Sustainability is a major global concern considering threats of climate change and emission growth. Where exactly would sustainability be on your agenda? Also, for industry, how to make business profitable while contributing to sustainability?
At Ingersoll Rand, sustainability is at the very foundation of our business. Our commitment to sustainability extends to the environmental impacts of our people, operations, and products and services. For any business, it is critically important to enhance shareholder equity. If we just focus on sustainability and don’t care about making money for our shareholders, we wouldn’t be in business anymore. So, return to shareholders has to be on top of the list. At the same time, we believe that the best way to give return to our shareholders is by introducing breakthrough ideas to market to enhance sustainability of our products and solutions, and ultimately make a positive impact to communities around us. In the case of Ingersoll Rand, the work that we have done on sustainability has actually resulted in increased organic revenue growth. It has given us a leading position and voice in the industry, increased margins on our products and as a result increased shareholder equity.
How Indian market is reciprocating to the sustainability goals?
It is very interesting because first of all customers in India are not very different from customers in the rest of the world. So, from the standpoint of energy efficiency and sustainability of products, even though regulations in India don’t require customers to buy new low global warming potential of refrigerants for a long time, we still see a number of evolved customers that are demanding the latest technologies which include low global warming potential refrigerants. Similarly, in our air compressor business, many of our customers are demanding energy efficient and sophisticated products. I think it is a combination of the strain on the energy grid, air compressors tend to be one of the highest consumers of energy in factory and shop. Additionally, it makes good business sense to also be buying the latest and best-in-class technology in the industry.
What kind of roadmap do you have for the Indian market especially when you talk about sustainability as an important business factor?
We do not see a huge difference in the roadmap for the Indian market vis-à-vis the rest of the world. On the air-conditioning side of the business, we continue to work on two priorities: putting the right refrigerant in the products that is safe, energy efficient and enhancing system efficiency. It is our priority to work and have more efficient products in systems. We believe, if we want to reduce the energy intensity of a building, we have to take a systems approach. In the Indian market too, our emphasis is on product efficiency and we are working to move that to system efficiency. We are also focused on connected buildings to ensure efficient functioning of a building throughout its lifecycle.
In addition, in the truck trailer refrigeration, we are focused on connected vehicles to monitor its performance in real time.
Ingersoll Rand has an ambitious target of reducing 35 per cent greenhouse gas footprint of its own operations by 2020. What’s the current status?
In 2014, we established long-term sustainability targets to address one of the biggest issues to our environment and society, including the company’s operational footprint.
One of our goals was to reduce greenhouse gas emissions from our own operations by 35 per cent – we exceeded that goal in 2018, two years early, and to date have reduced emissions by 45 per cent and energy consumption by 22 per cent.
Additionally, we have announced $500 million investment in product-related research and development to fund long-term GHG reduction and and we already spent in excess of $400 million. At Ingersoll Rand, we have met all our sustainability goals early.
So, what’s next?
To take the Sustainability Goals further, we recently made a 2030 commitment which is broader than our 2020 commitment. It includes goals tied to urbanisation because we know that a large per centage of the world will be urbanised by 2030. So, our 2030 commitments are designed to meet the challenge of climate change, resource constraints, provide world-class systems and service performance for buildings, homes, transportation and industrial customers. It also improves the quality of life for the people and communities where we operate and serve. The company will continue this momentum and create positive impact through three actions by 2030.
Firstly, scale technology, innovation and sustainability strategies to enable more efficient customer solutions. This includes reducing the customer carbon footprint by one gigaton CO2e – equivalent to the annual emissions of Italy, France and the United Kingdom combined.
Secondly, transform its supply chain and operations to have a restorative impact on the environment including achieving carbon neutral operations.