While business grows, emissions don’t have to
Our eco portfolio is our most important tool in reaching our climate and performance targets, and the sales and order intake of these products were record high in 2022. But sales of our diesel-powered equipment were still so high that our overall greenhouse gas emissions increased. Separating sales growth from emission growth is one of the biggest challenges companies are facing. Soili Mäkinen, SVP Sustainable Business Development at Cargotec, explains the challenge and Cargotec’s response to it.
Cargotec’s total greenhouse gas emissions increased by 5% in 2022 compared to our 2019 baseline due to sales growth. While we are happy that our business is growing, and that we are selling record numbers of our eco portfolio products, it is of course disappointing to see the increase in emissions. Like everyone else, we want to see them go down, not up. But the good news is that we know why this happened and what we need to do next.
Disconnecting business growth from emission growth: Mission Possible?
In almost all industries, sales growth typically goes hand-in-hand with increased emissions: when business goes up, so do emissions. Often, as is the case with Cargotec, this is because the majority of emissions are generated in the use phase of sold products (at Cargotec, this share was 73% in 2022). Separating sales from emissions - also called decoupling - is one of the biggest challenges companies face at the moment. But there is a way to grow your business while bringing emissions down: sell the “right” products. Sounds simple but is far from it.
From a climate perspective, the “right” products for Cargotec are our eco portfolio solutions, which help our customers reduce their climate impact. The eco portfolio is our most important tool in achieving our strategic performance targets and our science-based climate target.
Our eco portfolio products saw record high sales in 2022 - and the order intake for them is exceeding our expectations, as well - which helped bring down our emission intensity (tonnes of CO2 per euro in order intake). This is encouraging to see. And in our own operations, where we have full control over our emissions, we are seeing good results: a 28% reduction in 2022 compared to 2019.
We are definitely taking all the right steps - just not fast enough. The reality is that, to stay competitive also in the future, we should be selling more electric and other eco portfolio products and less diesel-powered ones. There‘s no way around it.
We need everyone onboard
So, our emissions increased. We are not yet selling enough of the products that help us get back on track. What now?
Our plan has not changed: we will continue to proactively promote our eco portfolio solutions to our customers - and help them see all the benefits of electric and eco-efficient products, from resource savings to emission reductions. And we will of course continue to develop new products for our eco portfolio and start phasing out traditional ones.
We also want to ensure that our employees understand our targets and how we will get there. We know that our people are very keen to learn more about sustainability and how they can contribute to achieving our goals. We plan to offer more such learning opportunities, so that people feel confident in convincing our customers and other stakeholders of the importance of sustainable business. We need everyone onboard.