Industrial Automation Magazine India

We are committed to carbon neutral operations by 2030

Published on : Tuesday 30-11--0001

Can you tell something about Ingersoll Rand’s commitment to sustainability?

This is a great question, because as you heard today – and I do not think there are statistics on this – most companies make commitments and do not follow up. So while making a commitment is interesting and it gets good press, it may not necessarily mean anything. The other thing I see as challenging is we see way too many companies making commitment for 2050, which guarantees that the CEO, or anybody on the staff, do not need to do anything in order to achieve those commitments, because it is too far away.

We made our first commitment in 2014 about reduction in greenhouse gases and at that time it was considered a bold step. But we made it to the United Nations and Clinton Global Initiative, and one of the things that the CGI insists is that you report quarterly on the results and we have an independent third party who clarifies we are delivering on our claims, to avoid the greenwashing. So that was important.

Were you able to deliver on the commitment? How difficult or easy it was?

Yes, we were able to achieve the commitment ahead of schedule. As I said during the morning session, it did take technology to achieve that but because it was a top down initiative, because the CEO put it down on everybody’s performance metrics, people pooled together. We did what we thought was not possible, and I would like to say we accomplished more in the first year than I expected we would accomplish in three. Because everybody was committed and had that on performance review, so they needed to do this.

Now we have made another commitment just about a month ago. This is a 2030 commitment. It is still a relatively short period of time – 11 years – but we are committed to carbon neutral operations by 2030. You heard panellists talking about carbon neutral operations in the session just concluded and I think it is critically important. We also committed to have net positive water, especially in the areas where it is scare – critically important again as we lose sight of the fact that water is an ever dwindling resource. This is from operations and supply chain standpoint. For customers we have another target – one gigaton carbon footprint reduction over the course of the next 11 years. When we make that kind of commitment – and I do not have the country specific list here – but it is equivalent to the entire carbon emissions on annual basis of Italy, France and UK. One gigaton is a big number and we know that if we do not start immediately, we will not be able to achieve it. So it needs everybody in the company to focus on it.

What are the other gains for the company in this?

One of the big benefits that we’ve seen out of these type of commitments is the ability to attract and retain great talent. Young people today are very interested in knowing what are the companies doing from the social responsibilities standpoint and climate is one of the most important things to them, because they know they have to live in this world for the next 40-50 years. And we retain them because they feel they are doing great things. They are engaged and feel they are doing something that makes a difference on a daily basis. And they look around and do not see other companies doing the same thing. A recent survey I saw about the Millennials also supports this – it is more important than how much you pay them; and of course we have to pay them well.

Is there a trade-off in terms of sacrificing profits for pursuing sustainability?

What we proved over the course of the last 5 years and achieving our commitments, is that we were able to do that and yet increase the margins, increase organic revenue to above what we were doing, and we were able to increase share-holder value significantly. I don’t think it has to be a trade-off. I actually believe a lot of consumers all over the world are ready for these changes and we see a lot of customers who want to be early adopters and are willing to pay to be an early adopter. In addition to this, as more and more companies set these kinds of targets, we see customers too are ready. I spoke to a facility manager who has plants around the world – this was about five years ago – and he said our company is dedicated to sustainability. He said I have a goal with me for this year handed down from above that I have to reduce energy consumption in my factory by 5%, and if you have the solution I can find the money for it. So we see more and more customers, because of the environmental pressure. The commitments that are being made by companies provide us the opportunities to do it all, which in turn allow us to increase business and make money. And I believe this will continue.

  

You also said you can do all this with existing technology. Is that so?

For our first commitment we did need technology, for we didn’t get a lot of help from regulators, and we did need new technology to achieve our goal. But as we look forward, we have a number of technologies validated by the Rocky Mountain Institute that is very much involved in the global cooling challenge, and if these are applied properly, we will be able to achieve our targets. Now, this doesn’t mean we don’t need help. Because we believe that any help that we can get from regulators or policy makers could be able to push some of these technologies, which is going to be critically important. We believe there will also be technologies we will develop as we are investing in that and it will help us, but even the existing technologies are enough to deal with these challenges. But more than technologies we need the will to implement them!

Pix caption: The Ingersoll Rand 2030 commitments.