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Sustainability - providing opportunities for Cargotec

05/06/2018

On 21 May, Cargotec Investor Relations organised an event in Helsinki where Karoliina Loikkanen, Director, Sustainability, talked about sustainability at Cargotec. In addition, MacGregor’s president Michel van Roozendaal gave a presentation about MacGregor.

The goal with Cargotec sustainability management is to support Cargotec’s growth and manage the risks. Managing risk part comes from complying with regulations and ensuring that our own operations are taken care of in an ethical and sustainable way. However, by improving our customers’ operations is how we - and our customers - benefit the most.


Cargo handling industry suffers from great inefficiencies - Cargotec can benefit from that

Even though we can contribute to more sustainable world by improving our own operations, the greatest impact we can make, however, comes from developing more efficient ways to handle cargo. Cargotec’s solutions are present nearly in all points of the supply chain - every other ship in the world carries MacGregor equipment, every fourth of ports’ container moves are handled by a Kalmar solution, and Hiab’s solutions serve transportation companies, fleet operators, and single truck owners, to name just a few. In fact, our operations touch indirectly nearly all industries that exist.

Today, the cargo handling industry suffers from inefficiency, that, according to studies by different consultancy groups, amounts to about 17 billion euros being wasted annually. Around 19 million CO2 equivalent tonnes are emitted on an annual basis only in shipping by moving empty containers. All in all, the maritime industry emits around 2.5 percent of global CO2 emissions, while logistics produces roughly six percent.

Sustainability in our industry is driven also by regulative development. California Clean Air Action Plan aims to decrease emissions in ports, and EU’s cleaner transportation development drives fewer emissions coming from logistics.

Thus, by improving global supply chain and ensuring our customers comply with tightening regulations, Cargotec can seek future growth.

We have several initiatives to improve sustainability on our customers’ operations

Besides the fact that our customers are obliged to follow the regulations, they gain great benefits of having more sustainable operations. By using more sustainable solutions provided by Cargotec, our customers can save money, they produce less emissions, and their equipment is also safer and healthier to use. For example, in order to improve customers’ operations, Cargotec has continuously invested in digitalisation - software solutions and common platforms, to name a few - to decrease the waste in cargo flows. In addition, if berthing availability would be optimised with our common data sharing platforms, ships could steam slower, with the same schedule, causing less emissions.

Today, the majority of ships are not utilising their full container carrying capacity. We are providing solutions to increase the capacity utilisation of the ships with careful cargo handling design leading up to 10 percent increase in ship’s utilisation rate. This enables customers to transport more cargo with less emissions per transported container.

We do admit that there is lot to be improved in decreasing the fuel usage of cargo handling equipment themselves, and we have been working on that systematically. Over 50 percent of Kalmar cargo handling equipment is available with electric power sources, and Kalmar has a goal of having its whole offering electrically powered by 2021. Our engineering and sales people have been able to ensure customers to replace their existing fleet with more eco-efficient solutions. In 2007, we committed to decrease the fuel consumption of our solution fleet by one million barrels during next six to ten years. By 2017 we had more than doubled that promise.

 

Sustainability decreases risks from investors’ point of view

In addition to bringing sustainability into our customers’ operations and thus being part of our growth strategy, we have to make sure we have a licence to operate by complying with laws and regulations. We do not only ensure that our own operations are sustainable and ethical but that the actors in our sphere of interest, e.g. our strategic suppliers, comply with high standards.Cargotec still has a way to go in this, but the direction and actions are on track.

Cargotec sustainability management supports UN Sustainable Development goals with clear policies, processes and KPIs. We are continuously developing our sustainability management and in 2018 we focus on conducting a renewed human rights risk assessment for Cargotec operations, with proposals for corrective actions, and we have already fulfilled the target of having all Finnish and Swedish sites use electricity from renewable sources. We also aim to have IIFR 4 to be implemented in factories, and to ensure 100 percent of our strategic suppliers have been taken into the sustainability self-assessment tool process.

Hence, we take sustainable issues seriously and we aim to be front runner in our industry. Fortunately, our efforts in terms of sustainability seem to have borne fruit - one of the event participants concluded that Cargotec truly is ahead of the curve.