More companies are using sustainable thinking to get a competitive edge. Here’s what 5 MNCs – Rolls-Royce, Royal DSM, Panasonic, BASF and Henkel – are doing to become more responsible this year.
Think of sustainability and most people think of tree-planting and recycling. But multinational companies that have incorporated resource-light, ethical practices into their operations will attest that the S-word means more than a token corporate social responsibility gesture.
For a number of international giants, sustainability is a key part of their business. Targets are set and performance monitored, as with other key financial performance indicators. Becoming more energy and water efficient trims operating expenditure while carbon-light products and services can plump up the top line. In short, sustainability pays off for business.
As 2017 gets underway, five multinationals based in Singapore – Rolls-Royce, Royal DSM, Henkel, BASF, and Panasonic – tell Future Ready Singapore how they are making sure they walk the sustainability talk in the year ahead.
One of the world’s largest engine makers, Rolls-Royce, plans to increase its output to 600 engines a year by 2020, the fastest increase in its history. But the British power systems company also aims to cut energy use by 30 per cent over the same time frame.
This energy reduction goal is part of the company’s “dashboard” of sustainability targets for the year 2020 that it continues to work towards via annual target-setting. Rolls-Royce says it will achieve this 30 per cent cut – excluding energy consumed in product testing and development – by investing in less resource-intensive new facilities and making existing ones more energy efficient.
Other goals include halving greenhouse gas emissions in operations and facilities by 2025 as well as ensuring zero waste to landfill by 2020.
The firm is also working towards meeting the 2050 goals set by the Advisory Council for Aeronautics Research in Europe, which include developing technologies and procedures to reduce aircraft carbon emissions by 75 per cent, reduce noise by 65 per cent, and reduce nitrous oxides by 90 per cent. These goals are pegged against the emissions of a typical new aircraft produced in 2000.
In Singapore, Rolls-Royce began sourcing power for its Seletar Campus using solar panels installed on the rooftops of its building and carpark last year. Tim Sullivan, the company’s director of energy and property compliance, said the solar panel initiative is the first in a series of planned renewable and low-carbon energy projects the company intends to undertake around the world in the next five years.
Dutch health and nutrition company Royal DSM is one of the few firms to use carbon pricing internally to guide business decisions. This internal pricing mechanism is used to guide investment decisions with the aim of reducing the emissions it generates per unit of production by 45 per cent from 2008 levels by 2025.
This is unsurprising given that CEO Feike Sijbesma was last year named co-chair of the Carbon Pricing Leadership Coalition (CPLC), which brings state and business leaders around the world together to come up with workable ways to implement carbon pricing.
Addressing the world’s food security challenge remains the goal for Royal DSM in 2017, focusing on three areas of sustainability: nutrition, climate change, and the circular economy.
For nutrition, the company continues to work on making it affordable and accessible through cross-sector collaboration with partners including the UN World Food Program and 45Rice, a Singapore-based programme to supply fortified rice to construction workers.
German chemicals heavyweight Henkel, best known for household detergent Persil, haircare brand Schwarzkopf and adhesives product brand Loctite, is engaging the might of its 50,000-strong global workforce to pursue its sustainability ambitions until 2020.
The firm wants to help its customers and consumers save 50 million tonnes in carbon emissions and educate 300 million consumers about the value of recycling as part of a sustainability push that was launched in 2016.
Its sustainability programme includes a roll-out of energy-efficient lighting to 95 per cent of production sites across Asia-Pacific in 2017.
Product-wise, Henkel is reducing the volume of packaging relative to net sales by 20 per cent. The company’s packaging developers design and review smart packaging to use the least amount of material possible and incorporate materials that can be recycled through public recycling systems.
Working closely with suppliers, all paper-based packaging that the company uses come from sustainable sources. For instance, fibres that go into corrugated boxes – representing the large majority of Henkel’s paper consumption in Asia-Pacific – are derived only from consumer and industry recycled paper, avoiding the use of fresh fibres.
The world’s largest chemical company, BASF, will be spending much of the year of the rooster thinking about pigs.
The €70 billion German giant is exploring alternatives to the antibiotic growth promoters used in post-weaning pigs. There has been growing concern that certain bacteria have become immune to antibiotics, which are increasingly seen as a health risk. BASF has started introducing Natuphos E in in Asia Pacific, a feed enzyme that will reduce the excretion of phosphorus in pigs and poultry, since too much phosphorus can put a strain on ecosystems.
BASF is also set to increase the proportion of R&D funding dedicated to products and services that will help industries become more resource-light, including what it calls Accelerator solutions.
In January 2017, BASF kick-started the year with a new technical application laboratory, the Newtrition Lab Asia Pacific, to develop health and nutrition solutions for Asia Pacific markets. Researchers from BASF will work with Singapore Polytechnic students to collaborate on projects to encourage innovation within the food and nutrition sector, conduct research, and develop science-based solutions.
One of the main thrusts of the sustainability agenda for Panasonic this year is waste.
The Osaka-headquartered electronic firm aims to improve its factory waste recycling rate to 99 per cent or more, and in addition, to further cut water consumption through its water-monitoring measures, reduce CO2 emissions, and minimise the environmental impact of the chemical substances it uses in its operations.
The multinational firm also aims to achieve a reduction in carbon emissions through products and services to 55 million tonnes from the base fiscal year 2006.
These goals fall under its Green Plan 2018, an environmental action plan launched in 2010 that will guide the company towards fulfilling its sustainability goals by its 100th anniversary.
The Japanese electronics giant says it wants to deepen collaboration with partners across its supply chains to accelerate sustainability initiatives.
Last year Panasonic Factory Solutions Asia partnered Singapore-based energy provider Sunseap to install 3,476 solar panels on the rooftops of three of its factory buildings, which can meet up to 20 per cent of the factory’s energy needs at peak performance.
In 2017, the company will continue to focus on establishing systems for sustainable procurement and address five major environmental challenges: greenhouse gas emissions reduction, resource recycling, water resource conservation, chemical substances management and biodiversity conservation. Panasonic will also promote ECO-VC, its value creation concept, to supply chain partners to minimise costs as well as environmental impact in procurement towards its Green Plan 2018.
This article was first published on Future Ready Singapore.