Microsoft, Mars, Ingersoll Rand on How to Profit from Climate Leadership
The EPA recently announced its climate leadership awards, recognizing companies, organizations and partnerships for managing and reducing greenhouse gas emissions in internal operations and throughout the supply chain, as well as integrating climate resilience into their operating strategies.
Three companies — Ingersoll Rand, Mars and Microsoft — took home organizational leadership awards for diverse climate change actions. Their examples highlight three take-aways for other companies looking to implement climate resilience strategies into their businesses. “They are proving that climate action isn’t just the right thing to do; it’s also the profitable thing to do,” said EPA administrator Gina McCarthy in a statement about the award winners.
Environmental Leader talked lessons learned with the three organizational leadership award winners. Here’s what they had to say.
Ingersoll Rand: Life Cycle Assessments are Good for Business
Global industrial manufacturing company Ingersoll Rand’s brands include Club Car, Thermo King, Trane, and Ingersoll Rand. The company has set a greenhouse gas emissions reduction goal of 35 percent from 2013 by 2020 for its global operations. The company won’t give an exact figure but says it’s “on track” to meet its goal. “To date the company’s Climate Commitment has supported the avoidance of approximately 2 million metric tons of CO2e globally,” says Holly Emerson, Ingersoll Rand senior sustainability analyst.
The EPA also recognized Ingersoll Rand for using life cycle assessments (LCAs) in its product development process to identify areas of high environmental impact, which can then be addressed directly. To date, the company’s products with LCAs account for over $870 million USD of revenue. One example of this is Ingersoll Rand’s EcoWise, a portfolio of products designed to lower environmental impact with low global warming potential refrigerants.
“The use of LCAs in product development is good business because it informs our design decisions by identifying areas we should be targeting, gives us the ability to test different design scenarios and confirms our environmental impacts using a standardized methodology available to all product makers globally,” Emerson says. Plus, she adds, the number of clients requesting this information is growing. Considering life cycle analysis when making purchasing and planning decisions helps companies reduce the environmental impact of large projects, such as commercial buildings.
“The use of LCAs can be a differentiator in the eyes of the customer,” Emerson says. “It can also be a driver for reducing environmental impacts and lowering operating costs.”
Mars: Improve Efficiency and Invest in ‘Breakthrough Technology’
The food and drink giant (it also has a petcare and symbioscience divison) set an absolute greenhouse gas emissions reduction goal of 25 percent by 2015, from 2007 numbers. While it hasn’t crunched the 2015 numbers yet, it expects to have met its goal. Up next: eliminating 100 percent of its greenhouse gas emissions by 2040. Mars’ other climate targets include:
- Reduce fossil fuel energy use by 25 percent (over 2007 levels) by 2015, and by 100 percent by 2040.
- Send zero waste to landfill by 2015.
- Reduce water usage by 25 percent by 2015.
Kevin Rabinovitch, (pictured, second from left) Mars global sustainability director, says the company is working to achieve these goals by efficiency improvements — through operational changes and capital investment — as well as investing in “breakthrough technology” that focuses on sustainable ways to manufacture products and renewable energy.
“One of many examples of efficiency improvement is at our Mars Chocolate site in Haguenau, France, which uses steam generated from a nearby waste energy facility to meet 90 percent of the site’s heating needs and lower energy-related GHG emissions by 60 percent,” Rabinovitch says. “Another example is in the Netherlands at the Oud-Beijerland factory, where Mars Food Associates reduced energy consumed by 18 percent over three years. They did this by modifying the way process water is heated, and improving the control of cooling water pumps.”
Rabinovitch points to the Mars Food site in Olen, Belgium, as an example of how the company is developing new sustainable manufacturing technologies. “The site has invested $500,000 in a pilot project to research new technologies for drying rice,” he says. “This could reduce GHG emissions by up to 50 percent compared to current drying operations.”
Microsoft: Set an Internal Carbon Price
Microsoft set and achieved its goal to become carbon neutral; as of July 1, 2015 the company achieved carbon neutrality across its manufacturing operations. Microsoft’s data centers, software development labs, offices and business air travel have been carbon neutral since July 2012.
One of the measures Microsoft took to reach this goal was to implement an internal carbon fee. The fee, paid by business units across the business, funds internal efficiency upgrades, Power Purchase Agreements and green power instruments, carbon offset projects, and supply chain engagement. These actions have funded the purchase of more than 10 billion kilowatt-hours of clean energy and reduced emissions by 7.5 million metric tons of carbon dioxide equivalent. It also saves Microsoft more than $10 million per year.
Tamara ‘TJ’ DiCaprio, Microsoft’s senior director of environmental sustainability, says the company calculates its internal price on carbon based on investments in “green” initiatives. “We carefully track and analyze the carbon emissions from our operations in more than 100 countries,” DiCaprio says. “We then total the investments in efficiency, renewable energy and carbon offset community projects to reach our carbon neutral commitment. The total cost of our investments divided by our carbon emissions footprint provides Microsoft with its annual price on carbon. For the current fiscal year, the carbon fee fund is approximately $20 million.”
In 2013 Microsoft published its carbon fee playbook, an overview on how it implemented its internal carbon price that includes a five-step process to guide other companies on how to put it into action at their own businesses. It helps the planet and business, DiCaprio says.
“Through our carbon fee, we’ve been able to kick start a virtuous cycle of environmental awareness and responsibility within Microsoft that continues to benefit both our company and the planet by reducing the impact of our operations on the environment and spurring innovation,” DiCaprio says. “This simple, repeatable model can help other organizations to achieve the awareness, education, and culture change required to demonstrate environmental responsibility.”
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