Cummins Inc. Chairman and CEO Tom Linebarger introduced an environmental sustainability plan Friday, pledging that everything the company does will lead to a cleaner, healthier and safer environment.
Outlining the plan to more than 100 students and faculty at Purdue University in West Lafayette, Linebarger said delivering on the environmental mission is critical to the company’s business strategy.
“Providing efficient and clean power is a win for our company, a win for our customers and a win for the environment,” Linebarger said.
The plan identifies specific goals in facilities and operations, the areas where Cummins has the most control.
Two years in the making, the plan calls for a reduction in the use of energy by 25 percent and of greenhouse gases by 27 percent, adjusted to sales by 2015. Those numbers are based on a 2005 baseline.
Cummins also plans to reduce direct water use across the company by 33 percent, adjusted to hours worked, by 2020.
It also has set a goal of achieving water neutrality by 2020 at 15 manufacturing sites in regions that don’t have enough usable water. Water neutrality involves Cummins reducing water usage at its plants while investing in projects that increase supplies of fresh water to the environment.
The company targets 2020 as the year it will have increased its recycling rate of waste products from 89 percent to 95 percent and achieve zero disposal status at 30 of its sites.
Linebarger called Friday’s announcement of Cummins’ first plan for environmental sustainability “a big deal.”
“We are raising the bar and trying to do more and new and different things,” he said. “This is just the next step in our effort to reduce our (environmental) footprint. Once we achieve these goals, we will continue to set and accomplish new ones.”
Cummins has an ongoing partnership with Purdue through its facilities, research support and the Cummins Professorship in Mechanical Engineering. He also noted Purdue provides a critical pipeline of talented employees to Cummins.
During a question-and-answer session, Purdue students asked how the company is promoting environmental-sustainability efforts internationally and whether Cummins will share its environmental strategies with its competitors.
Cummins has helped communities in India conserve water on farms and access water for homes, Linebarger said. The company also has reduced air pollution in China by working with farmers who had been burning waste in their fields.
Richard Simmons, director of research for Purdue’s Department of Aviation Technology, asked if synergy could be created among Cummins competitors to embrace environmental sustainability.
The goals call for Cummins to expand its efforts to work even more collaboratively with its customers, communities and others to make a positive impact, Linebarger said.
“There is a natural inclination as a corporate entity to want to lead,” Simmons said. “But, as he mentioned, there is some synergy as well that could exist and help promote regulations. When we are talking about something with the social implications of the environment, it’s encouraging that there are also opportunities to work together.”
Cummins products, mainly engines, have the greatest impact on greenhouse gases, despite innovations in that area, Linebarger said. The new goals prioritize actions for Cummins to address its biggest environmental opportunities, from the materials the company buys to the emissions of its products.
“They burn fuel, and since there is a lot of them they burn a lot of fuel,” Linebarger said. “The way that we can impact greenhouse gases the most is to focus on fuel efficiency of our products, both the new designs and the ones that are out there in use.”
Cummins will continue to develop innovative designs for efficient use of fuel and raw materials, Linebarger said. The company will build on successes such as the Cummins-Peterbilt SuperTruck, which was praised by President Barack Obama in February for achieving a 75 percent improvement in fuel economy compared to a typical truck on the road today, Linebarger said.
The company also wants to work with its international supply chain to reduce its environmental footprint. More than 80 percent of the company’s impact to waste and water comes from suppliers.
“This is stuff that we can do by using capabilities that we have in the company,” Linebarger said.
The goal to increase the company’s recycling rate will be a challenge because, at 89 percent, many of the methods to reduce waste already are being utilized, Linebarger said. The company is essentially going to have to create a new industry to recycle the remaining waste, he said.
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 $3 billion since 2005, according to the company. A total of
90 million gallons of fuel has been saved and about 1 million tons of carbon dioxide has been avoided through that process, the company said.
“With millions of engines and generators in service and customers in 190 countries and territories, there’s no question that Cummins has the global reach to make a positive impact on the environment,” Linebarger said. “And, as a company, this is the right thing to do.”
Saying it’s too soon to say how Cummins will meet all the standards he outlined Friday, Linebarger said: “My sense is that Cummins employees know how to innovate when given a top priority, so setting a target and getting our people involved will drive the kind of innovation that we need.”
Purdue University President and former Indiana Gov. Mitch Daniels, who introduced Linebarger, said this is just the latest example of Cummins embracing its environmental responsibility and its role as an innovator.
“There is nothing new about leadership, innovation or corporate statesmanship from Cummins, and that’s why we are so proud of them,” Daniels said.