According to Sims’s latest climate report, every tonne of scrap used for steel production avoids 1.5 tonnes of carbon dioxide emissions compared to producing steel from raw materials. The savings, Mikkelsen says, “are enormous” and added up to a savings of 13 million tonnes of carbon dioxide in 2023 alone – equivalent to removing almost three million gas-powered cars from the road for a year.

Mikkelsen also likes to say that Sims – the top-ranked firm on the Corporate Knights 2024 Global 100 list of the world’s most sustainable publicly traded corporations with more than $1 billion in revenue – is not a Johnny-come-lately to the circular economy in general and the business of decarbonizing steel in particular. “We weren’t late to this party,” he says. “We were sending out invitations 100 years ago.”

The iron and steel business is a major contributor to the climate crisis. Globally, this industry generates about 7% to 9% of all anthropogenic emissions, or about 2.6 billion tonnes per year, according to World Steel, an industry body. The sector, moreover, isn’t on track to achieve net-zero targets, despite investments in new forms of low-carbon energy for steel plants. As the International Energy Agency reports, “the current pipeline of low- and near zero-emission projects falls short of what is required to meet the [net-zero] scenario, and high-emission projects” – which is to say, coal-fired steel – “make up around two-thirds of all announced projects worldwide.” 

Recycling scrap, in short, makes more sense than ever, although the process, which involves smelting and other energy-intensive processes, also needs to boost its environmental performance.

Among the firms operating in this vertical, Sims scores highly. It earned the top spot on the Global 100, with 100% sustainable revenue and clean investments, a 95% score on the energy productivity of its operations, and 87.5% on its carbon productivity. The company also ranks highly on a range of social metrics – low employee turnover, for example, and strong gender diversity at both the board and C-suite levels. Mikkelsen adds that the firm has pushed to reduce carbon in its own operations, setting a target of 2025 to transition entirely to the use of renewable energy in its shredding and separating operations, as well as longer-term goals, such as becoming carbon neutral by 2030 and achieving net-zero emissions by 2050.

Its environmental track record is not, however, pristine. In 2022, a B.C.-based metal recycling firm in which Sims owns a stake was slapped with a provincial clean-up order related to the discharge of PCB- and heavy-metal-saturated effluent into the Fraser River; the company is fighting the order in court. The firm has also faced media scrutiny and regulatory action in the U.S. related to air pollution from one of its smelting facilities in the Chicago area. Sims’s 2022 sustainability report notes that the company has sought to comply with state environmental rules by investing US$15 million in an emissions-control system. 

At a high level, Mikkelsen’s pitch to investors is that scrap metal – steel, copper, aluminum, et cetera – has a bright future in the low-carbon economy, thanks to steadily rising demand for electric vehicles, wind turbines, electricity transmission grids, solar panels. “All of those are steel intensive, copper intensive, aluminum intensive.” He points also to the steady growth in the number of metal recycling plants that are either coming online or in the planning stages, in the U.S., Canada, the U.K. and elsewhere. Even countries that traditionally exported scrap metal, like Japan, are building electricity-fired processing  plants. 

But the expansion of demand for recycled metals isn’t immune to market fluctuations. In the past year, global demand for copper has dropped, and the slowing of the Chinese economy has sent ripples through international metal markets. The price of unprocessed scrap, meanwhile, has risen, which means companies like Sims have faced something of a financial squeeze, a dynamic that’s clearly visible in its latest earnings reports. The company generated US$8 billion in revenues in 2023 but saw its profits plunge by 72.9%.

Mikkelsen dismisses these trends as little more than background noise. “We look through the short-term swings and roundabouts of business life,” he says. “The longer-term trend we anticipate is that scrap metal is in short supply.”

We weren’t late to this party. We were sending out invitations 100 years ago.

 

– Stephen Mikkelsen, CEO, Sims Ltd

Yet those swings have forced the company to take a hard look at some of its far-flung holdings so it can, as Mikkelsen quips, “recycle” its capital. For example, Sims finally divested itself of part of its municipal recycling business – a large blue-box operation in New York City. In 2022, the firm sold much of its stake to Closed Loop Partners, a New York–based circular economy fund, and then divested the rest last year. “The New York business was, frankly, largely plastic recycling, and that wasn’t our core business,” he says. (New York’s huge blue-box program is now run by Balcones Recycling.)

Along with a few other divestitures as well as the acquisition of new scrap-processing plants in the U.S., Sims has moved to invest in high-tech sorting equipment designed to recover more of the marketable scrap metal in castoffs like end-of-life automobiles. At one of its plants in Nashville, Tennessee, the company has been piloting new automated sorting systems that have been designed to retrieve valuable metals like copper while separating out substances, like plastics, that don’t have any further value. “We’re using technology like optical recognition and robotics to do the last picking of valuable products out of our recycling and waste streams, which maximizes circularity and creates more value for our customers and our business,” Mikkelsen explains. The firm is also using AI-equipped robots to disassemble spent server racks from data centres. “That’s exciting technology for us, because it improves productivity and the accuracy of what we’re doing there.”

Just don’t expect those kinds of investments to generate much in the way of love from the environmental sector or climate-conscious voters. “We’re not doing those types of things which are very obvious to politicians and, I guess, the public in general. But,” Mikkelsen says, “metal recycling is an extraordinarily important part of how we’re going to decarbonize.” 

The post This scrappy Australian recycling pioneer is the most sustainable corporation of 2024 appeared first on Corporate Knights.

Although the Danish company has roots going back more than a century, the Vestas brand is a mere 75 years old. The firm was once a global leader in hydraulic cranes, but it is now the world’s largest wind turbine manufacturer, responsible for almost a fifth of global installed wind power capacity.

“Through our solutions, Vestas supports the global energy system with avoiding millions of tonnes of carbon emissions every year,” says CEO Henrik Andersen.

The multinational has tentacles around the globe. In the U.S. and Canada alone, Vestas has 40,000 megawatts (MW) installed and employs more than 7,000 people in the manufacturing, installation and servicing of onshore and offshore wind turbines. In December, the Danish firm secured another 235 MW order in Illinois and began installing Europe’s most powerful offshore turbine yet, in the North Sea off the Scottish coast. Once completed it will be Scotland’s largest renewable energy project, generating around 5,000 gigawatt hours (GWh) of renewable energy annually.

“To build a truly sustainable future, however, we must do more,” says Andersen. Since 2020, the company has taken a step further, with a new, more holistic global sustainability strategy, which it calls Sustainability in Everything We Do. The strategy has four pillars: reducing its carbon footprint, circularity, people, and the energy transition.

Some of the company’s emissions will be more challenging to tackle than others: it has committed to reducing its Scope 3 emissions (those beyond its direct energy use and operations) by 45% by 2030. More than half the firm’s emissions in its supply chain come from its use of steel, principally for turbine towers. Steel is one of the most carbon-intensive materials to produce, and Vestas is in “active and intensive dialogue with its steel suppliers to address this,” says Lisa Ekstrand, head of sustainability at Vestas.

“We’re talking to them to explore how we can work together to accelerate the decarbonization of steel. Many steelmakers have targets, but they are too long-term. We need things to happen faster if we are to meet our own carbon reduction targets. One answer may be for us to be part of the solution by providing them with green hydrogen produced using our turbines.”

When it comes to circularity, however, steel is almost the perfect material, being easily and infinitely recyclable. About 85 to 90% of a wind turbine is recyclable. The real challenge is the remaining 10 to 15%, comprising the blades, which can be longer than the wing of a Boeing 747. The wind industry has been criticized for failing to recycle old turbine blades. “These are challenging because they are made of composite materials, so we have a number of projects looking at how we can recycle them, and how we can develop blades designed to be circular from the start,” says Ekstrand.

One three-year development project is looking at how to separate the blades’ ingredients into carbon fibre and epoxy resin. Once you do that, you can use chemical recycling to break the resin down into its constituent chemicals. “It’s an exciting project because no one has managed to do it yet,” Ekstrand explains.

The focus is not just on recycling, though. Vestas also plans to increase the efficiency of its materials efficiency and cut waste in half by 2030. “We need both carbon reduction and a strong circular ambition to address the entire value chain,” Ekstrand stresses.

The company aims to be producing zero-waste turbines by 2040 and to become carbon neutral in its own operations by 2030, without using carbon offsets. It plans to decarbonize its service vehicle fleet by requiring all new vans to be electric or use renewable fuels by 2025. It’s also slashing emissions at its factories by phasing out natural gas heating systems.

Given its business, it is no surprise that Vestas was in the top quartile for clean revenue, clean investment, energy and greenhouse gas productivity, and water productivity.

On diversity and inclusion, it also scored well in terms of non-male representation in the boardroom and the C-suite. “Diversity and inclusion is a broad topic, and currently our focus is on increasing the number of women in leadership positions,” says Ekstrand, adding that just 14% of Vestas’s employee base is female. The company hopes to have women in 25% of its leadership positions by 2025, 30% by 2030.

But at the heart of the company’s sustainability efforts are the wind turbines it is famous for, and Vestas wants them not just to deliver zero-carbon power but to be low-carbon products themselves.

“We have talked to our customers about how much they value this, and how much they are willing to pay for it, because being frontrunners comes at a premium,” says Ekstrand. “There has been a big shift. I see a lot more demand from customers for lower-carbon products, more waste reduction and circularity. It is one of the reasons we have focused on this.”

The company, already a giant in the world of clean energy, has even bigger plans for the years to come, including next year installing and testing the world’s tallest and most powerful wind turbine, a prototype 15 MW offshore device that will reach 280 metres into the air and be capable of producing 80 GWh of power a year, enough to power approximately 20,000 European homes.

The post Wind giant sweeps into top spot of Global 100 appeared first on Corporate Knights.

It is fitting, then, that 2021’s most sustainable company on the Global 100 index is Schneider Electric. The French firm is at the heart of a megatrend that will define the global economy for decades to come, although it has never produced electricity itself.

Over the last 20 years, Schneider Electric has moved away from high-voltage electrical distribution to focus on data centres, decentralized electrical distribution (including off-grid solar storage) and smart solutions to make the world more electric, energy efficient, renewable and digital.

It has been a long journey, driven by two inspirational CEOs, Henri Lachmann and then Jean-Pascal Tricoire, who has run the company since 2006.

“It started with former UN secretary general Kofi Annan launching the Global Compact principles on sustainability,” says Gilles Vermot Desroches, senior vice-president for sustainable development and strategy. “We were one of the first companies to endorse them and to ask our suppliers to be more sustainable.”

“There are two sides to the sustainability coin,” he adds. “We aim to lead by example within our own operations and ecosystem, and we work to be part of the solution for our customers. Sustainability improves performance, innovation and our attractiveness as a place to work. It creates value.”

Besides curbing its own emissions by 250,000 metric tons of CO2 in 24 months by shifting to renewable energy, the company says its suite of energy-efficient technologies and services should save 120 million metric tons of CO2 on their customers’ behalf by the end of 2020.

Schneider Electric earned the top spot in the Corporate Knights ranking because of its strong performance across a range of sustainability criteria. The company earned 70% of its revenue from sustainable solutions, while 73% of its investments are directed toward sustainable solutions. It also performed strongly in areas including racial and gender diversity and resource productivity and safety.

The company is, despite roots that go back more than 180 years, in many ways a product of the digital age. “At the start of the internet, the big effort was to connect seven billion people. Today, 300 new assets connect to the internet every second. There are now more than 60 billion assets that can talk to people and to each other to make things run more efficiently,” Vermot Desroches points out. Simple but effective examples of this are controls that ensure that “if you’re not in the room, the light is not left on. If you’re not in the building, the heating is turned down.”

Although Schneider’s business focus is on the clean energy transition, its approach has a significant social aspect to it as well, which has been heightened by the pandemic. “We learned a lot about our impact as a company during COVID. This crisis would have been very different in 2010 without all the benefits that digital has brought, from ensuring hospitals have secure access to energy, to being able to manage business and personal relationships online.”

At the heart of the company’s efforts has been a shift from shareholder value to emphasizing stakeholder value, says Vermot Desroches. “If we want to continue to lead, we have to work with our stakeholders, including our suppliers. We’re asking all our tier-one suppliers to cut their emissions by 50%. We’re asking them to respect human rights.”

A key move, in 2017, was to “build a bridge between our KPIs and the [UN] Sustainable Development Goals,” he adds. These key performance indicators include growing green revenues to 80%, giving 50 million people access to green energy and training one million underprivileged people in energy management.

“The average age in Africa is 19, and 70% of the population [is] under 30. One in six under-30s who had a job in January lost them this year. It is impossible to solve problems for only part of the population. And we need these young people to provide innovation. We must involve them to harness the power of a generation of digital natives.”

“We’re a very technical company, but when it comes down to it, we empower people,” Vermot Desroches concludes. “We believe that access to energy and digital is a basic human right.”

Mike Scott writes about business, finance, clean energy and sustainability.

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The post Top company profile: Schneider Electric leads decarbonizing megatrend appeared first on Corporate Knights.