Living Our Values: Sustainability as a Part of Everyday Business Jerome D. Okarma Vice President, Assistant Secretary and Deputy General Counsel Johnson Controls, Inc.
Jan 22, 2016
Living Our Values:
Sustainability as a Partof Everyday Business
Jerome D. OkarmaVice President, Assistant Secretary and Deputy General Counsel
Johnson Controls, Inc.
Sustainability
Our Definition:An Integrated, balanced strategic approach
Johnson Controls• Sales: $22.6 billion
– 118,000 employees worldwide
• 57 consecutive years of sales increases
• 13 consecutive years of earnings increases
• 28 consecutive years of dividend increases– dividends paid since 1887
Automotive76%
Controls24%
Sales: $22.6 billion
Interiors
89%
Battery 11%
World’s largest supplier of seating,overhead, door and cockpit
systems, integrated electronicsand automotive batteries. Sales
of $17.1 billion
Sales
Automotive Group
• Quality interior systemsthat add value and createcompetitive advantage for our customers
• Batteries that lead the industryin quality, cost, life and dependability
Controls Group$5.6 billion global supplier of
integrated building control systems and services, including
facilities management, for non-residential buildings
Customers include hospitals, schools, airports, office buildings, data centers, government facilities, high-tech manufacturing sites, pharmaceutical laboratories
Improving the comfort and safety of buildings while increasing energy efficiency and reducing costs
Johnson Controls VisionMission• To continually exceed our customers’ increasing
expectations
Values• Integrity• Customer satisfaction• Our employees• Improvement and
innovation• Safety and the
environment
Objectives• Customer satisfaction• Technology• Growth• Market leadership• Shareholder value
A Culture of Sustainability
• Helping the environment—that’s our business– Etched into the company's fabric
• Impact was there from the start– 1885, Prof. Warren S. Johnson,
inventor, electric thermostat– Launched the temperature controls
industry
January 1925
A Culture of Sustainability
“Install the Johnson System in your building and save the great difference of 15 to 35 percent in annual fuel cost.”
“The Johnson PneumaticSystem of Temperatureand Humidity Control”
Spring 1917
A Culture of Sustainability
“Saves Fuel.........
And saves the health of pupils”
“Controlling the Temperatureof School Rooms”
April 1895!
A Culture of Sustainability
“Economy is Wealth”
“Innumerable examples show that The Johnson System of Heat Regulation saves from 1/4 to 1/2 of the fuel. What is better still, however, it preserves the health and produces comfort. It saves annoyance and worry.”
A Culture of SustainabilityIt's good business, not just a good thing to do!
– Essential to our long-term ability to grow• Provides us with new opportunities to support and serve customers• Treating people well increases morale, increases productivity, reduces turnover• Part of continuous improvement: waste and inefficiency costs money! • All employees play a role
– Customers expectations• Flawless environmental performance• Help with their own sustainability needs• Improved environmental performance gives us additional ways to reduce costs
– Investor and community expectations• Profits and high quality jobs• High standards of environmental and social responsibility.
Commitment: we approach sustainability like other core business issues
• Six Sigma• Lean manufacturing
A Culture of Sustainability
•Efficient•Measured•Organized
•Efficient•Measured•Organized
Practicing What We Preach– Just-in-Time production methods result in less scrap and
waste• Packaging reduction
– Six Sigma projects reduce scrap and increase production efficiency
– New battery grid making process—reduces variability• One Powerframe stamper
replaces multiple grid casters• 30% emission source reduction
Efficient
Continuous improvement– Energy efficiency in our facilities: 33% reduction in
energy consumption vs. 1997• Applying our controls expertise internally• Equal to 20 million pounds of greenhouse gasses
Practicing What We PreachEfficient
Johnson Controls Metasys system
Waste and recycling– Waste management programs
• Reduce materials sent to landfills, increase recycling• Goal of zero waste to landfill• Lamps/ballasts: PCBs, mercury
– Pervasive recycling • Scrap vinyl to garden hose• Scrap foam to carpet pad• Urethane adhesive to carpet
padding• Lead, plastic and acid
in auto batteries
Practicing What We PreachEfficient
• Corporate Health, Environment and Safety System (CHESS)– Internally developed, Web-based tool– Tracks consistent metrics globally– Regulatory compliance, waste disposal, energy consumption, work-related
injuries, greenhouse gasses– Enables monitoring of company-wide performance and intra-company
comparisons– Creates competition that encourages continuous improvement
• Environmental Management Systems– Every facility and operating unit globally– Consistent with ISO 14001 and OHSAS 18001– Outlines roles, responsibilities, objectives,targets/goals– Risk assessment and risk reduction plans
• Includes suppliers and customers, where appropriate
Practicing What We PreachMeasured
• Compliance X-Sight system– Collect and analyze data from suppliers covering thousands
of parts
– Helping to ensure that we comply with customer specifications and with End-of-Life Vehicle Directive in Europe
• ISO 14001– Most locations already certified
– 100 percent goal
• Ethics program– Annual recertification
– On-line system in seven languages; modules and tests tailored to an individual’s specific job responsibilities
Practicing What We PreachMeasured
• Sustainability report– Issued first report in Jan 2004 after two annual
environmental reports– Gathering information and metrics helped create
new linkages and processes– Selected GRI
• Provided a consistent framework• Helped identify areas of weakness or lack of data• Enabled easier benchmarking with other companies
• Supplier diversity– $1 billion in annual purchases
• One of only 12 U.S. companies to achieve milestone
– DivTrack system
Practicing What We PreachMeasured
2004 Sustainability Report
• Global teams: Environmental Roundtable, Safety Summit– Launched early 1990s– All businesses, all parts of the world– Environmental, safety, legal, IT, communication professionals– Share best practices, increase expertise, strategic planning
• Environmental training of all plant managers– Senior mgrs: general environmental requirements and regulatory matters
– Engineers: environmental management
– Line worker: specific environmental concerns under their control
Practicing What We PreachOrganized
• Formal awards programs by location and business unit– Best environmental performance
– Best safety performance
• Vision Week 2004: environment– Worldwide employee education and involvement
– Launch of a new global corporate program focusing on the environment and our people
Practicing What We PreachOrganized
Blue Sky Leaders
Helping employees around the world to grow and improve as leaders through support of programs inside the workplace and within the communities in which we live and work.
Blue Sky Environment
Reducing air pollution, water pollutionand waste by focusing on: · Making buildings ‘greener’ and more efficient · Making cars more fuel efficient and environmentally friendly · Recycling batteries and developing new vehicle power sources · Applying world-class environmental standards and practices globally
• Affiliations– Global Environmental Management Initiative (GEMI)– United Nations Global Compact– Business Roundtable/Climate Resolve
• Global warming issues– Suppliers Partnership For the Environment
• Founding member; automotive OEs and suppliers working on improving overall environmental performance of auto industry
– Interfaith Center for Corporate Responsibility
• Recognition– WEC Gold Medal for International Sustainable Development (2004)– NMSDC Corporation of the Year (2003)– EnergyStar awards (2001, 2003)– Ford World Excellence Award (2003)– Honda Green Partner Award (2004)
Can’t Do It AloneSustainability
Continued Commitment
• Sustainability is just a part of broader recognition and overall company image
• Customers, employeesexpect that we that we dobusiness the right way and we will not compromiseour values
• Customers are not just buying product; they’re buying Johnson Controls and all the things we represent
• Confident that we will continue to improve in every business and in every part of the world