The report by the Intergovernmental Panel on Climate Change set the world a clear target: we must reduce emissions of greenhouse gases to net zero by the middle of this century to have a reasonable chance of limiting global warming to 1.5C.
At Electrolux we are very proud of the energy and water efficiency program we developed for our manufacturing plants. The program, known as Green Spirit, began in 2005 with a vision to reduce our energy consumption. While it is true that all companies seek to reduce costs and be more efficient, the Green Spirit program wasn’t developed purely to generate cost savings. A primary goal for Electrolux was also to become more sustainable by reducing energy consumption. The cost savings produced by reducing energy usage gave factory management the added incentive to achieve their energy targets.
In subsequent years, we included an additional focus for the program, namely the reduction of water consumption in our factory buildings, warehouses, and processes. As with energy, we are always measuring ourselves in terms of the intensity measured as consumption per product produced. Today, we are working to refocus the program to meet the challenge of climate change head-on, with CO2 reduction targets and projects.
Electrolux was one of the first companies to produce an annual sustainability report. Our 2018 report shows that we have achieved a forty-four percent reduction in energy intensity since 2005 and a sixty-six percent reduction in absolute CO2 at our manufacturing sites. These achievements aimed at environmental protection are a direct result of the Green Spirit program and our employee’s commitment to sustainability.
We believe the key features of the Green Spirit program that have led to this success are as follows:
Clear goals and management commitment
Each year we establish energy and water goals for the factories, business areas, and overall company. These key business indicators (KPI's) are tracked and reported on a monthly basis at the senior management level.
Employee involvement and communication
Early in the program, we assembled cross-functional teams, with a dedicated leader, which are championed by the factory manager. These teams are tasked to meet monthly to discuss results and plan actions to improve sustainable development. Team members conduct energy audits and follow up on issues such as greenhouse gas emissions and carbon dioxide emissions to keep the program moving forward. In this way, we have developed an internal network of hundreds of employees actively working towards our energy and water goals.
A structured approach
The Green Spirit program is more than just a name. It is a set of energy and water management instructions and best practices that lay out a road map for success. In fact, every factory in the company is audited annually and recertified as to their conformance to the program set of criteria. There are 4 levels of achievement possible within the program, Bronze, Silver, Gold and Platinum. The factory teams are expected to improve their Green Spirit program results annually and achieve their targets. In fact, certification within our corporate quality system (EMS), requires that the factory achieve the corresponding level in the Green Spirit program. This link has proven to be a good incentive to keep the factories on the path to continuous improvement year over year.
At the Silver level (2ndlevel) of the Green Spirit site certification program, we turn our focus to large energy-consuming processes. Since we track our performance on a per unit basis, it is not only important to reduce the numerator but also to maximize the denominator. Having the most energy-efficient process in the world, will not help you achieve overall efficiency if you cannot produce close to the designed number of units per hour or day.
This Silver certification requires that the factory team knows which of their process consume the most total energy. It could be natural gas, or electricity or both. Then for the top two largest energy consumers in the plant, there must be a continuous improvement team working to measure and improve efficiency. There are tip levels established in the criteria that set the required improvement according to the actual measured performance.
It was the obvious impact of equipment performance and utilization on a factory’s energy intensity that eventually led us to create a maintenance excellence program to improve and stabilize equipment reliability
Over the years we have collected hundreds of best practices to reduce or manage energy and water consumption. Each year within each business sector, all the Green Spirit leaders meet to review best practices and develop our long term plans for the upcoming year. The next step is a face to face meeting of all the sector Green Spirit leaders somewhere in the world to compare plans, discuss program improvements and benchmark external companies to further refine our plans.
We have recently compiled a list of best practices, organized by the relevant processes or equipment as a tool for factory teams to use in finding new initiatives to implement. This tool has been translated into Chinese and introduced to our major supplier base in Asia. We have the same expectations of energy and water management of our suppliers as we do for our own factories.
Focus on major re-engineering and new building projects
For major new projects, we emphasize the expectation of a step-change in the energy and water footprint. Our global team, working with the local engineering teams, develops an energy model of the new project footprint that will be compared to the existing one. This helps us to ensure that we are implementing the step changes needed to keep driving down our energy and water consumption.
If you want to truly be a leader in any field or endeavour, you need to engage with others in the industry. This is also true for sustainability. This is why, as part of the Green Spirit program, we encourage external benchmarking and why we are part of the U.S. Department of Energy, Better Plants program. It is also why we were excited to be included in the recent UNIDO workshop on energy efficiency and de-carbonization of the industry in line with the Paris climate agreement.
You may ask, how renewable energy enters into our strategy. An effective energy management program should be the first thing you do. It makes no financial sense to buy renewable electricity or to install solar panels on a site before you prove you can manage its energy consumption.
Therefore, our strategy was to have our energy management program to reduce our consumption before looking at renewable energy. We started this phase just a few years ago, and today we are on the road to achieving our milestone of 50% of energy consumption from renewable sources by 2020. At the same time, we have installed solar panels on our manufacturing sites in Mexico, Australia and Italy and have a roadmap to continue to build this capacity globally.
The intent of sharing this information is not to presume that every company should follow what we have done, but rather to answer the question that we are asked often which is “what do you think has led to your success?”