INTEGRATED ANNUAL REPORT 2011 GRI RESPONSES  

Limiting our environmental footprint

Commitment entrenched in ethics, policies and procedures
Covered by group strategic focus area
Committed to measuring, reporting, and managing environmental impacts
Committed to reducing and offsetting negative environmental consequences, where appropriate
Ongoing assessment of risks and opportunities
Integrated into operations, management activities, and reporting
Emphasis on material aspects
Training and awareness
Environmental and commercial benefits

To fully understand its environmental impact, Barloworld partners with organisations such as:

UN Global Compact
World Wide Fund For Nature (WWF)
National Business Initiative (NBI)
Endangered Wildlife Trust (EWT).

In 2005 the group signed the Energy Efficiency Accord (EEA) with the South African Department of Mineral Resources and will sign the Energy Efficiency Leadership Network’s Pledge. The group participates in Business Unity South Africa’s climate change forum.

Barloworld’s approach to environmental management is informed by:

Environmental policy (pdf - 27kb)
Climate change policy (pdf - 27kb)
Good practice guidelines on environmental management for non-ISO 14001-certified operations (pdf - 74kb)
Sustainable development approach (environmental aspects). (pdf - 435kb)

These can be downloaded above.

Barloworld is committed to playing a leading role in environmental stewardship and limiting its direct environmental impact through management programmes across its divisions. This is consistent with our value-based management approach and strategic focus area of sustainable development.

Internally, aspects identified as material include:

Non-renewable energy consumption
Greenhouse gas emissions (derived from fossil-fuel consumption)
Water consumption
Recycling
Disposal of hazardous material.

The group largely represents OEMs and recognises the environmental impacts from the manufacture and use of its vehicles, plant or equipment. As a responsible corporate citizen, Barloworld considers these impacts and engages its suppliers and customers to ensure that the highest environmental standards are applied.

Indicators and data-collection systems

> Focus on material aspects
> Improving data-collection systems
> Entrenched monthly, quarterly and annual reporting
> Integrated into operations

Data collection is designed to enhance the management and reporting of material environmental aspects, using entrenched structures and systems.

Organisational boundaries and structures are aligned with those used for financial purposes to ensure alignment between financial, environmental and social reporting. Data are collected at operational level and consolidated at divisional and group levels. The data are used in the daily management of the company and relevant aspects are reported on a quarterly basis through the Safety, Health and Environment (SHE) report to the Risk and Sustainability committee, a committee of the Barloworld board.

Operational relevance and regular reporting ensure that environmental issues are integrated into management activities and responsibilities.

The following parameters are measured and reported:

Energy consumption
Carbon emissions
Energy and emissions intensities
Water use, source and recycling
Materials consumption
Use of recycled input materials
Waste (hazardous and non-hazardous)
Non-compliance/fines.

Targets

> Aspirational energy and emissions efficiency improvement targets set and reviewed
> Commitment to report progress
> Integrated into management responsibilities

Barloworld’s commitment to improving its energy efficiency for fossil fuels and related greenhouse gas (GHG) emissions is underscored by being an early signatory to South Africa’s Energy Efficiency Accord.

In 2009, we set the aspirational target of a 12% efficiency improvement in non-renewable energy consumption by the end of the 2014 financial year against a business as usual scenario that tracks revenue as a proxy for business activity. The target applies to our material energy sources, petrol and diesel, as well as to purchased electricity generated by fossil fuels.

While we recognise the difficulties of this approach, we are inspired by the benefits of a committed drive towards our target that translates focused attention, measurement, reporting and consumption reductions into cost savings and lower emissions.

Given the diverse and divisional nature of the group, appropriate divisional targets and methodologies are being set to account for industry and regional requirements and expectations.

We have adopted a similar approach for greenhouse gas emissions (scope 1 and 2) as these mainly result from consuming fossil fuels and buying electricity generated by fossil fuel.

Our targets are incorporated into our strategic planning process and ongoing management of the business, including performance scorecards.

Progress is measured by intensities based on reported revenue and targets are regularly reviewed, thereby balancing environmental sensitivities with commercial realities, legislation and national goals.

Energy

> Aspirational efficiency improvement targets set
> Measuring, reporting and managing energy consumption
> Identifying risks and opportunities
> Environmental and commercial perspective and benefits
> Focused activities to improve consumption efficiencies
> Third-party assurance of consumption data
> Introduction of reporting in gigajoules

Consuming energy derived from non-renewable resources such as coal and oil drive the group’s greenhouse gas emissions. Aside from the impact on our climate, the availability and cost of energy warrant significant efforts to reduce consumption across the group against a business as usual scenario.

Performance review

Combined petrol and diesel consumption was 3% down on 2010, driven by a focus on energy-saving initiatives. Similarly, electricity consumption was down 2.7%.

Group direct and indirect energy consumption

Petrol and diesel by division (ML) 2011   2010
  2009
 
Equipment 9.04   8.81   9.96  
Automotive and Logistics 24.62   26.21   24.89  
Handling 5.22   5.06   5.50  
Corporate 0.01   0.02   0.02  
Barloworld Group 38.89   40.10   40.37  

Electricity by division (MWh) 2011   2010
  2009
 
Equipment 25 805   24 057   25 644  
Automotive and Logistics 52 532   55 527   52 019  
Handling 8 594   9 481   9 094  
Corporate 365   658   810  
Barloworld Group 87 296   89 723   87 567  

These reductions are mirrored in the group’s gigajoule consumption.

Energy by division (GJ) 2011   2010
  2009
 
Equipment 429 070   413 097   471 383  
Automotive and Logistics 1 145 665   1 220 966   1 153 890  
Handling 230 840   234 696   214 852  
Corporate 1 669   2 997   3 592  
Barloworld Group 1 807 244   1 871 756   1 843 717  

Energy by source (GJ) 2011   2010
  2009  
Diesel 1 026 831   1 081 984   1 068 748  
Petrol 433 937   430 241   445 118  
LPG 2 484   2 278   11 053  
CNG 29 728   34 250   3 555  
Electricity 314 264   323 003   315 243  
Total energy 1 807 244   1 871 756   1 843 717  

These absolute reductions, combined with increased business activity, improved efficiency (measured by intensity) by some 20.7% year-on-year and 10.8% off the 2009 baseline.

Energy intensity

  Gigajoules per R1 million revenue
Divisions 2011   2010
  2009
 
Equipment 23.0   33.8   27.6  
Automotive and Logistics 43.4   49.8   49.8  
Handling 49.0   57.4   42.9  
Barloworld Group 36.3   45.8   40.7  

By incorporating energy-efficiency goals into our strategic framework, reporting and performance-review processes, we ensured focused commitment and, as a result, have made good progress towards meeting our targets.

Initiatives to improve our energy efficiency
Entrenching sustainable development into group strategy
Setting targets and entrenching integrated reporting that includes energy consumption
Focused communication programmes, including the principle that the cumulative impact of small changes becomes significant
A green initiative for existing buildings that included:
– Energy audits
– More efficient lighting, heating, cooling and ventilation systems
– Motion sensors on lights and air-conditioning systems
– Timing switches on compressors and other appropriate electrical equipment
– Geyser blankets and reducing geyser temperatures
– Resetting washbay blowers in car rental operations to optimise time taken to dry vehicles
A green initiative for new buildings resulted in:
– Three new dealerships (Automotive) include energy-efficiency technology with average energy savings of up to 30%
Continued roll-out of PowerWatch technology in our South African operations – this provides real-time electricity monitoring at installed sites, reflects consumption and related emissions against targets, raises awareness and identifies unnecessary power use
Reduced air travel and increased use of video conferencing
Logistics’ Green Trailer

Greenhouse gas emissions

> Group climate change policy
> Efficiency improvement targets set (scope 1 and scope 2)
> Measuring, reporting and managing emissions
> Identifying risks and opportunities
> Environmental and commercial perspectives
> Third-party assurance of emissions data

We are concerned about climate change and appreciate the causal link between greenhouse gas emissions and global warming. In addition, restrictions on emissions and proposed carbon taxes pose risks to Barloworld and our customer base. However, they also present commercial opportunities such as increased demand for products and solutions with limited or reduced carbon emissions and opportunities for internal initiatives to improve efficiency further with related savings. Incentives for managing climate change aspects and achieving group targets are in place.

The group reports greenhouse gas emissions in terms of the GHG protocol corporate standard, and units of CO2e which is the universal unit of measure adjusted for the global warming potential of the six Kyoto Protocol greenhouse gases.

Our identified emissions include carbon dioxide, nitrous oxide and methane from petrol and diesel combustion in trucks, machinery and equipment and vehicles, and from buying electricity.

Non-greenhouse gas emissions sources include oxides of nitrogen (NOx) and oxides of sulphur (SOx) from our automotive operations. Measures to mitigate these non-greenhouse gas emissions rely on consuming low-sulphur fuels and advanced engine technology for cleaner fuel combustion, which are outside the control of Barloworld. These emissions are difficult to quantify given the diverse conditions, technologies and regions in which we operate and are not considered material.

There are no significant ozone-depleting sources of emissions in our operations.

To reach our targets for improving emissions efficiency, we:

Measure emissions
Avoid emission-producing activities
Reduce emissions of unavoidable activities
Switch to appropriate energy-reduction technologies, where feasible
Offset remaining emissions from commercial activities where appropriate.

Since our material greenhouse gas emissions are linked to energy consumption (particularly petrol and diesel and, indirectly, electricity principally generated from coal), many of our energy efficiency initiatives have a secondary benefit – reducing greenhouse gas emissions.

For our submission to the 2011 Carbon Disclosure Project (view pdf download - pdf 1MB ), we assessed the financial implications of climate change risks. Given our reliance on fossil-fuel-propelled vehicles, plant and equipment as a core part of our business, these risks could be significant and may result in a higher cost base and lower revenue. Conversely, there are opportunities for competitive products and solutions with reduced carbon footprints.

Performance review

The group focuses on scope 1 and scope 2 emissions, primarily due to consuming fossil fuels and electricity generated from fossil fuels, respectively.

We have updated our emission factors for South Africa. This has resulted in increased emissions from diesel but reduced emissions from petrol and electricity sources. Overall, the effect is not material. See table of emission factors. (view pdf download - pdf 242kb )

Consistent with our reduced energy consumption, group emissions are 6.3% down on 2010 levels, driven by a strategic focus on energy-saving initiatives.

Group emissions (CO2e tons)

Divisions 2011   2010
  2009
 
Equipment 46 102   45 912   52 063  
Automotive and Logistics 123 096   133 573   125 752  
Handling 19 441   21 415   20 219  
Corporate 404   833   1 019  
Barloworld Group 189 043   201 733   199 053  

Scope 1 and scope 2 emissions (CO2e tons)

  2011 2010
2009
 
Divisions Scope 1   Scope 2   Scope 1   Scope 2   Scope 1   Scope 2  
Equipment 24 722   21 380   23 503   22 409   27 153   24 910  
Automotive and Logistics 70 339   52 757   70 142   63 431   66 349   59 403  
Handling 14 218   5 223   15 176   6 239   14 356   5 863  
Corporate 26   378   43   790   47   972  
Barloworld Group 109 305   79 738   108 864   92 869   107 905   91 148  

Emissions intensity CO2e tons per R1 million revenue
Divisions 2011   2010
  2009
 
Equipment 2.5   3.8   3.0  
Automotive and Logistics 4.7   5.5   5.4  
Handling 4.1   5.2   4.0  
Barloworld Group 3.8   4.9   4.4  

Aligned with our energy-efficiency improvements, the 2011 emissions intensity has improved by 13.6% off the 2009 baseline year indicating that we exceeded our aspirational target to improve emissions efficiency, as measured by intensity, this year. We will, however, continue with our initiatives to improve emissions efficiency as the target remains based on intensity level at the end of the 2014 financial year.

Emissions intensity CO2e tons per employee
Divisions 2011   2010
  2009
 
Equipment 6.7   7.5   8.1  
Automotive and Logistics 13.5   14.1   13.9  
Handling 7.5   8.7   8.0  
Corporate 3.8   8.5   9.9  
Barloworld Group 10.1   11.1   11.0  

For our group, emissions per employee do not necessarily indicate efficiency, because we strive to increase activity without a corresponding increase in employee numbers. The data are reported for ease of reference only.

Avis expands its carbon neutral programme with South African project
Avis Rent a Car South Africa renewed its position on carbon neutrality through The CarbonNeutral® Company following three years (to end of the 2011 financial year) of internal energy efficiency, carbon reduction and carbon offsetting to reduce its carbon footprint to net zero.

Avis is the first car rental company in South Africa to achieve CarbonNeutral® certification.

The project is expanded to a CarbonNeutral® Company accreditation for Scopes 1, 2 & 3 for the next two years (2012 financial year and 2013 financial year), over which period Avis will offset approximately 12 500 tons of CO2 per annum.

Scopes 1, 2 & 3 GHG emissions consist of all emissions relating to the company including energy consumption, fuel usage, waste and business travel.

The two projects Avis selected for its new two-year portfolio are the Tieling Coal Mine Methane Capture project in China and the highly awaited Basa Magogo “Light it up” Improved Cooking Technique in South Africa.

The South African Basa Magogo project is the first Gold Standard project of its kind in the world. Support from Avis enables the teaching of local communities in South Africa to burn coal differently in order to be more fuel efficient, thereby saving money and reducing carbon emissions.

Recognising our broader activities and the nature of our products and solutions, we report certain scope 3 emissions. This covers emissions due to business air travel and emissions from our South African car rental operations. The annual increase in scope 3 emissions from air travel to 4 767 tons indicates improved reporting rather than increased travel, as data for 2010 (3 120 tons) were incomplete. We are continuing to refine this aspect of our reporting.

Emissions from our car rental activities are inherent in our customer offering. We strive to reduce these by providing fuel-efficient fleets and having low-emission and hybrid vehicles available for rent. Car rental operations in South Africa produce some 86 661 tons (2010: 94 453 tons) of scope 3 CO2, a decrease of 8.2%. This represents an 11.3% improvement in emissions intensities per rental day, in turn reflecting changes that include the efficiency of new technology and profile of the rental fleet. Avis Rent a Car South Africa provides invoices that indicate emissions for each rental and, in time, will provide offset facilities. Avis Fleet Services also reports relevant emissions to customers, and it is anticipated that this information would be applicable to other Barloworld rental fleets in future.

Water

> Scarcity of the resource understood and policy set accordingly
> Measurement, reporting and management in place
> Conservation initiatives
> Environmental and commercial perspective
> Reporting and assurance on billed extraction from municipal and local government sources

Although a limited consumer of water, Barloworld recognises the scarcity of the resource and strives to use water more efficiently. The group also increasingly recycles water and harvests rain water where possible.

To better understand our water use and contribute to knowledge and data on water use, we participated in the 2011 Water CDP.

Most water is sourced from local municipal and government supply systems, and used to wash plant, equipment and vehicles. The increase in the automotive division principally reflects a larger car rental fleet and greater commercial activity.

Water consumption by division (ML) 2011   2010
  2009
 
Equipment 250   256   271  
Automotive and Logistics 470   430   505  
Handling 45   43   46  
Corporate 2   2   21  
Barloworld Group 767   731   843  

Overall, some 10.6% of water was recycled in the group, with our automotive division recycling 16.9% and equipment operations in Iberia recycling 15.6%.

We acknowledge the detrimental effect of polluting water or removing water from natural systems, particularly in water-stressed regions. We are committed to being a responsible custodian by measuring, monitoring, managing and reporting water use as part of standard business practice.

Due to our diverse operating regions, we are implementing appropriate decentralised initiatives to conserve water or mitigate the effects of using it in our business. Through these initiatives, we strive to minimise the risk of future water constraints and realise the commercial benefits of effective and efficient water use.

No protected areas were affected by water discharges from the group nor were any water sources significantly affected by our withdrawal of water in the past year.

The washing of plant, equipment and vehicles constitutes the major portion of water use in the group. After passing through filtration and separation processes, effectively all water used is legally discharged back into municipal and local government systems. Consistent with identifying water consumption as a material aspect of our environmental stewardship approach, we obtain third-party assurance for billed water provided by municipal or local government sources.

Group saves water
Saving water

Equipment southern African has installed appropriate technology in a number of operations to reach its target of a 30% improvement in water use efficiency by 2014 (2009 baseline).The division also fitted a water recycling plant at its new site in Maputo, Mozambique
Equipment in Spain has recycling facilities at seven operations, with another two under construction
In Automotive, Avis Rent a Car recycles up to 88% of water used, which is cleaned to 90% clarity and has significantly reduced the need for municipal water from over 220 litres to around 20 litres per car washed. The Avis water management process now saves some 75 million litres of water per annum
Automotive’s three new dealerships all have water recycling and rainwater harvesting plants and three other dealerships have permanent waterless car-wash facilities, saving around 130 litres (86%) of water per car wash

Materials

> Focus on managing and reporting material aspects
> Distinction between direct and indirect material usage
> Limited opportunity to consume recycled materials

Materials are sourced from OEMs and other suppliers and used to support the retail and service nature of our operations. Those with a high impact on the environment are monitored.

Materials used 2011   2010
  2009
 
Paper (kg) 954 270   906 039   1 075 867  
Solvent (ℓ) 277 268   266 372   215 552  
Lubricants (grease and oil) (ℓ) 8 981 255   9 146 730   7 556 528  
Tyres (kg) 2 009 720   1 329 242   1 500 089  
Batteries (kg) 1 411 086   859 831   977 916  

From 2011, divisions report materials used by mass or volume to ensure comparability of reported data. For some materials, particularly tyres and batteries, this contributes to the increased consumption reported in kilograms as, in the previous period, 2 757 and 3 537 units, respectively, were reported in addition to the mass for these categories.

While we report overall consumption, internal measures distinguish between direct (own) and indirect (customer) consumption. This is being refined and provides important indicative patterns of consumption, depending on the material.

Given the service orientation of our equipment, automotive and handling divisions, customer consumption accounts for most of the lubricants used (some 83%).

Apart from our remanufacture and rebuild activities, opportunities for using recycled materials are limited as Barloworld predominantly represents OEMs and principals. The percentage of recycled paper used is negligible (the significant drop is due to clarifying the definition of waste paper, with prior years including paper sent by the group for recycling). For tyres, the recycled component is 5.6% of those reported by mass.

Recycled input materials used 2011   2010
  2009
 
Paper (kg) 587   1 901   10 922  
Tyres (kg) 112 526   124 030   44 762  

Waste

> No significant waste generation
> Focus on managing and reporting material aspects
> Distinction between hazardous and non-hazardous waste
> Certified waste disposal in place
> 100% waste oil recycled

The group does not generate significant volumes of waste. Both hazardous and non-hazardous waste streams are monitored by type, volume, disposal method and destination. All used oil and other hazardous waste is disposed of through certified contractors.

Waste 2011   2010
  2009
 
Non-hazardous            
Paper (kg) 558 919   457 609   511 951  
Tyres (kg) 860 954   768 490   615 420  
Hazardous            
Solvents (ℓ) 139 156   97 433   77 131  
Lubricants (ℓ) 3 026 925   2 698 685   3 230 623  
Oil filters ((kg) 241 507   114 492   71 380  
Batteries (kg) 217 446   119 610   152 791  
Computers (kg) 6 659   4 726   810  

The shift to reporting only by mass has contributed to the increase in the mass of tyres. In the previous period, 2 117 tyres were reported in units in addition to those reported by mass. This change was anticipated in the prior report and implemented to ensure consistency and clarity in the data.

Equipment southern Africa transported, without incident, 1 001 tons of hazardous waste consisting of its waste oil and water, hydrocarbons, water mixtures and emulsions. Logistics transported 9 324 tons of used pot linings without incident. Waste batteries, hazardous because of their lead content, were transported by certified waste disposal contractors to recycling facilities. Smaller quantities of hazardous waste disposed of through contractors included used fluorescent lighting tubes.

Biodiversity

Most group operations are in established urban areas and have limited impact on biodiversity. The group does have four vehicle maintenance and repair facilities operating in the Kruger National Park in South Africa and a handling branch in Little Rock, Arkansas, USA, adjacent to a protected wetland.

No waste was shipped internationally nor were there any significant spills during the year.

A critical aspect of our waste management and product lifecycle stewardship is extending product use. This includes ensuring products have a number of useful lives, partly through remanufacture and rebuild programmes.

Notices and non-compliance

There were no significant fines or non-monetary sanctions for non-compliance with environmental laws and regulations during the year.

Barloworld Equipment’s component repair and remanufacturing facilities in southern Africa and Russia
At R240 million, the new Barloworld Reman Centre (BRC) in Boksburg, Gauteng, is Barloworld Equipment’s biggest investment ever in a single project.

This 30 000m² facility will more than double Barloworld Equipment southern Africa’s component repair and remanufacturing throughput for engines and drive-trains. State of the art tooling and testing equipment will make it possible to repair components for Caterpillar’s giant 797 trucks as well as the new Cat electric drive trucks, top of the range 2-4MW Cat C175 generator sets, as well as growing industrial, marine and electric power opportunities.

Our component repair and remanufacturing capability is a critical part of our after sales support for customers, a key element of our integrated solutions offering, and will play a major role in achieving our 2015 vision. The BRC will open in mid-2012.

Thursday 14 July 2011 marked the official opening of Barloworld Equipment Russia’s first component rebuild centre (CRC) in Novisibirsk at a cost of US$11 million.

This is the largest and most complex project ever undertaken by a Russian Cat dealer and is unique in terms of capability. The CRC will employ 38 mechanics and 14 support staff and incorporates its own training facility to ensure sustainability of skills such as artisans and operators.

It has been designed to serve the needs of some 430 mining and construction customers with a total fleet of 1 150 Cat machines, engines and gensets. Machines as big as D9 dozers and 773 trucks can be completely rebuilt here and components for all Cat machines, including the largest existing and planned mining machines, can be repaired.