Industrial manufacturing companies like ITW have a special obligation to protect our environment. We rely on and consume natural resources to make our products, and our role in the industrial supply chain creates opportunities for sustainable practices. With hundreds of individual businesses around the globe, it’s no small challenge. We are often asked, “How can you support sustainability over a vast, decentralized group of businesses?”

Decentralization – developing local,
sustainable practices

The fact is, ITW’s environmental commitment is strengthened by decentralization because it gives our businesses the flexibility to develop sustainable, innovative approaches when and where they are needed. However, each business must follow the corporate ITW Sustainability Policy as a guide for its sustainability plans. Our businesses are also supported by an array of internal tools and resources, and the results of their efforts are reported annually to our Board of Directors through ITW’s Environmental, Health, Safety and Sustainability Department.

In 2010, a number of ITW businesses embarked on new initiatives that are helping us keep our commitment to protecting the environment. Below are just a few highlights from nearly 70 new sustainability-related projects initiated or enhanced in 2010:

• Lumex – Lumex represents the way that many of our businesses hold their operations to the same energy-efficient standards and solutions that they offer to customers. Lumex manufactures LED lighting replacements that use 50 percent less energy than traditional, incandescent lighting sources. Internally, the business does not use any incandescent bulbs, turns the lights off in non-active building areas, incorporates multi-zonal temperature control, and follows a company-wide, rigorous recycling program.
• Space Bag – This innovative storage product business redesigned its retail display approach, resulting in 11 percent less paperboard used in the construction of its displays. That change translates into an annual reduction of 26 tons of paper. (Space Bag’s paper board contains post consumer recycled content.) Internally, Space Bag has taken steps to reduce the environmental impact of their facility by installing sensors and energy efficient lighting. This resulted in a 40 percent reduction in electricity consumption.
• Hi-Cone – The innovative, photodegradable plastic ring beverage carriers produced by Hi-Cone significantly reduce paper, fuel, carbon emissions and waste compared with traditional packaging. The business’s trademark “min=max” approach to packaging—minimum impact with maximum benefit—has earned industry and ITW’s recognition, while the internal recycling program in its U.S. facilities is reducing the equivalent of 40,000 gallons of oil and 1,000 cubic yards of waste each month.** (Hi-Cone employees also participate in an annual Adopt-a-Beach volunteer clean-up effort.)

ITW global carbon emissions data collection underway

ITW recently implemented a web-based program to collect data from each of our business units on the amount of electricity, natural gas, oil and propane consumed. Our goal is to determine and address the total amount of harmful carbon dioxide (CO₂) emissions related to our operations and reduce energy consumption. CO₂ is a “greenhouse gas,” so called because it traps the sun’s energy in the atmosphere, which can contribute to climate change. (See 2010 Environmental and Safety Data for more information on our 2010 global resource consumption data.)

ITW also increased the number of businesses registered with the International Organization for Standardization (ISO) 14001, for a current total of 55 sites. ISO sets environmental management standards to help organizations minimize their impact and comply with regulations.

Strict compliance with mandatory emissions trading programs

As ITW continues its own emissions reporting program, it also participated in two major mandatory emissions reporting schemes: one in the United Kingdom, the Carbon Reduction Commitment Energy Efficiency Scheme, and the other in Australia, the National Greenhouse and Energy Reporting. At this time, the two programs primarily involve data reporting. However, these initial efforts are intended to support emissions trading schemes in the near future.

Emissions trading (“cap and trade”) markets are developing globally in response to concerns about increased CO₂ emissions. These government-run programs allow organizations to trade emissions permits, generating revenue for those who require fewer permits and providing, at a cost, flexibility for those who need more. (Emissions trading programs in other nations, such as the U.S., are currently limited to voluntary, regional markets.) Our compliance will help in our internal efforts to track this data.

Continued improvement with the Carbon Disclosure Project

The Carbon Disclosure Project (CDP) is an independent, not-for-profit organization that maintains the largest database on corporate greenhouse gas emissions in the world. CDP makes the scoring of participating organizations accessible to the public. ITW has participated in this voluntary disclosure for several years, and each year we have been pleased to see our score improve. In 2010, we scored 73 in our category, reflecting an eight percent increase over 2009. We also responded to CDP’s new Water Disclosure Survey. This aggregated data is also made available to the institutional investors, policymakers, researchers, and others who turn to CDP to help address environmental issues.

Strategic Sourcing “Go Green” 2010 wins

Our corporate Strategic Sourcing Department’s Go Green initiative is part of the support ITW provides to our business units’ sustainability efforts, and it’s key to reducing our overall environmental impact. In 2010, notable achievements under Go Green included lighting retrofits at eleven business units, which we expect will yield a 50 percent year-over-year reduction in electricity usage; five million pounds of material recycled as part of Go Green’s Waste Reduction Program; and the GreenDriver™ partnership, which achieved significant reductions in reducing transportation-based CO₂ emissions. (See sidebar at right)

*The Institute of Refrigeration, 2008.
**Equivalency Values provided by A Greener Solution, based on data from the U.S. Environmental Protection Agency and other organizations.