Cummins Unveils Environmental Sustainability Plan

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Cummins Unveils Environmental Sustainability Plan

Cummins Chairman and Chief Executive Officer, Tom Linebarger, unveils the Company’s environmental sustainability plan during a speech at Purdue University

Posted: May 8, 2014

After nearly two years of study, Cummins has adopted a comprehensive plan to reduce the Company’s environmental footprint, addressing everything from its manufacturing operations to Cummins’ engines and generators in use.

In areas where Cummins has the most influence, such as the Company’s plants and internal supply chain, the plan calls for immediate action. It establishes specific, measurable goals by 2020 for the Company to reduce the water and energy it uses and the waste it disposes.

In other areas, such as the Company’s products in use – the overwhelming majority of Cummins’ environmental footprint – the plan commits the Company to working collaboratively with a variety of stakeholders to make a positive environmental impact while delivering economic value to its customers. Cummins has been working hard to reduce its environmental footprint for years, with a special focus over the last decade on waste, water and energy.

The Company produces the cleanest engines and generators in the industry and has been engaged with communities on environmental issues through programs like the Environmental Challenge.

But this is the most comprehensive plan the Company has put together and it comes as many consumers at the click of a computer mouse can get goods delivered to their door overnight, if not in a matter of hours. Cummins powers the trucks, trains and other forms of transportation that help make those deliveries possible. In some cases, the Company’s generators even power the factories producing the goods. Cummins, however, recognizes that in the midst of these amazing times there is growing concern about the air, water and land all of us depend on.

The Company wanted a plan to help guide it as Cummins delivers the power our customers need in an increasingly interconnected world in a way that protects the natural resources we all share.

“With millions of engines and generators in service, and customers in 190 countries and territories, there’s no question in my mind that Cummins has the global reach to make a positive impact on the environment,” said Chairman and Chief Executive Officer Tom Linebarger.

“Many of our employees are already doing this through the products they design and the processes they follow,” he added. “This is just the next step in fulfilling our vision of making people’s lives better by unleashing the power of Cummins.”

OUR SUSTAINABILITY JOURNEY

Cummins has long embraced “green” practices like its remanufacturing operations, which today keep some 50 million pounds of Cummins product in use and out of landfills annually.

But as recently as the 1990s, the Company shared the industry held belief that newly proposed clean air regulations in the United States would be impossible to meet.

Cummins leaders concluded, however, that their opposition was inconsistent with the Company’s long-held values. They began to see Cummins’ technical expertise as a key competitive advantage to meet increasingly stringent regulations.

PRODUCT DESIGN

About 70 percent of a product’s environmental footprint is locked in at the design stage, according to the U.S. Environmental Protection Agency. The Company’s sustainability plan establishes designing for innovation as a key goal, with a focus on the efficient use of fuel and raw materials.

The Company can build on many successes. In February, the President of the United States praised the concept “SuperTruck” developed by Cummins and the Peterbilt Motors Company, which during testing under real world conditions achieved a 75 percent increase in fuel efficiency compared to a typical truck on the road today.

The tractor-trailer includes a high tech engine with a waste-heat recovery system, an aerodynamic exterior and other energy saving features that the participating companies will now work to commercialize.

Cummins’ new G Series engine is another example of a sustainable product design. A key focus for the heavy-duty engine platform has been achieving significant weight reductions. A sculpted block retains high rigidity while removing unnecessary mass. The use of composite material for the oil pan and valve cover provides further weight reductions.

Cummins is poised for more innovation. The Company’s new technical center under construction in India, for example, will be the first at Cummins designed from the ground up to handle alternative fuels. It will also be the first tech center to make significant use of virtual reality.

PRODUCTS IN USE

Cummins’ biggest challenge will be to make a positive environmental impact when its products are in the hands of its customers. The Company’s independent analysis estimates that more than 95 percent of Cummins’ total environmental footprint comes when its products are hauling freight, moving dirt, powering buildings, or in some way in use.

The good news is there may never have been a better time for the Company to engage with its customers to make a positive difference on the environment. With diesel emissions at near zero levels for particulate pollutants, attention is increasingly focused on fuel efficiency.

Cummins’ customers can see bottom-line benefits in the push for fuel efficiency. A five percent increase in fuel economy equals a five percent reduction in fuel costs and a roughly five percent drop in GHG emissions.

For nearly 10 years, Cummins has used Six Sigma, the business problem-solving tool, to help customers operate their Cummins equipment more efficiently, saving them more than $1 billion since 2005. About 90 million gallons of fuel has been saved and more than one million tons of carbon dioxide (CO2) has been avoided.

Now, the Company is expanding its efforts, working with other companies to help customers realize millions in savings through greater fuel efficiency.

RAW MATERIALS AND PROCESSING

Another area that holds tremendous potential for Cummins to work collaboratively is in raw materials and processing.

Like many companies today, Cummins increasingly relies on independent suppliers to provide it with the metals, other raw materials and some parts the Company needs. The parts and processes connected with Cummins’ external supply chain require significant amounts of energy, water and raw materials.

For example, 88 percent of the Company’s water footprint can be linked to the extraction and processing of raw materials, according to the independent analysis of Cummins’ environmental footprint.

The plan calls for Cummins to work with its supply chain to reduce the Company’s use of raw materials and packaging, and to share best-practice tools to help suppliers reduce their footprint, which in turn helps Cummins reduce its footprint.

The plan also calls for collaboration between Cummins engineers, manufacturing leaders, material scientists, outside experts and suppliers to use advanced manufacturing processes that require less energy, water, and other natural resources or result in products that are easier to recycle and reuse.

INTERNAL OPERATIONS

Cummins is establishing its most specific goals in those areas where it has the most influence and experience – its internal operations.

The Company has a large and sophisticated supply chain. Through an improved transportation system, Cummins is determined to reduce the total miles traveled to move shipments across the Company.

Cummins is publicly releasing its goals and will report on the Company’s progress in future Sustainability Reports.

Here are the goals:

ENERGY AND GHG: The sustainability plan calls for reducing energy and GHG emissions at Cummins by 25 and 27 percent, respectively, compared to a 2005 baseline and adjusted to sales, by 2015.

The Company voluntarily pledged a 25 percent GHG emission reduction as part of the Environmental Protection Agency’s Climate Leaders Program in late 2006. It achieved a 28 percent reduction, but then sold a part of the Company that had eliminated a significant amount of GHGs. Cummins is now looking for additional savings to meet its goals.

WATER: The plan calls for reducing direct water use across the Company by 33 percent by 2020, adjusted for hours worked. In those areas where water is scarce, the plan also calls for achieving “water neutrality” at 15 manufacturing sites by off-setting water use with community improvements that either conserve water or make new water sources available. The plan calls for working with all sites globally to share best practices and institute water conservation processes.

WASTE: The plan calls for increasing the Company’s recycling rate from 89 percent in 2013 to 95 percent by 2020, with a special focus on Cummins’ 40 highest waste disposing sites. In addition, it calls for reaching “zero disposal” status at 30 sites by 2020 where 100 percent of waste will be recycled in a useful manner.

While the Company’s 89 percent recycling rate compares favorably to many companies, recycling that last 11 percent will mean Cummins’ zero disposal sites must deal with many hard-to-recycle items.

A CALL FOR ACTION

ACES leaders say the new goals are only the beginning. They may add additional specific goals over time.

“It will take a huge effort involving all of our employees’ skills and passion,” said Karen Cecil, Cummins’ Director – Global Environmental Sustainability. “It will mean working not just with our customers and suppliers, but with many external stakeholders, including our communities. It’s something we’ll always be working on as the world changes and new challenges arise.”

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