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USPS 2017 ANNUAL SUSTAINABILITY REPORT

United States Postal Service 2017 Annual Sustainability Reportabout.usps.com/.../green/report/2017/annual-sustainability-report2.pdf · iv. 2017 Annual Sustainability Report. Deliver

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USPS 2017

ANNUAL

SUSTAINABILITYREPORT

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

Megan J Brennan

Postmaster General and Chief Executive Officer

MESSAGE FROM THE POSTMASTER GENERAL AND CHIEF SUSTAINABILITY OFFICER

The United States Postal Service plays a vital role in American commerce and binds the nation together through secure reliable affordable and universal mail delivery This unique commitment allows us to serve the public by delivering to every address in the United States and gives us a special responsibility to be good stewards of the environment in the communities where we live and work nationwide

As one of the largest federal agencies we understand the importance of leading by example which is reflected in our ongoing commitment to sustainability and through the release of an annual sustainability report

We solicited opinions from all departments within our organization to identify economic environmental and social areas that are important to our customers suppliers employees and others Engaging our stakeholders in this way enables us to ensure total transparency in the creation of our 2017 report

As you read through the report you will see that we were able to reduce facility energy intensity greenhouse gas emissions and water consumption We achieved this despite the challenges of a rapidly evolving business environment a highly competitive marketplace and constraints to our current business model

This report is a testament that through the elimination of waste reductions in energy and fuel use we were able to significantly lower our carbon footprint and drive down costs mdash practices that are good for the environment and also good for business

Today and for the future we pledge to the American public that we will continue to pursue environmental stewardship as part of our immediate and long-term strategic plans and policies With every delivery the Postal Service is committed to making a positive impact on the environment mdash doing our part to ensure that future generations enjoy a healthy planet

Thomas G Day

Chief Sustainability Officer

GRI 102-14 102-16

iii

iv 2017 Annual

Sustainability Report

Deliver to 1573 million delivery points nationwide

Operate over 32000 facilities

2017 operating revenue of $696 billion

Deliver more than 1495 billion mailpieces

$

Worldrsquos largest post delivering 47 of the worldrsquos mail

civilian employer in the United States with more than 644000 employees One of the

largest civilian employers of veterans

Utilize more than 230900 vehicles

2ndnd2

$0Receive tax dollars for operations

ABOUT THIS REPORT

About UsOur mandate is to provide universal postal services to the nation We are subject to numerous federal state and local laws and regulations Wersquore governed by a Board of Governors consisting of the Postmaster General Deputy Postmaster General and nine independent governors appointed by the president In fiscal year 2017 the term of the last remaining independent governor expired and the board consisted of

only our Postmaster General and Deputy Postmaster General However three Governor nominations have been sent to the US Senate and await confirmation We serve a diverse customer base of retail and commercial customers in the United States as well as internationally and our operations are funded through the sale of our products and services mdash not with tax dollars

Not Your Ordinary Operation

We have a rich history of meeting our customer needs regardless of how unique they are From using stagecoaches hot air balloon Railway Post Offices and even dog sleds in the

past to current-day use of mules in the Grand Canyon ldquopail mailrdquo to passing ships on the Detroit River snowmobiles and cable cars mdash we deliver for our customers

GRI102-2102-5

102-6102-7

102-18

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

v

We are embracing innovation and implementing initiatives to reduce our costs and provide the highest quality of service to our customers Our strategic initiatives and continuous improvement efforts are guided by our Future Ready Fiscal Years 2017 to 2021 US Postal Service Five-Year Strategic Plan

As a business entity that delivers almost half of the worldrsquos mail mdash and being a presence in every community in our country mdash we provide the best possible service to

our customers to remain competitive We measure our strategic performance by examining metrics on

High-quality service

Excellent customer experiences

Safety in the workplace

Workforce engagement

Financial health

ABOUT THIS REPORT

About Us

vi 2017 Annual

Sustainability Report

About Sustainability ReportingIn this report we link our impacts and corporate initiatives to sustainability with a focus on how our operations affect the three areas of sustainability

Economy

Environment

Society

This includes detailing our initiatives and progress in addressing sustainability topics and describing the processes in place to address performance and operational changes

Additionally this report highlights key initiatives managed by our Office of Sustainability These include

Reduction of facility energy and water use

Alternative energy use and technology

Improvement of vehicle fleet efficiency

Environmental compliance

Recycling

GRI102-46 102-49 102-52

ABOUT THIS REPORT

About Sustainability Reporting

Also included throughout this report are key performance indicators showing organizational sustainability trends and progress towards objectives and targets

Consistent with previous years this report follows the Global Reporting Initiative (GRI) framework for sustainability reporting This includes an examination of the sustainability impacts of our operations through stakeholder participation This report transitions from using GRI G4 guidelines to using newly updated GRI Standards We used the updated framework to enhance our stakeholder engagement approach streamline disclosures and clarify our reporting content This results in a report thatrsquos more readable and transparent The three areas of sustainability are addressed in the following sections of this report Economic Viability Environmental Stewardship and Social Responsibility The reporting period is Oct 1 2016 to Sept 30 2017 and accordingly quantitative data in the report is from fiscal year 2017 unless otherwise noted

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

vii

2017 Stakeholder Engagement Process The goal of our stakeholder engagement process is to determine our topics mdash economic social and environmental elements of our operations By engaging our stakeholders we use their feedback to identify the topics and rank them for most significant impacts and influence The stakeholder engagement process has been continually refined since it was piloted in 2015 to be more efficient and expand the internal stakeholder group to solicit a broader range of opinions Currently we get stakeholder feedback from an internal group that includes representatives from across our organization We also engage our external customers through focused surveys

In 2015 our stakeholder team developed a list of 13 topics that continue to be reviewed and prioritized each year Our goal is to engage a wider range of internal and external stakeholders in the future

Materiality Assessment Materiality is the principle that determines which topics are essential to report ldquoMaterial topicsrdquo reflect significant economic environmental and social impacts of our organization or substantively influence the decisions of our stakeholders We examine issues consider business strategies and get customer and stakeholder input Topics are assessed based on significance and impact Theyrsquore ranked by internal and external stakeholders according to the likelihood andor severity of impact and possible risks or

The top five highest scoring topics below (in bold) are our material topics for 2017

1 Optimize delivery and network operations

2 Digital and physical security

3 Financial stability

4 Customer service and satisfaction

5 Innovation

6 Employee health safety and wellness

7 Energy fuel and emissions

8 Environmental compliance

9 Climate change adaptationoperational resiliency

10 Government relationslegislative and regulatory reform

11 Brand image

12 Employee engagement

13 Community engagement

opportunities such as effects on our long-term success and opportunities to gain advantages or influence outcomes within our organization This process identifies our material topics

We revised our methodology and topic scoring process to meet the intent of GRI Standards to ensure transparency consistency and accountability in our reporting Our internal stakeholder group rescored the 13 topics for significance For more information on the

topic scoring process see GRI disclosure 102-43 in the GRI Content Index

While each topic can impactour business and operationsand each topic is covered to some degree in this report only the material topics are discussed in detail and included in the 2017 GRI Content Index This year we focused on updating the reporting process to align with the new GRI Standards and progress toward previously identified measurable goals

GRI 102-40 102-42

102-43 102-44

102-46 102-47

102-49 ABOUT THIS REPORT

2017 StakeholderEngagement Process

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

Megan J Brennan

Postmaster General and Chief Executive Officer

MESSAGE FROM THE POSTMASTER GENERAL AND CHIEF SUSTAINABILITY OFFICER

The United States Postal Service plays a vital role in American commerce and binds the nation together through secure reliable affordable and universal mail delivery This unique commitment allows us to serve the public by delivering to every address in the United States and gives us a special responsibility to be good stewards of the environment in the communities where we live and work nationwide

As one of the largest federal agencies we understand the importance of leading by example which is reflected in our ongoing commitment to sustainability and through the release of an annual sustainability report

We solicited opinions from all departments within our organization to identify economic environmental and social areas that are important to our customers suppliers employees and others Engaging our stakeholders in this way enables us to ensure total transparency in the creation of our 2017 report

As you read through the report you will see that we were able to reduce facility energy intensity greenhouse gas emissions and water consumption We achieved this despite the challenges of a rapidly evolving business environment a highly competitive marketplace and constraints to our current business model

This report is a testament that through the elimination of waste reductions in energy and fuel use we were able to significantly lower our carbon footprint and drive down costs mdash practices that are good for the environment and also good for business

Today and for the future we pledge to the American public that we will continue to pursue environmental stewardship as part of our immediate and long-term strategic plans and policies With every delivery the Postal Service is committed to making a positive impact on the environment mdash doing our part to ensure that future generations enjoy a healthy planet

Thomas G Day

Chief Sustainability Officer

GRI 102-14 102-16

iii

iv 2017 Annual

Sustainability Report

Deliver to 1573 million delivery points nationwide

Operate over 32000 facilities

2017 operating revenue of $696 billion

Deliver more than 1495 billion mailpieces

$

Worldrsquos largest post delivering 47 of the worldrsquos mail

civilian employer in the United States with more than 644000 employees One of the

largest civilian employers of veterans

Utilize more than 230900 vehicles

2ndnd2

$0Receive tax dollars for operations

ABOUT THIS REPORT

About UsOur mandate is to provide universal postal services to the nation We are subject to numerous federal state and local laws and regulations Wersquore governed by a Board of Governors consisting of the Postmaster General Deputy Postmaster General and nine independent governors appointed by the president In fiscal year 2017 the term of the last remaining independent governor expired and the board consisted of

only our Postmaster General and Deputy Postmaster General However three Governor nominations have been sent to the US Senate and await confirmation We serve a diverse customer base of retail and commercial customers in the United States as well as internationally and our operations are funded through the sale of our products and services mdash not with tax dollars

Not Your Ordinary Operation

We have a rich history of meeting our customer needs regardless of how unique they are From using stagecoaches hot air balloon Railway Post Offices and even dog sleds in the

past to current-day use of mules in the Grand Canyon ldquopail mailrdquo to passing ships on the Detroit River snowmobiles and cable cars mdash we deliver for our customers

GRI102-2102-5

102-6102-7

102-18

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

v

We are embracing innovation and implementing initiatives to reduce our costs and provide the highest quality of service to our customers Our strategic initiatives and continuous improvement efforts are guided by our Future Ready Fiscal Years 2017 to 2021 US Postal Service Five-Year Strategic Plan

As a business entity that delivers almost half of the worldrsquos mail mdash and being a presence in every community in our country mdash we provide the best possible service to

our customers to remain competitive We measure our strategic performance by examining metrics on

High-quality service

Excellent customer experiences

Safety in the workplace

Workforce engagement

Financial health

ABOUT THIS REPORT

About Us

vi 2017 Annual

Sustainability Report

About Sustainability ReportingIn this report we link our impacts and corporate initiatives to sustainability with a focus on how our operations affect the three areas of sustainability

Economy

Environment

Society

This includes detailing our initiatives and progress in addressing sustainability topics and describing the processes in place to address performance and operational changes

Additionally this report highlights key initiatives managed by our Office of Sustainability These include

Reduction of facility energy and water use

Alternative energy use and technology

Improvement of vehicle fleet efficiency

Environmental compliance

Recycling

GRI102-46 102-49 102-52

ABOUT THIS REPORT

About Sustainability Reporting

Also included throughout this report are key performance indicators showing organizational sustainability trends and progress towards objectives and targets

Consistent with previous years this report follows the Global Reporting Initiative (GRI) framework for sustainability reporting This includes an examination of the sustainability impacts of our operations through stakeholder participation This report transitions from using GRI G4 guidelines to using newly updated GRI Standards We used the updated framework to enhance our stakeholder engagement approach streamline disclosures and clarify our reporting content This results in a report thatrsquos more readable and transparent The three areas of sustainability are addressed in the following sections of this report Economic Viability Environmental Stewardship and Social Responsibility The reporting period is Oct 1 2016 to Sept 30 2017 and accordingly quantitative data in the report is from fiscal year 2017 unless otherwise noted

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

vii

2017 Stakeholder Engagement Process The goal of our stakeholder engagement process is to determine our topics mdash economic social and environmental elements of our operations By engaging our stakeholders we use their feedback to identify the topics and rank them for most significant impacts and influence The stakeholder engagement process has been continually refined since it was piloted in 2015 to be more efficient and expand the internal stakeholder group to solicit a broader range of opinions Currently we get stakeholder feedback from an internal group that includes representatives from across our organization We also engage our external customers through focused surveys

In 2015 our stakeholder team developed a list of 13 topics that continue to be reviewed and prioritized each year Our goal is to engage a wider range of internal and external stakeholders in the future

Materiality Assessment Materiality is the principle that determines which topics are essential to report ldquoMaterial topicsrdquo reflect significant economic environmental and social impacts of our organization or substantively influence the decisions of our stakeholders We examine issues consider business strategies and get customer and stakeholder input Topics are assessed based on significance and impact Theyrsquore ranked by internal and external stakeholders according to the likelihood andor severity of impact and possible risks or

The top five highest scoring topics below (in bold) are our material topics for 2017

1 Optimize delivery and network operations

2 Digital and physical security

3 Financial stability

4 Customer service and satisfaction

5 Innovation

6 Employee health safety and wellness

7 Energy fuel and emissions

8 Environmental compliance

9 Climate change adaptationoperational resiliency

10 Government relationslegislative and regulatory reform

11 Brand image

12 Employee engagement

13 Community engagement

opportunities such as effects on our long-term success and opportunities to gain advantages or influence outcomes within our organization This process identifies our material topics

We revised our methodology and topic scoring process to meet the intent of GRI Standards to ensure transparency consistency and accountability in our reporting Our internal stakeholder group rescored the 13 topics for significance For more information on the

topic scoring process see GRI disclosure 102-43 in the GRI Content Index

While each topic can impactour business and operationsand each topic is covered to some degree in this report only the material topics are discussed in detail and included in the 2017 GRI Content Index This year we focused on updating the reporting process to align with the new GRI Standards and progress toward previously identified measurable goals

GRI 102-40 102-42

102-43 102-44

102-46 102-47

102-49 ABOUT THIS REPORT

2017 StakeholderEngagement Process

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

iv 2017 Annual

Sustainability Report

Deliver to 1573 million delivery points nationwide

Operate over 32000 facilities

2017 operating revenue of $696 billion

Deliver more than 1495 billion mailpieces

$

Worldrsquos largest post delivering 47 of the worldrsquos mail

civilian employer in the United States with more than 644000 employees One of the

largest civilian employers of veterans

Utilize more than 230900 vehicles

2ndnd2

$0Receive tax dollars for operations

ABOUT THIS REPORT

About UsOur mandate is to provide universal postal services to the nation We are subject to numerous federal state and local laws and regulations Wersquore governed by a Board of Governors consisting of the Postmaster General Deputy Postmaster General and nine independent governors appointed by the president In fiscal year 2017 the term of the last remaining independent governor expired and the board consisted of

only our Postmaster General and Deputy Postmaster General However three Governor nominations have been sent to the US Senate and await confirmation We serve a diverse customer base of retail and commercial customers in the United States as well as internationally and our operations are funded through the sale of our products and services mdash not with tax dollars

Not Your Ordinary Operation

We have a rich history of meeting our customer needs regardless of how unique they are From using stagecoaches hot air balloon Railway Post Offices and even dog sleds in the

past to current-day use of mules in the Grand Canyon ldquopail mailrdquo to passing ships on the Detroit River snowmobiles and cable cars mdash we deliver for our customers

GRI102-2102-5

102-6102-7

102-18

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

v

We are embracing innovation and implementing initiatives to reduce our costs and provide the highest quality of service to our customers Our strategic initiatives and continuous improvement efforts are guided by our Future Ready Fiscal Years 2017 to 2021 US Postal Service Five-Year Strategic Plan

As a business entity that delivers almost half of the worldrsquos mail mdash and being a presence in every community in our country mdash we provide the best possible service to

our customers to remain competitive We measure our strategic performance by examining metrics on

High-quality service

Excellent customer experiences

Safety in the workplace

Workforce engagement

Financial health

ABOUT THIS REPORT

About Us

vi 2017 Annual

Sustainability Report

About Sustainability ReportingIn this report we link our impacts and corporate initiatives to sustainability with a focus on how our operations affect the three areas of sustainability

Economy

Environment

Society

This includes detailing our initiatives and progress in addressing sustainability topics and describing the processes in place to address performance and operational changes

Additionally this report highlights key initiatives managed by our Office of Sustainability These include

Reduction of facility energy and water use

Alternative energy use and technology

Improvement of vehicle fleet efficiency

Environmental compliance

Recycling

GRI102-46 102-49 102-52

ABOUT THIS REPORT

About Sustainability Reporting

Also included throughout this report are key performance indicators showing organizational sustainability trends and progress towards objectives and targets

Consistent with previous years this report follows the Global Reporting Initiative (GRI) framework for sustainability reporting This includes an examination of the sustainability impacts of our operations through stakeholder participation This report transitions from using GRI G4 guidelines to using newly updated GRI Standards We used the updated framework to enhance our stakeholder engagement approach streamline disclosures and clarify our reporting content This results in a report thatrsquos more readable and transparent The three areas of sustainability are addressed in the following sections of this report Economic Viability Environmental Stewardship and Social Responsibility The reporting period is Oct 1 2016 to Sept 30 2017 and accordingly quantitative data in the report is from fiscal year 2017 unless otherwise noted

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

vii

2017 Stakeholder Engagement Process The goal of our stakeholder engagement process is to determine our topics mdash economic social and environmental elements of our operations By engaging our stakeholders we use their feedback to identify the topics and rank them for most significant impacts and influence The stakeholder engagement process has been continually refined since it was piloted in 2015 to be more efficient and expand the internal stakeholder group to solicit a broader range of opinions Currently we get stakeholder feedback from an internal group that includes representatives from across our organization We also engage our external customers through focused surveys

In 2015 our stakeholder team developed a list of 13 topics that continue to be reviewed and prioritized each year Our goal is to engage a wider range of internal and external stakeholders in the future

Materiality Assessment Materiality is the principle that determines which topics are essential to report ldquoMaterial topicsrdquo reflect significant economic environmental and social impacts of our organization or substantively influence the decisions of our stakeholders We examine issues consider business strategies and get customer and stakeholder input Topics are assessed based on significance and impact Theyrsquore ranked by internal and external stakeholders according to the likelihood andor severity of impact and possible risks or

The top five highest scoring topics below (in bold) are our material topics for 2017

1 Optimize delivery and network operations

2 Digital and physical security

3 Financial stability

4 Customer service and satisfaction

5 Innovation

6 Employee health safety and wellness

7 Energy fuel and emissions

8 Environmental compliance

9 Climate change adaptationoperational resiliency

10 Government relationslegislative and regulatory reform

11 Brand image

12 Employee engagement

13 Community engagement

opportunities such as effects on our long-term success and opportunities to gain advantages or influence outcomes within our organization This process identifies our material topics

We revised our methodology and topic scoring process to meet the intent of GRI Standards to ensure transparency consistency and accountability in our reporting Our internal stakeholder group rescored the 13 topics for significance For more information on the

topic scoring process see GRI disclosure 102-43 in the GRI Content Index

While each topic can impactour business and operationsand each topic is covered to some degree in this report only the material topics are discussed in detail and included in the 2017 GRI Content Index This year we focused on updating the reporting process to align with the new GRI Standards and progress toward previously identified measurable goals

GRI 102-40 102-42

102-43 102-44

102-46 102-47

102-49 ABOUT THIS REPORT

2017 StakeholderEngagement Process

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

v

We are embracing innovation and implementing initiatives to reduce our costs and provide the highest quality of service to our customers Our strategic initiatives and continuous improvement efforts are guided by our Future Ready Fiscal Years 2017 to 2021 US Postal Service Five-Year Strategic Plan

As a business entity that delivers almost half of the worldrsquos mail mdash and being a presence in every community in our country mdash we provide the best possible service to

our customers to remain competitive We measure our strategic performance by examining metrics on

High-quality service

Excellent customer experiences

Safety in the workplace

Workforce engagement

Financial health

ABOUT THIS REPORT

About Us

vi 2017 Annual

Sustainability Report

About Sustainability ReportingIn this report we link our impacts and corporate initiatives to sustainability with a focus on how our operations affect the three areas of sustainability

Economy

Environment

Society

This includes detailing our initiatives and progress in addressing sustainability topics and describing the processes in place to address performance and operational changes

Additionally this report highlights key initiatives managed by our Office of Sustainability These include

Reduction of facility energy and water use

Alternative energy use and technology

Improvement of vehicle fleet efficiency

Environmental compliance

Recycling

GRI102-46 102-49 102-52

ABOUT THIS REPORT

About Sustainability Reporting

Also included throughout this report are key performance indicators showing organizational sustainability trends and progress towards objectives and targets

Consistent with previous years this report follows the Global Reporting Initiative (GRI) framework for sustainability reporting This includes an examination of the sustainability impacts of our operations through stakeholder participation This report transitions from using GRI G4 guidelines to using newly updated GRI Standards We used the updated framework to enhance our stakeholder engagement approach streamline disclosures and clarify our reporting content This results in a report thatrsquos more readable and transparent The three areas of sustainability are addressed in the following sections of this report Economic Viability Environmental Stewardship and Social Responsibility The reporting period is Oct 1 2016 to Sept 30 2017 and accordingly quantitative data in the report is from fiscal year 2017 unless otherwise noted

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

vii

2017 Stakeholder Engagement Process The goal of our stakeholder engagement process is to determine our topics mdash economic social and environmental elements of our operations By engaging our stakeholders we use their feedback to identify the topics and rank them for most significant impacts and influence The stakeholder engagement process has been continually refined since it was piloted in 2015 to be more efficient and expand the internal stakeholder group to solicit a broader range of opinions Currently we get stakeholder feedback from an internal group that includes representatives from across our organization We also engage our external customers through focused surveys

In 2015 our stakeholder team developed a list of 13 topics that continue to be reviewed and prioritized each year Our goal is to engage a wider range of internal and external stakeholders in the future

Materiality Assessment Materiality is the principle that determines which topics are essential to report ldquoMaterial topicsrdquo reflect significant economic environmental and social impacts of our organization or substantively influence the decisions of our stakeholders We examine issues consider business strategies and get customer and stakeholder input Topics are assessed based on significance and impact Theyrsquore ranked by internal and external stakeholders according to the likelihood andor severity of impact and possible risks or

The top five highest scoring topics below (in bold) are our material topics for 2017

1 Optimize delivery and network operations

2 Digital and physical security

3 Financial stability

4 Customer service and satisfaction

5 Innovation

6 Employee health safety and wellness

7 Energy fuel and emissions

8 Environmental compliance

9 Climate change adaptationoperational resiliency

10 Government relationslegislative and regulatory reform

11 Brand image

12 Employee engagement

13 Community engagement

opportunities such as effects on our long-term success and opportunities to gain advantages or influence outcomes within our organization This process identifies our material topics

We revised our methodology and topic scoring process to meet the intent of GRI Standards to ensure transparency consistency and accountability in our reporting Our internal stakeholder group rescored the 13 topics for significance For more information on the

topic scoring process see GRI disclosure 102-43 in the GRI Content Index

While each topic can impactour business and operationsand each topic is covered to some degree in this report only the material topics are discussed in detail and included in the 2017 GRI Content Index This year we focused on updating the reporting process to align with the new GRI Standards and progress toward previously identified measurable goals

GRI 102-40 102-42

102-43 102-44

102-46 102-47

102-49 ABOUT THIS REPORT

2017 StakeholderEngagement Process

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

vi 2017 Annual

Sustainability Report

About Sustainability ReportingIn this report we link our impacts and corporate initiatives to sustainability with a focus on how our operations affect the three areas of sustainability

Economy

Environment

Society

This includes detailing our initiatives and progress in addressing sustainability topics and describing the processes in place to address performance and operational changes

Additionally this report highlights key initiatives managed by our Office of Sustainability These include

Reduction of facility energy and water use

Alternative energy use and technology

Improvement of vehicle fleet efficiency

Environmental compliance

Recycling

GRI102-46 102-49 102-52

ABOUT THIS REPORT

About Sustainability Reporting

Also included throughout this report are key performance indicators showing organizational sustainability trends and progress towards objectives and targets

Consistent with previous years this report follows the Global Reporting Initiative (GRI) framework for sustainability reporting This includes an examination of the sustainability impacts of our operations through stakeholder participation This report transitions from using GRI G4 guidelines to using newly updated GRI Standards We used the updated framework to enhance our stakeholder engagement approach streamline disclosures and clarify our reporting content This results in a report thatrsquos more readable and transparent The three areas of sustainability are addressed in the following sections of this report Economic Viability Environmental Stewardship and Social Responsibility The reporting period is Oct 1 2016 to Sept 30 2017 and accordingly quantitative data in the report is from fiscal year 2017 unless otherwise noted

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

vii

2017 Stakeholder Engagement Process The goal of our stakeholder engagement process is to determine our topics mdash economic social and environmental elements of our operations By engaging our stakeholders we use their feedback to identify the topics and rank them for most significant impacts and influence The stakeholder engagement process has been continually refined since it was piloted in 2015 to be more efficient and expand the internal stakeholder group to solicit a broader range of opinions Currently we get stakeholder feedback from an internal group that includes representatives from across our organization We also engage our external customers through focused surveys

In 2015 our stakeholder team developed a list of 13 topics that continue to be reviewed and prioritized each year Our goal is to engage a wider range of internal and external stakeholders in the future

Materiality Assessment Materiality is the principle that determines which topics are essential to report ldquoMaterial topicsrdquo reflect significant economic environmental and social impacts of our organization or substantively influence the decisions of our stakeholders We examine issues consider business strategies and get customer and stakeholder input Topics are assessed based on significance and impact Theyrsquore ranked by internal and external stakeholders according to the likelihood andor severity of impact and possible risks or

The top five highest scoring topics below (in bold) are our material topics for 2017

1 Optimize delivery and network operations

2 Digital and physical security

3 Financial stability

4 Customer service and satisfaction

5 Innovation

6 Employee health safety and wellness

7 Energy fuel and emissions

8 Environmental compliance

9 Climate change adaptationoperational resiliency

10 Government relationslegislative and regulatory reform

11 Brand image

12 Employee engagement

13 Community engagement

opportunities such as effects on our long-term success and opportunities to gain advantages or influence outcomes within our organization This process identifies our material topics

We revised our methodology and topic scoring process to meet the intent of GRI Standards to ensure transparency consistency and accountability in our reporting Our internal stakeholder group rescored the 13 topics for significance For more information on the

topic scoring process see GRI disclosure 102-43 in the GRI Content Index

While each topic can impactour business and operationsand each topic is covered to some degree in this report only the material topics are discussed in detail and included in the 2017 GRI Content Index This year we focused on updating the reporting process to align with the new GRI Standards and progress toward previously identified measurable goals

GRI 102-40 102-42

102-43 102-44

102-46 102-47

102-49 ABOUT THIS REPORT

2017 StakeholderEngagement Process

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

vii

2017 Stakeholder Engagement Process The goal of our stakeholder engagement process is to determine our topics mdash economic social and environmental elements of our operations By engaging our stakeholders we use their feedback to identify the topics and rank them for most significant impacts and influence The stakeholder engagement process has been continually refined since it was piloted in 2015 to be more efficient and expand the internal stakeholder group to solicit a broader range of opinions Currently we get stakeholder feedback from an internal group that includes representatives from across our organization We also engage our external customers through focused surveys

In 2015 our stakeholder team developed a list of 13 topics that continue to be reviewed and prioritized each year Our goal is to engage a wider range of internal and external stakeholders in the future

Materiality Assessment Materiality is the principle that determines which topics are essential to report ldquoMaterial topicsrdquo reflect significant economic environmental and social impacts of our organization or substantively influence the decisions of our stakeholders We examine issues consider business strategies and get customer and stakeholder input Topics are assessed based on significance and impact Theyrsquore ranked by internal and external stakeholders according to the likelihood andor severity of impact and possible risks or

The top five highest scoring topics below (in bold) are our material topics for 2017

1 Optimize delivery and network operations

2 Digital and physical security

3 Financial stability

4 Customer service and satisfaction

5 Innovation

6 Employee health safety and wellness

7 Energy fuel and emissions

8 Environmental compliance

9 Climate change adaptationoperational resiliency

10 Government relationslegislative and regulatory reform

11 Brand image

12 Employee engagement

13 Community engagement

opportunities such as effects on our long-term success and opportunities to gain advantages or influence outcomes within our organization This process identifies our material topics

We revised our methodology and topic scoring process to meet the intent of GRI Standards to ensure transparency consistency and accountability in our reporting Our internal stakeholder group rescored the 13 topics for significance For more information on the

topic scoring process see GRI disclosure 102-43 in the GRI Content Index

While each topic can impactour business and operationsand each topic is covered to some degree in this report only the material topics are discussed in detail and included in the 2017 GRI Content Index This year we focused on updating the reporting process to align with the new GRI Standards and progress toward previously identified measurable goals

GRI 102-40 102-42

102-43 102-44

102-46 102-47

102-49 ABOUT THIS REPORT

2017 StakeholderEngagement Process

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

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2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

viii 2017 Annual

Sustainability Report

CONTENTS

iii MESSAGE

iv ABOUT THIS REPORT

iv About Us

vi About Sustainability Reporting

vii 2017 Stakeholder Engagement Process

1 ECONOMIC VIABILITY

2 Innovation

4 Financial Stability

5 Optimize Delivery and Network Operations

7 Digital and Physical Security

8 Customer Service and Satisfaction

10 Operational Resiliency

11 Government RelationsLegislative and Regulatory Reform

12 ENVIRONMENTAL STEWARDSHIP

13 Energy and Emissions

17 Environmental Compliance

21 SOCIAL RESPONSIBILITY

22 Employee Engagement and Health Safety and Wellness

25 Community Engagement

27 Diversity Initiatives

29 2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

1

ECONOMIC VIABILITY

Our economic viability is affected by a combination of factors These include

Financial stability which is affected by governmental legislative and regulatory reform

Incorporating innovation into our operations

Optimizing our delivery and network operations

Ensuring digital and physical security of the mail

Providing excellent customer service to achieve high customer satisfaction

Another driving factor affecting our economic viability and revenue is mail volumes Historically mail volumes fluctuate throughout the year Volume and revenue are the highest in the first quarter of the fiscal year which includes the holiday mailing season and lowest in the third and fourth quarters during the spring and summer

To serve our customer needs we operate and manage an extensive and integrated retail distribution transportation and delivery network throughout the United States and its territories

Our strategic goals outlined in the Five-Year Strategic Plan are impacted by each of the areas listed above that contribute to our economic viability Where possible we have mapped our goals to desired corporate performance outcomes and aligned measurable annual metrics with targets that are set and reviewed annually

GRI 102-2 102-4

102-6 102-8

103-1 Financial Stability 103-1 Optimize Delivery and Network Operations

203-1

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

Innovation

ldquoAs the world changes to thrive in a digital environment so does the Postal Service We have always evolved and innovated to drive the best value and experience for our customers and we continue to do so now and will into the futurerdquo

Postmaster General Megan Brennan

Our ability to innovate and adapt to changing customer needs as well as to better engage our employees is integral to our future success Itrsquos important not only economically but environmentally and socially as well During 2017 we continued to make progress in delivering state-of-the-art products to our customers

We are driven to put the customer first when making decisions about innovations and strategic investments in a digital economy Wersquore committed to providing outstanding customer experiences as well as great value in our products and services Engaged employees are necessary to achieving a high level of customer satisfaction As we build a culture of employee engagement wersquore rolling out innovative human resources programs that appeal to high-quality candidates and meet current employeesrsquo needs The speed of our innovations is also key to our success and ability to provide customers with the products and services they desire Additionally proper investment in our network delivery and retail platforms keeps us up to date with current needs and includes initiatives to expand innovative approaches and deployment of technologies to improve the customer experience

ndash

Our Inventive Products and Services As we strive for innovation by embracing new technologies wersquove tested and deployed new capabilities

Informed Delivery Customers now can get a preview of mail arriving in their mailboxes soon on their mobile devices In 2017 Informed Delivery achieved

more than 7 million registered users with more than 10000 new customers signing up daily We combined My USPS mdash the legacy service system mdash and Informed Delivery platforms to offer our consumers the ability to monitor their incoming mail and packages in one dashboard

ldquoNow available in virtually every community in America Informed Delivery makes mail even more dynamic adding a whole new layer to the evolution of the mail experiencerdquo

ndash Postmaster General Megan Brennan

2 2017 Annual

Sustainability Report

GRI 103-1 Innovation 103-2 Innovation 103-3 Innovation

102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

3

Other Products and Services Wersquore developing and implementing additional services and platforms to aid our business improve efficiency of our operations and further serve our customers Current and future innovative features and services include

Expected Delivery

Expected Delivery is a test feature for certain ZIP Code areas where customers are provided a two-hour estimated delivery window for some packages

Informed Visibility

Informed Visibility is an analytics platform to support business mailers using real-time delivery data to boost the effectiveness of their mailings It uses the data collected by employeesrsquo handheld devices to identify and correct areas that need improvement

Informed Facility

Informed Facility is a content delivery platform that rapidly provides information throughout the Postal Service Itrsquos used by our employees and brings multiple information sources into a central location It was tested at 26 field sites during 2017

Informed Address

Informed Address is a proof of concept that leverages social media by linking digital information such as email or social media usernames with physical addresses We will be piloting this initiative in 2018

Share Mail This service allows customers to share in-mail promotions with friends and family by receiving multiple copies of exclusive promotions that can then be mailed to others with prepaid postage This service allows marketers to send a single mailpiece and potentially reach multiple customers by taking advantage of the social component of word-of-mouth

Next Generation Products

Customers continue to embrace next generation mailboxes which are bigger to accommodate more packages We plan to test additional improvements to the boxes including keyless locking and notification features that alert customers when mail is delivered Next generation mailboxes are available for purchase at wwwuspscompackagemailbox

ldquoBy empowering our workforce and leveraging the technology of handheld devices we not only provide the Postal Service with significant savings we are enhancing the way we collect information store and report data and provide end-toshyend visibility for all mailrdquo

ndash Chief Information Officer Kristin Seaver

GRI 102-2 203-2

ECONOMIC VIABILITY

Innovation

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

4 2017 Annual

Sustainability Report

Financial Stability

ldquoWe believe strongly in the power of mail especially when mail is integrated with digital channelsrdquo

Chief Financial Officer Joe Corbett

We continue to pursue financial stability through product development and innovation competitive pricing operational efficiencies and cost reductions Having a diverse customer base including household and commercial customers also contributes to the financial stability of our organization mdash no single customer represents more than 5 percent of our operating base

As a self-funded and independent establishment of the executive branch our revenue comes primarily from sales of postal products and services We monitor revenue by mail classes and weights This year our revenue totaled approximately $696 billion a decrease of 26 percent from last year

We measure our financial health using controllable income (loss) as an indicator We also measure our efficiency using the metric of deliveries per total work hours

Controllable Income ($ millions)

2017 Goal 100

2017 Result (814)

2018 Goal (1400)

Deliveries per Total Work Hours (percent change)

2017 Goal 06

2017 Result -05

2018 Goal 21

Focusing our initiatives on our strategic goals wersquore actively working to achieve our financial health targets and future financial stability in an increasingly digital market climate We believe that as we continue to create innovative and affordable services along with legislative and regulatory reform we can reach financial stability Wersquore committed to delivering high levels of performance through efficient delivery and network operations and excellent service to achieve our goals

($ millions) 2015 2016 2017

Total revenue 68928 71498 69636

Controllable income (loss) 1188 610 (814)

Net loss (5060) (5591) (2742)

Deliveries per total work hours ( change) -11 01 -05

ndash

For full details please see our 2017 FORM 10-K

GRI102-2102-6102-7

ECONOMIC VIABILITY

Financial Stability103-1 Financial Stability103-2 Financial Stability103-3 Financial Stability

201-1

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

5

Optimize Delivery and Network Operations We put special effort into optimizing our delivery and network operations to provide our customers with the highest quality service In 2017 we delivered to more than 157 million delivery points including both residential and business This is an increase of over 12 million delivery points compared to the previous year At the same time wersquove improved the efficiency of our operations and decreased the total number of offices stations and branches by over 400 units Over the year we also worked to create or significantly update tools and dashboards that proactively identify and resolve issues that cause system impacts These efforts coupled with employee training and increased communication have allowed us to continuously improve our delivery and network operations

Saving Money with Green Principles

We embrace green principles at our Information Technology centers to help us save money on maintenance while improving energy efficiency reducing waste and saving natural resources At centers in Raleigh NC San Mateo CA and Eagan MN the Postal Service saved more than $750000 through updates to cooling systems and restructuring of maintenance services

ldquoThe IT team embraced the green principles of reducing recycling and reusing By collaborating with other departments we are finding new ways to save the Postal Service money mdash an approach that benefits employees and customers alikerdquo

ndash Information Technology Vice President Jeff Johnson

As part of our commitment to deliver high-quality service we measure the speed and reliability of delivery of our market-dominant products using on-time delivery based performance indicators The First-Class Mail letters and flats composite score is the weighted average of the performance of Single-Piece First-Class Mail and Presort First-Class Mail The Marketing Mail and Periodicals composite score accounts for Marketing Mail letters flats and Periodicals For 2017 we achieved our goal for Marketing Mail and Periodicals Temporary disruptions in service contributed to missing the targets for Single-Piece First-Class Mail and Presort First-Class Mail Natural disasters and weather events outside of our control caused disruptions in mail distribution network transportation or delivery processes that negatively impacted the resulting overall scores

High-Quality Service Metrics and Targets

Indicator ( delivered on time) 2017 Goal

2017 Result

2018 Goal

First-Class Mail letters and flats composite 9600 9329 9600

Marketing Mail and Periodicals composite 9100 9144 9180

GRI102-6102-7102-10

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

103-1 Optimize Delivery and Network Operations103-2 Optimize Delivery and Network Operations103-3 Optimize Delivery and Network Operations

203-1

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

6 2017 Annual

Sustainability Report

ldquoWersquore looking to identify and activate problem solvers at all levels to spread continuous improvement and create a better product for our employees and our customersrdquo

ndash Office of Continuous Improvement Manager Jewelyn Harrington

Wersquore committed to improving our processes to deliver high-quality service This includes updating maintenance practices to reduce inefficiencies encouraging employee engagement and deploying new technologies In addition we promote continuous improvement through awareness campaigns education and communications that include enhancements to the Office of Continuous Improvementrsquos internal website

ECONOMIC VIABILITY

Optimize Delivery and Network Operations

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

7

Digital and Physical SecurityCybersecurity ensures operational continuity protects our employees and keeps our customersrsquo information safe Wersquore investing in platforms that increase security as well as improve employee safety benefit sustainability and enhance customer experiences As cyberattacks have evolved wersquove responded by raising cyber awareness fortifying network monitoring and strengthening telecommunications response capabilities

This year our CyberSafe at USPS team trained more than 150000 employees and contractors on cybersecurity fundamentals The team also engages employees using interactive touchpoints including monthly phishing simulations to help employees recognize and report cyberscams Related events include the Annual Cybersecurity Awareness Fair at our national headquarters which promotes best practices to employees

ldquoItrsquos our collective responsibility to stay vigilant in the face of increasing cyberthreats and take the necessary steps to protect our networks our employees and our customersrdquo

ndash Chief Information Security Officer Greg Crabb

We Protect Your Mail 5538 arrests 4679

convictions Primarily mail theft mail fraud and prohibited mailings

$15 million Value of misappropriated or stolen mail transport equipment recovered

40489 pounds $224 million Illegal narcotics and drug-trafficking assets seized

117227 physical evidence items examined by forensic scientists at the Postal Inspection Servicersquos state-of-the-art National Forensic Laboratory 940 suspects identified

CyberSafe at USPS publishes security announcements and tips throughout the year to raise awareness among our customers and more than 600000 employees about topics that include

Texting scams involving bank notifications IRS notifications and contests

Tech support scams that involve individuals impersonating information technology employees deploying pop-ups or requesting payment

Takeover scams targeting financial accounts

Safe public Wi-Fi use

Ransomware avoidance

Suspicious email reporting requirements for our employees

Physical security of the mail is a top priority for us mdash our customers rely on the Postal Service to deliver each piece of mail on time and intact The US Postal Inspection Service investigates a range of crimes involving the US Mail including mail theft identity theft mail fraud and suspicious mail We raise employee awareness about how they can contribute to keeping the nationrsquos mail system safe These efforts include communication campaigns employee training programs publications and sponsored events including National Preparedness Month We believe itrsquos each employeersquos responsibility to help secure the mail and our facilities and vehicles

GRI103-1 Digital and Physical Security103-2 Digital and Physical Security103-3 Digital and Physical Security

ECONOMIC VIABILITY

Digital and Physical Security

203-1

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

Customer Service and Satisfaction

ldquoOur employees are working tirelessly to deliver medicines supplies and other critical mail in Texas They are providing the best possible service even as they are affected by the storm themselvesrdquo

ndash Postmaster General Megan Brennan

Serving our customers well is the key focus of our business practices and contributes to the sustainability of our operations We embrace innovative approaches that improve experiences for all customers including individuals and business mailers Customer expectations are changing and wersquore making sure we meet those expectations Wersquore committed to making it easier for our customers to do business with us For example our business mail entry units use research and diagnostics to help our customers identify which of our products and services meet their particular needs

ldquoChanging customer expectations driven by innovation and digital transformation are forcing all of us to put the customer at the center of everything we dordquo

ndash Chief Customer and Marketing Officer

Jim Cochrane

Our goals for 2017-2021 in delivering excellent customer service and experiences include

Understanding changing customer needs and market trends

Providing more visibility and control of mail and package delivery services

Transforming the commercial mailer and shipper experience

Improving retail experiences and expanding digital and alternative access

Enabling a seamless international experience for customers

Building a world-class customer care process

Increasing customer engagement through social media

Customer experience is the most important element to contribute to our success

Wersquove updated our Customer Insights (CI) score metric mdash how we measure customer experiences and assess our performance mdash to provide a more complete view of business customer and consumer feedback on our core business strategies The components of the CI score include Business Service Network survey Point of Sale survey Delivery survey index Customer Care Center survey and Enterprise Customer Care Although we fell short of our 2017 goal wersquove redoubled our efforts to achieve our 2018 goal Wersquore implementing improvements to solve delivery-related issues including new scanning and case tracking platforms and enhancing employee training Wersquore updating our Customer Insights survey questions to better identify what matters most to customers

Customer Insight score

Goal 8900

Result 8830

Our focus on providing the highest level of customer service comes with strong support from leadership Postmaster General Megan Brennan attends a

number of postal organization meetings throughout the year where she stresses the importance of putting customer needs first

Additionally the Postal Service participates in about 60 trade shows a year to highlight our products and services We estimate large returns on investment for these activities from generating new sales leads to promoting the value of mail to building our brand in the digital age

ldquoAttending trade shows really helps our brand They give us a chance to show off our innovative products Itrsquos a real opportunity for usrdquo

ndash Sales Outreach Manager Joyce Carrier

Keeping Small Businesses in the Loop

The Postal Service regularly hosts workshops and other events for entrepreneurs across the country These include activities to coincide with National Small Business Week and ldquoGrow Your Businessrdquo sessions at local Post Offices and other locations

GRI ECONOMIC VIABILITY

102-43 103-1 Customer Service and Satisfaction Customer Service and 103-2 Customer Service and Satisfaction Satisfaction 103-3 Customer Service and Satisfaction

8

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

9

Brand ImageOur brand image is a driving force to remain competitive in a digital age By providing universal service throughout the country we reach every American and our brand is a recognizable symbol of trust and dependability

Sprucing up Collection Boxes

The Greater Indiana District takes steps to make sure one of our most recognizable brand images mdash blue collection boxes mdash reflect our postal pride Boxes are inspected and identified for restoration or replacement with graffiti‑resistant paint used on new boxes Itrsquos more than just a makeover mdash wersquore delivering on the promise of our brand

USPS BlueEarth ServicesWe help our customers reduce waste increase recycling and improve their carbon footprint through our BlueEarth programs They promote sustainability and reduce environmental impacts

ECONOMIC VIABILITY

Customer Service and Satisfaction

USPS BlueEarth Carbon Accounting Service Provides commercial customers with an online report that enables them to determine Scope 3 GHG emissions associated with their mail and analyze the carbon emissions associated with their supply chain

USPS BlueEarth Federal Recycling Program Supports waste reduction efforts of government agencies by providing a secure way to recycle empty printer cartridges and small electronics free of charge

USPS BlueEarth Secure Destruction Offers mailers an innovative sustainable mail service option that promotes the protection of customersrsquo and employeesrsquo privacy We automatically intercept securely destroy and recycle undeliverable‑as‑addressed First‑Class Mail that would otherwise be returned to the sender The program helps reduce landfill waste and carbon emissions by reducing the environmental impacts to the overall mail stream

Follow us on Instagram uspostalservice

Taking advantage of new technologies and social media we promote our brand through the popular photo‑sharing site Instagram which is used to showcase new products and our operations We also offer customer service help options through Twitter USPSHelp 2017 Secure Destruction Metrics

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

10 2017 Annual

Sustainability Report

Operational Resiliency Operational resiliency has become a greater focus because of natural disasters and severe weather events including flooding and extreme hot and cold temperatures As mentioned previously our targets for on-time delivery of First-Class Mail products were affected by a number of these events during 2017

Major hurricanes and historic flooding in Texas Florida and Puerto Rico devastated communities and caused disruptions in our operations and services Additionally wildfires in California tested the resiliency of our organization In the aftermath of these events service was suspended at several facilities due to infrastructure damage In an effort to

restore service and a sense of normalcy to communities we resumed delivery service in areas that were deemed safe and offered pickup mail service for residents Service updates were provided through our USPS Service Alerts webpage to provide important notification to employees and customers about their mail

Not only did the Postal Service focus on quickly restoring service our employees were on-site at local shelters helping displaced customers reconnect with their mail by helping them complete temporary change-ofshyaddress forms and directing them to alternate Post Offices to get their mail

Providing Assistance in a Time of Need

Natural disasters not only impact our operations but also our people We live in the communities we serve When the Postal Service set up a booth at the largest hurricane shelter in Houston in the wake of Hurricane Harvey a 45-year veteran mail processing clerk was one of the many people helped Resources available to our employees include the Postal Employeesrsquo Relief Fund and Employee Assistance Program When we help employees we are also helping the community

Postal Service operations resuming in a temporary shelter after a natural disaster

ECONOMIC VIABILITY

Operational Resiliency

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

11

Most favorably viewed federal agency Government RelationsLegislative and Regulatory Reform

As a self-supporting independent establishment of the executive branch our business model and operations are significantly influenced by congressional oversight and legislation Our Government Relations and Public Policy group serves as the primary USPS representative to Congress executive branch and other government bodies 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

On Jan 31 the Postal Service Reform Act of 2017 was introduced in the US House of Representatives This legislation HR 756 would make significant reforms in retiree health

care delivery efficiency governance innovation and accounting The measure was approved by the House Oversight and Government Reform Committee in

March We look forward to continuing discussions onthis bill and other issuesas the 115th Congress proceeds

ECONOMIC VIABILITY

Government RelationsLegislative and Regulatory Reform

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

12 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

ldquoOur sustainability focus has been to become more efficient while reducing our impact on the environment Wersquore making progress on that front which I think bodes well for our futurerdquo

ndash Chief Sustainability Officer Tom Day

Our goal is to reduce our impact on the environment while maintaining superior service to our customers We work every day to make sure wersquore in compliance with federal state and local laws We also work to reduce our energy use and GHG emissions and responsibly manage Postal Service infrastructure so that our organization will endure and continue to serve the nation as it has for more than 240 years

Our network of buildings and vehicles is vast mdash it has to be to handle nearly 50 percent of the worldrsquos mail volume and serve all 50 states and five US territories Wersquove always been a leader in adopting innovative technologies to move process and deliver mail By integrating cutting-edge ideas and inventions into our operations we enhance our value improve environmental stewardship and better meet the needs of our customers

Environmental compliance is the cornerstone of a successful sustainability strategy and includes corporate initiatives such as the underground storage tank program water quality

and solid and hazardous waste management To measure and track our progress we conduct environmental compliance reviews at selected facilities and focus on

continuous improvement These compliance reviews provide the foundation for organization-wide strategies and support training and other sustainability initiatives

GRI 102-11

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

13

Energy and Emissions Making use of emerging technologies we work to operate more efficiently save energy and reduce our GHG footprint across the organization We focus on reducing our impact across our operations including at our facilities with our vehicle operations and within our supply chain

Facility Energy

2015

73235 BtuGSF

2017

68389 BtuGSF

66 REDUCTION

from 2015 to 2017

Our facilities require a large amount of energy to carry out our mailing and shipping operations Wersquore taking advantage of renewable technologies to reduce our impact and implementing innovative energy savings projects to reduce emissions as well as produce cost savings

Solar Energy In 2017 we installed nearly 35000 solar panels (13 megawatt direct current system) at the Los Angeles CA Processing and Distribution Center making it the cityrsquos largest solar power generation system at the time of installation

The panels will provide an estimated 188 million pounds of carbon dioxide emissions avoided annually mdash the equivalent of 2000 cars mdash and will generate enough energy equal to providing power to 2420 typical American homes annually The project is part of a unique plan for us to enter the alternative energy arena and reduce our organizationrsquos carbon footprint In addition the opportunity allows the Postal Service to accrue savings from a 13 megawatt portion of the installation thatrsquos dedicated to providing the facility with solar energy equivalent to 6 percent of its consumption while also

generating revenue from power available to others from the 117 megawatt portion of the installation

Facility Energy Savings Project In an effort to reduce energy consumption and waste we implemented conservation measures at our 880000-squareshyfoot network distribution center in Springfield MA Upgrades include replacing the electric heating system with high-efficiency gas-fired boilers updating more than 50 pump and fan motors with high efficiency models and installing a new heating and cooling control system with programmable

Solar Results

Tom Samra vice president of USPS Facilities is recognized for facilitating the Los Angeles CA Processing and Distribution Center solar energy project for the Postal Service This project is essential to reducing our energy footprint and generating positive returns for our organization such as becoming more sustainable financially and environmentally This also allows us to be a sustainability leader within our community

ldquoThe Postal Service Facilities team sought an innovative renewable energy solution in Los Angeles The resulting project provides financial benefits to the Postal Service while helping the environment at the same timerdquo

ndash Facilities Vice President Tom Samra

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

Springfield MA upgrade results

SAVE $787kyear

75 million kWh of electricity

More than

100k gallons of water

155 billion Btus of waste heat

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

thermostats Based on project cost utility rates and a performance rebate we anticipate this project will deliver a 30 percent return on investment

Energy and Utility Management Real-time Monitored Facilities

2015

426

2016

615

2017

726

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

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 Wersquore expanding our EEMS network by installing digital communication control and monitoring devices at our facilities

Monitoring Devices

2017 726 facilities

923

726

Goal Monitoring devices

installed at

facilities

UMS has standardized energy reporting and utility bill management which enables us to reliably monitor and analyze facilitiesrsquo energy data In 2017 we continued to use the Environmental Protection Agencyrsquos 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

Emerging Vehicle Technology For mail delivery we rely on efficient and effective vehicle operations Wersquore focusing

Postal fleet petroleum use (million GGEs)

2016 2017

1828 1789

21 DECREASE

from 2016 to 2017

on initiatives that use new technologies that will accommodate a diversifying mail mix improve safety and service reduce emissions and produce operational savings Wersquoll continue to conduct testing of prototype vehicles to allow us to make informed decisions about the future of our vehicle fleet

Electric Vehicles

The Postal Service is testing three Nissan Leaf and three Chevrolet Bolt electric vehicles for mail delivery in Northern Virginia Through testing we can collect data on maintenance performance battery condition and carrier feedback Early results show reductions in vehicle emissions and fuel costs We will continue to test new technologies as they appear in the marketplace

Hydrogen Fuel Cell Innovation On Feb 16 we commissioned the first hydrogen fuel cell system at the Washington DC Network Distribution Center This is the first step in replacing the lead-acid battery system at the facility with a safer greener and more productive solution to fuel its fleet of powered industrial vehicles (PIVs) We operate over 23000 PIVs in processing and distribution centers nationwide and hydrogen fuel cells provide us with an opportunity to positively transform our operations

Hydrogen fuel cells are a superior solution to lead-acid batteries due to their operational characteristics Lead acid batteries have limited run-time capabilities and long recharging cycles and are costly to operate and maintain These batteries also pose environmental health and safety risks that hydrogen fuel cells do not Hydrogen fuel cells provide the Postal Service several benefits including increased maintenance intervals shortened refueling times reliable voltages and clean operations

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions 14

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

15

In the first year of the pilot the hydrogen fuel cell system provided operational environmental and cost-savings benefits The technology demonstrated its value for us through increases in equipment availability and PIV operator productivity and decreases in electricity consumption and maintenance costs In the first year alone PIV operator productivity increased by approximately 27 percent and led to over $1 million in labor savings at the facility

As a next step in 2018 wersquoll be evaluating the scalability of the technology to additional processing and distribution centers based on the pilotrsquos positive results

Autonomous Vehicle Research Our research and development efforts with autonomous cars trucks and vans suggest the technology increases safety reduces fuel costs and improves worker productivity By integrating innovative autonomous vehicle technology into our fleet improvements in delivery efficiency and driver safety are expected Applying it to long distance mail transportation operations can improve efficiency schedule reliability and safety as well as reduce fuel consumption The Postal Service will continue research development and testing of new innovative autonomous technologies to apply them where they make the best economic sense for the business

Contract Transport SmartWay Our commitment to environmental stewardship extends to suppliers in our supply chain We seek transportation suppliers who are EPA SmartWay members andor use alternative lower-emission fuels Suppliers are required to submit plans detailing their sustainability initiatives in their business proposals

By encouraging our suppliers to use alternative fuels we had 178 tractor-trailers and trucks traveling more than

135 million miles annually using alternative fuel This year highway contract route supplier Pat Salmon and Sons Inc retrofitted 27 diesel tractors to run oncompressed natural gas which is estimated to loweremissions by 5593 metrictons of carbon annuallywhile offsetting equipment and transportation costsPat Salmon and Sons isone of 19 highway contractroute suppliers who have converted 270 vehicles to alternative fuel for operation of over 24 million annual ldquogreen milesrdquo

Climate Leadership Award

The Postal Service received this prestigious honor in recognition of efforts to help highway route contractors and other suppliers reduce their GHG emissions Additionally we work to reduce highway miles traveled through dynamic routing and encourage suppliers to use alternative fuels

ldquoThis conversion aligns with the Postal Servicersquos strategic initiative to improve sustainability and reduce greenhouse gas emissions in order to improve our overall carbon footprint As our delivery points increase each year this remains a top priority at the Postal Servicerdquo

ndash Supply Management Vice President Susan Brownell

ENVIRONMENTAL STEWARDSHIP

Energy and Emissions

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

16 2017 Annual

Sustainability Report

Greenhouse Gases Each year we calculate and report GHG emissions resulting from our operations We submit the results of our GHG inventories to the federal government International Post Corporation and The Climate Registry

GHG emissions are categorized as follows

Scope 1 emissions Postal-owned vehicles and facilities

Scope 2 emissions Purchased electricity and steam

Scope 3 emissions Contracted transportation leased facilities and employee commutes

Scope 1 and 2 emission reduction goals are tracked together Although contract transportation is a Scope 3 emission itrsquos not required to be reported on or included in our Scope 3 emission reduction goals Still we voluntarily track and report our contract transportation emissions

Each year we measure our progress against established reduction goals

Scope 1 amp 2 Baseline 2008

2025 2017 Goal Result

25 211

Scope 3 Baseline 2008

2025 2017 Goal Result

25230

Climate Registry Status

The Postal Service celebrated nine years of Climate Registered status by measuring and publicly reporting a third-party verified GHG inventory with The Climate Registry The Postal Service joins other organizations across North America in choosing to report greenhouse gases to this program The Climate Registry is a nonprofit organization that operates the only carbon footprint registry in North America supported by states provinces territories and tribes

International Post Corporation

The Postal Service is a member of the International Post Corporation a group of national postal service providers The goal of the organization is to support international mail service between the providers Twenty global posts from Africa Europe North America South America and the Asia-Pacific region participate in the Environmental Measurement and Monitoring System program to collaborate on reducing GHG emissions across the postal sector

Read more about the International Post Corporation including 2017 Postal Sector Sustainability at httpswwwipcbeenknowledge-centresustainability

GRI ENVIRONMENTAL STEWARDSHIP

102-12 Energy and Emissions

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

17

Environmental Compliance We strive to minimize the environmental impacts of our operations Compliance with environmental requirements is fundamental to reducing impacts and a foundation for sustainability success Wersquove established proactive programs and practices to ensure compliance with applicable federal state and local environmental regulations Environmental compliance benefits not only our planet but also our employees the communities we serve and our business bottom line

Environmental Compliance Reviews Environmental Compliance Reviews (ECRs) are conducted periodically at targeted facilities In 2017 there were 130 ECRs conducted to help monitor and enforce regulatory compliance at our mail processing vehicle maintenance and petroleum storage operations

ECRs Conducted

2015

130

2016

91

2017

130

ECRs help us ensure that our facilities remain in compliance with applicable environmental permits plans and training requirements The data collected during the ECR process along with feedback from our facility managers is used to enhance existing regulatory compliance programs and improve overall environmental performance Additionally ECRs improve employee engagement by providing hands-on training on environmental management systems and create awareness of the many helpful online compliance bulletins and resources available to them

Storage Tank Program This was the fourth year of our underground storage tank removal and replacement program It focuses on improving tank infrastructure in order to reduce environmental risk improve emergency fueling planning repair storage tank systems conserve fuel costs and reduce regulatory compliance costs In 2017 regulatory tank testing costs were reduced by $70000 The program also establishes a centralized national monitoring and record-keeping system and provides on-site inspections and compliance support Under this program we removed or replaced 114 tanks between 2014 and 2017 and plan to remove or replace approximately 63 more by the end of 2020

Tanks Removed or Replaced From Facilities

2014

14

2015

6

2016

58

2017

36

Regulated Waste Program and Hazardous Materials Management Regulated waste includes hazardous waste and certain types of non-hazardous waste Postal Service 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 2017 we added a new contract for national recycling of old computer monitors and televisions containing cathode ray tubes We also conducted an internal customer satisfaction survey to provide valuable feedback to our national regulated waste management 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

GRI ENVIRONMENTAL STEWARDSHIP

102-43 Energy and Emissions

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

18 2017 Annual

Sustainability Report

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 Reports are primarily submitted electronically using state and federal software Electronic reporting better supports the processing of information and planning required by emergency response groups

Water Quality ProgramOur National Water Quality Program ensures and maintains regulatory compliance under the federal Clean Water Act Oil Pollution Act and Safe Drinking Water Act state and local requirements and associated Postal Service policies The program covers approximately 435 sites and

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

addresses issues such as oil spill prevention plans and compliance with storm water regulations including submitting required permits and monitoring discharges from our sites

Water Compliance Site Visits Conducted

2014

117

2015

153

2016

168

2017

106

Sites included in the program have on-site or mobile fueling operations aboveground or underground fuel storage tanks large emergency generators waste water pre-treatment systems septic systems vehicle washing or stormwater retentiondetention basins

In 2017 we completed 106 program reviews across the country We plan to complete approximately 107 reviews in 2018 In addition to assessing compliance and reducing potential liabilities the reviews provide on-site employee training and assistance with data management record-keeping and permit compliance

Water UseWhile water use is not a major input for our operations wersquore committed to improving impacts from our operations by reducing water consumption at our facilities and complying with water use restrictions for landscaping Through these practices wersquore contributing to the sustainability of our environmental communities Water is consumed primarily through employee use and facility maintenance and wersquore proud to report continuous reductions in water consumption since 2008

2025Reduction

Goal

2017Reduction

Result

Water IntensityBaseline 2007

36 495

Environmental Data Management Focusing on innovating our processes this year we field-tested a mobile application that provides environmental reviewers with instant access to site specific data during site assessments and solicits feedback from end users We then modified the application to improve data tracking and management during site assessment visits Additionally we developed and deployed a new verification review process within our centralized data management system Verification reviews ensure environmental deficiencies are adequately resolved and support our continuous improvement process

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

19

Recycling The 2017 Green Survey for our employees collected feedback on how employees currently conserve our limited resources as well as employee ideas for additional conservation measures The majority of respondents indicated that they recycle at work We developed an innovative recycling program for our employees in which recyclables particularly mixed paper are returned from our Post Offices to central collection points known as ldquorecycling hubsrdquo using our transportation network Our recycling hubs have recycling equipment to handle Post Office generated recyclables including cardboard plastic metal and e-waste With the support of postal employees wersquove increased our mixed paper recycling volume by 15000 tons

We also work with our mailers to properly address mail Address-corrected mail is quickly delivered and reduces the amount of paper waste generated This is just one way we demonstrate the mantra ldquoreduce reuse and recyclerdquo We strive to reduce waste by not creating it in the first place Wersquoll continue to maintain high standards and pursue ambitious goals for recycling and waste diversion

140 Recycling hubs

recycled

274713 tons of material

in 2017

Goal

Divert 50 of solid wastefrom landfills

Result

Diverted

541 in 2017

EPA Recognizes Postal Service for Waste Reduction

The Environmental Protection Agency recognized our Northeast and Great Lakes areas with 2017 WasteWise Regional awards for their efforts in reducing waste by diverting it from landfills and recycling Candidates for this award are evaluated on annual improvements of waste diversion overall waste performance and waste prevention This is largely attributed to our National Recycling Operation that focuses on broadening recycling in a standardized approach In one year the accomplishments from these areas saved thousands of dollars and generated revenue for our operations The Great Lakes Area alone has reduced trash management and removal costs by $16 million since 2013 and this year avoided over $34 million by diverting over 32000 tons of waste The Northeast Area in 2017 avoided over $43 million in disposal costs by diverting 435 thousand tons of waste mostly comprised of mixed paper cardboard and plastic

Employees Going Green

The results are in mdash nearly 6800 Green Survey respondents indicated that employees consciously conserve resources

81 percent report they recycle at work

91 percent turn off lights in empty rooms

67 percent consider the environment when making purchases

Some employees reported their workplace doesnrsquot value green practices Wersquore researching this and will report on it more in the future The survey shows optimism for the future mdash hundreds of respondents requested information on setting up Lean Green Teams and provided suggestions for improving sustainability practices

GRI 102-43 ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

20 2017 Annual

Sustainability Report

ENVIRONMENTAL STEWARDSHIP

Environmential Compliance

Product ResponsibilityWersquore committed to being a leader when it comes to product and service responsibility We encourage and require our key national suppliers to provide environmentally preferable products (EPP) for purchase using our online catalog eBuy2 ordering system Each year we have a goal to continuously improve on the number of EPP items offered and purchased In

2017 we purchased more than $401 million of EPPs weighing over 202046 tons

We also provide environmentally preferred Priority Mail and Priority Mail Express boxes and envelopes mdash containing post-consumer recycled content and that are 100 percent recyclable mdash to our customers at no charge Postal expedited mailing

paper products are also made with either Forest Stewardship Council or Sustainable Forestry Initiative certified materials We will continue our commitment to responsible products and services by using a suite of Postal Service developed tools and resources while ensuring the best value for sustainable product availability for our customers

EPP Purchases

Mill

ions

Thou

sand

tons

2015 2016 2017

$50

$0

$100

$150

$200

$250

$300

$350

$400

$450

180

185

190

195

205

Recycled contentEnergy efficient Reputable

ecolable certified

Water efficient

USDA BioPreferred Weight of EPPs purchased

200

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

21

SOCIAL RESPONSIBILITY

Our commitment to sustainability extends to our employees customers and communities We strive to cultivate a cooperative inclusive and safe workplace environment while supporting charitable resources and services Wersquore proud to be the local face of federal government making a positive impact

Our social responsibility focuses internally on our employees mdash including engagement health safety and wellness mdash as well as externally in the communities where we work and live We actively participate in various community engagement efforts including support for different causes and national food drives Additionally diversity is important to our success as an organization mdash employee diversity and inclusion as well as having a diverse network of suppliers To encourage our supplier diversity we strive to create a level playing field by making our requirements known our evaluation process transparent awarding contracts based on best value and promoting economic development in the communities we serve by providing access to small minority-owned and woman-owned businesses

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

22 2017 Annual

Sustainability Report

Employee Engagement and Health Safety and Wellness Our employees are critical to our continued success and sustainment We maintain our commitment to a highly engaged and healthy workforce by implementing aggressive safety goals rewarding outstanding employee initiatives and

considering ideas and feedback to improve our operations and services These resources equip and empower employees to be outstanding workers while protecting their safety and well-being

Mobile Mammogram Services in the Workplace

While we encourage employees to protect their health competing priorities often result in deferred or delayed doctor visits This year to accommodate busy schedules we sent mobile mammogram units to our facilities across the country Dozens of employees took advantage of the fast innovative and potentially lifesaving services conveniently offered at their worksites

SOCIAL RESPONSIBILITY

USPS Employees

Capital Metro

HQ

Southern

Western

NortheastEastern

Great 25172 79260 Lakes

Pacific

51428

17816 29217

88925

74817

1678722022

74261

60767 17671

55972

17996

328

644178

11739

Non-Career

Career Non-Career

Career

Female Male

43 57

95 5

Part-time

Full-time

Female Male

47 53

Part-time

100

GRI

Employee Engagement and Health 102-7 102-8

Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

23

ndash

Engagement Fosters Wellness Among Employees

Our leaders creatively engage employees to promote teamwork solidarity and workplace wellness Oklahoma District Manager of In-Plant Support Joshua Hallman uses ldquohuddle boardsrdquo that enable employees to record daily operational successes and areas for improvement and Greater Indiana District Manager Todd Hawkins motivated over 300 employees to set personal health goals These engagement efforts promote communication and friendly competition while fostering camaraderie among employees

ldquoIncreasing engagement is about more than increasing productivity Itrsquos also about creating a culture in which everyone works safely and smartlyrdquo

Employee Engagement Executive Director Kelvin Williams

Employee Engagement ActivitiesEngagement is an evolving process that requires ongoing collaboration and involvement Effective communication among our leaders and employees allows us to improve our operations while fostering enthusiasm involvement and commitment to our mission By the end of 2017 we had trained more than 38000 managers leaders and non-bargaining employees about the benefits of an engaging workplace The annual Postal Pulse survey measures employee engagement and this year the surveyrsquos response rate was 46 percent a 16 percentage point increase over last year but below our 51 percent goal The 2017 survey results showed a grand mean engagement score of 325 out of 5 a slight increase over last yearrsquos score of 324 Grand mean is the average score of 12 engagement components that are included in the survey In the future we plan to focus on engagement as we continue building a world-class employee experience

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

Health and SafetyResearch suggests that disengaged employees are more likely to have safety incidents in the workplace compared to engaged employees who are more likely to be safe at work Because employee health and safety is one of our core values we work hard to engage and educate employees on occupational hazards while implementing strict safety requirements and regularly assessing accident risks

Accident Rate per 100 Employees

2014

160

2015

164

2016

161

2017

154

This year total accidents decreased by more than 3000 compared to last year Although we did not achieve our target accident rate of 15 per 100 employees for 2017 wersquore working to achieve this rate in 2018 Wersquoll continue to engage and educate employees on accident prevention focusing on frequent safety hazards such as dog bites extreme weather and improper lifting

Corporate Wellness Initiatives

This year the Northland Capital Connecticut Valley and Appalachian districts as well as our headquarters facilities participated as pilot sites for our new Wellness Program advocating for employeesrsquo physical mental social and financial health Program initiatives included surveying employees on the current state of employee wellness hosting career workshops installing machines to track health metrics and updating onsite exercise facilities Based on feedback from pilot site assessments we will implement changes and improvements as we promote wellness through this effort

Motor Vehicle SafetyOur drivers travel more than 2 billion miles each year and are on the roads daily In 2017 we had 29387 accidents More than half of accidents were experienced by our newer drivers (less than two years of experience) Wersquove seen an increase in accidents caused by other drivers hitting our vehicles on the road or while stopped making deliveries Our focus is to prevent on-the-job motor vehicle crashes through policies guidance stand-up talks and training focused on safe driving seatbelt use and preventing distracted driving

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

24 2017 Annual

Sustainability Report

Sustainable Facility Initiatives and Lean Green Teams Our Sustainable Facility Initiatives promote resource conservation and waste reduction across our organization In 2017 over 2900 postal facilities had registered teams to help reduce energy and water waste decrease petroleum consumption

minimize trash generation and increase recycling Employeesrsquo efforts across the country have helped us save money by reducing waste disposal costs by over $7 million compared to 2016 and generating more than $17 million in recycling revenue

Hinsdale NH Post Office

Postmaster General Sustainability Excellence Awards Our Postmaster General Sustainability Excellence awards recognize superior Lean Green Team initiatives and other informal employee-based projects that contribute to a sustainable workplace The following teams were honored for their efforts in 2016 to reduce waste water use and energy consumption and increase recycling efforts in their facilities districts and areas

Caparra Heights Station in San Juan PR where a Green Team is building sustainability awareness through no-cost and low-cost actions

Erie PA Processing and Distribution Center which reduced water usage in restrooms by more than 125000 gallons

Hinsdale NH Post Office a historic site that planted a rain garden of native grasses and flowering perennials filtering out pollutants in stormwater runoff

Manchester NH Processing and Distribution Center which replaced lightbulbs with LED bulbs saving money on purchase prices and reducing annual energy costs

National Center for Employee Development in Norman OK a training facility that ramped up its paper recycling efforts replaced fluorescent lamps with LEDs and installed power controllers on computer servers

North Houston Processing and Distribution Center which recycles an average of 600 tons of mixed paper each month more than any other USPS facility

Northern Ohio District which doubled its recycling revenue downsized waste and saved money for the Postal Service

St Louis National Distribution Center which reduced waste and purchases of unnecessary cardboard saving more than $100000 in six months

Supply Management at USPS headquarters in Washington DC which diverted more than 420000 tons of mixed paper from landfills to proper recycling streams Supply Management also won a second award for reducing highway contract route transportation emissions and fuel

SOCIAL RESPONSIBILITY

Employee Engagement and Health Safety and Wellness

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

25

Community Engagement As active members of our communities we provide public resources and participate in activities to engage our customers and neighbors From educating our community to recognizing everyday heroes to supporting important causes we do our part to strengthen the communities we serve

Be The Match mdash Delivering the Gift of Life For more than 20 years wersquove partnered with Be The Match the worldrsquos largest bone marrow registry to conduct nationwide workplace donor recruitment campaigns and registry drives Many of our employees have joined the registry helping diversify marrow sources to increase patientsrsquo likelihood of finding a lifesaving match To date more than 61000 employees have joined the Be The Match registry

Carrier AlertHeroesrsquo Corner Our employees play a vital role in communities across the country Our Carrier Alert Program enables disabled or elderly customers to display a decal on their mailbox to let carriers know that an accumulation of mail could be a cause of concern regarding the well-being of the resident Our carriers often respond helpfully mdash and sometimes heroically mdash on their daily routes when they see their fellow citizens needing help Visit the USPS Heroesrsquo Corner to learn more about our employees who go above and beyond

Donating Life

Newman Lake WA retail associate Ron Laughbon has donated 24 gallons of blood since 1979 His donations have helped more than 500 people including cancer patients burn victims and newborns Laughbon encourages others to donate explaining ldquoIf you can help save someonersquos life thatrsquos pretty specialrdquo

Heroes

Waipahu HI

Hawaii Letter Carrier Josue Ramirez sensed trouble on his route When he saw two stray dogs preparing to attack a woman walking a smaller dog Ramirez ran toward the scene with dog repellant in hand After he sprayed the strays and they fled Ramirez walked the woman and her dog home safely while neighbors called the police

Lewiston NY

Retail associate Diane Whetstine and Postmaster Patrick Madigan saved a customer from being scammed out of thousands of dollars When helping the customer with a significant money order purchase Whetstine picked up on the familiar signs of a scam and enlisted Madigan to urge the customer not to send the money order or an additional substantial check

Omaha NE

While delivering mail Letter Carrier Noreen Mintken heard a loud noise followed by two kids running around the corner screaming ldquoThey have a gun Theyrsquore shootingrdquo Mintken stayed with the boys as they sought shelter and walked them to a nearby Boys amp Girls Club to make sure they were safe

Corpus Christi TX

Letter Carrier German Osorio found a suicide note attached to a mailbox on his route He contacted his supervisor Corisa Ruiz who immediately called 911 Because of their collective quick action emergency responders were able to find the person who wrote the note before it was too late

Albuquerque NM

Letter Carrier Christopher Jaramillo was delivering mail and noticed a 6-foot sinkhole By using his postal vehicle he blocked motorists from getting close to the hole and warned drivers of the hazard until help arrived

Berlin WI

Letter Carrier Eric Momsen was delivering mail and heard screaming from a frantic mother He immediately went to her aid to find her 6-month old daughter had stopped breathing as a result of a seizure He reacted quickly and instructed that the baby be turned on her side where she began to breathe again and color returned to her face

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

26 2017 Annual

Sustainability Report

Stamp Out Hunger

ndash

ldquoItrsquos an honor to be able to help people in need by leading an effort that brings out the best in so many Americansrdquo

NALC President Fredric Rolando

On May 13 the National Association of Letter Carriers (NALC) held its 25th annual Stamp Out Hunger Food Drive the countryrsquos largest single-day food drive NALC partners with other Postal Service associations and charitable groups to encourage nationwide participation in the food drive during which letter carriers collect donations of non-perishable goods that are distributed to local food agencies helping to feed millions of Americans affected by hunger This year letter carriers collected 75 million pounds of food Combined with last yearrsquos record 801 million pounds itrsquos the highest two-year contribution to date mdash 1551 million pounds Since the annual food drive began in 1993 more than 16 billion pounds of food have been collected to support those in need

Disaster Relief

The Postal Employeesrsquo Relief Fund provides assistance grants to employees who have lost their homes in natural disasters Since its creation in 1990 the fund has distributed more than $162 million to Postal Service employees and their families struggling to recover from earthquakes floods fires and storms

Combined Federal CampaignSince 1961 the Combined Federal Campaign (CFC) has collected federal employeesrsquo contributions to charitable organizations through payroll allotment Funds support more than 12000 charitable organizations whose causes range from working to cure disease to providing for the elderly and disabled in the United States and abroad The CFC encourages participation across all government agencies including the Postal Service

Fundraising StampsSemipostal stamps raise funds for national public interest causes Our Breast Cancer Research semipostal stamp has raised more than $86 million since 1998 to fund federal breast cancer research efforts and the Save Vanishing Species semipostal stamp has raised over $4 million since 2011 to protect endangered species Revenue from semipostal

stamp sales is transferred to selected agencies who use the funds to support their causes Wersquore expanding our collection of semipostal stamps in 2018 with the introduction of the Alzheimerrsquos stamp It will raise funds for Alzheimerrsquos research and increase public awareness for the disease

SOCIAL RESPONSIBILITY

Community Engagement

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

27

Diversity Initiatives Our workforce embraces the multicultural roots of the American people By promoting diversity among our employees customers and suppliers we foster a positive corporate environment that drives innovation while respecting the uniqueness of individuals

Employee Diversity We value the diversity of our workforce and strive to create an inclusive corporate culture Wersquore honored to have our efforts recognized by the following

Top 20 Government Employer mdash Careers amp the disABLED Magazine 2017 Readers Choice

Top Government and Law Enforcement Agencies mdash Best of the Best 2017 Hispanic Network Magazine

Top 20 Government Employer mdash Woman Engineer Magazine 2017 Readersrsquo Choice

Top Government and Law Enforcement Agencies mdash Professional Womanrsquos Magazine Best of the Best 2017

Top Government and Law Enforcement Agencies mdash Black Employment amp Entrepreneur Journal Best of the Best 2017

The Executive Diversity Council hosts innovative programs that encourage employee engagement and professional development while promoting diversity awareness This year the council was expanded to include a steering committee that establishes diversity goals and objectives for our organization as well as local diversity councils that evaluate and implement

programs In 2017 the council hosted diversity training for postal leaders and participated in Celebrate Diversity Month an event held in April to help employees understand and appreciate each otherrsquos differences We will continue to integrate diversity and inclusion into all aspects of our operations including employee recruitment development and retention

ldquoThe Postal Service is committed to fostering diversity throughout our organization mdash in every function and at every level This is a business imperative because it demonstrates to our employees that they are valued and appreciated and that makes us stronger not only as individuals but as an organizationrdquo

Postmaster General Megan Brennan ndash

Employment for All

We proudly help empower and advance the careers of women During a Womenrsquos History Month event in March Postmaster General Megan Brennan highlighted the fact that nearly half our workforce is female and that women play an integral role in the organization Participants attended a panel discussion with women in upper-management positions including Corporate Communications Vice President Janice Walker and Chief Information Officer Kristin Seaver Topics included the importance of mentorship nurturing enthusiasm for work learning from feedback and continuously seeking new opportunities

SOCIAL RESPONSIBILITY

Diversity Initiatives

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

28 2017 Annual

Sustainability Report

Diversity Stamps Postage stamps depicting American moments of pride honor and celebration are issued each year This year we paid tribute to diverse American people and experiences in our annual stamp collection

Uncle Samrsquos Hat Uncle Samrsquos top hat represents the bravery and fortitude of the American spirit The stamp portrays eight hats resting on differently shaded ldquofacesrdquo a tribute to the countryrsquos ethnic and racial diversity

Dorothy Height In recognition of her leadership during the Civil Rights Movement Height received the nationrsquos two highest civilian honors the Medal of Freedom and the Congressional Gold Medal

Delicioso This book of 20 stamps features the names and illustrations of traditional Latin American culinary dishes

Celebrating African-American History and Culture The National Museum of African American History and Culture in Washington DC is devoted to African-American life art history and culture

Supplier DiversityContract Clauses We maintain a strong competitive and diverse supplier base We contract with over 18000 suppliers to provide products and services that support our operations including small minority-owned and woman-owned businesses These businesses help us meet the changing demands and needs of the communities we serve In January OMNIKAL (formerly DiversityBusinesscom) recognized our efforts by naming the Postal Service the top government agency for inclusion best among the top 25 government agencies for promoting diversity and inclusiveness in business opportunities in America Over 2 million businesses voted and the Postal Service ranked No 1 for engaging in supplier diversity by providing opportunities to diverse enterprise owners This marks the 16th consecutive year the Postal Service is ranked among the top agencies for this honor

6 consecutive years

Supplier Diversity Goals

2017 Goal ()

2017 Result ($)

2017 Result ()

Small businesses 392 21 billion 236

Minority-owned businesses 48 252 million

Woman-owned businesses 65 365 million 41

29

We recognize our suppliersrsquo achievements and contributions in green business practices during our annual Supplier Sustainability Excellence Awards When practical and cost effective we seek suppliers offering environmentally preferable products and help suppliers identify opportunities to improve sustainability practices This year our Supplier Sustainability Excellence honors went to Davenport Transportation Inc and Matheson Trucking Inc whose innovative vehicle technology reduces fossil fuel consumption and promotes alternative fuels such as compressed natural gas and liquefied national gas These are just two of a dozen businesses that were recognized in June 2017 for their contributions to the success of our organization

SOCIAL RESPONSIBILITY

Diversity Initiatives

GRI 102-9 102-10

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

2017 GRI CONTENT INDEX

This index includes supplemental information about our sustainability practices including transparency about GRI Standards used in this report and GRI disclosures that have been reported against and where these disclosures can be

found in the report or in an external document The table reports core disclosures as well as management approach and specific disclosures for each of our material topics

GRI Disclosure Number

Description Response

GRI 102 GENERAL DISCLOSURES - VERSION 2016

ORGANIZATIONAL PROFILE

102-1 Name of the organization

United States Postal Service

102-2 Activities brands products and services

Page iv About Us section Page 1 Economic Viability section Page 2 Our Inventive Products and Services section Page 4 Financial Stability section For additional information on the organizationrsquos activities please see the Item 1 Business section of the 2017 FORM 10-K Page 1 of 91 For additional information on primary brands products and services please see the Service Categories section of the 2017 FORM 10-K Page 3 of 91 For additional information on products or services that are the subject of stakeholder questions or public debate please see the Item 1A Risk Factors section of the 2017 FORM 10-K Page 6 of 91

102-3 Location of headquarters

475 LrsquoEnfant Plaza SW Washington DC 20260

102-4 Location of operations

Page 1 Economic Viability section Although our operations are conducted primarily in the domestic market we generate international revenue representing approximately 4 percent of operating revenue

102-5 Ownership and legal form

Page iv About Us section For additional information on nature of ownership and legal form please see the Governance section of the 2017 FORM 10-K Page 1 of 91

102-6 Markets served Page iv About Us section Page 1 Economic Viability section Page 4 Financial Stability section Page 5 Optimize Delivery and Network Operations section We serve the industrials sector as defined under the Global Industry Classification Standard Industry Classification Benchmark and Thomson Reuters Business Classification We operate in the communications distribution and delivery advertising and retail markets throughout the nation and internationally

GRI 102-46 102-49 102-55 29

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

30 2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-7 Scale of the organization

Page iv About Us sectionPage 4 Financial Stability sectionPage 5 Optimize Delivery and Network Operations sectionPage 22 Employee Engagement and Health Safety and Wellness sectionFor additional information on scale of the organization regarding employees please see the 2017 Annual Report to Congress Page 11 of 28For additional information on scale of the organization regarding number of operations please see the Services section and Item 2 Properties section of the 2017 FORM 10-K Page 2 of 91 and Page 12 of 91

102-8 Information on employees and other workers

Page 1 Economic Viability sectionPage 22 Employee Engagement and Health Safety and Wellness sectionNearly 100 percent of operations involving the delivery and processing of mail is done by both career and non-career employees While a very small portion of our operations involves contractors we do not collect statistics on employees and supervised employees of contractorsAnnually there is seasonal variation in employment due to the holiday mailing season To accommodate surges in volume during the holiday season we have increased Sunday delivery service for some of our customers in limited US markets and add employees for the holiday season Additionally in national election years mail volume is temporarily impacted This is due to political organizations making use of Marketing Mail generating volume increases during the months preceding an electionA full record of employees by pay status is compiled and stored in an Enterprise Data Warehouse from which reports are generated for public release

102-9 Supply chain Page 28 Supplier DiversityContract Clauses sectionFor additional information on the organizationrsquos supply chain including its main elements as they relate to the organizationrsquos activities primary brands products and services please see the Supplying Principles and Practices Manual

102-10 Significant changes to the organization and its supply chain

Page 5 Optimize Delivery and Network Operations sectionPage 28 Supplier DiversityContract Clauses sectionFor additional information on changes in operations including facility openings closings and expansions please see the Real Estate Inventory Actions section of the 2017 Annual Report to Congress Page 10 of 28For additional information on changes in the location of suppliers structure of the supply chain or relationships with suppliers including selection and termination please see the Summary of Changes section of the Postal Servicersquos Supplying Principles and Practices

102-11 Precautionary principle or approach

Page 12 Environmental Stewardship section

102-12 External initiatives Page 16 Greenhouse Gases section

102-13 Membership of associations

Universal Postal Union International Post Corporation The Climate Registry National Postal Forum Mailersrsquo Technical Advisory Committee Postal Customer Councils

STRATEGY

102-14 Statement from senior decision-maker

Page iii Message From the Postmaster General and Chief Sustainability Officer section

2017 GRI CONTENT INDEX

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

THICS AND INTEGRITY E

102-16 Values principles standards and norms of behavior

Page iii Message From the Postmaster General and Chief Sustainability Officer section For more information on descriptions of the organizationrsquos values principles standards and norms of behavior please see the Code of Ethics section of the 2017 FORM 10-K Page 75 of 91

OVERNANCE G

102-18 Governance structure

Page iv About Us section The Postmaster General through the Deputy Postmaster General with the Chief Sustainability Officer and other responsible departments has decision-making responsibility on economic environmental and social topics

STAKEHOLDER ENGAGEMENT

102-40 List of stakeholder groups

Page vii 2017 Stakeholder Engagement Process section Our internal stakeholders include a total of seven representatives from the following departments our Strategic Planning Supply Management Facilities Corporate Communications Government Relations and Energy Initiatives offices Additionally we used results from the 2016 Mailersrsquo Technical Advisory Committee customer survey

102-41 Collective bargaining agreements

Approximately 92 percent of career employees are covered by collective bargaining agreements

102-42 Identifying and selecting stakeholders

Page vii 2017 Stakeholder Engagement Process section

102-43 Approach to stakeholder engagement

Page vii 2017 Stakeholder Engagement Process section Page 8 Customer Service and Satisfaction section Page 17 Regulated Waste Program and Hazardous Materials Management section Page 19 Recycling section The stakeholder group examined the economic environmental and social impact for each topic separately The three elements for each topic were averaged to determine a final score There were no changes in the importance to the customer scoring in GRI Standards therefore we used 2016 customer survey results The revised significance score was averaged with the 2016 importance to customer scoring to determine final ranking of the topics

102-44 Key topics and concerns raised

Page vii Materiality Assessment section

REPORTING PRACTICE

102-45 Entities included in the consolidated financial statements

See the Related Party Transactions section of the 2017 FORM 10-K Page 41 of 91 See Item 8 Financial Statement and Supplementary Data section of the 2017 FORM 10-K Page 43 of 91

102-46 Defining report content and topic boundaries

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page 29 2017 GRI Content Index section

102-47 List of material topics

Page vii Materiality Assessment section

102-48 Restatements of information

Not applicable for this report period

2017 GRI CONTENT INDEX 31

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

GRI Disclosure Number

Description Response

102-49 Changes in reporting

Page vi About Sustainability Reporting section Page vii 2017 Stakeholder Engagement Process section Page vii Materiality Assessment section Page 29 2017 GRI Content Index section

102-50 Reporting period As used herein all references to years in this report unless otherwise stated refer to fiscal years beginning Oct 1 (2016) and ending Sept 30 (2017)

102-51 Date of most recent report

April 2016

102-52 Reporting cycle Page vi About Sustainability Reporting section

102-53 Contact point for questions regarding the report

United States Postal Service Office of Sustainability Room 2801 475 LrsquoEnfant Plaza SW Washington DC 20260 202-268-2000 sustainabilityuspsgov

102-54 Claims of reporting in accordance with the GRI Standards

This report has been prepared in accordance with the GRI Standards Core reporting option

102-55 GRI content index This GRI Content Index adheres to the requirements of this disclosure

102-56 External assurance External assurance is not being pursued for 2017

MATERIAL TOPIC INNOVATION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 2 Innovation section

103-2 The management approach and its components

Page 2 Innovation section

103-3 Evaluation of the management approach

Page 2 Innovation section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-2 Significant indirect economic impacts

Page 2 Our Inventive Products and Services section Anticipating costs related to external factors and with an eye toward efficiency without degradation in quality of postal products and services the Postal Service is urging Congress to pass postal reform legislation Among the provisions we seek are those needed to help ensure the Postal Service is self-sustaining financially strong and a reliable low-cost partner to the American people and communities we serve

MATERIAL TOPIC FINANCIAL STABILITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 4 Financial Stability section For additional information on the material topic and its boundary please see the Results of Operations section of the 2017 FORM 10-K Pages 15-16 of 91

103-2 The management approach and its components

Page 4 Financial Stability section For more information on the management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

2017 GRI CONTENT INDEX 32

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual Sustainability Report

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 4 Financial Stability section For more information on the evaluation of our management approach and the components please see the FY2017 Performance Report and FY2018 Performance Plan section of the 2017 Annual Report to Congress Pages 13-14 20-25 of 28

GRI 201 ECONOMIC PERFORMANCE - VERSION 2016

201-1 Direct economic value generated and distributed

Page 4 Financial Stability section Total operating expenses $722 billion Total compensation and benefits $491 billion Interest expense $226 million US government entities operating and interest expense $16749 million In addition to the income we generate from investments in securities issued by the US Treasury we record

imputed interest on the future installment payments that are owed to us under the Revenue Forgone Reform Act of 1993 Investment income was immaterial for the years ended Sept 30 2017 2016 and 2015

Net loss $27 billion For more information on direct economic value generated and distributed on an accrual basis including the basic components for the organizationrsquos global operations please see the Operating Revenue and Volume section of the 2017 FORM 10-K Page 17-18 of 91 Our operating revenue and volume for the years ending on Sept 30 2017 2016 and 2015 by service category are detailed in the 2017 FORM 10-K Page 19 of 91

MATERIAL TOPIC OPTIMIZE DELIVERY AND NETWORK OPERATIONS

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section

103-2 The management approach and its components

Page 5 Optimize Delivery and Network Operations section

103-3 Evaluation of the management approach

Page 5 Optimize Delivery and Network Operations section

GRI 203 INDIRECT ECONOMIC IMPACTS - VERSION 2016

203-1 Infrastructure investments and services supported

Page 1 Economic Viability section Page 5 Optimize Delivery and Network Operations section Page 7 Digital and Physical Security section All initiatives are commercial in nature

MATERIAL TOPIC DIGITAL AND PHYSICAL SECURITY

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 7 Digital and Physical Security section Security includes international security (ie terrorismterrorist acts illegal drug trafficking mail theft) physical security (ie security of Postal Service facilities employees collection boxes) safety of our employees (ie robbery mail theft and employee internal security) and cybersecurity (protection of employee and customer information)

103-2 The management approach and its components

Page 7 Digital and Physical Security section

2017 GRI CONTENT INDEX 33

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

2017 Annual

Sustainability Report

34 2017 Annual

Sustainability Report

2017 GRI CONTENT INDEX

GRI Disclosure Number

Description Response

103-3 Evaluation of the management approach

Page 7 Digital and Physical Security section

GRI 418 C USTOMER PRIVACY - VERSION 2016

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

While we do not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis in November 2014 the Postal Service disclosed that a cyber-intrusion had occurred The Postal Service notified personnel that the personally identifiable information of over 800000 current and former employees 485000 workersrsquo compensation records and the customer inquiry records of about 29 million customers had been compromised We worked closely with federal agencies as well as private sector specialists to investigate and remediate the cyber intrusionReason for Omission USPS does not publicly disclose statistics on breaches of customer privacy and losses of customer data on an annual basis

MATERIAL TOPIC CUSTOMER SERVICE AND SATISFACTION

GRI 103 MANAGEMENT APPROACH - VERSION 2016

103-1 Explanation of the material topic and its boundary

Page 8 Customer Service and Satisfaction section

103-2 The management approach and its components

Page 8 Customer Service and Satisfaction sectionFor additional information regarding our customer service and satisfaction management approach see the Excellent Customer Experience section of the 2017 Annual Report to Congress Page 16 of 28

103-3 Evaluation of the management approach

Page 8 Customer Service and Satisfaction section

OTHER SPECIFIC DISCLOSURES

Not applicable Complaint handling and resolution process

Page 8 Customer Service and Satisfaction sectionFor additional information see the FY2017 Performance Report section of the 2017 Annual Report to Congress Page 17 of 28

Not applicable Results of surveys measuring customer satisfaction

Page 8 Customer Service and Satisfaction sectionPage 17 Regulated Waste Program and Hazardous Materials Management sectionPage 19 Recycling section

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index

The 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 Servicereg First-Classtrade First-Class Mailreg Foreverreg Informed Deliveryreg Informed Visibilityreg Marketing Mailreg Post Officetrade Priority Mailreg Priority Mail Expressreg Priority Mail Express Internationalreg Priority Mail Internationalreg United States Postal Inspection Servicereg United States Postal Servicereg US Mailreg US Postal Servicereg USPSreg USPS BlueEarthreg uspscomreg

Additional trademarks Be The Match Registryreg Forest Stewardship Councilreg Global Reporting Initiativetrade Sustainable Forestry Initiativereg The Climate Registryreg

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 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index
  • 2017 Annual Sustainability Report
  • Key Performance Indicator Table
  • Message
  • About This Report
    • About Us
    • About Sustainability Reporting
    • 2017 Stakeholder Engagement Process
      • Contents
      • Economic Viability
        • Innovation
        • Financial Stability
        • Optimize Delivery and Network Operations
        • Digital and Physical Security
        • Customer Service and Satisfaction
        • Operational Resiliency
        • Government RelationsLegislative and Regulatory Reform
          • Environmental Stewardship
            • Energy and Emissions
            • Environmental Compliance
              • Social Responsibility
                • Employee Engagement and Health Safety and Wellness
                • Community Engagement
                • Diversity Initiatives
                  • 2017 GRI Content Index