Safeguarding the environment is nothing new to John Deere. We know that responsible resource management is vital not just to our company, employees, and customers, but also to our world. Every one of our operating processes reflects this strong commitment to environmental protection. We're constantly on the lookout for energy-efficient systems, as well as systems that sustain air and water quality or reduce or eliminate waste. And when investing in new products, approaches, or technologies, we give preference to those that have the least environmental impact.
Energy and Greenhouse Gases
We are focused on energy efficiency and greenhouse gas (GHG) reduction. This is nothing new at John Deere. We have documentation of facility energy-efficiency awareness programs extending back to 1932. It makes good business sense.
In 1972, John Deere initiated its formal energy-efficiency program. Then in 2003, we added a worldwide GHG inventory program.
The results: between 1972 and 2006, our energy conservation programs reduced John Deere's total worldwide greenhouse gas emissions by 63% per ton of production. To further manage the risks of GHG emissions from our operations and identify cost-effective energy-saving opportunities, John Deere joined the U.S. Environmental Protection Agency's Climate Leaders program in 2007. Under this program, we established a goal to reduce the company's global GHG emissions by 25% per dollar of adjusted revenue from 2005 through 2014.
With the introduction of our enterprise eco-efficiency goals in 2013 and the ending of the Climate Leaders program, we retired this goal two years early, having achieved a 17% reduction in GHG emissions per dollar of adjusted revenue. Over 40% of our facilities met or exceeded the goal two years early. Looking at this achievement in other ways, over the same goal time period of 2005 to 2012, we reduced GHG emissions 26% per ton of production, 41% per dollar of reported revenue, and were able to hold our absolute emissions relatively flat, with less than a .5% increase.
Our reduction journey continues with the establishment of our 2018 Enterprise Eco-Efficiency Goals.
Water is a key resource for our customers, so it is important to us. Water usage data is collected and tracked at all manufacturing locations. Standards and guidelines for constructing new manufacturing facilities encourage the inclusion of water-reduction technology in the initial project design.
Sustainable Facility Design
As we grow, we ensure we grow efficiently by incorporating into our facility design process a commitment to sustainable design with a focus on water reuse, energy efficiency, recycling, and waste elimination.
In 2013, we established our 2018 Enterprise Eco-Efficiency Goals governing how we use energy and water, how we manage our waste, and how we design our products. We're pleased to share these goals with you here.
We follow through on our commitment to sustainable practices and environmental stewardship by supporting strong environmental policies, vigilantly complying with all applicable regulations wherever we do business, considering environmental impact in all our business planning, and fostering a culture of eliminating waste.
Environmental Management System: Our environmental policy is integrated into the company's worldwide operations through the John Deere Environmental Management System. This system includes a set of documented processes for controlling and continuously improving environmental performance based on the ISO 14001 standard. John Deere manufacturing facilities worldwide must follow this standard. We have put in place a global network of regional environmental managers to work with factories to ensure compliance with regulations and implement sustainable practices. A shared resource of regulatory experts is also available to help with interpretation of regulations and development of compliance tools.
Assurance: Each year, all John Deere manufacturing and parts distribution facility managers provide formal documentation of their efforts to appropriately manage risks and safeguard employees and the environment. Third-party audits are also conducted at all manufacturing sites — internal audits at other sites — to verify compliance with the John Deere Environmental Management System standards and local legal requirements around the world every two years. John Deere also records and analyzes environmental incidents globally to ensure continuous improvements in our environmental performance. To ensure proper disposal of waste materials, all waste disposal suppliers must be approved prior to use.
For acquisitions, leases, and purchase of property, we take steps to identify and quantify any environmental risks and liabilities. A formal integration process ensures quick implementation of the John Deere Environmental Management System at acquired businesses and newly constructed factories.
Global environmental professionals attend rigorous training, helping them understand complex legal and corporate requirements and vital company processes and procedures.
Furthermore, our leaders provide oversight. The Board of Directors' Corporate Governance Committee receives annual updates on strategy in conjunction with a briefing on environment, health, and safety issues. The Executive Environment & Product Sustainability Council provides support and advocacy. They provide the employee and financial resources for operational changes needed to implement environmental strategies and achieve goals.
To ensure that suppliers conduct business with a high degree of integrity and in a socially and environmentally responsible manner, all of John Deere's suppliers are expected to adhere to the Supplier Code of Conduct. The John Deere Supplier Code of Conduct was updated in 2012 and is available in 19 languages.
Environmental compliance is a key expectation of suppliers. Suppliers are expected to conduct their operations in a way that minimizes the impact on natural resources and protects the environment, customers, and employees. They must ensure their operations comply with all laws related to air emissions, water discharges, toxic substances, and hazardous waste disposal.
Suppliers' products must comply with the John Deere Restricted Materials List (for suppliers). And they must maintain sufficient knowledge of input materials and components to ensure they were obtained from permissible sources, in compliance with laws and regulations. Suppliers may be required to validate this origin.
John Deere monitors suppliers to mitigate risks of impact to human rights, health, and safety, as well as the environment, and we take measures to ensure that John Deere suppliers do business in a highly ethical manner. Tools are in place to evaluate supplier activity in a variety of areas, including environmental performance.
A risk management tool is in place to monitor supplier information for financial health, quality and availability of products, country events, market segment issues, and compliance. The compliance portion of the tool monitors activity related to supplier environmental compliance, Supplier Code of Conduct violations, high-risk supplier environmental audits and non-conformances, and restricted materials issues. This oversight allows for improved risk management of high-risk supplier activity and overall compliance in the supply chain.
- All 2012 and 2013 data have been third-party verified to the ISO 14064 - 3 assurance standard.
- Baseline is adjusted due to acquisitions, divestitures, and data updates realized from improved accuracy.