Environmental, social, and governance considerations shape the efficiency of integrators.

What is it about?

This study investigates the impact of Environmental, Social, and Governance (ESG) factors on the productivity of the leading air cargo integrators: DHL, FedEx, and UPS. This study uses a two-step method to analyze how Environmental, Social, and Governance (ESG) factors affect the productivity of major air cargo companies: DHL, FedEx, and UPS. The research first measures technical productivity using Free Disposal Hull (FDH) and then looks at how ESG factors impact this productivity with dynamic panel regression. The findings reveal that DHL exhibits the highest efficiency among the integrators, while UPS shows comparatively lower performance. The findings reveal that DHL exhibits the highest efficiency among the integrators, while UPS shows comparatively lower performance. The analysis also uncovers several significant relationships between ESG factors and productivity metrics. Notably, there are positive correlations with greenhouse gas emissions and accident rates, suggesting that these areas may facilitate competitive advantages in certain contexts. Conversely, air freight rates and the ramifications of the COVID-19 pandemic are identified as negative influences on productivity, underscoring the challenges the industry faces in adapting to external pressures.

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Photo by qiwei yang on Unsplash

Photo by qiwei yang on Unsplash

Why is it important?

This study emphasizes the complexities of managing ESG initiatives, particularly as the air cargo sector experiences rapid growth. The findings show that companies need to carefully balance following ESG standards and keeping their operations efficient, indicating that successfully combining these aspects could improve long-term sustainability and competitiveness in a changing market. Addressing these challenges will be critical for optimizing productivity while fulfilling ESG commitments as the industry changes.

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