Post on 16-Oct-2020
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GLOBAL CLIMATE CHANGE
Our Work on Reducing our ImpactHistorical-Current-Prospective
Zack MansdorfL’Oreal
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Agenda
• A few words about L’Oreal• Why we care about Global Warming• Our situation• Our actions• Some issues• Conclusions
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What is L’Oréal ?
● N°1 Cosmetics company worldwide
● A Pure Player in Beauty
Haircare Haircolor Skincare Make-up Fragrances
15,790 €M Sales14.4 % market share(2006)
Focused on added-value categories
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Present in key distribution channels
HairSalons
Massmarket
SelectiveDistribution
Pharmaciesand
dermatologists
The Body Shop
What is L’Oréal ?
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LuxuryLuxuryProductsProducts
ActiveActiveCosmeticsCosmetics
The The Body ShopBody Shop
Consumer Consumer ProductsProducts
MIZANI
Professional Professional ProductsProducts
A unique portfolio of diverse and complementary brandsBrand power4
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Climate Change and L’Oreal
• We view climate change as presenting both risks and opportunities
• We are below European standards for mandatory carbon trading and have an aggressive carbon emission reduction program worldwide
• We see some product opportunities
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Global Climate ChangeIt is an issue of concern for our stakeholders
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Major Sources of GHG
• Sites– Fuels for heating and wash
water– Electricity for our highly
automated factories and warehouses, offices, etc.
• Other– Raw Materials– Packaging– Transportation– Employees
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What Is Our Situation?
• GHG reduction is a challenge with our growth ambitions
• We had direct (fuel) and indirect (electricity) CO2 emissions for factories and warehouses of 223 Ktons for 2006
• 83 Ktons (38%) from fuels and 140 Ktons (62%) from purchased electricity (81.6 in fuels for 2007)
• We can estimate emissions of +23% (~67 Ktons) from administrative sites for a total ~290 Ktons
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ESTIMATED CONTRIBUTION BY CATEGORY FOR TOTAL CO2 EMISSIONS(limited to electricity use for administative sites)
63%14%
23%
FACTORIES WAREHOUSES ADM SITES
What Is Our Situation?
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210221 227 230 223
236251
266282
298316
335355
377
399
0
50
100
150
200
250
300
350
400
450
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
actual
Projected CO2 emissions from on-site energy use in Ktons (gas, oil, electricity)**Excludes non-energy and off-site sources such as transportation
+69% in 10 yrs
Projections based on 6% growth per year
OUR GHG EMISSIONS WILL GROW WITH SALES GROWTH
221 estimated
What Is Our Situation?
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What Is Our Situation?The country where the electricity is generated (means of generation) has
a significant impact on emissions (e.g. France=~80% Nuclear)
0
100
200
300
400
500
600
700
800
900
1000
g CO2 / kWh of electricity
IND
IA
CH
INA
ISR
AEL
IND
ON
ESIA
USA
MEX
ICO
ITA
LY
GER
MA
NY
UK
JAPA
N
SPA
IN
BEL
GIU
M
CA
NA
DA
FRA
NC
E
BR
AZI
L
CO2 FROM ELECTRICITY PRODUCTION PER COUNTRY
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WHAT IS OUR SITUATION?Contributions by site vary greatly
0
2000
4000
6000
8000
10000
12000
14000
TONSOF CO2
CO2 EMISSIONS FROM ELECTRICITY AND FUELS USED IN FACTORIES DURING 2006
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Carbon Footprint Pilot Studies
5648
2167
819 592
184 74 -170
1000
2000
3000
4000
5000
6000
7000
TRAVEL
MATERIALS
ENERGY
BUILDIN
GS
FREIG
HT
INTE
RNAL EMISSIO
NS
WASTE
CES CLICHY BILAN CARBONE (Tons CO2 Equivalent)
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Carbon Footprint Pilot Studies
1459
1120986
890
17249
0
200
400
600
800
1000
1200
1400
1600
FREIG
HT
BUILDIN
GS
PACKAGING
ENERGY
TRAVE
L
WAST
E
ORMES WAREHOUSE BILAN CARBONE (Tons CO2 Equivalent)
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How Will We Continue To Reduce Our Emissions?
Broad Scope• Focus on
– Energy Efficiency– Process Change– Product Change
• Find green energy partners where feasible (e.g., Libramont)
• Purchase green energy where available• Make capital investments to improve
efficiency or recapture energy with an allocation for energy related projects in the existing Operations capital budget
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How Are We Going To Continue To Reduce Our Emissions?
• Initiate studies for capital investment in alternative energy sources on-site and energy efficiencies through new or novel equipment and insulation
• Require all new major projects/launches to include energy/carbon footprint, water and waste impacts
• Apply our new Sustainable Buildings policy on new building and renovation standards for water, waste and energy efficiency/carbon footprint
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Participation In Initiatives
• L’Oreal actively participates in various peer groups on the climate change issue
• We participate in the Carbon Disclosure Project and received a “60” rating
• Merrill Lynch rated us as a leader (Aug 2007)• We are participating in the Supply Chain
Leadership Coalition and will follow other initiatives concerning our supply chain
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SOME ENERGY PROJECT EXAMPLES
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FAPROGIPre-heating of Wash Water Using
Recovered Heat
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Exchanger-Steam
3,7 T/h
Wash and Waste Water System
WastewaterExchanger900kWf
Production Wastewater20 m3/h average
60°C
Waste Water
60°C
Storage 22m3
CIP
35m3/h15°C
Wash Water
15°C70°C
Storage
22m3
-First rinsewater and demineralizewash
20°C
WastewaterTreatment
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Installation of a waste heat recovery system for wash water
Wastewatercooler
900kWf
WastewaterTreatment
Steamexchanger0,7 T/h
22°C60°C70°C 20°C
Plate Type HeatExchanger1700 kW
35 m3/h
65°C35m3/h
15°CStorage
22m3
First rinsewater and deminerizerwash
Stockage30 m3
StorageCIP
22m3
20 m3/h average
Waste washWater
45°C exchange
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ENVIRONMENTALENVIRONMENTAL
PRODUCTIVEPRODUCTIVE
ECONOMICECONOMIC-- SavingSaving energyenergy: :
Gas consumption: - 15% = - 1,8 GWh/yrElectric consumption: -5% = - 0,6 GWh/yr-- ReductionReduction of of stackstack emissionsemissions: :
C02 reduced by 300 tons/year
--InvestmentInvestment/Capital:/Capital:250k€
--SavingsSavings fromfrom lesslessfuel/fuel/electricelectricconsumptionconsumption: -85k€/an
--PayPay Back:Back: 35 mois
--SavingsSavings due to not due to not investinginvesting in extra in extra heatingheating//coolingcoolingcapacitycapacity: - 375k€
--IncreasedIncreased capacitycapacity for for washwash waterwater--AllowsAllows for installation of a CIP for installation of a CIP systemsystem--ReductionReduction in maintenancein maintenance
Win/Win Results
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Use of Green Energy
• Renewable “green”energy use– Solar cells at our
factory in Burgos, Spain
– Solar water heating at our factory in India
– Geothermal at our new research center in Chevilly-Larue
– Wind power in New Jersey
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LIBRAMONT CASE STUDY
• Outside consortium of constructors, contractors and financiers have proposed a bio-methane “co-generation”facility
• Using corn as the feed stock to produce methane for on-site production of steam, hot water and electricity
• Process is considered “carbon neutral”• Sited on our property• Turnkey operation with pricing at 80% of market rates• Will have a residual ~10% emissions from fuel use• Contracts signed and operations to being in 2008
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Solar Water Heating in Monaco
• Sofamo solar water heating for sanitary water
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High Efficiency Proximity Lighting
Old 250Watt Metal Halide Fixture w/lamp
Sensor
Aisle area lighting 2X2 T8’s w/sensor
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Administrative Sites
• Motion sensors for the office lighting in our USA Headquarters in NYC and a number of other offices
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Other Areas of Concern
• Supply Chain Aspects• Water• Waste
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- 5.5 gPACKAGING LIGHT WEIGHTING-FRUCTIS
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OUR RECORD IN CONSERVING WATER
Water (Liters/f inished product)
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0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2002 2003 2004 2005 2006 2007
Water 2002-2007= -24%
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OUR RECORD IN REDUCING WASTE
Transportable w astes less returnable packaging (g/PF)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2002 2003 2004 2005 2006 2007
Waste 2002-2007= -30%
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ISSUES
• What reporting method should be used?• What should be included in your carbon
foot print?• Double counting (supplier and you)• How does one control what is done outside
your company (raw materials, transportation, packaging, etc.)?
• Monitoring and recordkeeping is an immense problem
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CONCLUSIONS
• We are committed to reducing our environmental footprint with an emphasis on reducing, in absolute terms, our GHG emissions. Water and waste are also issues
• We believe there will be significant brand benefits to these initiatives
• This effort fits within our goal to be recognized as a “Great Citizen of the World”