Green Management Activities and Performance free essay sample

Samsung Electronics Sustainability Report 2012 / Green Management Activities and Performance The scope of global data in this section is all operation sites include Korea as well as overseas. 02 08 16 24 35 Green Management Framework Climate Change Response Eco-Products Green Operation Sites Green Communication / Samsung Electronics Sustainability Report 2012 / 1 Green Management Framework Green Management Strategy Establishing a Green Management Strategy Samsung Electronics is implementing green management practices for sustainable development by actively analyzing the impact we make on the environment and assessing management risks associated with those impacts. We considered a wide range of our economic, social and environmental impacts and formulated a systematic green management strategy to adapt to changes in the market environment. We conducted materiality tests to assess key risks identi? ed while developing our green management strategy and prioritized them for more effective management. Details on our green management strategy formulation process and priority risk management activities follow. Strategy Development Process Identi? cation of key environmental issues Risk analysis Internal capacity analysis Strategy development Economy/society/technology Identi? cation of priority on environmental issues Stakeholder consultation Physical risk Regulatory risk Indirect risk Social/cultural risk Internal capacity analysis Identi? cation of external best practices and gap analysis Formulation of short/mid/longterm strategy; Identi? ation of key tasks and key performance indicators Key Risks and Management Activities Type Physical risks Key Issues Rise in price of raw materials and oil Management Activities Installation of high energy ef? ciency facilities Development of energy use reduction policies Intensi? ed water shortage Implementation of water resource management strategies and water-related risk management structure Regulatory risks Implementation of national energy /greenhouse gas reduction policies Strengthened product-related regulations Operation site GHG reduction activities Energy ef? ient product development and sales Regular monitoring and compliance activities of energy/hazardous materials/recyclingrelated regulations Indirect risks Change in market and industry Increased competition for eco-technologies Development of Eco-Products and strengthening of green marketing Development and utilization of eco-friendly materials Release of innovative Eco-Products Social/cultural risks Changes in consumer preference Expansion of consumer green marketing Environmental communication with local community residents Increased stakeholder demands Increased stakeholder communication and response to demands Responsive information disclosure 2 / Samsung Electronics Sustainability Report 2012 / Green Management Vision and Mid-term Goals Vision and Slogan Our green management strategy enables us to grow sustainably and invest in the future of both humanity and nature. We will write a custom essay sample on Green Management Activities and Performance or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Samsung Electronics established its green management vision based on our underlying philosophy of helping to build a prosperous society and preserving the environment through business activities that give due respect to people and nature. Our green management activities are reinforced under our slogan of ‘PlanetFirst. Green Management: Basic Philosophy, Vision, Slogan Basic Philosophy Contribute to building a prosperous society and preserving the environment through business activities that give due respect to people and nature based on the concept of reverence for life Vision Creating new value through eco-innovation Slogan ‘PlanetFirst’ represents Samsung Electronics’ commitment to sustainable development and social responsibility through eco-driven business and management activities. Green Management Policies Samsung Electronics is committed to leading the realization of a sustainable society. Through our green management activities, we are contributing to the prosperity of humanity and the conservation of the natural environment. Global Green Management System Establish a top-class global green management system, ensure full compliance of all environment safety and health regulations in all our operation sites and enforce strict internal standards. Zero-Accident Green Operation Sites Create recycling-centric production facilities and safe workplaces where wastes are recycled and accident prevention measures are implemented to ensure the health and safety of all employees. Life Cycle Responsibility for Products and Services Take full responsibility for ensuring minimum environmental impact and the highest safety in all stages of the product life cycle including purchasing of parts/raw materials, development, manufacturing, transfer, product use and end-of-life. Preservation of the Global Environment Take actions to tackle climate change and protect local communities as well as the global environment. Disclose green management policies and achievements to both internal and external stakeholders. Green Manufacturing Process Establish manufacturing processes that minimize the release of greenhouse gas emissions and pollutants by employing bestavailable clean manufacturing technologies that enable ef? cient resource and energy management. / Samsung Electronics Sustainability Report 2012 / 3 Mid-term Target: Eco-Management 2013 Eco-Management 2013 outlines our mid-term targets announced in 2009. Lowering greenhouse gas emissions relative to sales by 50% from 2008 levels and designing 100% of Samsung Electronics products as Eco-Products are the two core objectives. To reach the stated goals, we have developed 19 speci? c actions under the three categories of green operations, green products, and green communication. We are taking actions to minimize the negative impact on the environment associated with our business activities and disclosing our environmental achievements against mid-term targets to bolster our commitment to green management. EM2013 Core KPIs and Achievements Area GHG reduction (Korea) Indicator GHG emissions relative to sales (tons CO2 /KRW 100 million) Proportion of Good Eco-Products (%) 011 Target 4. 62 96 85 2011 Actual 4. 46 97 85 2012 Target 4. 21 97 87 2013 Target 3. 72 100 100 Eco-Product development ratio Proportion of Good Eco-Devices (%) Investment in Green Management Samsung Electronics is making regular investments in green management practicesin two separate categories of investment in green facilities and site operation expenses. In 2011, Samsung Electronics invested KRW 703 billion in green management practices, which is an 86% increase from 2010. Green Management Investment Investment in green facilities Site operation expenses (USD million) Total 266 150 310 311 294 379 461 604 2009 2010 2011 113 1 USD=1,164. 30 KRW (base year: 31st. Dec. 2011) Green Investment Detail Indicator Investment in green facilities Details Investment in air and water quality, waste management and pollution prevention facilities (Extension of air pollution control in semiconductor) Expenses paid to operate pollution prevention and treatment facilities (Power consumption, chemical, labor, accreditation, etc) Site operation expenses Environmental Awards and Achievements Samsung Electronics has received international recognition for sustainability performance. For example, Samsung Electronics was selected as a sector leader in environmental performance in the Dow Jones Sustainability Index. It was also selected for the Carbon Disclosure Leadership Index for three consecutive years by the Carbon Disclosure Project. Samsung Electronics won 22 awards including ENERGY STAR Partner of the Year by the U. S. EPA. Awards and recognition from external stakeholders indicates the strength of our environmental regulation compliance and stakeholder communication efforts. 4 / Samsung Electronics Sustainability Report 2012 / 2011 Recognition for Excellence in Environmental Management Name of Award Green company assessment Best Global Green Brands Ranking Environmental, Social, Governance Assessment Sustainability Index Dow Jones Sustainability Index Interbrand Korea Corporate Governance Service Kyunghyang Daily SAM Given by China Europe International Business School (CEBIS) Date April July August August September Details Selected as the greenest company among the top 100 foreign companies in China Ranked 25th in the Global 50 Green Brands rankings Received A+ grade in environmental management among 800 listed companies Selected as 2nd best environmental performer among the top 100 companies in Korea Named as the most sustainable technology company in the 2011 Dow Jones Sustainability Index Named as top environmental performer in the semiconductor sector Carbon Disclosure Project Green Ranking Green Ranking CDP Committee Newsweek Joongang Daily September October December Included in the Carbon Disclosure Leadership Index for three consecutive years Ranked 22nd among Global Top 500 companies Ranked 4th in Tech. Equipment sector Ranked 2nd among top 100 companies, Ranked 1st in IT sector 2011 Environmental Awards Received Region Korea Name of Award Green Star Certi? cation Award Korea Green Management Award Energy Winner Award Korea Consumer Well-being Index certi? ation award Green Product of the Year CDP Korea 200 Report Launch Awards National Green Technology Award Given by Korea Management Association Ministry of Knowledge Economy/ Ministry of Environment Consumers Korea Korea Standard Association Green Purchasing Network CDP Committee Ministry of Knowledge Economy U. S. Consumer Electronics Association U. S. Environmental Protection Agency TreeHugger International Electronics Recycling Conference Expo Global Green USA’s i nitiatives Buyers Laboratory Inst. Boys Girls Clubs of America U. S. Environmental Protection Agency Northeast Recycling Council International Forum Design Hannover Which magazine Green Organization Green Business Enterprises China Energy Saving Association WEF, IOD Date June June July August October October November January April April May June August September October October March September November November May June Details Washing machine, refrigerator, Kimchi refrigerator and air conditioner. IT solutions division was awarded with a medal for solar powered note PC. 10 products were awarded for high energy ef? iency including the grand award for smart air conditioner. Samsung Anycall brand ranked 1st in mobile phones Solar powered note PC (NT-NC215), low-power monitor (S23A550H) Included in the Carbon Management Industry Leader Low-power mobile semiconductor technology Washing machine, electric oven, monitor, memory chip, LCD panel, HDD Selected as Partner of the Year Restore (SPH-M570) mobile phone Leadership in Recycling Program SPH-M580 Replen ish mobile phone Eco-Product award for printers with eco-driver technology Recognition for donation of high energy ef? iency products Recognition for contribution made in reducing mercury in LED display Recognition for support made in Recycling Association activities Eco-friendly materials used in note PC (NT-NC10) Energy Ef? cient LED TV (55D8000) Eco-friendly product award for Eco Bubble Washing Machine Eco-friendly innovative product award for Eco Bubble Washing Machine Received awards for two consecutive years Eco Innovation award for eco-friendly note PC 900X3A U. S. CES Eco-Design Award Energy Star Award TreeHuggers Best of Green Awards Sustainability Leadership Award Green Millennium Awards Outstanding Achievement Award BGCA Partnership Award Mercury Reduction Award State Electronics Challenge Award for Sustainability Germany UK iF Material Award Which Energy Saver Award Green Apple Award International Green Award China India Energy Saving Contribution Award Golden Peacock Award / Samsung Electronics Sustainability Report 2012 / 5 Green Management Implementation Structure Organizational Structure Samsung Electronics has a structured organization in place for effective implementation of green management. The CS Environmental Center, which reports directly to the CEO, is in charge of mid-term target setting and monitors green management KPIs. It is also responsible for the development of climate change responses, life cycle GHG emissions management and the provision of supplier support. The CS Environment Center is also esponsible for overall green management issues including Eco-Design, eliminating hazardous materials in products, and energy ef? ciency standards regulations. The Environment, Health and Safety Center is responsible for ensuring the green operations of all production plants through close collaboration with the Environment Health and Safety (EHS) team at each production plant. The center is responsible for analyzing environment and safety risks monitoring changes in global environmental regulation s and national policies, and improving Samsung Electronics’ EHS practices. Each plant also has an environmental affairs manager and a team of experts to ensure compliance with environmental regulations and the implementation of green management improvement measures. Corporate Green Management Committee We are aware of the environmental impact associated with our business activities and the strategic importance of implementing green management practices. This understanding led to the establishment of the Green Management Committee which meets twice a year to con? rm green management policies, assess performance and make decisions on the establishment of improvement measures. Samsung Electronics also has a Climate Change Response Committee in charge of supporting GHG emissions and energy management, as well as an Eco Council in charge of supporting Eco-Product development and green operations at facilities. We also hold regular EHS strategy meetings for reviewing changes to EHS regulations and formulating responses. Corporate Green Management Consultation Group Name Green Management Committee Eco-Product Council GHG/Energy Executive Council EHS Strategy Council Frequency Half-yearly Half-yearly Half-yearly Quarterly Details Headed by CEO. Makes decisions on global green management policies and plans Composed of product development team in business divisions. Consults on Eco-Product development strategy Consults on company-wide GHG and energy management strategy Consults on corporate EHS strategy Employee Training Samsung Electronics offers 32 green management training courses in four categories: basic, legal, job function and overseas. The basic course is designed for all employees and provides an introduction to Samsung’s green management policies. The legal courses are designed for EHS affairs managers at production plants and are focused on the prevention of accidents and risk management as required in relevant laws and regulations. The courses in the job function category are designed for EHS managers at product and plant management levels to enhance their in-depth understanding of EHS affairs. The overseas classes provide staff at overseas plants with information on EHS requirements that must be observed. 6 / Samsung Electronics Sustainability Report 2012 / Environmental Achievement Management Achievement Management and Rewards Samsung Electronics developed a Global EHS System (G-EHS) for integrated management of EHS data. The system played a pivotal role in boosting our green management capacity into a top-tier program in energy and GHG reduction, product environmental regulation compliance, workplace accident reduction goals and achievement monitoring. We created reward schemes, including the Samsung Green Management Award and the Samsung Electronics Annual Award, to internally promote green management practices. The Samsung Green Management Award is given by the Samsung Corporation to recognize exemplary production plants and suppliers with excellent green management practices. The Samsung Electronics Annual Award is a cash bonus and an extra point in annual reviews given to organizations and employees that made key contributions in green management areas. Environmental Audit Samsung Electronics is participating in environmental audits conducted by internal and external experts in order to identify areas of improvement and take appropriate actions. For example, we have been conducting internal audits on all production plants in regards to hazardous materials and energy management. We have implemented an eco-partner policy which mandates regular assessments on the status of suppliers’ environmental management and implementation of improvement measures. We also have an internal mandate on the installation and testing of environmental management equipment at facilities, ISO14001 environmental management certi? cation, and an OHSAS18001 safety and health management system for all existing plants and new plants to be constructed. All plants are subjected to regular audits by third party certi? cation agencies. Information Disclosure Samsung Electronics publishes annual sustainability management reports to share information on our environmental management including targets, strategies, GHG emissions data, Eco-Product information, green production plants, and stakeholder communication programs. The information on our green management practices is disclosed on our global web site for easy access by stakeholders. (http://www. samsung. com/us/aboutsamsung/sustainability/environment/environment. tml) We are actively participating in the Carbon Disclosure Project to share our detailed activities and achievement in our carbon management practices. Global-EHS System Environmental Expense Management Samsung Electronics is managing environmental expenses in an integrated and cost effective manner using the G-EHS. The investment in environmental safeguards at facilities and the operation costs of each production plant is managed by environmental managers at each site. The cost data is then collected by the Environmental Strategy team of the CS center annually for calculation of total expenses spent on environmental management. We are following the Ministry of Environment’s guidelines on environmental data collection and report the data to relevant stakeholders, including the Bank of Korea. Environmental costs are budgeted during an annual corporate business planning process and spent accordingly. / Samsung Electronics Sustainability Report 2012 / 7 Climate Change Response Climate Change Response Strategy Risks and Opportunities Risks and Opportunities Analysis Process Samsung Electronics determines materiality and priority of issues by using ? ve criteria, as listed below, when determining climate change related risks and pportunities. Criteria of Risk and Opportunity Analysis Criteria Signi? cance to stakeholders Industry (competitor) benchmarking Signi? cance to the company Readiness Likelihood Peers and competitors’ reaction to the issue Impacts to the company wide policy, strategy, goal and others, as well as direct ? nancial impacts (short/medium/long-term ? nancial impacts) Having reaso nable control over the issue or not, and degree of readiness in capital (HR asset) to deal with related issues Probability of events and amount of time left (before potential regulation enforcement) Details Concerns of stakeholders such as customers, evaluators and NGOs. Risk Management Samsung Electronics identi? ed the following climate change risks and response activities for their management. Risk Management Activities Category Regulatory risks Type of Risks Emission trading scheme Emission reporting obligations Product ef? ciency regulations and standards Product labeling regulations and standards Uncertainty on new regulations Risk Management Activities Developing CDM project within semiconductor manufacturing process Improving transparency on GHG emissions data through third party veri? ation Increasing RD on energy ef? ciency improvement on products and receiving energy marks Increasing number of eco-label certi? ed products Monitoring on global environmental regulations Identi? cation of risks and response manuals on site facilities through regular/special review and 3rd party audit Strategic response to Eco-Product exhibition and evaluations Developing products using insight f rom consumer research Physical risks Change in precipitation and drought Other risks Reputation change in consumer behavior Capitalizing on Opportunities Opportunities associated with climate change and its impacts on Samsung’s operation as follows. Opportunity Creation Activities Category Regulatory risks Opportunities GHG Emissions trading scheme Product ef? ciency regulations and standards Voluntary agreements Opportunity Creation Activities Development of CDM projects using reductions made at semiconductor production plants and products Introduction of energy mark certi? ed products Voluntarily participating in GHG reduction activities Strengthening system air conditioner business Developing/upgrading of indoor air puri? rs, development of water puri? cation technologies Increased number of Eco-Products and related RD Strategic participation in Eco-Product exhibitions and climate change related evaluations Physical risks Extreme weather events Air and water pollution Other risks Increased consumer demand on low carbon products Increase of brand value as a low carbon and energy ef? cient product provider Reduction in operation cost by improving energy ef? ciency of equipments Corporate energy cost management 8 / Samsung Electronics Sustainability Report 2012 / Management Targets and Strategies Based on the environmental mid-term strategy ‘Eco-Management (EM) 2013,’ Samsung Electronics manages its climate change mitigation activities through two management systems. Our Eco-Design System (EDS)evaluates GHG emissions from a product’s life cycle (from designing to disposal of a product) and our G-EHS manages corporate GHG reduction activities from all facilities around the world. We also have gathered GHG emissions data, including GHG data from employee business travels, logistics, and suppliers, in order to manage Scope 3 GHG emissions. Climate Change Response Strategy We have created GHG management strategies for all relevant divisions in order to achieve GHG reduction targets in production facilities, product development, and its suppliers. Climate Change Response Strategy Category Incorporation of GHG reduction facilities Product Energy Ef? ciency Improvement Implementation of Energy Management System Details Reduction of F-gas emissions from the semiconductor and LCD manufacturing process Reduction average energy consumption of products by 40% and achieving 0. 5W of standby power by 2013, in comparison to 2008 ? ures. Implementation of energy management system and establishment of internal energy ef? ciency certi? cation system subjected to all business sites in Korea Support for the establishment of global supplier’s GHG inventory system by offering training and expertise sharing to global suppliers Supplier support International Initiative Membership Status Initiative World Semiconductor Council (WSC) W orld Business Council for Sustainable Development (WBCSD) Korea Business Council for Sustainable Development (KBCSD) Electronic Industry Citizenship Coalition (EICC) KPI on GHG Emissions Reduction and Achievements Samsung Electronics designated GHG emissions intensity at Korean plants as its KPI for GHG management, a ? gure that accounts for 90% of Samsung Electronics’ global emissions. The mid-term target is a 50% reduction in GHG emissions intensity by 2013 compared to the 2008 baseline. Samsung Electronics has been meeting annual GHG emissions reductions targets since 2009. We reduced intensity by 40% in 2011 compared to the 2008 baseline and expect to achieve the 2013 target. We have selected GHG reduction during the product use phase as our second KPI to be achieved by manufacturing energy-ef? ient products. The 2013 mid-term target is to reduce GHG emissions by 85 million tons (accumulated) from 2008 levels. We aim to achieve this through a 40% reduction in average electricity consumption of Samsung Electronics products compared to a 2008 baseline. We are currently on track to achieve this goal, meeting annual targets since 2009. GHG KPI and Achievements KPI GHG emissions intensity (production in Korea, Target tons CO2 /KRW 100 million) Actual Reduction Ratio (%, 2008 baseline) Cumulative GHG emissions reductions over ? e years (Global, 10,000 tons) Target Actual Indicator 2009 6. 85 5. 83 22 334 444 2010 5. 65 5. 11 31 1,169 1,529 2011 4. 62 4. 46 40 2,695 3,292 2013 3. 72 50 8,468 GHG emissions intensity: Total CO2 emissions1 ? (Sales[Korea] / price index2) 1 Total GHG emissions from production plants in Korea, expressed in CO2 -equivalent 2 Producer price index in Bank of Korea public notice (Base year 2005: PPI=1) / Samsung Electronics Sustainability Report 2012 / 9 Management Structure Samsung Electronics’ GHG emission management structure is as follows. GHG Management Committee Name Green Management Committee Detail Discuss and make decisions on corporate-level strategic decisions on climate change response Set development goals and implementation strategies on high energy ef? ciency and low power-consumption products Establishment and implementation of production plant GHG reduction strategy Climate change risks analysis and monitoring CEO Host Frequency Twice a year Eco-Product Council Head of CS Environmental Center Twice a year GHG/Energy Executive Committee Head of CS Environmental Center Twice a year GHG/Energy Committee Head of Environmental Strategy team Five times a year Scope 1, 2 Emissions Management Scope 1, 2 Emissions Management Process Emission Management Structure The operation sites included in the GHG emission management scope are production plants and buildings under direct operational control of Samsung Electronics. Monthly GHG emission data from eight Korean plants and buildings, 30 overseas production plants, and 76 non-production subsidiaries (sales, logistics, and RD centers) are collected through the environmental management system, G-EHS. The emission data from each site are checked against targets and improvement measures are formulated. The GHG emissions data and reduction achievements against targets are reported to environmental managers at each site, in addition to the corporate environmental affairs management team and top management. Emission Calculation Method GHG emissions were calculated with management data at each site and the national guidelines of each country as well as international standards including the IPCC Guidelines, ISO 14064 were used as reference for matters not speci? d in the national guidelines. GHG Emissions (Scope 1, 2) Samsung Electronics’ GHG emissions intensity in 2011 was reduced to 4. 46 tons/KRW 100 million. which was 13% lower than 2010 ? gures. We have taken various measures including the installation of facilities for reducing GHG emissions from indutrial processes, improvement in energy ef? ciency of production facilities, installation of high ef? cient facilities and wil l continue to implement various GHG reduction measures. GHG Emissions Intensity Category Korea Target Actual Global Actual tons CO2/KRW 100 million) Indicator 2009 6. 85 5. 83 4. 35 2010 5. 65 5. 11 4. 15 2011 4. 62 4. 46 3. 70 GHG emission intensity: Total CO2 emissions1 ? (Sales[Korea] / price index2) 1 2 Total GHG emissions from production plants in Korea, expressed in CO2 -equivalent Producer price index in Bank of Korea public notice (Base year 2005: PPI = 1) Calculation Method (Global): Global total CO2 emissions / Global Sales 10 / Samsung Electronics Sustainability Report 2012 / GHG Emissions Region Korea Scope 1 Scope 2 Total Global Scope 1 Scope 2 Total (1,000 tons CO2) Scope 2009 3,564 5,008 8,572 3,750 5,875 9,625 2010 4,057 5,552 9,609 4,155 6,500 10,655 2011 3,924 6,031 9,955 4,045 7,259 11,304 Adjustment was made to Korean GHG emissions data between 2009 and 2011 as a result of third party verification in June 2011 following guideline in national GHG target management policy. Data scope is 100 percent of both Korea and global emissions by Samsung Electronics GHG Emissions by Type (Global) 2009 CO2 SF6 PFC S N2O HFC CH4 Total 6,340 2,037 912 170 164 2 9,625 (1,000 tons CO2) 2010 7,012 2,397 901 212 131 2 10,655 011 8,378 1,738 859 220 108 2 11,304 Third Party Veri? cation of GHG Data Our GHG reduction has been veri? ed by a third party agency in compliance with relevant Korean government policy. The Korean Foundation for Quality has recently completed veri? cation of GHG emissions data between 2007 and 2011 of eight operation sites in Korea. We also voluntarily received GHG emission data veri? cation for overseas production plants. GHG Reduction Activities Samsung Electronics succeeded in reducing 1. 4 million tons of CO2 in 2011. The reduction of 1. 3 million tons was achieved with the installation of PFC, SF6 emissions reduction facilities. The introduction of high energy-ef? ciency facilities and the optimization of utilities contributed to a reduction of 28,000 and 188,000 tons of CO2 respectively. Implementation of a waste heat recovery system resulted in 24,000 tons of CO2 emissions reduction. A collection of improvement measures also contributed to a reduction of 130,000 tons of CO2 emissions. Third Party Veri? cation of GHG Data / Samsung Electronics Sustainability Report 2012 / 11 Scope 3 Emissions Management Scope 3 Emissions Management Process Samsung Electronics’ Scope 3 GHG emissions include GHG emissions associated with suppliers, product use, transport of parts and products and business travel by Korean employees. Supplier GHG emissions are calculated using the activity data submitted by suppliers. Emissions associated with logistics and business travel are automatically calculated by the G-EHS. GHG emissions associated with product use are estimated using energy consumption information and typical use scenarios for each product. The GHG emissions of product use are correlated to the energy ef? iency of products. The GHG emissions data of each scope can be managed by environmental managers in each division, the corporate environmental affairs management team, and top management. Boundary of Scope 3 Management Raw material Parts Manufacturing Logistics Consumer use Disposal/ recycling Employee business travel Scope 3 GHG emissions are calculated as per related international st andards including ISO 14064, IPCC guidelines, WBCSD Scope 3 guidelines and carbon footprint labeling standard of Korea. GHG Emissions in Product Use Samsung Electronics de? es †GHG Emissions associated with product use† as the amount of GHG emissions caused by electricity consumption of Samsung Electronics products. The emissions associated with product use have not increased despite an increase in the number of products sold due to the increased energy ef? ciency of newer products. We achieved 17,630 thousand tons of GHG emission reductions in 2011 compared to the 2008 levels. Improvement Rate of Product Energy Ef? ciency Target Actual (%) GHG Emissions Reduction in Product Use Target Actual Cumulative (1,000 tons CO2) 32,920 23. 1 15. 7 7. 7 8. 4 15. 25. 6 15,290 15,270 4,440 4,440 8,350 10,850 17,630 3,340 2009 2010 2011 2009 2010 2011 Product Energy efficiency improvement rate = (2008 average power consumption–2011 average power consumption) / (2008 average po wer consumption) ? 100 Target is made by 10% of annual increasing in product sales volume Scope: All consumer products sold globally (excluding parts) 12 / Samsung Electronics Sustainability Report 2012 / GHG Emissions associated with transport of parts and products Samsung Electronics is monitoring CO2 emissions associated with transport of materials, parts and products. The emissions have been increasing by 15% per year on average due to the establishment of new overseas production facilities and an increase in overseas production volume. Efforts are being made to reduce product weight and optimize transport routes to achieve reductions in emissions related to transport. A modal shift to lower GHG emissions is also employed to achieve further reduction. Modal shift (Change in means of transport): Samsung Electronics is changing air transport to maritime transport and road transport to railroad transport to achieve reductions in GHG emissions. Business Travel Emissions Samsung Electronics is monitoring GHG emissions associated with business travel. The emissions have increased by more than 10% due to the establishment of new overseas operation sites and an increase in the number of employees. We are making an effort to reduce business travel-related emissions through measures including the encouragement of the use of mass transportation and video-conferencing systems. GHG Emissions Associated with Business Travel (Korea) (1,000 tons CO2) 113 101 Emissions Associated with Transport of Parts and Products (1,000 tons CO2) 8,440 1 7,430 4,340 5,690 2009 Calculation formula 2010 2011 Air travel: ? [Distance(Km) ? No. of employees travelled ? GHG emissions conversion factor by class] Land transport: ? [No. of employees travelled ? cost (KRW) per travel ? distance 2008 2009 2010 2011 conversion factor (km/KRW) ? emissions conversion factor (ton CO2 /employee ·km)] Management scope: Based on global business travel data by Kore a-based employees Management method: Emission data is automatically calculated using the G-EHS system on a monthly basis and G-ERP Calculation formula: Distance (Km) ? Weight (Kg) ? GHG emission conversion factor by emission sources Management scope: transport of products, materials and parts (transport service paid by business partners are also included) Management method: Monthly emissions are calculated based on logistic data Data scope is 100 percent of global emissions by Samsung Electronics Suppliers’ GHG Emissions Samsung Electronics manages suppliers’ GHG emissions data associated with Samsung Electronics’ business; total GHG emissions of a supplier multiplied by the ratio of sales to Samsung Electronics. Samsung Electronics began monitoring and analysis of GHG emissions from its supplier companies since 2009. We provided training courses to help the suppliers report their GHG emissions. Supplier GHG Emissions 2009 2010 812 4,502 (1,000 tons CO2) Compilation of 2011 supplier data has not been completed as of May 2012. Scope of 2009 and 2010 supplier emissions data is accountable for 40% and 63% respectively of total purchases by Samsung Electronics. Only Korea-based suppliers participated in the 2009 data collection. / Samsung Electronics Sustainability Report 2012 / 13 Corporate GHG Emissions Break-down 2011 GHG Emissions Break-down (1,000 tons CO2) Employee business travel 113 Manufacturing 11,304 Logistics 8,440 Consumer use 32,412 On-site Energy Management Energy Management Structure in Operation Sites The CS Environmental Center at Samsung Electronics created climate stratrgy part to manage energy use at operation sites by conducting tasks including the collection of monthly data and the analysis of the cause of changes in emissions. Bi-monthly GHG and energy working group meetings are also held to share success stories and news on energy saving activities. Energy KPI and Achievements Samsung Electronics has adopted an energy cost rate (%) to assess the ? nancial bene? ts of energy consumption reduction. The 2013 target is 0. 878% with a goal of achieving a 2. 5% reduction per year. We have optimized the operations of manufacturing and utility equipment, introduced energy ef? cient equipment and waste heat recycling facilities to achieve the target. The energy cost rate increased in 2011 compared to 2010, due to an increase in energy consumption and energy price. However, we succeeded in achieving the 2011 target set in 2008. Energy Cost Rate (Korea) Target Actual %) Energy Consumption Intensity Korea Global (tons CO2/KRW 100 million) 0. 982 0. 910 0. 956 0. 849 0. 929 0. 928 74. 7 56. 1 54. 3 66. 1 50. 6 59. 7 2009 2010 2011 2009 2010 2011 Energy cost rate (%) = energy cost in manufacturing site (Korea) / Sales (Korea) ? 100 Data scope is 100 percent of both Korea and global emissions 14 / Samsung Electronics Sustainability Report 2012 / Electricity and LNG Consumption Category Korea Indicator Electricity (Gwh) LNG (Mil. Nm ) 3 2009 10,729 148 12,180 174 2010 11,894 170 13,435 197 2011 12,925 197 15,047 237 Global Electricity (Gwh) LNG (Mil. Nm3) Data scope is 100 percent of both Korean and global emissions by Samsung Electronics Energy Saving Activities and Ahievements Samsung Electronics achieved energy use reductions by 171,000 TOE through optimization of manufacturing and utility equipment, installation of high energy ef? ciency equipment, and waste heat recovery. It is equivalent to savings of KRW 70 billion in energy cost and reduction of 370,000 tons CO2. Need for systematic energy management is increasing with the introduction of new policies such as the GHG/Energy target management system enforced by Korea government in 2011. Responding to the change, we implemented the Energy Management System (EnMS) for analysis of energy use status, management of reduction targets, and promotion of energy saving activities in systematic manner. Implementation of the EnMS and other energy management initiatives enabled five production plants in Gumi, Giheung, Hwasung, Onyang and Tangjung to receive international energy management certi? cation (ISO 50001) in 2011. We also implemented ‘Pre-certi? cation of Energy Ef? ciency’ for all energy using devices, equipment, and raw materials to induce energy ef? iency improvement by equipments suppliers and to contribute to energy savings at operation sites. Our ultimate goal is to achieve of GHG emissions reduction and cost reduction at the same time. Renewable Energy Renewable Energy Expansion Plan and Activities Samsung Electronics is developing 1MW of hydro power plant and 1. 4MW scale of solar power system in Korea. we are also expanding the investment on solar cell, smart grids and geothermal heating system. We are investing in the development of photovoltaic cells, smart grid technology, and geothermal heating/cooling systems as a sustainable growth opportunity.