Sustainability is an enormous business prospect for Cargotec. Climate change and greenhouse gas emissions are our key focus areas within the environment theme. The logistics industry is causing a significant share of the global emissions. At Cargotec, this challenge is actually perceived as a business opportunity. Manufacturing products and technologies that enable avoiding or reducing greenhouse gas emissions in other sectors (the logistics sector, for example) is pivotal in the transition towards a low-carbon economy.
Cargotec’s eco portfolio was established already in 2017 and it consists of products and services that enhance customers’ sustainability with tangible environmental benefits. With our offering, we can have the greatest contribution towards mitigating climate change. The eco portfolio recognises the products and services that contribute to climate change mitigation through improved fuel economy and lower emissions, congruent with the objectives of the new EU Taxonomy regulation. However, we have also included products with other sustainability benefits to the portfolio, such as sale of pre-owned equipment that promotes circular economy. Therefore, our eco portfolio is not fully aligned with the current draft technical screening criteria of the EU Taxonomy.
Many of our products are still powered by fossil fuels today and therefore result in greenhouse gas and other air emissions in the product use phase. Considering the value chain, about 60 percent of our climate impact arises from the use of sold products, hence we consider energy and emission efficiency of our products and services as a topic of high importance. Transforming the industry and mitigating climate change with low-carbon solutions for customers is a great business opportunity for us. We consider the electrification of our offering as an effective measure to mitigate the emissions from use of sold products. The electric versions are more energy efficient, and moreover, electricity can be generated from renewable sources. Kalmar is committed to having electric versions of its full offering available by 2021, which is well supporting our environmental goals.
Our target for the eco portfolio for the strategy period 2019-2021 was to achieve double sales growth compared to traditional products. We have met this target set for 2021 already now, ahead of time. Our eco portfolio has performed outstandingly well compared to the traditional products during the COVID-19 pandemic. We have recorded a significant growth in the sales of the eco portfolio when comparing the 2020 sales to sales in 2018, while at the same time, the sales of traditional products have decreased. The eco portfolio sales increased to 24 percent (2019: 21) of Cargotec’s total sales in 2020. All new solutions need to pass an external review process prior to inclusion in the portfolio.
Our new target for 2021 is to revise the eco portfolio criteria to align with the upcoming EU Taxonomy regulation. Many of our products can substantially contribute to climate change mitigation and we plan to prove this claim by conducting life cycle assessment (LCA) studies. We assess the environmental impact of products and services considering the total life cycle and consider LCA as the best method to assess the potential environmental impact of a product or a solution. In terms of the EU Taxonomy, Cargotec’s activities fall into two categories: manufacture of low carbon technologies and data-driven solutions for GHG emissions reductions. Automation and digitalisation are seen as major enablers for eliminating inefficiencies and to drive a wider societal change towards circular economy.
We are collecting real-time data from tens of thousands of pieces of equipment that are connected and operated by our customers. This data gives us visibility about the actual energy consumption of the equipment and we utilise this data in calculation of the greenhouse gas emissions from use of sold products. This is a valuable resource for us to measure our performance towards our climate ambition goals. Reducing the energy requirement of sold products and services is crucial in meeting the emission reduction target.