How We Manage Energy and Climate Change
At SGS, we are on a journey to reduce our carbon emissions and minimize our impact on climate change. Our two global CO2 targets to the end of 2014 have focused on us achieving a 10% reduction in CO2 emissions per FTE (full time equivalent employee), and a 10% reduction in CO2 per unit revenue, against a 2010 baseline, using more energy efficient technologies and renewable power sources as well as behavioral change. In addition, we have offset all residual CO2 emissions associated with operations in our major countries for 2014, to become a carbon neutral company.
Achieving carbon neutrality for us means:
- Reducing energy consumption and emissions wherever possible: around 80 projects are now underway to reduce energy across the company
- Sourcing renewable electricity: we buy renewable energy certificates with higher additionality from hydro-electric power plants in Norway equivalent to the annual electricity consumption in our trend European countries
- Purchasing credible carbon offsets
In October 2014, SGS was awarded, for the second consecutive year, a position on ‘The A List’ in the CDP Climate Performance Leadership Index, a global ranking of 187 listed companies on their approach to climate change mitigation. SGS has reported its carbon data to investors through CDP for the past eight years, and this award recognizes our performance on carbon data reporting and carbon emissions reduction. Read more about Risks and Opportunities Associated with Climate Change.
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Energy efficiency in buildings (EEB)
With over 80,000 employees and more than 1,650 premises, targeting energy consumption at our offices and laboratories is the most direct and effective way we can contribute to tackling climate change. The electricity used by our buildings accounts for almost 60% of our global carbon emissions. As part of our target to reduce CO2 emissions intensity by 10%, we have conducted 34 energy audits on buildings as part of our Energy Efficiency in Buildings program in 2014 and we manage around 80 projects spread across 20 affiliates. The Green Building guidelines and self-assessment checklist applies to all affiliates.
Our two energy management specialists report into the Group Vice President, Corporate Sustainability, and oversee day-to-day management of the EEB strategy, working across the affiliates to implement our Green Building guidelines globally and support local programs through energy audits, technical notes, best practice-sharing workshops and providing technical expertise. During 2014, we established a network of facility managers, which provides a platform for information sharing and advice on common themes linked to EEB.
Eddy Van Eeno, Global Sustainability EEB Project Manager, shares his experience of implementing the EEB program globally: “Our greatest challenge is the huge diversity of our company. Our building scope includes a range of laboratories operating a diverse range of activities. A consumer testing services laboratory, for example, is likely to have a lower energy demand than a geochemical laboratory with powerful crushing machines; and an industrial laboratory may be high-tech, or it may be focused on more physical processes such as welding or extraction. Such diversity, however, challenges us to find innovative solutions in managing energy efficiency. For example:
- Our laboratory in Taunusstein, Germany replaced an oil-fired heating system with a gas one and introduced a combined heat and power generator, condensing boilers and an energy management system. The installation was completed in 2014 and these measures have delivered a 20% reduction in CO2 emissions, equivalent to one-third of the building’s energy costs
- As reported in 2013, our textile testing laboratories in Tirupur and Chennai have more than halved the volume of water purchased by using waste water that is processed in an effluent treatment plant. Furthermore, condensation from air conditioning units is collected, processed and recycled as laboratory grade water
- Our laboratory in Kolkata, India which was relocated in 2013, uses a unique rooftop solar photovoltaic system which was installed in 2013 and is capable of withstanding high coastal winds to generate around 12.5 MWh of electricity per year, equivalent to 2.5% of the building’s energy consumption
- All our Minerals laboratories now use a newly designed crucible which maximizes the number of sample pots in a furnace at any one time, reducing fuel consumption per sample by 40%
- SGS is installing an energy management and navigation system designed by Siemens across a number of facilities in Belgium, Germany, the Netherlands and Switzerland, providing detailed intelligence on electricity, gas, water, fuel consumption levels and usage patterns. The system has the potential for us to have oversight of all installations globally
- Our facilities in Noorderlaan and Polderdijkweg, Antwerp – two of our largest laboratories in Europe – have implemented a number of EEB measures, including the installation of a free cooling system in the server room, and diverting energy arising from the server room to heat the building. In addition, in our offices we have achieved an average weekly saving of 34 kWh, equivalent to 12% of our total electricity consumption for lighting. We are also in discussion with the Port of Antwerp to re-use water from the nearby dock in our cooling system
- SGS Search, a Dutch-based engineering and sustainability advisory services and asbestos testing company which we acquired in July 2014, received a CO2 reduction certificate recognizing its commitment to energy reductions across its supplier inventory
- Through our membership of the EEB (EEB 2.0) project convened by the World Business Council for Sustainable Development (WBCSD), SGS is leading the EEB 2.0 project in India and is co-member of the EEB 2.0 project in the Benelux which aims to unlock financially viable energy efficiency investments that are currently not being realized because of financial, regulatory or organizational barriers.” (See our 2014 Sustainability Review for more detail on this initiative)
(See our 2014 Sustainability Review for case studies on our EEB programs across our global network.)
SGS is a signatory to the World Business Council for Sustainable Development’s (WBCSD’s) Energy Efficiency in Buildings Manifesto. Under this manifesto, we have committed to a 10% reduction in CO2 emissions for all offices and for all laboratories we own that are larger than 2,000 m2 by 2014 and a 20% reduction by 2020, against 2014 baselines.
Progress against our EEB targets is tracked via the SGS Energy Rating Tool for Offices and Laboratories, and reported to WBCSD. In 2014 we expanded the coverage of the data collection from 23 to 39 buildings on the EEB scope.
Through our membership of the EEB (EEB 2.0) project convened by the WBCSD, SGS is leading the EEB 2.0 project in India which aims to unlock financially viable energy efficiency investments that are currently not being realized because of financial, regulatory or organizational barriers. (More detail on this initiative can be found in our 2014 Sustainability Review.)
SGS is also involved as a co-organizer of a WBCSD EEB 2.0 project in Benelux, which will launch in Amsterdam in May 2015. Led by AkzoNobel, SGS will work alongside AGC and ArcelorMittal in coordinating the project.
Managing Environmental Behavior: Spot The Orange Dot
Encouraging environmental behavior in the workplace forms a key part of our energy management approach. Our innovative ‘Spot the Orange Dot’ behavior change campaign, launched in 2012, was rolled out to a further 9 affiliates in 2014. The campaign uses strategically positioned orange stickers to remind employees to take concerted action to improve our energy and resource efficiency. Our popular campaign mascot, Lëss the polar bear, reminds employees about the importance of “Doing More with Lëss” in posters which reinforce the orange dot message. To date, 17 affiliates have taken the campaign, with further affiliates planning to implement it during 2015.
2014 highlights include:
- Up to 6% reduction in electricity consumption during the first eight months and an important reduction in spend on disposable cups at our three largest facilities in SGS France
- A more responsible approach to the use of lighting and air conditioning controls and lower paper and ink consumption in SGS Malaysia
- SGS Bangladesh launched the campaign across five sites in September 2014 and set itself a target to achieve a 5% reduction in electricity consumption by the end of 2014
- SGS Italy is running the campaign across four sites, and is focusing on reducing water and paper consumption as well as reducing electricity use through more effective control of lighting
- SGS Poland launched the campaign in September 2014 across five sites, and plans to extend in throughout 2015 in order to create momentum amongst employees and entrench sound environmental behavior in its culture
- SGS Mauritius is targeting lighting, paper reduction and recycling, air conditioning and equipment and a reduction in water usage as its focus for the campaign. Greater employee awareness has led to a number of energy saving ideas being proposed by employees, such as switching off the water fountain and coffee machine at the end of the day and replacing the distilled water equipment with a more energy efficient model. The affiliate plans to replace all tube lighting with LED tubes in 2015
- SGS South Africa provided year-on-year electricity consumption data as part of its ‘switch off’ campaign. Lëss the bear visited six sites to raise awareness of the Spot the Dot campaign
- SGS Benelux has established a taskforce to progress the campaign using energy, water and waste as its main themes
- SGS Belgium has seen a marked reduction in the use of plastic coffee cups and printer paper following a concerted effort to reduce and recycle. Two buildings have installed special bins to collect used plastic cups, which are then recycled into plastic
- Electricity consumption in SGS South Korea decreased 2.7% and printing reduced by 11% in the first half of 2014
- SGS Indonesia launched the campaign in September 2014 to coincide with Lower Carbon Day. Their focus is on reducing electricity and paper consumption. At the launch locally grown oranges were distributed to all employees as a lower carbon snack option, and an orange toast was held as a demonstration of commitment to the “Doing more with Lëss” campaign
- SGS UK is gearing up to run the campaign in 2015, creating a template for data capture drawn from sources such as electricity meter readings, which will be conducted three times per day over a four week period starting in January
Lower Carbon Day
We launched our first Lower Carbon Day on September 3 2014. Employees across the company were involved in actions aimed at raising awareness around energy efficiency and the need to support the principle of a lower carbon future. (See our 2014 Sustainability Review for case studies on Lower Carbon Day activities in our affiliates.)
Our Green IT policy requires us to procure equipment responsibly, use IT to enable our operations to be greener, optimize the energy efficiency of our data centers and implement responsible disposal practices.
Sites must meet criteria on five dimensions covering energy monitoring, recycling of IT equipment, cooling optimization, virtualization and use of renewable power, with a ‘Green A’ label awarded to sites fulfilling five criteria, ‘Green B’ fulfilling four criteria, ‘Green C’ fulfilling three criteria, ‘Green D’ fulfilling two criteria, ‘Green E’ fulfilling one criteria and ‘Green F’ not fulfilling any criteria.
Virtualization and centralization are used to reduce energy demand in our major data centers. SGS uses a number of technologies including free cooling, which involves using outside temperatures in certain climates to cool air, and cold aisles, which contain the temperature-sensitive equipment in one chilled compartment instead of air conditioning an entire room. Excess heat extracted from the cold aisle in Geneva is used to warm our offices. Where data space is rented, options for energy efficiency include virtualization and purchasing renewable energy; a leased data center in Geneva uses 100% hydraulic power. (See our 2014 Sustainability Review for our case study on how we expect to achieve energy reductions from free cooling our data centers.)
During 2014, we completed an assessment and classification of 97 SGS data centers representing around 90% of SGS revenues using a standardized assessment methodology and toolkit, which included Green IT as one of five dimensions. All sites are now aligned with our defined SGS Green IT label, which awards a ranking of between A and F to sites based on their energy efficiency.
We are increasing video, audio and web conferencing to reduce travel costs, cut CO2 emissions, and improve work-life balance. In 2014 we have promoted the benefits of audio and videoconferencing within the company, starting with the more well-traveled routes.
Across our fleet of more than 9,000 cars, we currently operate a number of green car initiatives, covering topics such as eco-driving, purchasing more fuel-efficient vehicles and vehicle maintenance. Our target in most regions is to reduce average carbon emissions to 95g per kilometer across the fleet by 2020.
SGS is on a journey to reduce its carbon emissions and minimize its impact on climate change. In addition to sourcing renewable energy and increasing energy efficiency, we have offset all CO2 emissions associated with operations in our major countries (representing 91% of Group revenue and 92% of headcount) for 2014.
We believe becoming carbon neutral has three main benefits:
i. Taking action now – energy efficiency and carbon intensity reduction projects are key to tackling climate change. However, carbon emissions will continue to be generated while such projects are taking effect, and we know that each tonne of carbon eliminated today is more valuable than one removed at some point in the future. Carbon neutrality bridges the gap between the current reality and a more sustainable future
ii. Quantifying carbon costs – we identify sustainability priorities by quantifying the costs associated with sustainability challenges, as highlighted in our Green Book. However, the economic cost of carbon is difficult to quantify. Carbon neutrality enables a clear cost of carbon to be assigned. We incentivize affiliates to re-double their efficiency efforts by requiring each one to pay for their emission offsets
iii. Community commitment – supporting carbon offsetting projects which benefit local communities aligns with our community investment strategy
(See our case study in our 2014 Sustainability Review to find out how we are supporting local needs through a renewable energy project in Norway.)
Investing in Renewable Power
In December 2014, SGS became one of the first companies globally to sign the RE100 initiative, pledging to use 100% energy from renewable sources. Led by The Climate Group and in partnership with CDP, RE100 is collaborating with the International Renewable Energy Agency (IRENA) and others to get 100 of the world’s largest companies committing to 100% renewable power by 2020. The RE100 campaign highlights the business and reputational benefits enjoyed by companies who make the commitment to using power exclusively from renewable power sources. It will also help companies who wish to switch to renewables by offering guidance on selecting and implementing the best approach to utilizing renewable power, and information on the financial implications, risks and rewards of different options.