A leading light
Published on 14 September 2017
Maurice Loosschilder (left), Head of Sustainability Strategy & Reporting at Philips Lighting and Mark Cairns, Maersk Country Manager in The Netherlands discuss the Carbon Pact signed between the two companies at the Philips Lighting warehouse in Eindhoven. Photo: Rud Taal
In a warehouse in Eindhoven in the Netherlands, Philips Lighting products are being loaded into a Maersk container ready for shipping. Many of the products produced by the Dutch lighting company are low-energy LEDs – key to the company’s mission of making the planet more sustainable.
Replacing traditional bulbs with LEDs would reduce global energy consumption from lighting by over 50%, and Philips Lighting has pledged to sell more than 2 billion LED lamps by 2020.
“Sustainability lies at the heart of our company,” explains Maurice Loosschilder, Head of Sustainability Strategy & Reporting at Philips Lighting. “We see a huge opportunity to mitigate climate change via a global shift to LEDs.”
The supply chain impact
For Philips Lighting, being sustainable is not only about selling low-carbon technology. It is about changing the way business is done entirely. Last year the company introduced strict targets for its operations – publicly committing to becoming carbon neutral by 2020, with zero waste to landfill from its manufacturing facilities.
Maersk is helping Philips Lighting realise these ambitions thanks to a Carbon Pact - that pledges to reduce the carbon emissions from shipping by 20% by 2020.
Currently, 44% of Philips Lighting’s total carbon footprint comes from its supply chain logistics – making this the biggest total contributor, even more so than its industrial sites - so any reduction would make a huge dent in the company’s carbon footprint.
“The supply chain is one of the first places a company needs to look to make sure it is doing everything possible to bring down its carbon footprint,” says Greg Boyle, Global Director Ocean Freight & Distribution at Philips Lighting.
“The partners we use are key to helping us reduce our footprint. Today it’s a prerequisite when we decide who to work with. If a company doesn’t have a proper sustainability programme in place, we won’t even consider doing business with it because sustainability has become embedded in how we do business.”
A pact to lower carbon
The Carbon Pact commits both companies to transparency regarding carbon emissions, sets a concrete target on reducing CO2 and to the development of new tools and practices, which could lower emissions further.
Maersk introduced the concept three years ago and now has 15 different Carbon Pacts in place with companies from various industries. Maersk can reduce CO2 emissions on behalf of the customer through sailing the most efficient vessels and providing customers with transparency on the carbon efficiency of different routes.
Carbon pacts such as this one are helping us to win business in a world where sustainability is increasingly on the agenda. We’re showing that responsible business is good business.Mark Cairns, Maersk Country Manager in the Netherlands
“Such Carbon Pacts have proved a useful tool for Maersk in bringing something different to the customer relationship”, says Mark Cairns, Maersk Country Manager in the Netherlands.
“Carbon Pacts such as this are helping us to win business in a world in which sustainability is increasingly on the agenda,” says Cairns. “It allows us to bring something new to the table. By committing to reducing supply-chain emissions, we’re not only demonstrating our long-term commitment to the environment, we’re also showing that responsible business is good business.”
Shining a light on climate change
Every month, Philips Lighting receives a report detailing its precise carbon footprint performance. Since the pact was signed in 2016, Philips Lighting has saved around 1,200 metric tonnes of CO2 compared to the industry average by shipping with Maersk.
“The Carbon Pact content and CO2 reduction targets we develop are specifically tailored to the customer,” explains Kaisa Helena Tikk, Global Sustainability Advisor in Transport & Logistics Sustainability. “We discuss customers’ sustainability challenges and identify actions to be worked on jointly, as well as look at trading patterns and developments in our fleet to suggest how we can reduce our carbon footprint five years from now.”
“The Carbon Pact content and CO2 reduction targets we develop are specifically tailored to the customer” Kaisa Helena Tikk, Global Sustainability Advisor in Transport & Logistics Sustainability.
The two companies are working together in other ways too, for example by running a joint workshop at The New York Times Energy for Tomorrow conference in Paris last year on the de-carbonisation of the supply chain.
“We shared what we had learnt with several other like-minded companies such as IKEA, Nestle and Dell,” says Tikk. “Thereby bringing attention to the issue of climate change and much-needed transparency to carbon emissions in logistics.”
More room to collaborate
In its quest to become carbon neutral, Philips Lighting now hopes to sign similar pacts with other suppliers.
“I think the Maersk perspective is one that other carriers can aspire to,” says Loosschilder, Head of Sustainability Strategy & Reporting at Philips Lighting. “Currently this Carbon Pact is unique for us, but when we assess the positive impacts it’s definitely a best practice that we should apply to other suppliers as well.”
“We are very happy with the progress made so far,” adds Boyle, Global Ocean Director Freight & Distribution, Philips Lighting. “The Carbon Pact has been instrumental in bringing down the carbon footprint of our biggest mode of transport. For a company of our size to have already reduced our total ocean freight emissions by 1% is a fantastic success to claim. The more we can work together to bring down emissions, the more it becomes a win-win situation for Maersk as well as for us.”
Clean Cargo Working Group
- The Clean Cargo Working Group is a business-to-business collaboration between more than 40 global customers and container carriers dedicated to accelerating sustainability in container shipping.
- This is achieved by aligning environmental standards, tools and comparable performance data, enabling customers to benchmark environmental performance and integrate environmental performance indicators in their procurement decisions.
- Maersk has long been among the leaders of the shipping industry on environmental performance, with a 10% advantage over the global industry average on CO2 emissions. In 10 out of 19 trades, Maersk is a top-3 performer, and its performance is better than average on almost all major trades. In total, Maersk has reduced its CO2 emissions by more than 42% since 2007.