CNH Industrial is committed to continuously improving the environmental performance of its manufacturing processes, by adopting the best technologies available and by acting responsibly to mitigate its environmental impact. Environmental protection at CNH Industrial is based on principles of prevention, conservation, information, and people engagement, to ensure effective long-term management.
The materiality analysis identified the use of water, the protection of biodiversity, and the management of waste and effluents as significant environmental aspects1 for the Company and stakeholders alike. The proper management of both waste and effluents is particularly relevant because it leads to efficient disposal and reduces pollution risks (and hence reputational risks), which have greater economic and social implications than all other environmental aspects. From the stakeholders’ point of view, waste requires proper management due to increasing volumes in developed, industrialized countries, while spills have less importance owing to the minimal risk of accident and/or spills associated with today’s very high equipment standards. Water management and the protection of biodiversity are material aspects gaining increasing importance among the international community. Both are regularly addressed by the Company through initiatives driven by investments that, at this stage, are commensurate with the extent of their impact in the areas most affected. Stakeholders, particularly in LATAM and APAC, consider water as the most neglected and critical resource worldwide. They consider it crucial in the capital goods sector in terms of both management (e.g., wastewater) and risk of contamination (e.g., water used in washing and painting processes). In APAC, stakeholders call upon public-private partnerships to modernize urban water-distribution systems. Nevertheless, they struggle to find links between biodiversity and business, which is an important topic that could perhaps pave the way to future discussions on the management of plant impacts.
The Environmental Policy, available on the Corporate website, describes the short, medium, and long-term commitments toward the responsible management of the environmental aspects of manufacturing (particularly energy, natural resources, raw materials, hazardous substances, polluting emissions, waste, natural habitats, and biodiversity).
These aspects are included in both the environmental management system of CNH Industrial and the environmental pillar of World Class Manufacturing; both systems require compliance with guidelines, procedures, and operating instructions, and regular internal audits and reviews by management. This dual approach enables the effective management of all environmental aspects, and the adequate evaluation of outcomes (even with respect to estimated targets), which are duly reported via the Sustainability Report and the Corporate website, among other means.
Environmental aspects are monitored, measured, and quantified to set improvement targets at both Corporate and segment levels. As further evidence of the Company’s commitment toward protecting the environment, all 2013 indicators confirmed the continuous improvements seen in recent years. Furthermore, in line with the Business Plan, all improvement targets were updated in the new 2014-2018 Environmental Plan drafted in 2014 (see also pages 36-38).
In 2014, CNH Industrial’s determination to manage the environmental impact of its business in a sustainable way was recognized once again at global level, with the Company’s inclusion in the Dow Jones Sustainability Index (see also page 47).
The path toward reducing the Company’s environmental footprint, which encompasses aspects affecting the environment (from the selection and use of raw materials and natural resources, to product end-of-life and disposal), continued to require significant commitment throughout the year, both financially and in terms of interventions to improve technical and management performance.
CNH Industrial’s overall expenditure on environmental performance improvement in 2014 exceeded $56 million (an increase of over 13% compared with 2013), broken down as follows: $35 million for waste disposal and emissions treatment, and $21 million for prevention and environmental management. A total of $16 million was invested in initiatives to reduce the environmental impact, generating cost savings of $5 million.
RESPONSIBILITY AND ORGANIZATION
The highest responsibility for initiatives focusing on environmental protection at CNH Industrial lies with the Group Executive Council (GEC). The specific projects aiming at the environmental improvement of manufacturing processes fall under the responsibility of plant managers.
In 2014, individual environmental impact reduction targets were included in the Performance and Leadership Management system (see also page 83) for some plant managers and for most of the managers in charge of the projects indicated in the Sustainability Plan.
In order to implement the Environmental Policy, each Region coordinates and manages environmental issues through the Environment, Health and Safety (EHS) function, which checks that commitments are met locally, periodically verifies performance against targets, audits compliance, provides training and technical assistance, proposes new initiatives, and establishes environmental policies. An important role is also played by the plant employees of other functions/bodies (production line, logistics, manufacturing engineering, etc.) involved with environmental issues in various capacities.
In its endeavor to protect the environment, the Company also uses centralized systems like the Standard Aggregation Data (SAD), i.e., a performance indicator management tool, and the Environment, Health and Safety IT platform, which provides users with training and information tools such as ISO 14001 certification support documents (guidelines, procedures, reporting guidelines, etc.). Approximately 210 people from Company sites worldwide have access to the platform.
ISO 14001 CERTIFIED PLANTS
In 2014, CNH Industrial continued to pursue and maintain the certification of its plants’ environmental management systems as per the ISO 14001 international standard. As at 2014, 53 CNH Industrial manufacturing plants worldwide were ISO 14001 certified (see also page 237).
In addition to the systematic management of environmental aspects under normal operating conditions, the ISO 14001 certified environmental management system requires the adoption and regular verification of emergency plans and procedures, which must be communicated to employees via specific staff training. These procedures define roles and responsibilities, as well as responses to tackle unusual and/or emergency situations, to protect both people and the environment.
The environmental certification maintenance process entails a cycle of external third party audits, carried out by licensed entities or bodies. The process involves annual monitoring and certification renewal every three years.
Furthermore, each plant is required to perform an internal audit every year to verify the performance of its environmental management system.
In keeping with the previous year, the second course for ISO 14001 internal auditors was organized at the San Matteo plant (Italy) for EHS staff members from Italian plants. This activity made it possible to begin a series of internal audits of environmental management systems, performed by cross-functional teams (consisting of one representative of EMEA’s central EHS function and one person from an operational unit). This program allows team members to share their professional and plant experiences, promoting mutual exchange and the dissemination of best practices while ensuring that standards are applied consistently across different manufacturing plants. The Italian plants in Bolzano, Jesi, Piacenza, San Mauro Torinese, and Suzzara were the first to be involved in this new initiative.
Furthermore, as per the Sustainability Plan, the Company’s ongoing effort to certify the environmental management systems at Italian non-manufacturing sites led to the certification of the Research & Development and Logistics Center in Modena San Matteo.
ENGAGEMENT AND AWARENESS ACTIVITIES
CNH Industrial is committed to promoting and disseminating the principles of continuous improvement and environmental protection both within and outside the Company. It does so by addressing employees and business partners via dedicated communication and training tools, as well as by organizing events engaging employee family members and local communities.
A reliable and effective means of engaging people and sharing information is the World Class Manufacturing program (see also page 164), which promotes good practices and the implementation of improvement projects, including those suggested directly by employees.
In 2014, CNH Industrial involved approximately 24 thousand employees in environmental training activities, for a total of approximately 42 thousand hours.
As regards communication activities, on World Water Day (March 22), the Company made use of the Corporate Intranet to globally publicize its main projects (both implemented and underway) and efforts aimed at reducing water consumption and the volume of water discharged by its plants. On that same occasion, a brochure on the Water Footprint of Food was distributed at plants in EMEA and APAC, illustrating the virtual water contents of food products and the impact of daily activities on water consumption.
During celebrations for the 42nd World Environment Day (June 5), always via the Corporate Intranet, CNH Industrial publicized its main initiatives to reduce its environmental impact. Many initiatives also took place at local level. At the plants in Argentina, Brazil, and Venezuela, for example, approximately ten thousand employees were engaged in awareness initiatives on environment protection. Among other things, the plants organized theatrical plays focusing on environmental topics; furthermore, to raise awareness of waste recycling and regeneration, they partnered with companies specializing in oil recycling, enabling employees to exchange used cooking oil from their homes with bars of soap made from exhaust oil.
In 2014, as part of its awareness-raising activities on environmental matters, the Company also issued and disseminated specific standards across the manufacturing sites in EMEA following the introduction of compactors to handle packaging waste. The standards reflect existing, effective solutions already in place in the waste production areas of some CNH Industrial plants. By using this type of compactor, plants can improve recycling, reduce the environmental impact of waste transport, and subsequently cut management and disposal costs. Some plants implemented the new standards before the end of 2014, enjoying immediate benefits: a compactor for bulky plastic and cardboard packaging materials was installed at Croix (France), in the plant’s area of greatest waste production; the Modena, Brescia Special Vehicles, Foggia, Torino Driveline, Torino Engine, and Vittorio Veneto plants in Italy, on the other hand, introduced different types of compactors and containers for plastic bottles, plastic packaging materials, aluminum cans, and paper cups.
ENVIRONMENTAL EDUCATION AT SCHOOL
In early 2014, the Vysoke Myto plant (Czech Republic), which is located in a sensitive area in terms of availability and use of water resources, launched an information and training initiative at primary schools in the area. Through recreational-educational classroom sessions held by the plant’s environmental specialists, children were educated on the importance of protecting water resources.
A similar initiative took place at the Suzzara plant (Italy), where a number of primary school students were invited to engage in environmental training activities, as part of a broader project focusing on gaining knowledge of the local industry. The initiative involved approximately one hundred students, and is expected to be extended to the secondary schools across the district in 2015.
The plant in Foggia (Italy) reached out to secondary school students with an awareness campaign on the correct use of natural resources and on energy saving. The project was carried out in collaboration with the municipality, and is part of the Sicuramente initiative.
Lastly, the Sete Lagoas plant (Brazil) launched awareness-raising and environmental education initiatives at local schools in the district (see also page 123).
(1) As regards emissions, see page 181.