a centralized national monitoring and record-keeping system and provides on-site compliance support. Under this program, we removed or replaced 78 tanks between 2014 and 2016 and plan to remove or replace approximately 24 more by the end of 2017.

Regulated Waste Program and Hazardous Materials ManagementRegulated waste includes hazardous waste and certain types of non-hazardous waste. Postal operations generate a variety of common regulated wastes such as used oil, batteries, electronic waste, used fluorescent lamps and ink-related waste from mail processing. National contracts are in place to manage these wastes. In 2016, we tested various new ink products to ensure that potential related wastes are properly disposed. We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste services contractors. As part of our continuous improvement process, we periodically review regulated waste generation and management data to identify opportunities for waste reduction. We provide annual regulated waste training to employees who manage such waste at our facilities.

An established Spills and Hazardous Materials Release Reporting system ensures all spills and releases to the environment are properly addressed,

remediated and reported, as applicable. In addition, we voluntarily participate under the Emergency Planning and Community Right-to-Know Act to notify state and local emergency response and planning organizations about the hazardous materials located at our facilities that trigger the reporting requirements. These organizations include state emergency response commissions, local emergency planning committees and local fire departments.

Water Quality ProgramWe ensure and maintain national regulatory compliance under the Clean Water Act, Oil Pollution Prevention Act, Safe Drinking Water Act, state and local requirements, and associated USPS policies. We’ve developed a National Water Quality Program for approximately 435 sites. The program addresses issues such as oil spill prevention plans and compliance with stormwater regulations, including submitting required permits, pollution sampling and monitoring our sites to prevent illegal discharges.

Reviews occur in five-year cycles. We look at sites that have on-site or mobile fueling operations, aboveground and underground fuel storage tanks, large emergency generators, pre-treatment systems, vehicle washing, stormwater retention/detention basins and septic systems. In 2016, we completed approximately 170 program reviews across the country. In addition to assessing compliance and reducing potential liabilities, the reviews provide targeted, hands-on, site-level employee training and assistance with data management, record-keeping and other vital environmental functions. They’re

also an opportunity to communicate our policies to employees and provide guidance and management instructions.

Environmental Data ManagementThis year we created a mobile application that provides environmental reviewers with instant access to site-specific data during site assessments. Using this application, reviewers can examine the types of regulated activities at a site while recording observations, capturing photos and reviewing pertinent site information. The application helps the Postal Service further its sustainability initiatives by improving site assessment accuracy, streamlining report formats and maintaining data quality.

energy initiAtivesThe Energy Initiatives team works to create a culture of conservation throughout the Postal Service while reducing our GHG footprint. Additionally, this team is responsible for corporate sustainability reporting to the federal government and other organizations.

To move the mail, we operate facilities and vehicles across the continental United States and territories. These assets are our major source of our energy use. We’re committed to reducing our impact on the environment

Energy Action Month 2016We’re committed to ensuring that we continue a legacy of service and become a more resilient organization preparing for the effects of climate changes. Using our Postal Posts blog and other USPS outreach efforts, we explained the fundamentals of the changing climate and how it can affect human health and safety. The blog provided tips for preparing for warmer weather, severe storms and drought, helping our employees and customers adapt to the changing global environment.


by being a good steward and continuously monitoring our buildings, utility consumption, water and fleets. We demonstrate sustainability leadership by reporting our resource consumption and GHG emissions. Together with our Postal Service colleagues, we set and are working toward internal goals for reducing GHG emissions, water consumption and energy use.

Facility Energy

Our mail processing, vehicle maintenance and retail operations take place in over 32,000 facilities nationwide. In an effort to achieve energy use reduction targets, each year we track and report energy consumption at each facility.

Goal: Reduce facility energy intensity 25 percent by 2025 relative to a 2015 baseline.

Result: 4.1 percent reduction.

Greenhouse GasesOur operations and processes emit GHGs which contribute to changes in the earth’s atmosphere. As sustainability leaders, we’re pursuing ambitious goals to conserve natural

resources and reduce our GHG emissions. We conduct annual GHG inventories and report our results to the federal government, International Postal Corporation and The Climate Registry. These reports help us maintain transparency while measuring progress toward our goals and developing emission reduction strategies.

This year, we established the following targets for GHG reductions:

Goal 1: Reduce Scope 1 and 2 emissions by 25 percent by 2025 relative to a 2008 baseline.

Result 1: 19.3 percent decrease.

Goal 2: Reduce Scope 3 emissions (excluding contract transportation emissions) by 30 percent by 2025 relative to a 2008 baseline.

Result 2: 23.6 percent decrease.

0

50,000

100,000

150,000

200,000

250,000

300,000

FY2016FY2015FY2014

Vehicles Scope 1 & 2 emissionsFacilities

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4.6

4.8

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Num

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Scope 1 & 2GHG cut

since 2008 19.3%

Scope 3GHG cut

since 2008 23.6%

Scope 1, 2 and 3 GHG emissions, including contract transportation (million MTCO2e)

2014 2015 2016

11.6 11.7 12.2

Energy and Utility ManagementOur Enterprise Energy Management System (EEMS) and Utility Management System (UMS) help us inventory, analyze and report our annual facility energy use.

Real-time monitored facilities

2014 2015 2016

324 426 615

EEMS consolidates and standardizes energy-related data and provides a platform for tools to easily access the information. This system provides us with the ability to locally and remotely monitor energy consumption and equipment data to better manage and realize cost and consumption savings. We’re expanding our EEMS network by installing digital communication control and monitoring devices at our facilities.

Goal: Install monitoring devices at 923 facilities by 2020.

Result: 615 monitoring devices installed.

UMS has standardized energy reporting and utility bill management, which enables us to reliably monitor and analyze facilities’ energy data. In 2016, we continued to utilize the Environmental Protection Agency’s Energy Star Portfolio Manager, a benchmarking tool that enables us to measure and track energy and water consumption and GHG emissions. Using this tool, the Postal Service is able to track and estimate our building energy consumption, intensity and change over time, which helps us identify problems and track the progress of improvements.

Scope 1 and 2 emissions reductionSince 2014, we’ve maintained more than 32,000 facilities and added nearly 20,000 vehicles to our fleet. As a result of facility closures, reductions in heating fuel use and improved electrical distribution efficiency, our Scope 1 and 2 emissions have declined.

USPS places its GHG emissions into three categories:�� Scope 1 includes emissions from

Postal Service-owned sources including our vehicles and facilities.

�� Scope 2 includes emissions from indirect sources, such as purchased electricity and steam.

�� Scope 3 includes other indirect emissions sources such as contracted transportation, leased facilities and employees.

2015

2016

4.1% REDUCTIONfrom 2015 to 2016

70,200 BTU/GSF

73,236 BTU/GSF


Water UseWhile water is not a major input for our operations, we’re committed to improving sustainable operations by reducing water consumption at our facilities. Water is consumed primarily through employee use and facility maintenance and we’re proud to report continuous reductions in water consumption since 2008.

Goal: Reduce water use per square foot by 36 percent by 2025 relative to a 2007 baseline.

Result: 50.8 percent reduction.

Operational Resiliency The changing global climate could potentially disrupt our operations and services. In an effort to prepare for climate change risks to our networks and infrastructure, the USPS Climate Change Adaptation Working Group considers plans to prepare for and mitigate climate change impacts such as employee safety, rebuilding costs, downtime and equipment loss. We also published articles online and in the Postal Bulletin related to climate change. Additionally we created a climate tool that provides information on our facilities in a specific geographic area, including the number of employees, vehicles and equipment.

Reduced potablewater intensity

by 50.8%

“We’re taking a proactive approach now to address the impact of climate change on the Postal Service and to better position our organization to manage emerging mission risks, ensure effective operation and identify new resilience opportunities.”

— Thomas G. Day, Chief Sustainability Officer

We’re bolstering operational resilience by enhancing awareness about climate-related health issues. This year, we enhanced our communications efforts with increased monitoring. We developed subject matter safety talks and videos, as well as online training for both supervisors and employees, to provide education about heat- and cold-related illnesses and warning signs.

Vehicle OperationsDuring this report period, our fleet consisted of more than 227,000 vehicles, including 48,600 alternative fuel vehicles. Our vehicles used over 182 million gallons of gasoline equivalent (GGE) to drive over 1.3 billion miles, an increase of nearly 7.3 million miles over 2015. This increase is due to the ever-growing number of delivery points across the country, Sunday delivery service and our same-day delivery service tested in some cities.

Goal: Reduce fleet-wide per-mile GHG emissions 30 percent by 2025 relative to a 2014 baseline (g CO2e/mile).

Result: 2.8 percent increase.

Next Generation Delivery VehiclesWe operate a mixed delivery vehicle fleet, using multiple vehicle models to meet customers’ delivery needs. We operate about 163,000 right-hand-drive Long Life Vehicles (LLVs) purchased between 1987 and 2001. Because most LLVs are beyond their designed useful lifespan, we’re working to replace many of them with the next generation of delivery vehicles, a future class of durable, fuel-efficient delivery vehicles equipped with innovative safety features and technologies. These vehicles will provide reliable and efficient delivery service while honoring our commitment to environmental stewardship and meeting the needs of our employees.

We’re currently in the early stages of the procurement program — five suppliers together will produce 50 prototype USPS next generation delivery vehicles. The prototypes will represent a variety of vehicle sizes and drive configurations, and will feature hybrid technology and alternative fuel capabilities. In 2017, we plan to test prototype vehicles in a range of different climates, population centers and delivery environments. We anticipate deployment of new delivery vehicles by summer 2019. Additionally we'll continue to explore the latest technology to supplement our delivery fleet.

26.7%

144.3 million GGE

182.8 million GGE

INCREASEfrom 2005 to 2016

2016

2005


Emerging Technology: Hydrogen Fuel CellsThe Postal Service utilizes lead-acid battery systems in over 23,000 powered industrial vehicles at processing and distribution centers across the United States. Lead-acid batteries have limited run-time capabilities and long recharging cycles, and are costly to operate and maintain. There also are environmental, health and safety risks associated with the batteries, and they’re subject to federal reporting requirements.

In 2016, we implemented a pilot project replacing lead-acid batteries with hydrogen fuel cell systems in powered industrial vehicles at the Washington, DC, Network Distribution Center. Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals, shortened refueling times, reliable voltages and clean operations. This technology will increase plant and equipment productivity, decrease fueling and maintenance costs, and provide environmental and safety benefits.

For example, the pilot project demonstrated reductions in operator, equipment and warehouse inefficiencies — long term this will recover thousands of operational hours and save millions of dollars per year. Based on the success of the pilot project, we’ll consider future hydrogen fuel cell deployments in powered industrial vehicles across the organization.

Contract Transport/SmartWay We rely on contractors to help move mail via highways, rural routes, air, rail and ship. We track and report our contractors’ vehicle fuel consumption, which comprises our largest source of GHG emissions. In fact, our emissions from contracted mail transportation increased by 10.7 percent since 2008.

We’re taking steps to reduce emissions from contract transportation. As members of the EPA’s SmartWay program, we work with contractors who use alternative-fuel and fuel-efficient vehicles to assist with our operations.

corporAte sustAinAbility initiAtivesThe Corporate Sustainability Initiatives group works to integrate sustainability into daily operations in our facilities and is committed to engaging employees in implementing resource conservation strategies throughout the organization.

0

50

100

150

200

Number of vehicles

FY2016FY2015FY20140.0

0.5

1.0

1.5

2.0

2.5

Fuel consumed (GGEs)

Num

ber o

f veh

icle

sFuel consum

ed (thousand GGEs)

Highway contract route alternative fuel vehiclesIn an effort to substitute alternative fuels in place of petroleum, we’re working with suppliers to increase the number of highway contract route alternative fuel vehicles. Both the number of vehicles and fuel consumed has more than doubled since 2015.

Postmaster General Sustainability Excellence AwardsWe foster a culture of conservation throughout our organization and among our customers, suppliers and peers. The Postmaster General Sustainability Excellence Awards recognize employees implementing innovative solutions to reduce wasted energy, fuel and water, as well as increase the use of environmentally preferable products and diversion of solid waste from landfill to recycling. In addition to recognizing employee efforts with this prestigious award, we share successful sustainability stories and strategies through multiple corporate communications channels.

Green Office Initiatives and Lean Green TeamsOur employees help us promote a conservation culture by participating in formal and informal waste reduction projects at all levels. One mechanism for this Green Office Initiative is the formation of Lean Green Teams. Organized at the facility and regional levels, more than 1,400 teams across the country work on low- and no-cost projects to conserve natural resources. Lean Green Teams along with Lean Six Sigma teams and local managers have been instrumental in helping the Postal Service save money while driving waste out of our operations.

section continued on page 12

10 2016 SuStainability RepoRt 2016 SuStainability RepoRt 11

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largeSt USPS’SNatuRal Gas-pOwEREDfleetRiO GRaNDE DistRiCt, tX

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RecyclingWhile we generate various waste streams, the majority of our waste consists of recyclable materials such as discarded lobby mail, paper and plastic shrink wrap. Recycled waste from our facilities is managed through the National Recycling Operation, which uses our existing infrastructure and networks to backhaul recyclables to central collection points. The National Recycling Operation has been deployed to 97 facilities.

We also work with our mailers to properly address mail. Address-corrected mail is quickly delivered and reduces the amount of paper waste generated. In 2016, we recycled 255,897 tons of material. Paper recycling volume decreased by 61,587 tons from last year due to the increase in properly addressed mail. This is just one way we demonstrate the mantra “reduce, reuse and recycle.” We strive to reduce waste by not creating it in the first place. We’ll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion.

Goal: Divert at least 50 percent of solid waste from landfills.

Result: 50.4 percent solid waste diverted.

Our Sustainability BrandThe Postal Service leads by example, offering services to help customers and federal agencies conduct operations in a more effective manner while contributing to their sustainability goals.

�� USPS BlueEarth Carbon Accounting Service allows commercial customers to determine Scope 3 GHG emissions associated with their mail and packages sent through the Postal Service. The service provides customers with

an online report to analyze carbon emissions and the environmental impacts of their supply chain.

�� USPS BlueEarth Federal Recycling Program helps us support our customers’ waste reduction efforts. This innovative solution is available to participating government agencies and their employees to securely recycle empty printer cartridges and small electronics free of charge. Twenty-seven federal agencies are currently enrolled in the program. Participating agencies receive detailed recycling activity reports to assist them in complying with Executive Order 13693 requirements. Additionally, this program is included as part of the federal National Strategy for Electronic Stewardship.

�� USPS BlueEarth Secure Destruction promotes the protection of our customers and employees privacy in a sustainable manner. This service integrates digital technology with physical mail by automatically intercepting, securely destroying and recycling undeliverable-as-addressed First-Class Mail with no additional fee to our customers. This mail often includes personal protected information that would otherwise be returned to the sender, imposing costs on both our operations and our customers. This program also helps reduce landfill waste and avoids associated carbon emissions through recycling securely destroyed items. In 2016,

more than 30.6 million pieces of undeliverable mail were captured, destroyed and recycled — an increase of more than 5.3 million pieces of mail captured compared to 2015.

Spending on Environmentally Preferable ProductsWe’re committed to helping our cus-tomers and suppliers adopt sustainable practices through various policies, practices and procurement guidelines. USPS employees are encouraged to conserve resources and reduce waste at the source, helping drive down the quantity of landfill waste generated at our facilities. Our free packaging meets Sustainable Forestry Initiative or Forest Stewardship Council certification stan-dards. Additionally, where cost-effective and feasible, we practice environmental stewardship through the implemen-tation of our socially responsible and sustainable supply chain program guidelines and procedures.

This year saw an increased number of environmentally preferable products available in our online catalog ordering system. We purchased over $357.2 million of these products, which weighed 194,468 tons. This is an $84.2 million increase (31 percent) in purchases of environmentally preferable products along with an increase of 13,533 tons (5 percent) over our 2015 accomplishments. By investing in environmentally friendly products, we’re supporting our mission to protect our planet, employees and communities.

Divertedof solid waste from land�lls in 2016

50.4%

Safer Choice Partner of the Year AwardThe EPA honored the U.S. Sustainable Acquisition and Materials Management (SAMM) Interagency Workgroup with a 2016 Safer Choice Partner of the Year Award. The Postal Service actively participates in SAMM, which focuses on developing sustainable acquisition policy recommendations and sharing best practices among federal agencies. As the USPS representative on the team, Sustainability Performance Management Specialist Ron Robbins has researched, evaluated and promoted Safer Choice-labeled products at the Postal Service for more than 20 years. His efforts reflect our dedication to providing safe, environmentally responsible products at our facilities.


G4-27G4-EC1

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Postmaster Natalie Barrios stands near care packages shipped at the Clute, TX, Post Office.

During the holiday season, the Postal Service hires 35,000-40,000 mail handlers, retail associates, tractor trailer drivers and city carrier assistants. Many of our seasonal workers are retired USPS employees.

socIal resPonsIbIlIty

Connecting with our employees, customers and peers near and far is a vital part of our commitment

to sustainability. We live and work in the communities we serve and recognize the positive impacts we can make. We strive to provide our employees with the opportunities and resources to serve our customers and communities in many ways.

community connection We’re proud to host and participate in many national and local activities that serve the public.

Post Office Field TripsStudent field trips to Post Offices offer educators valuable curriculum connections for language arts and social studies course work. On these excursions, students observe retail associates assisting USPS customers, clerks sorting and distributing mail, and carriers making preparations for delivery routes. Students learn about the journey of a letter from entry at the Post Office to its delivery destination, discovering how the mail touches each of our lives. They leave with a better understanding of how we bind communities together, connecting local citizens with the nation and the world.

Support Our Troops We help connect deployed troops with loved ones at home. We make available a

military care kit emblazoned with “America Supports You” to demonstrate our solidarity with deployed troops. The kit contains two Priority Mail APO/FPO Flat Rate Boxes, two Priority

Mail Medium Flat Rate Boxes, Priority Mail tape, Priority Mail address labels and appropriate customs forms. We also list tips on our website for sending military and diplomatic mail to help make it easier to exchange letters and packages between family members and loved ones.

humAn resource initiAtives Our employees are our most valuable assets. By taking care of our employees we ensure that they in turn will take care of our customers. Our human resources initiatives emphasize the Postal Service’s commitment to continuously improving our work culture and encouraging our employees to take an active role in their communities.

Employee Engagement Activities A highly engaged workforce is critical to success and we work hard to improve employee engagement by equipping our workforce with the necessary tools, training and resources. This year, our initiatives included maintaining executive level oversight of the USPS Engagement Strategy, developing more than 18,000 “State of the Team” conversations and



action plans to achieve engagement goals, and delivering employee engagement information to all segments of our organization. Through this program, we identified, trained and certified 26 engagement ambassadors to deliver training to more than 6,000 supervisors and managers. The training is focused on a dozen engagement principles such as providing feedback and ensuring employee opinions count.

This year’s survey results show positive trends in employees feeling that they’re recognized, their opinions count and they’re

“The Postal Service is committed to changing its culture.” - Kelvin Williams, Employee Engagement Executive Director

connected to our mission. Results of our annual Postal Pulse survey, a series of 12 questions gauging employee engagement, show a grand mean score of 3.24 in 2016, an increase from the 2015 score of 3.16. We continue to work toward improving employee engagement by supporting career growth and development programs, providing comprehensive benefits, and demonstrating cultural and ethnic sensitivity through diversity initiatives.

Be the Match - Bone Marrow Drive Since 1997 the Postal Service has been a committed partner to Be the Match Registry, which connects patients searching for a cure and life-saving bone marrow donors. Our employees help increase the chances that patients will find a life-saving bone marrow match. As of September 2016, more than 80 patients found their match among the more than 60,900 USPS employees who joined the registry.

Operation Santa As active members of their communities, our employees are eager to help their fellow citizens, especially during the holiday season. In 1912, we began Operation Santa, where employees and citizens respond to thousands of children’s letters to Santa with personalized responses. By the 1940s, Operation Santa incorporated efforts from charitable organizations, community groups and corporations. Today, we remain committed to making holiday wishes come true.

Stamp Out Hunger National Food DriveThe National Association of Letter Carriers, National Rural Letter Carriers’ Association and other postal employees, supporters and volunteers team up annually to fight hunger in America. On May 14, millions of

Carrier Alert Our employees are heroes in their communities. As carriers deliver their routes they watch out for their customers, especially the homebound and elderly, noticing signs of potential accidents or illnesses such as accumulating mail, lights on during midday, drawn draperies and the absence of tracks on snowy walkways. Our Carrier Alert Program offers monitoring and alert mechanisms to elderly and disabled patrons. Working through sponsoring agencies, participants place Carrier Alert Program decals on their mailboxes and notify local Post Offices of their participation.

Almost every week, the Postal Service learns of lives saved thanks to the actions of our carriers. Here are just a few of these acts of bravery honored in 2016:

�� Hegins, PA, rural carrier Janet Fetterolf performed two heroic acts in one week — she alerted a disoriented man’s relatives that he needed medical attention and she assisted an elderly fall victim by enlisting help from neighbors.

�� Buffalo, NY, letter carrier Joseph Moskal witnessed a man assaulting a teenage girl and intervened, saving her life and restraining the attacker until police arrived.

�� Detroit, MI, letter carrier Marlon Williams provided first aid for two dog bite victims in dire need of medical attention.

�� Boca Raton, FL, letter carrier Richard Herrera assisted a 5-year-old girl until her family found them after she was dropped off at the wrong bus stop.

�� Calumet City, IL, letter carrier Kathyleen Sinwelski noticed accumulating mail at a customer’s home and helped discover that the resident was unconscious.

Visit the USPS Heroes’ Corner to learn more about our employees making a difference in their communities (https://link.usps.com/heroes).

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https://link.usps.com/heroes


Americans participated in the Stamp Out Hunger National Food Drive, the largest one-day food drive in the nation. During this event, carriers collected food donations left by mailboxes and in Post Offices and delivered them to local community food banks, pantries and shelters. This year, the drive collected 80 million pounds of food, well above the previous record of 77 million pounds set in 2010. This effort has successfully delivered more than 1.5 billion pounds of food to hungry Americans since it began in 1993.

Combined Federal Campaign The Combined Federal Campaign (CFC), established in 1961, is an annual fundraising drive in support of charitable organizations. During this six-week campaign, our employees are encouraged to financially contribute to this effort. The CFC provides a recognition program for federal units that achieve high standards of CFC support. In 2016, more than 60,000 USPS employees contributed nationwide to the CFC.

Dog Bite/Attack Prevention ProgramWe’re building on our efforts to keep our employees safe from dog attacks on their routes. In addition to encouraging our customers to secure pets when retrieving mail, they can help alert letter carriers about dogs on their delivery routes. Customers can indicate if there’s a dog at their address using the Package Pickup application, which sends an alert to carriers’ mobile delivery devices while they deliver mail. In addition, the National Dog Bite Prevention Week publicity campaign,

which was May 15-21, distributes information and suggestions for preventing dog attacks.

Semipostal Stamps

The Postal Service offers two semipostal stamps that help raise funds for important causes. The Breast Cancer Research stamp was issued on July 29, 1998, and through 2016 has raised over $83 million for breast cancer research. The Save Vanishing Species stamp was issued on Sept. 30, 2011, and through 2016 has raised nearly $3.6 million to help protect threatened and vanishing species.

diversity initiAtivesOur inclusive environment encourages contributions from different cultures, backgrounds, experiences and perspectives. We promote diversity among employees, in our business products and within our supplier network. These efforts help us cultivate a workplace culture reflecting the rich, diverse histories and experiences of the American people.

Employee Diversity AwarenessWe conduct innovative and inclusive employee engagement and professional development programs to encourage diversity awareness. Our initiatives include Multicultural Awareness Day, Executive Diversity Council, regional councils and committees, cultural resource kits, diversity training programs, networking sessions, lunch and learn series, diversity through film and book club. Our commitment to creating an inclusive work environment has been recognized by Fortune magazine, which ranked us among the “50 best companies for minorities.” By cultivating a diverse workforce we continue to be an “employer of choice,” attracting talented individuals and helping them achieve their career goals.

Diversity StampsPostage stamps are miniature masterpieces capturing the American experience. We issue new stamps every year. The 2016 stamp collection includes portraits and tributes capturing the interests of the American people and highlighting our diverse culture, including:

�� Richard Allen — An inspiring preacher, activist and civic leader

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16 2016 SuStainability RepoRt

whose life and work resonate profoundly in American history. (Issued Feb. 2)

�� Sarah Vaughan — One of America’s greatest jazz and pop singers with a talent for improvisation and skillful phrasing and a voice that ranged over several octaves. (Issued March 29)

�� Festival of Eid — The two most important festivals in the Islamic calendar — Eid al-Fitr and Eid al-Adha — are commemorated. The script on the stamp reads Eidukum mumbarak, “May your Eid be bountiful (or blessed).” (Issued June 10)

�� Jaime Escalante — This beloved California educator used unconventional methods to inspire his inner-city East Los Angeles students to excel in mathematics, proving that “unteachable” students could master even the most difficult subject. (Issued July 13)

Supplier Diversity/Contract Clauses

2016 USPS supplier diversity

2014 2015 2016

Small business($ billion) 3.8 4.5 2.9

Minority business($ million) 434 527 379

Women-owned business ($ million)

677 766 651

In addition to practicing diversity and cultural sensitivity among employees, the Postal Service maintains relationships with diverse suppliers, ensuring all suppliers have equal opportunities to provide value-added products and services. We’re members of leading multicultural business and trade associations such as the National Minority Supplier Development Council, Women’s Business Enterprise National Council and the National Congress

of American Indians. Additionally, in 2016, USPS Supply Management supported strategic supplier diversity initiatives including network optimization and world-class package platform activities. Our work was recognized by FederalNewsRadio.com, DiversityPlus magazine and DiversityBusiness.com which honored the Postal Service as the top government agency for multicultural business opportunities.

In addition to diversity, we foster innovative sustainable partnerships with our suppliers. We hold suppliers to high standards by including sustainable practices and environmental responsibility in suppliers’ contracts and contract performance. When practical and cost effective, we seek suppliers offering environmentally preferable products, and help suppliers identify opportunities to improve sustainability practices. In June 2016, we recognized 10 suppliers for their innovative solutions that exceeded expectations in the areas of supplier performance, supplier excellence, supplier innovation, supplier diversity and sustainability excellence.

This report describes our sustainability initiatives and progress toward our goals. While we’re proud of our progress, we’re conscious of the need for continuous improvement. We remain committed to growing and innovating our business while protecting natural resources, empowering our employees and providing valuable services to our community.

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Supplier Sustainability Excellence AwardDodd Unlimited Inc., a small, woman-owned, contract delivery service provider, won the 2016 USPS Supplier Sustainability Excellence Award for helping the Postal Service adopt more efficient alternative and flex-fuel delivery vehicles.

http://www.federalnewsradio.com

https://diversityplus.com/

http://www.DiversityBusiness.com


GRI # Description 2016 Reference/Response

STRATEGY AND ANALYSIS

G4-1 Provide a statement from the most senior decision-maker of the organization (such as CEO, chair or equivalent senior position) about the relevance of sustainability to the organization and the organization’s strategy for addressing sustainability.

Page iii, Message from the Postmaster General and Chief Sustainability Officer section.

ORGANIZATION PROFILE

G4-3 Report the name of the organization. United States Postal Service (Cover page of 82, USPS 2016 Form 10K)

G4-4 Report the primary brands, products and services.

Although USPS operates as a single segment, revenue is monitored by mail classes, products and shapes. Our management uses the following broad service categories to describe and report on our performance:

� First-Class Mail � Marketing Mail � Shipping and Packages � International � Periodicals � Other: This broad category includes PO Box services, Money Orders, Certified Mail, Registered Mail, Signature Confirmation, Adult Signature and Insurance. (Page 3 of 82, USPS 2016 Form 10K )

G4-5 Report the location of the organization’s headquarters.

475 L’Enfant Plaza, SWWashington, DC 20260 (Cover page of 82, USPS 2016 Form 10K)

G4-6 Report the number of countries where the organization operates, and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics covered in the report.

USPS serves retail and commercial customers in the communications, distribution and delivery, advertising and retail markets throughout the nation and internationally. (Page 1 of 82, USPS 2016 Form 10K) Priority Mail Express International and Priority Mail International services compete in the e-commerce cross-border business. They provide an affordable option for our retail and business customers for much of their shipping needs to over 180 countries. (Page 3 of 82, USPS 2016 Form 10K) The Postal Service also has Commercial Outbound ePacket available to 29 countries. Ongoing bilateral agreements exist with Canada Post, Australia Post, PostNL (Netherlands), China Post Group, Hong Kong Post and Korea Post.

G4-7 Report the nature of ownership and legal form. The U.S. Postal Service is established under the provisions of the Postal Reorganization Act of August 12, 1970, Public Law 91–375, 84 Stat. 719, as an independent establishment of the executive branch of the Government of the United States, under the direction of a Board of Governors, with the Postmaster General as its chief executive officer. The Board of Governors of the Postal Service directs the exercise of its powers through management that is expected to be honest, efficient, economical and mindful of the competitive business environment in which the Postal Service operates. (Page 9 of 348, GPO Title 39)

GRI Index

In order to improve sustainability reporting accuracy and transparency, we have included the following GRI

G4 content index with supplemental

information about our sustainability practices. This table includes the recommended core general disclosures as well as the specific standard

disclosures aligned with the five material aspects determined by stakeholders. We’ve also included the data source(s) referenced for respective disclosures.




G4-8 Report the markets served (including geographic breakdown, sectors served and types of customers and beneficiaries).

Page 1, Optimize Delivery and Network Operations section.Page iv, About Us section.Additionally, with our mandate to provide universal postal services to the nation, USPS serves retail and commercial customers in the United States as well as internationally. Our operations include an extensive and integrated retail, distribution, transportation and delivery network, and USPS operates as a single segment throughout the United States and its territories. (Page 13 of 82, USPS 2016 Form 10K)Prices and fees are determined by our Governors, subject to a review process by the Postal Regulatory Commission (PRC). Services are sold by Post Offices, stations and branches, plus a large network of Contract Postal Units, Community Post Offices, Village Post Offices, commercial outlets that sell stamps and services on our behalf, and through our website www.usps.com. Operations are conducted primarily in the domestic market, with international revenue representing approximately 4 percent of operating revenue for the year ended September 30, 2016. (Page 2 of 82, USPS 2016 Form 10K)

G4-9 Report the scale of the organization. Page 1, Financial Stability section.Page 1, Optimize Delivery and Network Operations section.Additionally, in 2016 USPS had total of 508,908 career employees and 130,881 non-career employees, with a combined workforce of 639,789 employees.(Page 29 of 72, USPS 2016 Annual Report to Congress) With international revenue representing approximately 4 percent of operating revenue as of Sept. 30, 2016, USPS operations are primarily conducted within the United States; international operating costs by region or country or statistics on employees by region are not material. However, USPS is at the core of a $1.4 trillion mailing industry that employs 7.5 million people. USPS has the country’s largest retail network — larger than McDonald’s, Starbucks, and Walmart domestic operations combined. For comparison to private companies of similar scale, USPS would rank 39th on the Fortune 500 list and 137th in the Global Fortune 500 list (https://about.usps.com/who-we-are/postal-facts/welcome.htm).

G4-10 Report the total workforce by employment type, employment contract and region.

USPS employees broken down by headquarters, region and career-type for fiscal years 2016, 2015 and 2014 is available in the 2016 Annual Report to Congress. (Page 29 of 72, USPS 2016 Annual Report to Congress)Additionally, nearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career USPS employees. While a very small portion of USPS operations involves contractors, USPS does not collect statistics on employees and supervised employees of contractors.USPS employees total 639,789 career and non-career employees, with male employees representing 52.8 percent of the total career workforce and female employees representing 47.2 percent of the total career workforce. Of the total career workforce, 263,548 male employees and 192,693 female employees are covered under collective bargaining rights of the following unions:

� American Postal Workers Union (APWU) � APWU Information Technology/Accounting Services (IT/AS) Bargaining Unit � National Association of Letter Carriers (NALC) � National Postal Mail Handlers Union (NPHMU) � National Rural Letter Carriers’ Association (NRLCA) � National Postal Professional Nurses (NPPN) bargaining unit � Postal Police Officers Association

http://www.usps.com

https://about.usps.com/who-we-are/postal-facts/welcome.htm

https://about.usps.com/who-we-are/postal-facts/welcome.htm



G4-11 Report the percentage of employees covered by collective bargaining agreements.

Chapter 9 of the Employee and Labor Relations Manual (ELM) is dedicated to labor relations and discusses labor organizations in detail. The ELM discusses that each employee has the right to form, join or assist a labor organization, and that no interference, restraint, coercion or discrimination to encourage or discourage membership in such an organization shall be effected. (Pages 819 – 866, USPS Employee and Labor Relations Manual, Chapter 9 – Labor Relations)Approximately 91 percent of career employees are covered by collective bargaining agreements and are primarily represented by the APWU, AFL-CIO; NALC, AFL-CIO; NPMHU, AFL-CIO; and NRLCA. (Page 43 of 82, USPS 2016 Form 10K)

G4-12 Describe the organization’s supply chain. Page 1, Optimize Delivery and Network Operations section.Page 16, Supplier Diversity/Contract Clauses section.Additionally, the vice president of Supply Management defines the overall business strategies of the Postal Service’s various supply chains and, in concert with USPS management involved in the supply chains, manages them to promote the Postal Service’s overall business success. (Page 4 of 686, USPS Supplying Principles and Practices) See the USPS Supply Chain Business Strategy online at https://about.usps.com/manuals/spp/html/welcome.htm.

G4-13 Report any significant changes during the reporting period regarding the organization’s size, structure, ownership or its supply chain.

Page 1, Optimize Delivery and Network Operations section.Additionally, USPS executed over 5,000 lease actions, ensuring operations could continue at these properties. The Facilities team implemented portfolio modification projects ranging from emergency replacements to planned infrastructure changes supporting organizational and network initiatives. Facilities completed 52 new construction projects and 42 projects to consolidate or repurpose space within existing owned or leased buildings. These projects enable the Postal Service to provide enhanced services, maintain or restore operations after catastrophic events, and combine multiple facilities into fewer or smaller locations when appropriate. It also allows USPS to take advantage of less costly space, sell large underutilized properties or move to smaller, more efficient space. To meet the continual need to maintain our buildings, USPS completed over 58,500 repair, alteration and replacement projects along with 387 upgrades for the Premier Post Office program. USPS also finished 182 upgrades to maintain customer access. These measures ensure safety, security and serviceability of Postal Service buildings as USPS maintains and right-sizes its network to provide a positive customer experience.(Page 51 of 72, USPS 2016 Annual Report to Congress)

G4-14 Report whether and how the precautionary approach or principle is addressed by the organization.

Page 5, Environmental Compliance Reviews section.The Postal Service adheres to a precautionary approach when it comes to the environment. Beyond assessing compliance, environmental compliance reviews also provide “hands on” training and assistance to sites in data management, record keeping and other vital functions, and also assist in disseminating policies, guidance and tools, and collecting records and data for corporate systems. (Page 67 of 72, USPS 2016 Annual Report to Congress)The Postal Service also has a Strategic Sustainability Performance Plan and Climate Change Adaptation Plan in place, along with many environmental-related initiatives through the Office of Sustainability, to respond to environmental-related challenges.

G4-15 List externally developed economic, environmental and social charters, principles or other initiatives to which the organization subscribes or which it endorses.

Our mandate is to execute the operations of USPS in accordance with U.S. law, and thereby administering universal mail/parcel service to the citizens of the United States and its territories. Additionally, USPS maintains membership with unions listed in G4-10 as well as memberships with the Mailers’ Technical Advisory Committee and Postal Customer Council.

G4-16 List memberships of associations (such as industry associations) and/or national/international advocacy organizations.

Universal Postal UnionInternational Post Corporation The Climate Registry

https://about.usps.com/manuals/spp/html/welcome.htm

https://about.usps.com/manuals/spp/html/welcome.htm



IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-17 List all entities included in the organization’s consolidated financial statements or equivalent documents. Report whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report.

Page 1, Financial Stability section.Additionally, see § 221.1 39 CFR Ch. I (7–1–14 Edition)221.2 Board of Governors.221.3 Office of Inspector General.221.4 Corporate officers.221.5 Headquarters organization.221.6 Field organization.AUTHORITY: 39 U.S.C. 201, 202, 203, 204, 207, 401(2), 402, 403, 404, 409, 1001; Inspector General Act of 1978 (Pub. L. 95–452), 5 U.S.C. App. 3.(Page 37 of 348, Government Publishing Office, Title 39-Postal Service)

G4-18 Explain the process for defining report content and the Aspect Boundaries.

Page iv, About this Report section.Additionally, the stakeholder engagement section of this report further describes the determination of materiality, prioritization of aspects identified and ranking of aspects, and identifies the stakeholders engaged in the reporting process. The scope of the report is defined broadly by operational control. Operational controls include sorting, processing, moving mail, maintaining mail delivery vehicles and conducting administrative tasks within the United States and its territories. Unlike previous versions of the framework, GRI G4 does not include ratings or in accordance levels. GRI G4 also emphasizes materiality; G4 Guidelines require organizations to disclose all material aspects of operations and provides a generic set of disclosures on management approaches. USPS employs the G4 Guidelines to disclose our impacts on climate change, health, safety and other issues while introducing goals and disclosing pertinent information.

G4-19 List all the material Aspects identified in the process for defining report content.

Page v, Materiality Matrix section identifies all material aspects identified in this report.

G4-20 For each material Aspect, report the Aspect Boundary within the organization. Report any specific limitation regarding the Aspect Boundary within the organization.

Page v, Materiality Matrix section identifies all material aspects identified in this report. All aspects identified in this report are material within the organization.

G4-21 For each material Aspect, report the Aspect Boundary outside the organization.Report any specific limitation regarding the Aspect Boundary outside the organization.

Page v, Materiality Matrix section.Additionally, all aspects identified are not considered material outside of the organiza-tion.

G4-22 Report the effect of any restatements of information provided in previous reports, and the reasons for such restatements.

Not applicable for this report period.

G4-23 Report significant changes from previous reporting periods in the Scope and Aspect Boundaries.

Page iv, About this Report section. Additionally, this is second year for Postal Service reporting under GRI G4; however, there are no significant changes from previous reporting periods in the scope and aspect boundaries.

STAKEHOLDER ENGAGEMENT

G4-24 Provide a list of stakeholder groups engaged by the organization.

Page iv, 2016 Stakeholder Engagement Process section.Additionally, our internal stakeholder group consisted of seven individuals representing six USPS departments. USPS also surveyed the Mailers’ Technical Advisory Committee, a group of customers who work with the Postal Service to enhance the value of mail.

G4-25 Report the basis for identification and selection of stakeholders with whom to engage.

Page iv, 2016 Stakeholder Engagement Process section.



G4-26 Report the organization’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process.

Page iv, 2016 Stakeholder Engagement Process section.Additionally, the internal stakeholder group met in person five times over three months. The external customer group met once in person, during which we presented information about the GRI G4 stakeholder engagement process. Subsequent engagements with the external group were conducted online via an emailed survey soliciting opinions on previously identified material aspects and an email thanking the group members for their participation and summarizing survey results.

G4-27 Report key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting. Report the stakeholder groups that raised each of the key topics and concerns.

Page iv, 2016 Stakeholder Engagement Process section.Page 13, Employee Engagement Activities section.Additionally, USPS delivered the Postal Pulse survey to 600,000 career and non-career employees. Thirty-two percent of employees completed and returned the survey. (Page 21 of 72, USPS 2016 Annual Report to Congress)

REPORT PROFILE

G4-28 Reporting period (such as fiscal or calendar year) for information provided.

Fiscal year 2016 performance beginning Oct. 1, 2015, and ending Sept. 30, 2016.

G4-29 Date of most recent previous report (if any). April 2016

G4-30 Reporting cycle (such as annual, biennial). Annual

G4-31 Provide the contact point for questions regarding the report or its contents.

United States Postal ServiceOffice of Sustainability, Room 2801475 L’Enfant Plaza SWWashington, DC [email protected]

G4-32 Report the ‘in accordance’ option the organization has chosen.Report the GRI Content Index for the chosen option.Report the reference to the External Assurance Report, if the report has been externally assured. GRI recommends the use of external assurance but it is not a requirement to be ‘in accordance’ with the Guidelines.

The Postal Service is reporting in accordance with G4 Core content index. External assurance is not being pursued for 2016.

G4-33 Report the organization’s policy and current practice with regard to seeking external assurance for the report.

This report was prepared in accordance with the GRI G4 Guidelines. In defining the content, USPS followed a process of establishing priorities based on determining material sustainability aspects for USPS (includes economic, environmental and social impacts) and reporting against aspects that are determined as significant to USPS.

GOVERNANCE

G4-34 Report the governance structure of the organization, including committees of the highest governance body. Identify any committees responsible for decision-making on economic, environmental and social impacts.

USPS is governed by an 11-member board consisting of independent Governors appointed by the President with the advice and consent of the Senate, Postmaster General and Deputy Postmaster General. As of the end of FY2016, one Governor was on the board (James H. Bilbray, Chairman of the Board of Governors). (Page 65 of 82, USPS 2016 Form 10K )

mailto:sustainability%40usps.gov?subject=



ETHICS AND INTEGRITY

G4-56 Describe the organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics.

Our mission is to provide reliable, efficient, trusted and affordable universal delivery service that binds the nation together, as it has for more than 240 years. (Page 12 of 72, USPS 2016 Annual Report to Congress) The Postal Service is committed to maintaining its standing as a responsible service organization, and understands that socially responsible behavior is good for business. This principle solidifies this element of corporate culture and enhances the trust factor in key business relationships. All USPS employees must adhere to the “Standards of Ethical Conduct for Employees of the Executive Branch,” 5 CFR 2635 and the “Supplemental Standards of Ethical Conduct for Postal Employees” at 5 CFR Part 7001. Certain high-level employees are also subject to the Senior Financial Managers’ Code of Ethics. Both codes can be found on the Postal Service’s website at: https://about.usps.com/manuals/spp/html/overview_007.htm, and https://about.usps.com/who-we-are/financials/senior-financial-managers-code-of-ethics-2010.pdf.

ECONOMIC

G4 -EC1 Direct economic value generated and distributed.

Page 1, Financial Stability section.Page 13, Community Connection section.Additionally, the effect of a nearly $1.1 billion non-cash adjustment for deferred revenue, operating revenue was nearly $70.4 billion for 2016, an increase of $1.6 billion, or 2.3 percent, from the prior year. (Pages 12 and 13 of 82, USPS 2016 Form 10K) The total operating cost for the Postal Service was $76.9 billion in 2016. (Page 39 of 82, USPS 2016 Form 10K) The total compensation and benefits expense for the Postal Service was $48.7 billion in 2016. (Form 10k, Page 20 of 82) Net cash used in financing activities, for the periods ended Sept. 30, 2016, 2015 and 2014 were $51 million, $62 million and $148 million, respectively, consisting primarily of cash payments on capital lease obligations. (Page 32 of 82 USPS 2016 Form 10K)The Postal Service incurred a net loss of $5.6 billion for the year ended Sept. 30, 2016, compared to a net loss of $5.1 billion for 2015, an increase in net loss of $531 million, or 10.5 percent. Although shipping and packages drove the growth in operating revenue, these gains were outpaced by increases in operating expenses, driven by compensation and benefits, and to a lesser extent, workers’ compensation expenses largely outside of management’s control. (Page 14 of 82, USPS 2016 Form 10K)Fixed-rate notes can be either callable or non-callable at the option of the Postal Service. All of the Postal Service’s debt is unsecured, not subject to sinking fund requirements and can be repaid at any time at a price determined by the Secretary of the Treasury based on prevailing interest rates in the United States Treasury security market at the time of repayment. As of Sept. 30, 2016, the premium associated with a prepayment of all debt was $598 million based on prevailing interest rates. The weighted average interest rate for all outstanding debt was 1.4 percent as of September 30, 2016. (Page 52 of 82, USPS 2016 Form 10K)The Postal Service has significant transactions with foreign countries in payables and receivables, with $453 million in payables to foreign countries. (Page 51 of 82, USPS 2016 Form 10K)

https://about.usps.com/manuals/spp/html/overview_007.htm

https://about.usps.com/manuals/spp/html/overview_007.htm

https://about.usps.com/who-we-are/financials/senior-financial-managers-code-of-ethics-2010.pdf

https://about.usps.com/who-we-are/financials/senior-financial-managers-code-of-ethics-2010.pdf



G4-EC7 Development and impact of infrastructure investments and services supported.

Page 1, Optimize Delivery and Network Operations section.Additionally, USPS is pursuing the following investments to improve our infrastructure and service:

� Mode conversions: The Postal Service continues to provide consistent and reliable service in an efficient manner by converting deliveries to a more centralized mode. Mode conversions also enable the Postal Service to reduce transportation costs.

� Route evaluations and adjustments: Field management continues to inspect, evaluate and adjust delivery routes as necessary to control costs while improving service.

� Investing in the delivery fleet: In 2016 the Postal Service invested $221.7 million in our delivery fleet. This includes 3,339 RAM ProMaster extended capacity delivery vehicles, purchased for $105.4 million to replace our aging fleet of 2006 minivans. (Page 52 of 72, USPS 2016 Annual Report to Congress)

� Air cargo optimization: During FY2016, there was a significant focus on improving our air network modeling capability and accuracy.

� Ground transportation optimization: Highway transportation expenses for 2016 were $3.8 billion. This is an increase of 5 percent over 2015.

� International operations optimization: The Postal Service continues to focus on improving customer service performance and reducing cost through increased visibility for international civilian, DOD (military mail) and Department of State volume using customs data to improve operational processes. (Page 53 of 72, USPS 2016 Annual Report to Congress)

PRODUCT RESPONSIBILITY

G4-PR5 Results of surveys measuring customer satisfaction.

Page 3, Customer Service and Satisfaction section.Additionally, USPS plans to build on its cross-functional collaboration with stakeholders from all customer contact channels to further improve customer focus and drive performance. (Page 18 of 72, USPS 2016 Annual Report to Congress) Additional results of the Customer Insight (CI) survey include:

Touch Point CI Score (Percentage)

Business service network 95.1

Point of sale 86.4

Delivery (residential) 79.9

Delivery (small/medium businesses) 72.6

Customer care center 85.2

USPS continues to develop videos, publications, service talks and training for employees to provide education and highlight elements of our customers’ visits that matter most to them. USPS will continue to work to improve response rates to our surveys. (Page 19 of 72, USPS 2016 Annual Report to Congress)



G4-PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.

Page 2, Digital and Physical Security section.Additionally, while USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data, in November 2014 USPS announced a significant cyber intrusion had compromised large amounts of data. Management has taken substantive positive action since the cyber intrusion based on input from business and industry experts. Specifically, the Postal Service is aligning its structure, operations and resourcing of cybersecurity functions with industry best practices. Cybersecurity will become increasingly important for the Postal Service if it follows other enterprises and adopts new “Internet of things” technologies within its network. (Page 19 of 53, 2016 OIG Fall Semi-annual Report to Congress)All employees with access to USPS information technology or who handle payment card industry information now must complete annual training to keep sensitive information secure and protect payment cardholder data. (https://about.usps.com/postal-bulletin/2016/pb22435/html/info_002.htm) USPS also has a CyberSecurity Operations Center (CSOC) responsible for identifying and mitigating cyber threats. As part of this process to protect USPS systems and information from cybercriminals, the CSOC conducts ongoing threat detection, threat analysis and incident response to maintain the security of USPS networks and resources. (https://about.usps.com/postal-bulletin/2016/pb22454/html/info_010.htm)

SOCIETY

G4-SO11

Number of grievances about impacts on society filed, addressed and resolved through formal grievance mechanisms

Page 13, Community Connection section.Page 13, Human Resource Initiatives section.Our Consumer and Industry Affairs group is responsible for Postal Service customer interaction and support for individual consumers, small businesses, large corporations and commercial mailers. The Office of Consumer Advocate and Customer Relations serves to confirm the “voice of the customer” is accurately represented to the organization and is focused on ensuring that each customer has a positive customer experience. The primary objective is to improve customer interactions with the Postal Service and position “the value of the mail” in a consumer and business environment. In addition, the group develops a strategic direction, policy improvements, program enhancements and standardized expectations to field consumer and industry contact operations. Consumer and Industry Affairs reaffirms the importance of customer service and shares customer insights through monthly videos, weekly messaging, training, tools and resources that inform and engage employees. We are continuously working to improve our standardized complaint handling and resolution process, which provides guidelines encompassing initial contact through resolution. A better resolution process for the customer increases their overall satisfaction. We want to improve processes and enhance systems in ways that support timely and thorough resolution of customer concerns and inquiries. (Page 39 of 72, USPS 2016 Annual Report to Congress)The Postal Service is committed to providing equal employment opportunity for all employees. This is a critical component in our efforts to recruit, develop and retain a diverse workforce. The Postal Service does not tolerate harassment of any type and holds managers responsible for preventing it. (Page 45 of 72, USPS 2016 Annual Report to Congress)

https://about.usps.com/postal-bulletin/2016/pb22435/html/info_002.htm






DISCLOSURE ON MANAGEMENT APPROACH

DMA-Public Policy

Describe the significant issues that are the focus of the organization’s participation in public policy development and lobbying.

Page 2, Government Relations/Legislative and Regulatory Reform section.While we continue to face financial challenges that require legislative and regulatory changes, our recent results reflect our progress. The Postal Service continues to work with Congress and other key stakeholders to develop legislation that results in meaningful, beneficial reforms to improve our business model and help to ensure long-term financial stability. In addition, we will urge the PRC to enact regulatory changes as a result of the 10-year regulatory review, beginning after Dec. 20, 2016, that will enable the Postal Service to achieve and maintain financial stability by replacing the current price cap with an alternative regulatory structure that provides the increased pricing flexibility and speed to market necessary for us to operate in an ever-changing market. At the same time, we are continuously taking steps to succeed in a growing and highly competitive marketplace. The continued growth of shipping and package services is a direct result of our efforts to offer consumers more choices, excellent value and reliable service. The digital economy offers an unprecedented opportunity to address the needs of both our mail and package customers, and we are making improvements to our network and infrastructure in order to meet those needs. However, the combination of increased package revenue and operational efficiencies still does not sufficiently offset mail volume declines, inflationary pressures on expenses, and statutory requirements for accelerated retiree health care prefunding. This underscores the need for a combination of continued revenue growth, continued focus on finding cost savings where possible, and legislative and regulatory reforms to ensure we can restore our financial viability, while continuing to meet our universal service obligation. (Page 6 of 37, Future Ready: U.S. Postal Service Five Year Strategic Plan, Fiscal Years 2017 to 2021)

TrademarksThe eagle logo, the trade dress of USPS packaging, the letter carrier uniform, trade dress of the round top collection box and the postal truck and the following word marks are among the many trademarks owned by the United States Postal Service®: First-Class™, First-Class Mail®, Forever®, Post Office™, Priority Mail®, Priority Mail Express®, Priority Mail Express International®, Priority Mail International®, Marketing Mail®, United States Postal Inspection Service®, United States Postal Service®, U.S. Mail®, U.S. Postal Service®, USPS®, USPS BlueEarth®, usps.com®.

Additional trademarks: Be The Match Registry®, Forest Stewardship Council®, Global Reporting Initiative™, Sustainable Forestry Initiative®, The Climate Registry®.

Year References: All references to a specific year refer to the Postal Service fiscal year (FY) ending Sept. 30. However specific month and year references pertain to the calendar date.

© 2017 United States Postal Service.

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Annual Sustainability Report 2016...1998/07/29 · 2016 Annual Sustainability Report, we engaged stakeholders in identifying areas that are critical to our success. This helps increase