Long-term value creation requires companies to steer both on the financial and non-financial aspects of business. Certain non-financial aspects contribute directly or indirectly to financial performance, and often have a greater impact over the medium to long term. At PostNL, we believe that an integrated approach towards performance management is key to ensuring the company creates stakeholder value in the long run.
The Integrated Reporting framework of the International Integrated Reporting Council (IIRC) provides guidance on how companies should communicate about value creation. PostNL used the guiding principles and main content elements of the framework as a basis for this Annual Report. PostNL aims to further develop its corporate reporting communication about long-term value creation.
PostNL prepared the non-financial information in this Annual Report in accordance with the core option of the Sustainability Reporting Standards of the Global Reporting Initiative (GRI). The GRI standards provide relevant and clear requirements for sustainability reporting on economic, social and environmental aspects, while allowing for company-specific aspects to be reported. PostNL decided to report in accordance with the core option of GRI because not all specific disclosures on material GRI topics, which are reporting requirements in the comprehensive option, are material in respect of this Annual Report.
In addition to the GRI requirements, we apply supplemental reporting criteria specific to PostNL for reporting elements which are not covered by GRI. This includes specific reporting definitions as presented in the Appendix 'Glossary and definitions'.
As a UN Global Compact signatory since 2012, PostNL reports its progress of implementing the ten UN Global Compact principles annually through an online submission. These are related to human rights, labour, environment and anti-corruption. The Appendix 'UN Global Compact reference table' provides an overview of the ten principles, and references to the descriptions of progress on those principles, in this Annual Report.
In relation to our international activities, we endorse the guidelines for multinational enterprises on responsible business conduct published by the Organisation for Economic Co-operation and Development (OECD). These non-binding guidelines provide recommendations in a global context consistent with laws and internationally-recognised standards.
The Sustainable Development Goals are a call to action by the United Nations (UN) to make progress on 17 global challenges in relation to peace and prosperity for people and planet. While the goals are agreed at government level, the call to action also applies to businesses. The SDGs are interrelated and relevant for PostNL, as we have an impact on all 17, both through our own operations and/or indirectly through our value chain. We take action on all SDGs, and apply a focused approach at group level. This helps us improve the contribution on those SDGs closest to the business activities of our company.
Based on SDG impact analysis and dialogue with our stakeholders, we identified and focus on four main SDGs. We connected our contribution to these SDGs with the long-term value creation process as described in our value creation model. The most direct impact of our business operations related to SDG8 and SDG13. On SDG9 and SDG12 we look beyond our own operations and proactively engage with partners in our value chain to make progress.
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We distinguish our impact between doing good (improving our positive impact) and avoiding harm (mitigating negative impact). For each SDG, we mapped the relevant PostNL topics to the related SDG sub goals to provide insight into where our contribution to the SDGs is to do good and where to avoid harm. The SDGs and sub goals (or sub targets as defined by the UN) are described qualitatively. We link the SDGs to our strategy through our key material topics and other relevant topics from our Materiality matrix. We defined performance indicators on all our key material topics.
Provide decent work conditions for our people, contribute to e-commerce growth, grow profitably and maintain an accessible, reliable and affordable postal service.
We provide direct and indirect employment to more than 53,000 people. The health and safety of people working with and for us is our first priority (SDG 8.8). Our efforts in safeguarding road safety contributes to good health and well being (SDG3.6). Safety also includes mental safety, which is why we focus on diversity and inclusion in our human resources policy. This is linked to reducing inequalities (SDG 10.2). We want to be a good employer with favourable working practices. During the pandemic in 2021 our priority was the health and safety of our people (SDG 3). This also includes fair compensation (SDG 8.5), helping our people to develop themselves (contributing to quality eduction (SDG 4.3 and 4.5)) and gender equality (SDG 5.5).
Our strategy is based on continuous growth. As a logistics and postal service provider, we contribute to the economic growth in both the regions and value chains we operate in (SDG 8.1). Alongside this growth, we want to remain relevant by becoming more effective across our business and accelerate digitalisation to support this. We also want to transform through innovation (linked to SDG 9.5) towards greater integration in the ecosystems we are part of (SDG 8.2).
We need to provide accessible, reliable postal services in the Netherlands as the dedicated postal operator. At the same time, we are continually developing our parcels network to capture growth effectively. We want to maintain and strengthen our state-of-the-art networks, which requires innovation and collaboration with business partners to develop the right infrastructure.
We are investing significantly in our network infrastructure, digitalisation and sustainability to further improve our core logistics (SDG 9.4). At the same time, we drive innovation through digitalisation to become a logistics market player more integrated with the ecosystems we are part of. Collaboration with our value chain partners on innovation is crucial for our long-term success (SDG 9.5). Improving our services and processes through re-designs based on customer journeys is one example. Developing new ways of working based on technology is another, which can be seen in our small parcel sorting centre. This sorting centre is using technology through robotisation to develop new processes that benefit PostNL and our customers. We are dependent on technological developments and other business partners to design and implement new ways of working, such as the transition to an electric fleet. For example, using solar panels as an energy source for our sorting centres is one area in which innovation and infrastructure helps us make a positive impact on affordable and clean energy (linked to SDG 7.2). And our sustainable city logistics programme is helping us lower emissions while minimising traffic nuisance to improve accessibility in cities (linked to SDG 11.2).
We want to reduce our ecological footprint by changing the way goods and resources are produced and consumed in collaboration with others within our value chain.
We engage with partners in our value chain to promote more sustainable alternatives, such as smaller, more sustainable packaging. This includes a more efficient use of natural resources, and minimising pollution/waste to air, land and water, which relates to environmental aspects (linked to SDG 11.6) and health and well being of people (linked to SDG 3.9). At the same time, we are becoming ever-more transparent about our direct and indirect environmental impact, and take actions to make our procurement practices compliant with legal requirements and our own policy. Waste management forms part of our certified environmental management system and is bound to (local) regulations. As well as reducing or treating our own waste in the best ways possible, we also engage with suppliers and customers about the topic, such as in relation to sustainable packaging. Our purchasing department aims to add two purchased goods per year that are made of circular resources. And in a bid to move closer to a circular economy, we are working with a number of e-tailers to collect and recycle e-waste.
Improve our impact on climate change by implementing measures to reduce our greenhouse gas (GHG) emissions across all of our operations.
We designed our emission-reduction targets to contribute to limiting global warming in line with the Paris Agreement on climate change. These targets are set to reduce direct and indirect GHG emissions from our own operations and outsourced activities (SDG13.2). Beyond our own climate action, we want to stimulate our logistics partners to decarbonise their activities for us by raising awareness and promoting active engagement. We have established long-term Science-Based Targets (SBT), approved by the SBT Initiative, to reduce our environmental footprint and drive sustainable growth of the business. Climate change impact goes beyond sustainable logistics at PostNL. With our targets and experience, we play an active role in engagement with our value chain partners on both climate change mitigation and adaptation through dialogues and partnerships on different levels (SDG 17.6).
As a large listed company in the Netherlands, PostNL has to comply with the EU directive on non-financial information (2014/95/EU). PostNL is required to report about non-financial information in relation to environmental, social and personnel matters, in respect of human rights and combatting bribery and corruption. The mandatory disclosures include:
Policies and results thereof;
Main risks and how these are managed;
Performance indicators, to the extent that these elements exist within PostNL.
PostNL uses the Greenhouse Gas (GHG) Protocol to report its greenhouse gas emissions. The production of direct and indirect CO2 emissions represents the main GHG of PostNL. We also take other GHG emissions into account, such as CH4 and N2O, and report our climate change impact in CO2 equivalents.
PostNL recognises that climate change events can have an impact on our company and business. For many years, PostNL has included the reduction of GHG emissions in its strategy. Since 2018, we externally disclose the alignment of our climate action approach to TCFD. We addressed all four TCFD reporting recommendation elements throughout this report.
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The GRI standards provided a structured approach to prepare the non-financial information in this report. This includes universal disclosures and topic-specific disclosures. The universal disclosures consist of three key elements:
Foundations: Defining report content & quality, requirements for preparing a report in accordance with GRI;
General standard disclosures: Contextual information about PostNL, its strategy, governance and reporting practices and;
Management approach: Information on how PostNL manages its key material topics.
PostNL uses the topic-specific disclosures to describe the company’s impact related to each key material topic, expressed in key performance indicators. In addition, PostNL has also taken into account two important elements in relation to value creation as described by the IIRC:
Strategic focus/future orientation: Information about the strategy and ability to create short-, medium- and long-term value and the ability to the use of and effect on the relevant capitals;
Connectivity: Show a holistic picture of the combination, interrelatedness and dependencies between the factors that affect the organisation’s ability to create value over time.
The GRI Content Index table in the Appendix 'GRI Content index' provides references to sections with specific information in relation to the GRI requirements in this report.
We follow the reporting foundations in line with the GRI standards. This includes engagement with stakeholders, putting sustainability data in context, assessing material topics and ensuring information in the report is complete.
PostNL's main stakeholder groups, including the main topics of engagement, are outlined in the chapter 'Our operating context'. We interact with a variety of stakeholders on a regular basis to understand their expectations, needs and interests. In addition to our day-to-day engagement, we also engage with them through stakeholder dialogues. Although there were restrictions in relation to the Covid-19 pandemic, we were able to organise our large stakeholder dialogue event in 2021 online. More information about the stakeholder dialogue is available in the chapter 'Our operating context'.
During the event we focused our discussions on topics where we want to have a proactive role in our value chain, climate change, human rights, and diversity and inclusion. Additionally, we use a materiality assessment to identify those topics that have the greatest influence on stakeholders' decisions, and which require management's strategic attention. In 2021, we used the matrix of the previousyear as the basis for our update this year.
The following table details the topics of interest and the means of engagement with each stakeholder group.
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Understanding the expectations of stakeholders helps PostNL to allocate resources effectively on relevant topics while focusing on adding short-, medium- and long-term value.
Performance data becomes information only when put into context, which is an important principle we apply to our non-financial reporting. Our performance is influenced by our strategic actions and external circumstances, which could be sector or location specific and based on relevant trends and common goals, such as the SDGs. PostNL provides context to its performance on key material topics in the Business Report of this report.
PostNL interacts with its stakeholders on a wide variety of relevant but different topics. Selecting the key material topics that drive our long-term value creation is required to bring focus to the Annual Report. This materiality concept is similar to financial reporting and is applied by evaluating the extent to which a topic influences stakeholders' decisions and the significance of PostNL’s impact on its environment, including stakeholders.
PostNL used the following sources to prepare a long list of topics as a first step in the assessment:
Desktop research including:
Peer review
Market trends
Topics evaluated in prior years, through our Annual Reports
Interests of benchmarks and guidelines (such as DJSI, CDP, GRI)
Media search
Long-term impact related to the SDGs
Interviews with (senior) management representing certain stakeholder groups with whom they have regular contact.
Based on the long list of topics from different inputs, we clustered topics based on their nature as a first step in the selection process. The prioritisation of topics was performed based on the following process:
Using the results of the extensive materiality assessment of 2020 as a basis;
Updating the wording of topics to report on more specific topics;
Updating the prioritisation of topics in the materiality matrix by the Annual Report project team. This was based on developments within PostNL and its operating environment and the relative importance of different stakeholders;
Discuss the prioritisation of topics through interviews with (senior) management representing relevant stakeholder groups and those responsible for PostNL’s strategic plans;
Validate the materiality matrix with the Executive Committee which includes approval of PostNL's Board of Management.
PostNL mapped its material topics to the five different domains of value creation. These topics are the starting point of our value creation model, which can be found in the 'How we create value' chapter.
The final element of the report foundations relate to completeness of topics, clear boundaries and coverage of the topics over time, to sufficiently reflect the significance of PostNL’s impact.
Through the materiality assessment, PostNL selected, to the best of its knowledge, all relevant topics to include in this report. For each topic included in the non-financial disclosures, PostNL identified the topic boundaries where PostNL’s impacts occur and how PostNL is involved in these impacts.
For all key material topics, the main impact of PostNL’s activities occur in the Benelux, with the exception of environmental impact, where the main impact is outside the Benelux due to air transport of mail and parcels. For all key material topics, PostNL influences the impact by its direct activities. For the key material topics 'Customer experience' and 'Climate change', this influence is also impacted by indirect activities, mainly through activities for which we collaborate with logistics partners.
PostNL applied high-quality standards when preparing the non-financial information in this Annual Report. This means that the company ensures that the information this report provides is:
Accurate: Precise and with sufficient level of detail
Balanced: Reflects both positive and negative aspects of performance
Clear: Understandable and accessible for stakeholders
Comparable: Consistent and allows for comparability over time
Reliable: Auditable
Timely: Allow stakeholders to make informed decisions.
PostNL has aligned the scope of reporting non-financial information with financial information. On certain areas the non-financial information scope differs from the financial reporting scope.
We do not include information about joint ventures in the scope of non-financial information. New entities acquired during the reporting year will be included in the first reporting year in which the entity was part of PostNL for the entire year. When we divest entities during the year, or when we classify entities as discontinued in our financial reporting, we exclude the non-financial information from the performance data in the report. For material and available information we will report the relevant non-financial performance information separately in this chapter of the report. In case of mergers, we evaluate appropriate scoping on a case-by-case basis.
The primary focus in our non-financial reporting is on our own direct operations. For certain information, we extend our reporting to the performance of relevant parties in our value chain. Examples include information about fatal accidents where delivery partners of PostNL may be involved. But also the CO2 emissions and kilometres of our transport logistics partners, both in the Benelux and beyond, including truck, air and boat transport. We include all emissions for transport directly arranged by PostNL. This excludes first- and last-mile transport where PostNL is not involved in organising the logistics.
PostNL strives to report the non-financial information as accurately and completely as possible. Due to inherent limitations in relation to the uncertainty of measurement equipment and/or availability of actual data, we use estimates, assumptions and judgements in our reporting. Estimates, assumptions and judgements are based on historical experience and other factors, including reasonable expectations under given circumstances.
For certain information, such as accidents, it is difficult to determine reasonable expectations. We partly depend on the reporting discipline of our people for accidents that occurred during the year. Despite all measures PostNL implemented, including an open safety culture, the inherent risk of incomplete accident reporting remains.
Emissions reporting provides inherent limitations to the accuracy of information. The main reason is the unavailability of data from contracted parties by PostNL about their factual transport kilometres, energy consumption and CO2 emissions. Actual emissions monitoring is not common and therefore conversion factors published by external institutes are used. PostNL used the following significant estimates to report its emissions:
For the contracted partners we calculate the fuel consumption using kilometres based on planning or actual route information from our operational systems and the average fuel consumption of our own fleet of comparable vehicles. In order to make conservative estimations, we assume all delivery partners use diesel vans in case we have no insight into the vehicles used. In 2019, we started to register information of vehicles used by delivery partners to obtain better insights in the vehicle mix. For those networks where we have this mix available, we use it to estimate the fuel consumption per vehicle type. Contrary to our own fleet, we do not know the exact number of kilometres driven by delivery partners. Therefore, the calculation of these kilometres include estimations.
The kilometres covered by foot, bike or e-(cargo) bike consist of all kilometres made during deliveries. We use several sources to calculate the total kilometres covered. More than 88% of the kilometres are based on actual data. The remaining part of the kilometres is estimated based on available data.
For both road and air transport, PostNL calculates the tonne-kilometres carried based on the distance travelled (between the Netherlands and the hub of the destination) and the actual weight of the mail and parcels transported. For trucks, PostNL uses publicly-available route planning information, and for air travel PostNL uses publicly-available information (Great Circle Mapper) to calculate the great circle distance between airports. Carbon emissions are calculated based on publicly-available emission factors per tonne-kilometre.
We use standard publicly available Dutch conversion factors to convert activity data from buildings and vehicles to energy consumption in Terra Joules (TJ).
To calculate CO2 emissions of our total own operations and of outsourced operations to our delivery partners in the Benelux, we use different external sources in order to estimate the emissions as accurately as possible.
PostNL uses the tank-to-wheel (TTW) conversion factors from activity data to CO2 emissions published by the independent Dutch initiative tied to the Government "CO2emissiefactoren.nl". This initiative manages an uniform list of factors commonly used and scientific based for the Dutch context. The conversion factors of electricity use outside The Netherlands are not provided by CO2emissiefactoren.nl, therefore PostNL uses the factors published by the International Energy Agency (IEA), an autonomous body in the framework of the Organisation for Economic Co-operation and Development (OECD).
The emissions of NOx and PM10 are not directly related to the usage of combustion fuels, but depend mainly on the efficiency of the engines of vehicles. The actual emissions of NOx and PM10 are not measured, therefore we use the maximum allowed emissions for the various European emission standards of vehicles we use (Euro 5 or Euro 6) in grams per kilometre. By using the maximum allowed emissions, PostNL reports the NOx and PM10 emissions conservatively.
Customer satisfaction, employee engagement, brand reputation and delivery quality are indicators measured on sample basis. PostNL aims to report performance data that provides a representative view of the population from which the sample is taken. To achieve this representativeness, PostNL ensures the sample sizes are statistically sufficient and include all different sub populations to justify our assumption that the result of the measurement represents the view of the entire population for the indicators mentioned.
Note that the numbers presented in the non-financial statements and disclosures, and therefore may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.
Developments in business, reporting requirements and methodology improvements influence the way PostNL measures, calculates and reports its performance data. Whenever PostNL updates its reporting scope or reporting methods, we also revise prior years’ data to keep the performance data comparable over time.
In 2021 we noticed that the energy efficiency of our fleet for the year 2020 was incorrectly disclosed. We have revised the related data point from 6.4 to 5.8 MJ/km in this year's disclosure.
Another data revision relates to diversity in our workforce. We updated our underlying details in our reporting definition to determine the total share of females in management positions. As a result, the comparative figures have been revised. We have changed the underlying definition as result of our increased transparency by breaking down the total share of females in management positions into operation, middle and senior management.
PostNL uses formalised processes to record, validate and consolidate information in order to report non-financial performance data. PostNL integrated non-financials in the regular planning and control cycle, including budgeting, target setting and periodic performance monitoring. We collect and report non-financial performance data on selected key performance indicators on a monthly basis. Other indicators are reported biannually or annually depending on the nature of the indicators.
Similar to financial reporting, all reporting entities are responsible for their non-financial performance data and implement actions to steer on results. Although the majority of non-financial information is recorded in central PostNL systems, for several entities and indicators other systems are used. For our consolidation processes, we use an IT system covering both financial and non-financial data. For some performance indicators, such as employee engagement, the data is prepared and collected centrally. We strive to report non-financial performance data based on actuals as much as possible. We focus on our key performance indicators. On other performance indicators, we may use extrapolation of results of large entities to determine the performance of smaller entities. This reduces the administrative tasks for smaller entities. We only use this method in cases where the extrapolations are reasonably predictable. In our data coverage table we provide insight into the information reported based on extrapolation.
In order to ensure that the data reported by different entities is consistent and of high quality, PostNL developed company-wide reporting definitions for each performance indicator. In addition, we implemented formal quality controls related to the reported data in the system for both the data owners (first line) and control department (second line). This includes de-central and central analytical procedures to evaluate the accuracy and completeness of reported data, as well as seeking explanations for unexpected trends in performance. PostNL uses its controls in a company-wide financial and non-financial internal control framework.
Some statements in this Annual Report are 'forward-looking statements'. By their nature, 'forward-looking statements' involve risk and uncertainty because they relate to and depend on circumstances that occur in the future. These statements involve known and unknown risks, uncertainties and other factors that are beyond PostNL’s control and impossible to predict and may cause actual results to differ materially from any future results expressed or implied. They are based on current expectations, estimates, forecasts, analyses and projections about the industries in which PostNL operates and PostNL management’s beliefs and assumptions about future events.
Undue reliance cannot be placed on these 'forward-looking statements' by readers of this report. These statements only speak as of the date of this Annual Report and are neither predictions nor guarantees of future events or circumstances. PostNL does not undertake any obligation to release publicly any revisions to these statements to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
PostNL’s Internal Audit department includes selected non-financial information and related controls in the scope of their work. In addition to the internal controls and internal audit, PostNL engaged EY as our independent external auditor for our financial statements to provide reasonable assurance on the non-financial information in this Annual Report.
The scope of EY’s assurance includes the non-financial information in the following sections of this Annual Report:
Introduction
Business report (excluding the 'Financial value' and 'Opportunity and risk management' as well as the chapter 'Environmental value', section: 'EU taxonomy on sustainable activities')
Non-financial performance statements (excluding Assurance report of the independent auditor).
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