On Earth Day the focus is on environmental awareness and standing up for the environment. In 2018 this commitment is even more relevant for companies as the role of business is recognized as critical to achieving lasting environmental benefits. The UN Sustainable Development Goals and the Paris Climate Agreement confirm the critical role business has to play. In parallel, this has led a multitude of stakeholders to take steps to raise expectations regarding ESG (Environmental, Social and Governance) performance and disclosure. While on one side the focus is on taking “responsibility” on the other side business understands that their engagement on sustainability is conditional to long term growth, as expressed remarkably clear in Larry Fink’s (CEO of BlackRock) often quoted letter to CEOs:
“The public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society…. Without a sense of purpose, no company, either public or private, can achieve its full potential"1
Let’s take a step back to see how Lumileds has been standing up for the environment, starting with how we define sustainability at Lumileds.
When we speak of operating sustainably, we mean that we aim for the highest standards of quality and responsibility in creating products that make life safer, better, and more beautiful.
• Our workplace and manufacturing practices prioritize the well-being of our employees and resource conservation.
• Our energy-efficient product innovations contribute meaningfully to the transition to a low-carbon economy.
• We act with integrity to uphold the practices expected by our customers, investors, regulators, and partners, and seek out suppliers that do the same.
Our definition of Sustainability encompasses E(nvironmental), S(ocial) and G(overnance) items, as the theme of this blog is around Earth Day, we will focus on the E items.
It starts with the environmental impact of our products. From the introduction of the first bulb for car headlamps in 1914 and the first commercialization of LEDs in 1968 our innovation efforts have been continually focused on increasing performance, efficiency (both energy and material) and lifetime. LED technology has reduced millions of tons of carbon while benefitting nearly every aspect of modern life. LED technology can do much more than saving energy. The true value of light lies in the combination of excellent visual, biological and emotional benefits to support human health and well-being.
In 2016 we have committed to a 20% reduction in carbon emissions, energy consumption, and water intake in our operations until 2020. Through relentless efforts to improvements in manufacturing on water, waste, energy and CO2, after two years we are well ahead of our commitment. These improvements stem from a multitude of projects across our global footprint of manufacturing sites, from replacement of equipment (e.g. chillers, boilers, fans, pumps) with state of the art energy efficient new equipment, installation of LED lighting, recycling of wastewater, to abatement of greenhouse gases.
Contribution to a low carbon green economy
LED lighting uses an average of 40% less power than fluorescent and 80% less than incandescent, to produce the same amount of light. This has led to reductions in million tons of carbon in the Automotive, Mobile and Illumination Market Segments. For the illumination market (not including LEDs in Automotive and Consumer Technology) IHS Markit reported that Lumileds LEDs reduced the total carbon dioxide emissions of lighting by an estimated 39 million tons in 2017, which is equivalent to a 0.11% reduction of the world’s entire CO2 footprint, and roughly equivalent to shutting down 11 coal-fired power plants. This places Lumileds in 3rd place among LED companies in terms of contributing to carbon dioxide reductions2. Other environmental benefits of LEDs are that they have a longer life span than conventional lighting products, which reduces the overall life cycle impacts of LEDs.
In addition to efficiency improvements in lumen/Watt that are relevant across our LED portfolio, Lumileds also develops LEDs for specific applications that are driven by environmental sustainability. As the global population expands and available farmland shrinks, the environmentally friendly practice of using LEDs to grow plants is establishing itself as a “greener” alternative to traditional farming methods. Lumileds LEDs for horticulture applications reduce energy and water and enable increased growth rates.
Working with our partners
At Lumileds we understand that alone, no single company can sufficiently contribute to ecological sustainability. Only by working together with our customers, investors, and suppliers, we can address a long lasting impact on the Earth. To drive improvement at our suppliers, in 2017 we organized 33 training sessions for suppliers, and executed 60 audits. By partnering with our customers, we are able to produce best-in-class products that consistently push the boundaries of light.
For more than 100 years, innovation has fueled every Lumileds breakthrough—resulting in an unprecedented portfolio of lighting advancements that help to reduce global warming. Our best opportunities are ahead of us: developments on connected lighting, autonomous and electric driving, and human centric lighting will grow the market for energy-efficient technology and the innovations we create next we will continue to contribute to long lasting environmental benefits.