Russell Hutchinson, business development manager at Daifuku’s UK branch, considers the growing importance of sustainability within warehousing.
It’s hard not to notice that the whole world is trying to be more sustainable. Going green is the mantra that is being adopted by consumer products from the humble loo roll to complex electrical goods. This trend is now firmly a part of the warehouse automation decision-making process. But is the materials handling sector stepping up to the plate when it comes to sustainability, or are there systems providers out there that are ticking the environmental box, without a genuine commitment to the planet?
Here are a few questions to ask potential automation providers next time you are involved in the specification of a new handling solution or upgrading an existing system.
Commitment from the Top
Any organisation that is serious about change is generally led from the top. Look at the amount of senior management effort that is devoted to sustainability before taking a view on the business’s genuine commitment to its ESG (environmental, social, governance) efforts. Looking through corporate websites, annual accounts and brochures usually gives a good feel for a company’s attitude to these issues. Is sustainability part of the organisation’s DNA or just a convenient add-on, led by the marketing team?
At Daifuku, our president and CEO Hiroshi Geshiro, chairs our sustainability committee. This senior level group facilitates discussions on social issues related to the environment, human rights and other topics with the aim of resolving these issues throughout the entire supply chain. As part of these efforts, the committee revised the Daifuku Environmental Vision 2050 in May 2023 to expand our focus areas and raise our environmental targets for 2030.
Independent Assessment
It’s all very well setting up sustainability committees or steering groups, but without some form of external measurement, they can become meaningless. At Daifuku, we actively seek external verification of our work towards carbon neutrality and our objective to remain an employer of choice. While our Green House Gas (GHG) emissions are verified by auditors from SGS, our ESG performance is evaluated by MSCI, FTSE and CPD respectively, each highly regarded, independent organisations.
As of February 2024, Daifuku received an ESG Risk Rating of just 18.0 from Morningstar Sustainalytics and was assessed to be at low risk of experiencing material financial impacts from ESG factors – making it one of the best performers in the sector.
As the old management saying goes, ‘What gets measured gets done’. And this is certainly the case with automation providers claiming sustainable credentials. In short, remain sceptical of those that shout about their environmental commitment without any third-party endorsement or verification. Our most recent results confirmed that we achieved a 34% reduction in overall CO2 emissions compared to 2018.
Environmental Vision
Through our Daifuku Environmental Vision 2050, we strive to realise a world where material handling systems operate with zero environmental impact. To this end, we are engaged in initiatives that reduce our CO2 emissions from our business activities to zero throughout the supply chain. This is achieved by developing and providing products and services that contribute to the realisation of a decarbonised society, using energy efficiently at group sites and suppliers, and introducing renewable energy.
This effort has seen some notable developments. For example, the electricity used at Shiga Works near Kyoto, the company’s largest domestic manufacturing plant in Japan, has been switched to renewable energy sources. This transition is equal to an annual reduction of about 6,300 tonnes of CO2 emissions.
This has also seen our production sites in China, Korea, and elsewhere adopt solar panels. The solar power system on the roof of our newest facility in China generates approximately 1.5 million kWh per year, which is about 76% of the plant’s overall consumed power (when operating 12 hours a day). This system is expected to reduce CO2 emissions by as much as 758 tonnes per year.
Resource Recycling
A major part of being a responsible manufacturer involves minimising the use of valuable materials and reducing waste. Once again, it’s important to see that any prospective automation partner is serious about its use of scarce resources – and is happy to publish its progress in this area.
At Shiga Works, we installed meters on hydraulic equipment to monitor peak water consumption, to measure how much was being consumed. Hydraulic equipment uses water for cooling, but we found that much more was being utilised, even when the equipment was not in operation. As a result, we installed a temperature sensor in the piping of the hydraulic tank which only pulled off water when required. Furthermore, a separate system was installed to reduce oil temperatures, thus minimising the need for coolant. This initiative is expected to reduce the annual water consumption of the facility by approximately 75%.
Co-existing with Nature
Increasingly, responsible companies are thinking about the locations in which they operate and the impact they have on the nearby wildlife. While not strictly part of the sustainable agenda, it’s still important to see that potential automation suppliers are making efforts to protect nature wherever they can.
At Shiga Works, we undertook a comprehensive survey of ecosystems around the manufacturing, warehousing and office facilities which identified approximately 1,000 species, 70 of which are endangered. To preserve this precious natural environment for future generations, we are pursuing various conservation initiatives through the Yui Project, which promotes communication both within and outside the company.
One of our biodiversity initiatives is dedicated to the preservation of dragonflies, which are seeing declining populations across Japan. For the 50 dragonfly species identified at Shiga Works, Daifuku is actively monitoring populations and managing the area’s green spaces for biodiversity. In 2023, we created new wetlands using mountain spring water, silver grass, and sedges, and we transferred eggs, larvae, and adult insects to the new area along with plants and topsoil from their existing habitat. We have set up a net around one meter tall so that the dragonflies can settle, and we will continue to monitor their progress.
Further, having replanted forest woodlands and created a pond on the site, we are now delighted to see that rare Yamato Salamanders are now once again breeding.
We do not claim to have reached our ultimate sustainable goal. We’re on a journey where the final destination may well continue to change. More important is our business’s senior level commitment to the environmental cause, which filters down to every level of the organisation.
The areas listed above are not exhaustive, but hopefully give those involved in the automation selection process some insight to make an accurate assessment of a supplier’s sustainable credentials.
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