United Rentals, Stamford, Conn., lists sustainability as one of its core values. Rental Management recently asked Matthew Flannery, president and CEO, United Rentals, to answer questions about what sustainability means to the world’s largest equipment rental company and how this core value is implemented. His responses follow.
Rental Management: In your Corporate Responsibility Report, you list sustainability as one of the core values of United Rentals. You state that it is to “engage in practices that lead to positive change by encouraging social accountability and environmental responsibility.” What does that definition mean regarding the practices at United Rentals?
Matthew Flannery: Our core values are more than initiatives or programs. They’re principles that are integrated into how we do business. We don’t just tell employees to do something, we want them to understand why that action matters and have a sense of ownership about it. For example, reducing our energy consumption — that’s a company goal that ties to our values, and each branch is using an electronic scorecard to track how they’re doing and see where they can improve. We feel it’s important to lead by example. We’ve always said that we’re not interested in being just the biggest, we also want to be the best. That’s sustainability in a nutshell. If we benefit the environment, we benefit everyone, and our scale can increase that benefit exponentially. It’s a goal that matters to all our stakeholders.
Rental Management: Do you see the practice of renting equipment as a sustainable action and that renting equipment could be used by others to improve their sustainability?
Flannery: Yes, when you think about the rental model, it’s a sharing model. Work gets done by fewer manufactured machines, with less idle time. It reduces unnecessary consumption of energy and materials. We find that rental equipment, in general, has a higher utilization rate than assets owned by our customers. Also, we manage the age of our fleet to keep it up to date with efficiency technologies. It can be difficult for a contractor to make that level of investment.
Rental Management: How long have consumption and production, as well as climate action, been part of the United Rentals report?
Flannery: We began disclosing our consumption data with our first Corporate Responsibility Report, which covered the years 2010 and 2011. Since then, we’ve put out a report each year showing internal trends that reflect our progress. Our current report includes our first publicly announced sustainability target — a greenhouse gas intensity reduction goal.
Rental Management: The report states that you have implemented policies and procedures to reduce energy, divert waste from landfills, properly dispose of harmful substances and reduce significant spills. Can you elaborate on what those policies are, the training you offer and what targets you are trying to meet?
Flannery: The policies and procedures are different in each case. Waste mitigation is a good example. We make sure our waste is handled correctly by the vendors we use, we manage our materials consumption, use recycling techniques like oil refining, reduce paper waste with our rental management system and refurbish equipment when it makes sense.
Another good example is the customized logistics and route-optimization tool we use for delivering and picking up equipment. It helps us to reduce the number of empty loads, lower fuel consumption and emissions, use less fuel idling in traffic and have less wear and tear on our delivery equipment.
We also have Lean and 5S programs that identify new ways to improve — and that’s just for one goal. Other goals, like emissions reduction, have their own policies and procedures.
Rental Management: Your reach continues to grow. That means your footprint of greenhouse gas emissions has the potential to increase significantly. In your latest report, you stated that your goal is to reduce those emissions by 35 percent by 2030. What steps do you have in place to achieve that goal?
Flannery: The 35 percent reduction is a GHG (greenhouse gas) intensity goal, which takes the future growth of our direct operations into account. The intensity measure is revenue: MWh per million dollars of revenue for energy and CO2e (carbon dioxide equivalent) per million dollars for emissions. We’ve reported two sequential year-over-year declines in intensity in both metrics so far, driven by the various programs detailed in the report, such as fuel types and lighting upgrades.
Rental Management: Is this goal of reducing emissions strictly at your corporate and branch operations, which you document as 77 percent coming from your delivery, sales and service vehicles, and the other 23 percent from your energy consumption at your branches and corporate offices? Or does it also include the use of your equipment at industrial locations and job sites?
Flannery: We’re starting with our own operations, which we call Scopes 1 and 2, where we have direct control of emissions. In the future, we hope to extend this to Scope 3, our whole value chain. A lot of Scope 3 will be beyond our direct control but within our realm of influence. Scope 3 emissions reduction is more complicated to calculate and requires our collaboration with customers, original equipment manufacturers (OEMs) and other partners. It’s a large commitment, but one that we’re prepared to make. We’re currently evaluating the value chain to identify the most viable actions.
Rental Management: How is United Rentals creating a culture of sustainability?
Flannery: The last 20-plus years have shown us that knowledge is the key to cultural change. Our job at the corporate level is to provide the team with data and goalposts so that everyone shares in the accountability and pride. Each branch team sees energy data that shows their performance and trends, and we communicate our progress in areas like lighting retrofits. Our driver scorecards document idling metrics. Sustainability isn’t a hard sell at United. This is something our employees care about, and they can see that our customers care about it, too.
Rental Management: You are the largest rental operation in the world. How do you intend to use your influence to make sustainability a dominant initiative throughout the industry?
Flannery: First, by setting an example and showing that sustainability can coexist with customer-focused rental operations in a financially healthy business model. Also, as we look at expanding to our full scope of influence, we believe that engagement is key. We want to engage more directly with our customers on environmental issues and communicate our customers’ needs and expectations to our suppliers. This will provide the large-scale feedback needed to drive meaningful change. It won’t happen overnight. It will be an evolution of change over the coming years, and we can be the catalyst as the industry leader.