At Johnson & Johnson, we believe the health of people and the health of the planet are inextricably linked. Air pollution and a changing climate resulting in extreme weather, droughts, floods, and movement in vector-borne and zoonotic infectious diseases will ultimately impact human health and well-being. This view is well documented by leading health organizations. The World Health Organization even went so far as to declare climate change one of the greatest threats to global health in the 21st century.1
Climate change is a big challenge that requires big solutions. No one person, no one company, no one government can do it alone. Instead, we must continue to create a global movement of people, companies and organizations all working together to care for our climate like our health depends on it. Because it does.
As the world’s most broadly based health care company, Johnson & Johnson is inspired by this challenge to advocate and create demand for a low-carbon economy. Our Climate Friendly Energy Policy acknowledges that in the field of climate science, there is consensus that human activity is contributing to climate change and that a warming climate has the significant potential to impact human health.
We have taken sustained, long-term action to address our energy use and greenhouse gas emissions as detailed below, and we are encouraging our extended supply chain to do the same through our Sustainable Procurement Program. We participate in all applicable CDP reporting programs, achieving recognition in 2016 as part of the CDP Disclosure Leadership Index for the seventh consecutive year. See our reports at www.cdp.net. We also support responsible climate and energy policy around the world, most recently through our Business Backs Low-Carbon USA participation, hosted by lowcarbonusa.org.
See EHS&S Governance for more information about our management approach.
Energy Use/Renewable Energy Use
Johnson & Johnson continues to implement efficiency programs designed to optimize the largest energy-using systems at our most energy-intensive properties. These programs are resulting in significant reductions in both energy and water use worldwide. Details on these programs can be found on page 48 of our 2015 Citizenship & Sustainability Report. In addition to ongoing energy efficiency programs, we continue our efforts to increase renewable energy consumption with our aspirational commitment to power all facilities with renewable energy by 2050. See Health for Humanity 2020 Goals Progress Scorecard for more information.
Greenhouse Gas Emissions
We follow the Greenhouse Gas (GHG) Protocol issued by the World Business Council for Sustainable Development and the World Resources Institute GRI 302-4, and three of our sites remain subject to the European Union Emissions Trading System program. We track and report our Scope 1 and Scope 2 emissions sources, and we engage with our external supply chain to collect meaningful data on our material Scope 3 emissions sources and collaborate with them on reducing their carbon footprint. We have set a goal to reduce our absolute CO2 emissions; see Health for Humanity 2020 Goals Progress Scorecard for more information.
Tracking and reporting Scope 3 emissions in a comprehensive and meaningful way remains a challenge because of limitations in the accuracy of measurement systems, as well as availability and quality of data from third parties. The Scope 3 emissions that we track currently include aspects of our Scope 3 emissions that we can measure with a reasonable degree of accuracy such as employee business travel, non-hazardous waste generated from our operations, electricity-related transmission and distribution losses, and limited downstream (United States only) transportation emissions. We continue to explore areas of opportunity identified through an input/output analysis performed to identify emissions hot spots within our value chain, and we participate in the CDP Supply Chain - Climate Change program. For more information, see the Procurement & Supplier Management section of this report.
Shipping-Related CO2 Emissions
Johnson & Johnson does not own the fleet used to ship our goods. To minimize environmental impacts from goods transport, we work with our transportation providers to optimize our network, using multi-compartment trailers, taking advantage of freight consolidation opportunities, eliminating deadhead miles (the number of miles that are driven from the point of unloading to the point where the new load is ready for pickup), and engaging in cross-shipper moves with other companies that have similar product lines.
Johnson & Johnson participates in the U.S. Environmental Protection Agency’s SmartWay program, which helps companies voluntarily increase transportation energy efficiency while decreasing GHG emissions and air pollution. At the same time, the SmartWay Transport Partnership helps freight companies improve fuel efficiency, increase environmental performance and increase supply chain sustainability.
We require all new buildings and renovations with a cost of at least $5 million and all new stand-alone buildings of a lesser value owned or leased by Johnson & Johnson operating companies worldwide to be LEED-certified. At the end of 2016, Johnson & Johnson counted 31 LEED-certified buildings, inclusive of two new facilities in the United States.
Our purchased energy consumption has decreased five percent, from 13,299 terajoules (TJ) in 2010 to 12,642 TJ in 2016; however, we have experienced a slight increase of approximately 85 TJ from 2015 to 2016. For direct and indirect energy consumption, see table entitled "Purchased Energy Consumption." GRI 302-1; 302-2 The reduction since 2010 is due primarily to improvements in the efficiency of our utility systems at our largest production facilities. GRI 302-43 The increase from 2015 to 2016 was due to expansions of our output at some of our largest manufacturing operations globally. Our energy intensity has decreased by 19 percent, from 216 TJ/billion USD in 2010 to 176 TJ/billion USD in 2016.4 GRI 302-3 See our Data Summary for more detailed data.
Our on-site clean energy installations include solar PV, geothermal, cogeneration, wind, and fuel cell technologies. Of these, we define solar PV, geothermal, and wind installations as renewable energy sources.
At the end of 2016, our installed or in-progress on-site clean energy technology capacity was over 54 megawatts (MWs). Most notable was the addition of a 3.0 MW wind turbine completed in early 2016 at our Vision Care facility in Limerick, Ireland.
With our Health for Humanity 2020 target relating to energy use, we refined the focus from increasing clean energy capacity under Healthy Future 2015 Goals, to increasing overall renewable energy consumption by 2020. In 2016, approximately two percent of the Company’s electricity consumption was from on-site renewable sources.
We have realized a 10.4 percent decrease in CO2 emissions at our facilities globally since 2010. [305-5] In 2016, we realized a 1.5 percent increase in CO2 emissions, from 1,176,602 metric tons in 2015 to 1,194,691 metric tons in 2016. For Scope 1 and Scope 2 emissions6, see table entitled "Worldwide Facility CO2e Emissions, Scope 1 and Scope 2". GRI 305-17, 305-28 For Scope 3 emissions, see table entitled "Scope 3 CO2e Emissions". GRI 305-3 The reduction since 2010 is the result of our continuous efforts on energy efficiency and clean energy projects, the electricity grid becoming cleaner across the globe, and our supply chain portfolio optimization. Our emissions intensity (including Scope 1 and Scope 2 emissions) per revenue since 2010 decreased by 23 percent, from 22 MT CO2 /million USD in 2010 to 17 MT CO2/million USD in 2016. GRI 305-4 We do not use carbon offsets to reduce our global emissions footprint. In 2016, our combined CDP disclosure and performance score was an A-, scoring above both the CDP program average and industry group averages.
Our CO2 reduction capital funding process provides a $40 million annual budget for energy and GHG reduction projects across the Company. In 2016, 14 new projects were approved and 15 projects were completed, with year-end total spend of $30.3 million. Over the last 12 years, 213 energy reduction projects were approved and 181 were completed. Together, the completed projects collectively avoided CO2 emissions of approximately 248,000 metric tons per year, which is equivalent9 to removing approximately 52,300 cars from the road, and saved approximately 50.0 million gallons of water annually. To date, the energy reduction projects completed since 2005 have cost approximately $370.2 million, and have reduced our annual energy costs by approximately $69 million through 2016.
More than 99.97 percent10 of the over-the-road transport providers in our U.S. network were members of the U.S. Environmental Protection Agency’s SmartWay program in 2016. SmartWay membership was part of the decision criteria for awarding business to our transportation providers.
2 Includes site-specific data from all Johnson & Johnson-owned and -leased sites over 50,000 square feet, as well as manufacturing and R&D sites under 50,000 square feet, unless otherwise noted. For information on how data from acquisitions and divestitures are managed, please see the About This Report section of this report. Energy use, carbon emissions and clean energy capacity data have been adjusted to reflect acquisitions and divestitures.
3 The types of energy included in the reductions are fuel and electricity. Reductions in energy consumption are calculated by comparing energy consumption before project implementation and expected consumption after implementation. The project data we have are based on engineering estimates when the projects are approved.
4 Our diverse product portfolio makes it difficult to track an organization-specific metric, so we can only use revenue, square feet or employees as a denominator for energy intensity. Electricity, stationary fuels and district heating and cooling are all included in energy intensity ratio, which also includes energy used at Johnson & Johnson facilities.
5 Recalculation for Emission Factors: It is standard for reporting on Scope 2 GHG emissions to use electricity factors with a two-year lapse time because of the delay in the availability of grid and country emission factors for a specific year. For this reason, we use the most recent emission factors available when reporting emissions, and then recalculate emissions for prior years when the actual factors become available. The percentage change data for 2016 now reflects both aviation and sales fleet data, which prior to 2016 were reported separately.
6 Emissions data are adjusted for prior years because of divestitures, acquisitions and updated emissions factors. As a result, data presented here will not correspond to the figures in the 2015 Report or those submitted to CDP in the respective years. For information on how data from acquisitions and divestitures are managed, please see the About This Report section of this report.
7 Johnson & Johnson does not currently use purchases, sales or transfers of offsets or allowances. Gases covered in these calculations include only CO2, as that is how our goal was originally written, but we have calculated methane and nitrous oxide emissions from 2010 forward, and these are included in our new goal. Hydrofluorocarbons (CFCs) are tracked by EHS&S. Perfluorinated chemicals, sulfur hexafluoride and nitrogen trifluoride do not result from our operations. We do not calculate or report biogenic CO2 emissions in metric tons of CO2 equivalent separately from the gross direct (Scope 1) GHG emissions. Base year is 2010, included in table. Emissions in base year have been recalculated to adjust for acquisitions and divestitures in accordance with guidance from World Resources Institute Corporate Accounting and Reporting Standard, which we follow. Electricity emission factors are obtained from the International Energy Agency’s CO2 Emissions from Fuel Combustion Report and the U.S. Environmental Protection Agency (EPA)’s eGRID publication. Fuel emission factors are obtained from the EPA Climate Leaders publication. Global Warming Potentials are obtained from the Intergovernmental Panel on Climate Change Fifth Assessment Report. The chosen consolidation approach for emissions is operational control.
8 Facility CO2 emissions numbers were third-party assured in 2010 to 2015, but prior year values are being restated because of electricity grid emission factors and the addition and removal of acquisitions and divestitures, which is in line with guidance from the World Resources Institute Greenhouse Gas Protocol Corporate Standard (WRIGPCS).
10 2015 value, EPA SmartWay Report