To get to a more sustainable world, businesses must step up and make bold commitments and changes regardless of regulatory environment.
In 2014, Ingersoll Rand made a global climate commitment to increase energy efficiency and reduce greenhouse gas (GHG) emissions related to our operations and products. We are proud of the progress we’ve made. We’ve increased energy efficiency across our operations by 10 percent two years ahead of our 2020 target, and we continue to progress toward new goals like increasing the use of renewable energy.
We have a strong team that contributed to this achievement, and we have been relentless in making climate and efficiency a top consideration in the decisions we make for our business and customers.
When we developed our plan to achieve our GHG reduction goal, we collectively agreed to work toward reducing energy use everywhere possible and generating energy everywhere we could generate it.
Our own Trane Energy Supply business was instrumental in providing a roadmap on how to be smarter about our energy purchases and in organizing an agreement that is responsible to the environment and good for our business.
Specifically, we signed a power purchase agreement for approximately 100,000 MWh of wind power annually. It replaces 32 percent of the company’s U.S. electricity use with green energy and reduces U.S. Scope 2 GHG Emissions from Electricity by 32 percent. We also initiated or commissioned on-site solar installations at three large manufacturing sites in the United States and China to address 15 percent of the energy load at these locations.
We have been sharing our learnings from our journey internally and with our customers directly. We thought it would be helpful to share with our affinity group, too, as many manufacturers—large and small—are embarking upon renewable energy strategies.
Start with a benchmark. As a first step, we put together a targeted plan for reductions and where renewables could make an impact. A critical aspect was understanding where energy leakage was occurring. We determined this by leveraging technology and insights we provide to customers every day to conduct an energy audit of our facilities.
Gather the right expertise and stakeholders. Renewable investments are complex, and the business case needs to be made across several functional areas. The technical accounting behind renewable adoption can also be tricky, as can arriving at a clear view of the various paybacks and incentives available across regions. By engaging expertise and stakeholders from inside and outside the company—and engaging them early—we were prepared to handle the complexities. We brought legal, procurement and finance to the table and enlisted a partner who had done this before and helped us understand the steps.
Don’t take on too much, too quickly. Embarking on a sustainability journey can be daunting. By breaking our plan down into manageable projects, we delivered results early and fostered additional support for our overall goals. We started by asking ourselves how we could make each facility more efficient itself. In our Mocksville, North Carolina, manufacturing facility, we upgraded air-conditioning systems, building controls and lighting and eliminated energy leakage from compressed air systems. This was instrumental in the progress we’ve made so far against our goals. We produced energy savings equal to the amount of energy used by 170 houses in one year by making sure the lights are shut off after every shift. And we re-fitted the facility with an energy-efficient lighting system, which saves the facility 300,000 kilowatt hours annually.
Create a standard financial model to assess business value of renewables. Global continuity with our first investments in renewables was critical, as was establishing an approach for future investments. We did this by developing a consistent and repeatable model for determining the business case for each on-site solar installation in the United States and China. We used a similar model for our power purchase agreement for wind power.
Set measurable goals and report on progress. With both our energy efficiency and our renewables strategies, it was important we knew what to look for along the way to confirm we were on the path to success. We knew our first PPA would be the hardest, so we ensured we were clear on where we were and where we wanted to go, and we set thresholds along the way, which triggered a need for decisions.
We are excited to see the ongoing results from the plans we have in place and the mindset and culture of environmental responsibility we’ve created throughout Ingersoll Rand.
We appreciate the opportunity to share our results and experiences thus far on our sustainability journey and hope to encourage other manufacturers to make similar commitments.
Keith Sultana is the senior vice president of global operations and integrated supply chain at Ingersoll Rand.