Sustainability is an enormous business prospect for Cargotec.
Cargotec’s sustainability work is based on a holistic and balanced approach, taking into account the aspects of environment, people and society, and governance. By being a 1.5 degree company, we strive to create value for all stakeholders. We sense the urgency of climate action and consider the transformation towards a sustainable world as a major phenomenon that will change the whole industry.
We support transformation into a fair and prosperous society. With our purpose – smarter cargo flow for a better everyday – we drive resource efficiency in our industry, in order to reach a low-carbon economy and thus turn environmental challenges into opportunities. Our climate ambition can only be achieved via inclusive cooperation with all the participants in the value chain. Making the transition just and inclusive for all ties the social and good governance aspects into our climate ambition.
The consequences of climate change are not only environmental, but there are also significant financial and social impacts. To ensure financial stability and global wellbeing also for future generations, it is our obligation to act on climate now.
Mitigating climate change
During 2021, we worked intensively towards our climate target to reduce the CO2 emissions of our value chain by 1 million tons by 2024 and 50 percent reduction by 2030. To drive the low-carbon industry transformation and the emission reductions in practice, Cargotec’s climate programme, Mission Climate, was kicked off in May. The goal of the programme is to decarbonise Cargotec’s supply chain, own operations and offering, while also boosting innovation.
Cargotec’s eco portfolio sales represented 19 (24) percent of consolidated sales. During 2021 we have been preparing for the upcoming EU Taxonomy regulation and we aim to revise the eco portfolio criteria to align with the taxonomy. To prove the EU taxonomy-alignment of the eco equipment, we conducted several product life-cycle assessment (LCA) studies during the year 2021. The pilot LCA’s confirm the hypothesis that electric versions of the equipment result in substantial life-cycle GHG reductions. Our target for 2022 is to assess the eco offering against revised eco portfolio criteria to prove the EU Taxonomy-alignment.
Moving towards responsible sourcing
During 2021, much effort was put on responsible sourcing and renewing the supplier sustainability risk assessment process. During the renewal, the Supplier Code of Conduct was renewed, with a target to cover not only suppliers but also other third parties. Consequently, it has been renamed and is now referred to as the Business Partner Code of Conduct (BPCoC). The supplier risk assessment renewal process will be finalised during 2022. The target is to have all refined processes implemented as part of a wider responsible sourcing programme in 2022.
The challenging COVID-19 pandemic situation continued throughout the year. Our safety performance declined during the year and our IIFR for Cargotec total was 6.0 (2020: 5.2). The IIFR weakened on the assembly sites and was 7.3 (3.4). The decline was caused by disturbances in the production processes, caused by component shortages. On the other hand, the IIFR figure improved to 5.3 (6.2) in service organisations and at the non-assembly sites. Our target for 2021 was to have the IIFR rate less than 5 across the whole organisation.
Our safety target for 2022 is to have the IIFR less than 5 across all operations, which is the same as in 2021. We are pursuing this goal with targeted actions, and through health and safety policies that encourage proactive reporting and enhance transparency. Our efforts are focused on building a high safety culture, including raising safety performance awareness amongst our employees and establishing an even stronger leadership commitment to safety topics.
During 2021, Cargotec Integrity Index improved by around 3 percent compared to the previous year, reaching a favorability score of 76 percent. The Integrity Index is a comprehensive measure built from three key categories in the Compass survey: 1) Sustainability, 2) Pride and hope, and 3) Leadership. Sustainability captures employee perceptions of aspects such as code of conduct, fair treatment, safety and environmental sustainability. Pride & hope shows to what extent employees are proud to be part of the company and hold a positive outlook. Leadership builds on our Leadership Profile and measures the quality of leadership the employees receive. We have set a long-term target to have a favorability score above 80%.
Sustainability targets 2022 (- 2024/26)