At Cargotec, we are continuously working to stay at the top of the game in sustainability. Although the main industrial sustainability impacts occur through our products, we do our best to improve the sustainability performance of our own operations as well. We take the sustainability standards that guide our operations seriously: many issues covered by standards are now a license to operate in the industry.
Environmental management and reporting data development gave us a baseline to define more ambitious targets for our own operations
In 2018, significant improvement were made to Cargotec’s centrally followed EHS reporting: for the first time, information from our non-assembly sites was validated, audited and published externally. Previously, only assembly site energy consumption data has been audited and published. To set ambitious targets and mitigate the greatest impacts, we now wanted a full picture of our operational energy consumption and emissions.
In 2018, Cargotec’s total energy consumption amounted to 573.8 TJ, with the highest consumption coming from electricity and diesel service vans. Compared to 2017, the assembly site total energy consumption increased by one percent to 356.4 TJ.
Based on this information, Cargotec’s Extended Executive Board agreed to set long-term targets to increase the purchase of renewable electricity and, where possible, replace service vans with hybrid vehicles.
Cargotec’s 2018 energy consumption mainly comprised of electricity (35%) and diesel (29%). Diesel fuel was primarily used in service vans, whereas electricity was used in our facilities.
In 2018, 100% of our assembly sites, service sites and offices in Finland and Sweden were powered by renewable electricity, resulting in approximately 30% of Cargotec’s electricity being renewable. The renewable energy purchase was part of a bigger internal climate change mitigation process, which will continue in the coming years. Our target is to have 40% of Cargotec’s total electricity consumption originating from renewable energy sources by 2019, and 50% by 2021.
With regard to diesel consumption, our target is to renew our vehicle policy during 2019 and shift to a more environmentally-friendly vehicle fleet in the coming years. This will be realised in sync with the termination of vehicle leasing contracts, as well as necessary infrastructure updates.
We report on our sustainability matters according to the Global Reporting Initiative (GRI) and are a signatory of the UN Global Compact. Our EHS policy is to promote a high safety level and environmental friendliness in our products, services and solutions. Our goal is to maintain a precautionary approach to environmental challenges and develop best practices for environmentally sustainable operations.
We are making a great effort to be more transparent, and are improving our communication with our suppliers and investors to increase environmental awareness and management. We proactively contact our investors to discuss the most relevant sustainability topics. During the year, we also took part in several sustainable investment conferences. We report to several third parties, which award us sustainability ratings that help our stakeholders to evaluate our sustainability performance. At the beginning of 2018, MSCI and Ecovadis both rated us among the most sustainable companies in our industry (class AA and gold respectively), and we have been disclosing to CDP since 2010.
With respect to the changing environment, we continuously work to optimise our production processes and reduce our emissions. One target is to have 50% of the companys' electricity to originate from renewable energy sources by the end of 2021.
On the operational side, several energy saving initiatives were implemented during last year. For example, at the Kalmar assembly site in Shanghai and Hiab’s assembly site in Korea, old inefficient machinery and lighting were replaced, cutting down on energy consumption and reducing CO2 emissions. More solar panels were installed at the Tampere Competence Centre in Finland and wood pellet combustion was increased at the assembly site in Stargard, Poland. Additionally, separate waste and air emission related targets are set at those sites where waste and emissions have been identified as significant environmental aspects. Those may include changing paintings methods or developing the efficiency of recycling systems.
All changes concerning our sites and facilities are thoroughly evaluated against their environmental impacts and risks before being put into action. The same process is being applied during acquisition and divestment projects; an external partner evaluates environmental risks and potential non-compliances by performing an environmental impact assessment. These assessments include site inspections, and soil and water sampling if any potential harm is identified.
The environmental impacts of Cargotec’s own operations are fairly small in comparison to the complete value chain. We therefore put a lot of effort into helping our customers reduce their environmental impact. The biggest emission savings are achieved when using our products and we are striving to continuously grow our portfolio of eco-efficient products and solutions. This portfolio includes electrically driven equipment, digital solutions, automation and services. We are pioneers in sustainable cargo handling and will take our role seriously now and in the future.
We develop occupational health and safety issues continuously to secure a safe working environment for our employees.
Our management follows actively the development on this area on various organisational levels. Our ultimate target is zero occupational injuries, and some of our sites have already achieved that level.
Occupational health and safety issues are included in Cargotec’s sustainability targets, which the Board of Directors and the Extended Executive Board follow regularly. Business areas have their specific occupational health and safety programmes, which are built to take into consideration the characteristics of their respective operational environments.
Health and safety programmes include, for example, various types of trainings, health and safety practice development and audits, as well as target follow-ups.
Ensuring and managing occupational health and safety issues is always the responsibility of the management of the company. As we nevertheless want to guarantee our employees the opportunity to highlight issues that they consider to risk safe working conditions, all employees have the possibility to bring up anonymously their health and safety conditions-related concerns. For this purpose we use the Cargotec Speak-Up line, a communication channel that primarily supports the enforcement of our Code of Conduct.
We are committed to international human rights agreements in our operating principles and staff policy and we want to ensure that our employees and candidates are treated with fair practices regarding compensation, career development as well as recruitment.
The implementation of the Code of Conduct and employee policy is conducted for example through HR tools and processes and with personnel trainings. We train our personnel in human rights and equality issues as part of our general Code of Conduct training processes. Additionally, all employees have the possibility to anonymously inform about possible non-compliances through the Cargotec global SpeakUp line. The company has a dedicated organisation that supports the business in ethics and compliance issues.
We want to be a responsible employer. We conduct our Compass employee engagement survey annually with which we evaluate our employees’ opinions on leadership, team climate, engagement, and insights on employees views about Cargotec social responsibility.
The Compass 2018 survey had a participation rate of 85 percent (2017: 86). Employee engagement has slightly declined to 67 percent (2017: 69). However, we see continuous improvement in our leadership indices. The leadership behaviours index is up at 73 percent (2017: 71) and the climate index shows an increase as well, being now at 77 percent (2017: 76). Our expectation is that, with the new strategy being assimilated and leadership indices on the rise, the engagement will follow.
The results from Compass survey guide the development of our HR strategies. Based on the results of the survey, managers in each business area organise feedback sessions and draw action plans with their teams. The progress of 1–3 key action points is followed throughout the year.We believe that with good leadership we can increase the engagement and performance of our teams and reaching our targets.
Harmonised processes and tools
Our online Human Resources Information System ZONE provides access to harmonised HR policies, processes and tools across the entire company. ZONE is a transparent tool that helps us to ensure a better quality of HR data and personnel management methods. ZONE is also the main platform for planning and analysing our personnel-related activities, such as an annual performance management process, people and organisational development needs, both external and internal recruitment, salary and incentives, including bonus programmes, and ensuring a fair and equal treatment of our employees globally. By leveraging ZONE in all our recruitment efforts, we expect to significantly improve our internal job rotation to build up engagement
Our performance management is based on the performance and development plan (PDP) concept and process. PDP is our primary leadership process that connects strategy to individual development plans and the targets set for our employees. It is a systematic and regular process used in our personnel performance and career development review, during which the principles of our Code of Conduct are also regularly discussed. Through PDP, employees participate in and contribute to organisational improvement. In 2018, the PDP completion rate was 92%.