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28/06/2016
RESULTS AND PROSPECTS BEHIND PIRELLI'S SUSTAINABILITY STRATEGY

Environmental sustainability

Years ago it was simply called "environmental accounting." Today, responsible resource management has a variety of other implications, especially for a global industrial group like Pirelli, determined and committed to focus more and more on Green Performance products developed through product and process innovation as well as encouraging a greater environmental awareness throughout its production and  supply chain

Guido Gambassi

Rating a tire according to its energy efficiency, or rolling resistance, thus its ability to reduce or optimize the fuel consumption of the vehicle it is designed for, is nowadays a customary approach, thanks also to the European labeling system introduced almost four years ago. On the other hand, considering what happens upstream, i.e. the environmental impact of the production process over that of the product itself, is definitely less frequent.  Two aspects on which Pirelli has been focusing a lot in recent years, as explained during a press open day at the Pirelli Foundation dedicated to the presentation of sustainability indicators and the route taken by the group on the development of sustainable management. Filippo Bettini, Head of Sustainability and Risk Governance of the Group, briefly explained how revenue growth from Green Performance products, reduction of water consumption, greater waste recovery rate, employees training days well beyond the business plan targets, new partnerships with strategic suppliers of natural rubber, in order to support natural rubber producers and protect biodiversity, are some of the main results of Pirelli’s sustainability strategy achieved through the three business dimensions of the group: economic, environmental and social. Since 2009, the base year chosen in relation to medium to long term sustainability goals, significant progress in the development and production of Green Performance products has been made, with increasing attention being paid towards reducing the environmental impacts of a tire’s  entire life cycle, as well as spreading a culture of safety in the workplace and support to employees and external communities in which the company operates.

Particularly noteworthy are 2015 figures, where almost half (48%, compared to 46% in 2014) of tire  revenues came from Green Performance products, nearly double compared to 2009, when it stood at 25%, and way above the 2013-2017 target, which forecasted to reach this value only at the end of 2017. Investments in Research & Development amount to more than 3% of total revenue each year, one of the highest investment rates of the entire sector, and in the course of 2015 about 215 million (3.4% of total revenues) was spent in R&D, again a further increase compared to the 205.5 million in 2014 and the 133 million spent in 2009.

The company’s commitment towards the preservation and protection of the environment was further underlined by 2015 figures on water consumption, 11 million cubic meters, a 3% reduction compared to 2014 and 42% compared to 2009. This was possible thanks to the efforts of all production sites around the globe, and since 2009 a total of 30 million cubic meters of water have been  saved: slightly less than the total water consumption needed for a full three-year production cycle for all the Pirelli group. Moreover, during the year, waste recovery rate rose to 91%, an increase of 18% compared to 2009 and 1% compared to 2014.

                                                                                                          

With 20 tire factories employing around 37 thousand workers worldwide, Pirelli has a long tradition in promoting initiatives on behalf of the communities in which it operates regardless of the country; a "responsible behavior" in line with the ideas of the founder of the Milan based group, among the first in Italy to open, way back in the 19th century, schools for workers and support services for their families. But staff training still receives great attention, in 2015 the average number of training days per capita rose to 8.3 days compared to 8.2 days in 2014 and to 7.2 in 2013. This figure exceeds, for the third consecutive year, the target of 7 average training days per capita contained in the business plan for the year 2015. The constant commitment to training is one of the main factors that contributed to a 6% reduction in injury frequency in 2015, improving 2009 figures by a staggering 73%.

The Pirelli Sustainability Plan fully incorporates the group’s 2013-2017 business plan as well as its vision for 2020. Among the environmental objectives planned for 2020 we find, compared with 2009 figures, a 15% reduction in CO2 emissions, an 18% and 58% decline in energy and water consumption respectively, not to mention a huge +95% waste recovery rate. Targets of sustainability are proving to be quite challenging also for finished products: Pirelli has, in fact, set out to improve the rolling resistance of its automobile tires by 40%, while truck and motorcycle tires will have to improve by 20% and 10% respectively compared to 2007 data; all of this by the 2020 deadline.

 

The sustainable management of the entire supply chain has been further strengthened, with economic , environmental and social criteria fully integrated in the processes of selection, collaboration and evaluation of Pirelli's partners around the world, with a strong focus on sustainability in the natural rubber supply chain. Pirelli’s Indonesian project along with its main supplier, the Kirana Megatara Group, is quite symbolic: it is the largest natural rubber producer in the country, which groups together 6,000 small growers. These farmers and rubber tappers had 70% less productivity compared to neighboring countries, where more modern methods were used. Under the direct supervision of Pirelli, farmers received high quality seeds, for the creation of more profitable forests with a consequent reduced impact on natural resources, specific training in tapping techniques in order to optimize the extraction of rubber, and the creation of support services for the farmer’s families, including scholarships for their children.

 

To meet the challenges of future sustainability, Pirelli engineers have developed methods to extract silica from rice husk ash, reducing CO2 emissions by 90% on the entire supply chain of this specific material, and has resumed the research (which began way back in the 40s) on guayule rubber, low-water shrub, at home in many deserts and which needs no pesticides, the use of which will reduce the exploitation of many forest areas.

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