CO 2 I N F O C U S. Group Purchase

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1 F O C U S CO 2 I N Minimising of your company s carbon footprint makes sense. Not only in terms of becoming greener, but also because of the financial benefit incorporated Group Purchase 1

2 Preface Climate and environment feature prominently on the agenda of politicians, the business community and the public in general. There is a widespread concern about the state of our world and the potential effects of rising concentrations of CO2 in the atmosphere on our daily lives 1. Carbon dioxide (CO 2 ) is the chief greenhouse gas that results from human activities and causes global warming and climate change. The concentrations of CO 2 in the atmosphere are increasing at an accelerating rate from decade to decade. Climate Science tells us that we need to deliver really high reductions in greenhouse gas emissions, probably within the next years. This is about the lifetime of a new power station or aeroplane and much less than the lifetime of a building, road or electricity and gas grid. It means that we need to start planning and deploying these long life assets more or less immediately if we want to meet the emissions targets of the future in a cost effective way. Our challenge as a society is to decarbonise almost completely, and this must be done quickly. It is surprising how often these two drivers pull in opposite directions. The quickest and cheapest things to do today may often create real problems - economic and technical - further down the line. GRUNDFOS is a company founded on responsibility. We strive to become a role model how to make climate considerations a premise for business operations and development. Considering purchase in GRUNDFOS, we do not only have a responsibility concerning the sourced products or components, we also have a responsibility concerning the community and environment. That is why GRUNDFOS Group Purchase wishes to be responsible as an active partner to inspire the suppliers to measure and reduce their CO 2 emission and to take responsibility themselves regarding the future climate. This folder is based on GRUNDFOS experience with reduction of CO 2 emission. 2

3 Say what you want. Do what you say There are a lot of different approaches to the work with environment e.g. the chosen focus such as CO 2, water, waste etc. or the method such as development of products, reduction of own environmental exposure or offsetting 2. It is important that the management have made it clear what they want and consequently act in that way. It is not philanthropy it is business In order to bring environment into the major business processes of the company, like product development, production and logistic, it is crucial that there is a business incentive for this. This could be lower raw material consumption, reduced costs or faster delivery. A majority of companies fall into the commercial trap of advertising left and right their green profiles, CO 2 neutrality, etc. The disadvantage is that environmental work becomes a work area of the marketing and communication departments. Improving the environmental impact is good business too. If you cannot measure it you cannot manage it Because the environment area is complex and dynamic, it requires consideration concerning focus if everything is important nothing is important. The specific focus must be pointed out and specific targets must be set up and afterwards continuously followed up. You must create continuous improvements to create changes. 1 CO 2 expresses the concentration of green house gasses in the atmosphere measured in Carbon Dioxide equivalents. 2 What is Carbon Offset?: Each of our everyday actions consumes energy and produces carbon dioxide emissions e.g. taking flights, driving our cars, heating or cooling offices. Carbon Offsets can be used to compensate for the emissions produced by funding an equivalent carbon dioxide saving elsewhere. 3

4 Hidden underground and inside buildings, pumps are the unseen energy users Pumps consume 10% of the world s electrical power. 2/3 of all pumps installed today are inefficient and use up to 60% too much energy. Approximately 85% of a normal pump system s Life Cycle Costs (LCC) are incurred by the power consumption of the motor. Putting pumps and motors on the agenda will help you minimize your company s carbon footprint 3 and offer significant economical savings. European companies of all kinds and sizes have already given their pump systems a thorough check, and this has led to the replacement of inefficient pumps resulting in substantial energy savings. At GRUNDFOS production site in Bjerringbro in Denmark we have worked with reducing the energy consumptions related pump systems and motors. Around norm motors were replaced by new GRUNDFOS MGE motors. The potential is around When analysing the demands, the energy consumption can be reduced by 75% by replacing the old inefficient and over-dimensioned motors by new MGE motors. Application: Replacement of 550 motors by new MGE motors Reduced energy consumption: 2,530,000 kwh per year CO 2 reduction: 1113 Ton. per year Investment: 266,667 Saved money: 239,467 PAYBACK TIME: 13 month 4

5 You can also visit our website to learn more about our company and pump systems. At the site you can read about new legislative energy efficiency demands and how pumps play a significant role. The site also features a Pump Audit calculator and information about why pumps typically account for up to 20-30% of a company s energy bill. Old CR pump 460 W New ALPHA2 PUMP 5 W A pump audit is the ideal way to start the process and find out whether your company s pump system is operating efficiently. It is an optimal way to reduce CO 2 emissions and save money by a thorough analysis of your installations and lead to further investigation of other motor applications in your facility. If you have any questions or concerns, please contact your local GRUNDFOS office. We have an expert panel ready to assist you. GRUNDFOS PUMPS LTD Yearly savings each pump: 4000 kwh. 1,9 Ton CO 2 3 A carbon footprint is a measure of the impact our activities have on the environment, and in particular climate change. It relates to the amount of greenhouse gases produced in our day-to-day lives through burning fossil fuels for electricity, heating and transportation etc. The carbon footprint is a measurement of all greenhouse gases we individually produce and has units of tons (or kg) of carbon dioxide equivalent. 5

6 Leak detection in compressed air systems Compressed air is one of the most inefficient ways to consume energy, yet it is often a necessity. Finding leaks in the compressed air systems will help you minimize your company s carbon footprint and energy consumption since your compressors will be able to keep the required pressure in the system with less power. In GRUNDFOS we want to reduce of the loss of compressed air as much as possible by systematic and continuous search for leaks in the system. The process requires a high level of discipline in order to monitor the progress of the project and to ensure that all identified leaks are repaired. In GRUNDFOS A/S a systematic review of all compressed air systems have led to substantial energy and cost savings. Application: Leak detection and repairing in GRUNDFOS A/S Reduced energy consumption: 739,000 kwh per year CO 2 reduction: 324 Ton. per year Investment: 44,000 Saved money: 75,000 PAYBACK TIME: 7 months 6

7 The benefits of this are not only the savings on energy but also a longer lifetime of compressors, less maintenance, and postponement of the need for capacity expansions. 7

8 GRUNDFOS Futu and The Climate Technical solutions are definitely a part of the solution to the climate challenge. However, we also need to focus on how to change the mindset and behaviour in the organization. Previously decisions were made on factors such as cost, quality, speed and flexibility and employees have been rewarded for ideas promoting e.g. productivity and lead time. Now it is time to change the decision-making processes to include and integrate environmental considerations in our processes. We need to recognize and reward initiatives and ideas that are proactive in that sense and demonstrate that we all play our own little part in solving the climate challenge. That is why GRUNDFOS has initiated the Future Now Award and the Climate Journey. Future Now Award GRUNDFOS has a strong focus on reduction of CO 2 emissions. In order to ensure that we will reach the overall ambition never to emit more CO 2 than we did in 2008, and to fulfil the environmental targets, we strengthen our focus on environmental responsibility in all GRUNDFOS companies. Since 2009 Group Management annually runs the Future Now Award campaign with the topic: Reduction of CO 2 emissions and the best implemented innovative and pro-active idea coming from an employee around the world is awarded. The winner is recognized in an appropriate forum and the idea is communicated to all companies within the Group. Last year s winner of the Future Now Award was a joint project between two companies within the Group: improvement of the environmental impact as a result of transportation. The companies co-operated using wellestablished truck optimization methods and synchronized the planning and logistic processes in the two companies. The result was an annual saving of 180 Ton of CO 2, and the number of tracks was reduced by 40%. Besides reducing the environmental impact, transportation costs were reduced by more than 200,000. 8

9 re Now Award Journey The Climate Journey The Climate Journey is a global initiative with the purpose of increasing the environmental awareness in all GRUNDFOS companies around the world. Changing the mindset of a global organization is a major task, however, one thing is certain: Without changing our mindset and behaviour, we will not make progress incorporating environmental consideration in our organization. In GRUNDFOS we have a saying: one person quickly reaches the limit for what he/ she can achieve. However, if we work together in a common direction, there are absolutely no limits. It is important that we spread the focus on environment from the dedicated environmental employees to all the 17,000 employees. 9

10 Calculate our CO 2 emission / Carbon footprint 10

11 What to measure? The term carbon footprint has become common in environmental management. It is a measure of the impact business activities have on the environment in terms of the amount of greenhouse gas (GHG) produced, calculated in units of CO 2 equivalent (CO 2 e). The purpose is to assess and work to reduce the carbon footprint. 1. First you need to make a decision whether you should calculate your organisational footprint or product/service footprint 2. Define scope 4, according to Green House Gas protocol Electricity, heat or steam generated on-site Natural gas, gas, oil, LPG or coal use attributable to company-owned facilities Company-owned vehicle travel Production of any of the six GHG s 5 Purchased electricity, heat or steam Also define scope according to the company s activities e.g. production + sales companies etc. 3. Define which greenhouse gases are included e.g. CO 2, Methane etc. 4. Collect all source data for gases defined above 3) Electricity Diesel Natural gas etc. 5. Perform calculation. Before this you need to make a decision regarding the calculation factors used for the sourced data e.g. collect from the supplier or use an international recognized average. e.g. International Energy Agency (IEA). 6. Analyse performance. In order to benchmark it is important to keep the same scope/boundary from period to period. 7. Use results in Strategic management and set up actions plans 8. Work with action plans 4 Scope 1: all direct GHG emissions Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam Scope 3: Other indirect emissions, such as the extraction and production or purchased materials and fuels, transport- related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. transmission and distribution losses) not covered in scope 2, outsourced activities, waste disposal, etc. 5 Carbon Dioxide (CO 2 ), Methane (CH4), Nitrous Oxide (N2O), Hydro fluorocarbons (HFC s), Per fluorocarbons (PFC s) and Sulfur Hexafluoride (SF6) 11

12 How to calculate? Use tools or get inspiration from GRUNDFOS A/S way of calculate. Calculation of energy content and CO 2 emissions from fuels Amount Conversion factor energy content Non-renewable fuel Unit MWh/tonne (MWh/1000 m 3 ) Calculated energy content Conversion factor CO 2 emission Calculated CO 2 emission kwh kg CO 2 /GJ kg CO 2 Natural gas 1000 m , ,8 Natural gas tonnes 0 13, ,1 0 Light fuel oil tonnes 0 11, ,3 0 Diesel tonnes 0 11, ,1 0 Fuel for own vehicles Diesel litres 0 11, ,1 0 Gasoline/petrol litres 0 12, ,3 0 Liquified Petroleum Gas tonnes 0 13, ,1 0 Compressed Natural Gas tonnes 0 13, ,1 0 Calculation of CO 2 emission from purchased energy Amount g CO2/kWh kg CO2 Bought electricity kwh Bought heat and steam kwh = Amount x Conversion factor energy content x 1000 = Calculated energy content x 3,6 x Conversion factor CO 2 /1000 emission 12

13 The colors mean: Fill in the energy amount in the specified unit If you have a conversion factor from your supplier, please enter the supplier s conversion factor instead of the standard factor Do not fill data in this fields, they contain calculations. Write the result into the CO 2 -columns in the Enviroment data sheet If the supplier cannot give you the conversion factor, use the factor for your country in the table below Purchased energy Country factor Country g CO 2 / kwh Argentina 343 Australia 895 Austria 198 Belgium 254 Bosnia and Herzegovenia 887 Brazil 81 Bulgaria 482 Canada 193 Chile 375 China 764 Croatia 349 Czech Republic 542 Denmark 329 Estonia 717 Finland 219 France 86 Germany 438 Greece 736 Purchased energy Country factor Country g CO 2 / kwh Hong Kong 762 Hungary 340 India 945 Indonesia 726 Ireland 512 Italy 403 Japan 436 Kazakhstan 489 Korea 460 Latvia 165 Lithuania 124 Malaysia 625 Mexico 467 Netherlands 395 New Zealand 212 Norway 7 Philippines 456 Poland 660 Purchased energy Country factor Country g CO 2 / kwh Portugal 395 Romania 428 Russia 326 Serbia 653 Singapore 545 Slovenia 350 South Africa 837 Spain 361 Sweden 43 Switzerland 28 Taiwan 623 Thailand 525 Turkey 471 UK 497 Ukraine 364 Un. Arab Emirates 831 USA 542 Example from GRUNDFOS GF405A GRUNDFOS A/S use these factors and calculations for measurement of CO 2 emission, GRUNDFOS can not guarantee the factors and calculations. 13

14 14 For Consideration:

15 Minimizing of your company s carbon footprint makes sense. Not only in terms of becoming greener, but also because of the financial benefit incorporated. Organisations need to assess and manage their carbon emissions, not only in order to meet regulatory needs and to save energy costs, but also to make a competitive advantage. During the past couple of years, we have witnessed increased raw material and energy prices and the trend seems to continue. GRUNDFOS response to this challenge is to handle it through sustainability. GRUNDFOS runs its business in a responsible and even more sustainable way. We make products and solutions that help our customers save natural resources and reduce climate impact. We take an active role in the society around us that s why SUSTAINABLE is one of GRUNDFOS values. Over the decades, companies have been required to add more and more parameters to service the market. Factors such as cost, speed, quality, flexibility, uniqueness have become important competitive parameters and shifted from order winners to order qualifiers. The above-mentioned trend with scarcity of resources, etc. affects our customers and this makes us ask: what do you do to protect the environment? In GRUNDFOS, sustainability is shifting from an order winner to an order qualifier and we can proudly say: We do something. It is a journey and the road is long. However, if you wait you will fall behind the rest of the pack. GRUNDFOS is not willing to risk that. GRUNDFOS would appreciate to know your thoughts, ideas, actions and investments into the field of CO 2 emission reduction. GRUNDFOS Group Purchase Management 15

16 Being responsible is our foundation Thinking ahead makes it possible Innovation is the essence Grundfos holding A/S Poul Due Jensens Vej 7 DK-8850 Bjerringbro Tel: The name Grundfos, the Grundfos logo, and the payoff Be Think Innovate are registered trademarks owned by Grundfos Management A/S or Grundfos A/S, Denmark. All rights reserved worldwide. 1211/GROUP PURCHASE/10566-D&I 16

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