Climate change mitigation is one of the major challenges facing the international community today. CNH Industrial approaches the issue by limiting energy consumption and the use of fossil fuels, which are responsible for air pollution and, above all, CO2 emissions.
Managing greenhouse gas emissions and optimizing energy consumption are prerequisites for the continuous improvement of the Company’s performance and the protection of the environment in which it operates.
As evidenced by the materiality analysis, both CNH Industrial and its stakeholders believe it is important to manage energy and air emissions carefully, due to the nature and extent of their environmental and economic impact, and to their link to global warming, an issue gaining increasing importance worldwide. The significance of these aspects is further highlighted by their political, technological, and economic implications, in terms of both sustainable procurement and impact mitigation. From the stakeholders’ viewpoint, energy management programs are challenging because they require reducing energy consumption to an absolute minimum during product manufacture and service delivery. Energy usage is minimized through production efficiency, while providing reliable and adequate supplies of fuel and power at the lowest cost, generating, in turn, the lowest environmental impact. In line with recent trends, stakeholders require companies to realize energy-efficient districts and buildings, share renewables, and reduce greenhouse gas emissions (e.g., GHG reduction by 2030 through zero-emission sources in China, compliance with the requirements of the Greenhouse Gas, Energy and Water Efficiency Program of the US Department of Commerce, etc.).
As stated in the Energy Policy that is the framework of a plant management system, CNH Industrial is committed to reducing: the use of fossil fuels in favor of renewable energy sources; energy consumption through more efficient products and processes; and greenhouse gas emissions by cutting energy consumption and through innovative technical solutions.
In line with the new Business Plan, the new 2014-2018 Energy Action Plan defines the short and medium term targets for the main activities affecting energy performance, CO2 emissions, and use of renewable energy. These targets are incorporated in the Sustainability Plan (see also pages 38-39) and reflect CNH Industrial’s voluntary commitment to improving its daily energy performance across manufacturing operations.
The improvement process is supported by a solid energy management system and by the application of World Class Manufacturing principles, specifically the energy pillar. Plants rely on this dual, integrated methodology to set standards and energy targets; furthermore, its systematic approach provides for the continuous monitoring of activities, the accurate evaluation of results against stated targets, and their dissemination through proper communication channels.
In 2014, a total of 7% of CNH Industrial’s energy spending was invested in improving energy performance, leading to a reduction of approximately 307 thousand GJ in energy consumption, and of approximately twenty thousand tons in CO2 emissions1.
RESPONSIBILITY AND ORGANIZATION
The highest responsibility for initiatives focusing on energy efficiency and on the management of CO2 emissions at CNH Industrial lies with the Group Executive Council (GEC). As evidence of the Company’s ongoing commitment to managing these issues, a number of targets for energy efficiency and reducing CO2 emissions were included in the 2014 Performance and Leadership Management system (see also page 83) for both energy and plant managers.
CNH Industrial has a dedicated internal structure overseeing issues related to the conservation of energy resources and the fight against climate change. Departments responsible for energy management activities are present both centrally, through the Manufacturing Engineering Council (MEC) and the Industrial Energy Management Committee, and at plant level.
Activities are coordinated by the Industrial Energy Management Committee, consisting of the energy managers and specialists from each segment, which interacts with the MEC and the Sustainability Unit, as well as directly with plants. Based on the strategies defined by the GEC, the Committee sets out CNH Industrial’s guidelines (with the MEC) and objectives (with the Chief Manufacturing Officer), as well as the best strategies to achieve them; it also manages investment budgets for specific projects and oversees the progress of the Energy Action Plan through constant monitoring. The Committee also performs internal compliance audits and raises energy-related awareness among management and employees through meetings and campaigns. A dedicated IT platform allows energy managers to share data reports and energy performance results.
The Company’s overall energy management structure consists of 79 professionals, located at both Corporate offices and plants.
ENERGY MANAGEMENT SYSTEM
The system developed and implemented by CNH Industrial aims at reducing the energy impact of manufacturing processes and the risks associated with new legislation and rising energy costs.
In 2014, as evidence of its quest to reduce its energy impact, CNH Industrial continued to pursue the certification of its manufacturing processes as per the ISO 50001:2011 standard, setting the challenging target of certifying all sites worldwide by 2020.
The main advantage of ISO 50001 certification is the systematic approach it provides to continuous improvement in energy performance: a more efficient and rational use of energy translates into economic benefits and fewer greenhouse gas emissions. CNH Industrial’s energy management system was rolled out to 39 plants, representing about 94% of energy consumption, outperforming the targets set for the year.
ISO 50001 CERTIFIED PLANTS
Specifically, in 2014, ISO 50001 certification was extended to the energy management systems at the plants in Pregnana Milanese (Italy), Croix and Rorthais (France), Goodfield (USA), and Cordoba (Argentina).
During the year, 145 internal audits and 33 external audits were performed by qualified professionals to verify the effective implementation and maintenance of energy management systems, and their alignment with the standards and targets set, thus improving energy performance.
Voluntary compliance with the ISO 50001 standard reflects CNH Industrial’s determination to manage its business sustainably, as recognized globally by its inclusion in the Dow Jones Sustainability Index and its CDP results (see also page 47). Specifically, owing to a significant improvement in its CDP score, the Company received an award for its commitment in the field of energy.
WISCONSIN GREEN MASTERS PROGRAM
In October, the plant in Racine (USA) received the Best Sustainability Process of the Year award and was recognized as a Green Master. Both awards were granted by the Wisconsin Sustainable Business Council. By applying WCM principles and ISO 50001 standards, the plant improved its energy performance by 48% compared to 2009, and significantly reduced water consumption and the presence of ozone depleting substances (ODS).
Following the award, the plant is considered among the most sustainable enterprises in Wisconsin. In 2014, the reporting and monitoring of greenhouse gas (GHG) emissions continued through voluntary compliance with the Corporate Accounting and Reporting Standard of the WBCSD2 and WRI3 (GHG Protocol) and with ISO 14064 standards, covering 100% of CNH Industrial’s energy consumption.
SHARING AND AWARENESS ACTIVITIES
The ongoing promotion of employee involvement and awareness of the importance of energy resource conservation is key to reaching CNH Industrial’s improvement targets. To this end, best practices are standardized and disseminated across plants through the World Class Manufacturing system, to enable the kind of synergy that is crucial for the development and continuous improvement of any global company.
In 2014, 4,645 hours of training were provided (mainly by internal professionals) to 3,723 people across different plants, focusing on the distinctive features of the ISO 50001 energy management system, on the correct monitoring and management of energy performance, and on WCM energy management principles. Additionally, the Company organized other training events on key energy saving technologies.
In February, within the scope of the M’illumino di Meno, the Italian awareness campaign on energy saving, CNH Industrial contributed by turning off the lights at the Industrial Village in Turin (the main multifunctional sales center in Italy) and by circulating information on its responsible behaviors throughout the Company, via the Corporate Intranet.
(1) The types of energy included were fuel, electricity, and heating. The energy consumption reduction value was estimated as per the International Performance Measurement and Verification Protocol (IPMVP), volume 1 (January 2012). The estimated CO2 value includes scope 1 and scope 2 emissions.
(2) World Business Council for Sustainable Development.
(3) World Resources Institute.