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2011 Corporate Social Responsibility Report

ENERGY USE AND GREENHOUSE GAS EMISSIONS

Lexmark has made a commitment to reduce the consumption of natural resources at all our leased and owned manufacturing facilities, research and development facilities and office spaces worldwide. Lexmark tracks greenhouse gas emissions as well as usage of natural gas, fuel oil, diesel, gasoline and electricity using the Greenhouse Gas Protocol methodology. Lexmark has established the following corporate goals to guide our energy-conservation efforts.

Lexmark's Goals

Lexmark established three long-term, waste-management goals for the corporation.

  • Reduce greenhouse gas emissions by 20 percent (2005-2017)
  • Achieve a 20-percent reduction in electricity consumption for headquarters, manufacturing and development (2005-2017)

Lexmark's Progress


While there is still much work to do, Lexmark has made significant progress toward achievement of these goals.

  • Reduced total greenhouse gas emissions by 29 percent from 2005 to 2011
  • Reduced total annual energy consumption by 16 percent compared to baseline year 2007
  • Reduced direct energy consumption by eight percent between 2007 and 2011
  • Reduced indirect energy consumption by 20 percent from 2005 to 2011

ENERGY CONSERVATION AT LEXMARK FACILITIES

Emissions Scope Canada, China, France, Hungary, India, US, Mexico, Geneva

Reducing Greenhouse Gas Emissions

Lexmark’s energy reductions have been largely inspired by the company’s desire to reduce greenhouse gas emissions. Cutting energy use is one of the most effective ways to reduce greenhouse gas emissions, a major contributor to climate change.

Lexmark publicly reports greenhouse gas emissions related to the use of direct and indirect energy through the Carbon Disclosure Project. Lexmark calculations of greenhouse gas emissions are based on the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) Greenhouse Gas Protocol (GHG Protocol).

The aforementioned efforts to reduce Lexmark's use of direct and indirect energy and travel translate directly into reductions in greenhouse gas emissions. The greenhouse gas emissions chart shows Lexmark’s Scope 1 (Direct), Scope 2 (Indirect) and Scope 3 (Other) greenhouse gas emissions for the years 2005 through 2011 in metric tons of CO2 equivalents.

Lexmark reduced its total greenhouse gas emissions by 29 percent from 2005 to 2011. This reduction exceeds Lexmark's voluntary goal for reduction of greenhouse gas emissions. While there was an overall decrease in greenhouse gas emissions, there was an increase in Scope 1 emissions due to the use of diesel-fueled emergency generators after a weather related electrical outage at a site in the Philippines.

In the past year, Lexmark has acquired several companies. The acquisition of these companies impacted our total greenhouse gas emissions.

Total Energy Usage

Total Energy Usage

Lexmark headquarters in Lexington, Kentucky has been the subject of multi-year energy conservation projects including Heating, Ventilating and Air Conditioning (HVAC) system upgrades and a facility reduction of 44,026 m2 with additional site size reductions planned for 2012. This site has also been the subject of an extensive employee education campaign that focused on teaching employees about energy wasting habits such as the use of space heaters, personal refrigerators and personal printers. The campaign encouraged employees to use more energy-efficient practices to meet their needs.

Similar energy conservation projects have taken place at Lexmark facilities in the Philippines, including the installation of high-efficiency chillers.

Facilities Energy Management Team – Lexmark International Philippines, Inc. (LIPI) Facilities Department has created an energy management team which will conduct an energy audit to identify energy savings opportunities and waste minimization.

Saturday and Sunday Reduced Production – In an effort to reduce energy consumption, LIPI reduced production volumes on weekends. Clean Dry Air (CDA) and Heating Ventilating and Air Conditioning-related power consumption is reduced 10-15 percent on Sundays and five percent on Saturdays. Water consumption is also reduced on Saturdays and Sundays.

The Total Energy chart shows Lexmark’s total annual energy consumption. By the end of 2011, Lexmark reduced its total annual energy consumption by 16 percent compared to baseline year 2007. A portion of this savings is attributable to Lexmark’s ongoing efforts to improve the efficiency of operations at our facilities worldwide.

Direct Energy

Direct Energy Usage

Lexmark operations make use of several direct energy sources in its operations (the driver of Lexmark's Scope 1 emissions), specifically natural gas, fuel oil and diesel. These non-renewable energy sources are purchased from local vendors then used to generate steam, power backup generators and provide heat at Lexmark facilities. Lexmark does not currently use direct renewable energy sources such as biofuels (i.e. ethanol) or hydrogen. Lexmark does not produce renewable or non-renewable primary energy sources for internal use or for external markets. 

Lexmark’s direct energy consumption decreased by eight percent between 2007 and 2011, as shown in the Direct Energy chart.

No direct energy renewables were used by Lexmark in 2011.

Total direct energy consumption by non-renewable primary sources is shown in the table below.

Total direct energy consumption by non-renewable primary sources
Non-Renewable Fuels MWh Gigajoule
Natural Gas 86153 310150.8
Diesel/Gas Oil 1632 5875.2
Distillate Fuel Oil No. 5 8 28.8
Propane 329 1184.4
Renewable Fuels MWh Gigajoule
Biofuel 0 0
Hydrogen 0 0

Indirect Energy Usage

Indirect Energy

Lexmark operations make use of only one indirect energy source (the driver of Lexmark's Scope 2 emissions): electricity. The electricity used at Lexmark facilities is primarily purchased from local energy providers and pulled from the local grids. The electricity supplied by local power companies is generated using a variety of non-renewable and renewable primary energy sources including coal, nuclear energy, solar power, wind power, geothermal energy and hydro energy. 

The Indirect Energy chart shows Lexmark’s total indirect energy (electricity) consumption for the years 2005 through 2011. Lexmark’s use of indirect energy decreased by 20 percent from 2005 to 2011. This decrease is a result of more energy efficient operations, reductions in facility space and reductions in production.

OTHER ENERGY CONSUMPTION

Travel related energy

Travel Related Energy Consumption

Lexmark’s efforts to reduce energy consumption expand beyond the walls of our facilities. As with most companies, business needs frequently require that some Lexmark employees travel for face-to-face meetings with customers, partners and coworkers, many of whom are separated by significant distances (the driver of Lexmark's Scope 3 emissions).

We always encourage the use of lower-impact, real-time alternatives such as conference calls, Web-based meetings and videoconferencing. Integrating high-tech solutions not only saves energy, but also increases the frequency and quality of our communications.

When air travel is necessary, Lexmark sends only those employees who are absolutely essential to accomplish business objectives. Whenever possible, employees are encouraged to optimize their travel itineraries by combining several business trips and using public transportation such as trains and buses instead of taxis and rental cars.

Lexmark, in collaboration with our vehicle provider, tracks miles traveled using Lexmark owned, leased and rented vehicles in the U.S. and Europe. In collaboration with our travel agency, we track air travel worldwide. Distance traveled has decreased by 20 percent since 2005. The increase against 2009 is due to the addition of Perceptive Software, Cebu and China vehicle travel and improved business conditions. In compliance with the Trade Agreements Act of 1979, Lexmark assembles TAA compliant products at it's configuration and distribution center in Southaven, MS.

While Lexmark does not track distances related to our employees’ daily commutes, we do have work-at-home programs in place that are aimed at reducing the environmental impact of commuting and improving work-life balance for our employees. For example, the Lexmark Competence Center in Budapest, Hungary offers employees options for environmentally preferred commuting.  The facility has bike racks and showers for employees who pedal to work and offers those who prefer public transportation, discounted monthly or yearly fares. Lexmark employees who work at the company's Lexington facility have a new opportunity to help reduce pollution due to a public transit bus stop being added in the parking lot.

PRODUCT TRANSPORTATION

Transporting our products is part of our business. We rely on transportation every day to deliver our products to customers around the world. While there is no avoiding the necessity to transport goods, we have measures in place to decrease the adverse environmental impacts associated with these activities. Lexmark works with environmentally progressive partners who apply innovative ideas and best practices to their transportation processes such as the use of diesel hybrid trucks or the use of rapidly renewable biofuels.

In September 2008, Lexmark joined the U.S. EPA SmartWay Transport Partnership and exceeded the program’s requirement for the amount of allowable freight to be shipped using SmartWay carriers. SmartWay is a collaborative program between the U.S. EPA and the freight industry designed to increase the use of energy efficient vehicles and includes impressive goals to reduce greenhouse gas emissions and lower air pollution emissions. In an effort to help curb climate change, Lexmark pledged to continuously minimize the environmental impact of its product shipments throughout the U.S. It is with great pride that we continue our efforts to shrink our carbon footprint by reducing the energy consumption and emissions associated with transportation.

Other measures we take to promote more efficient transportation include the following:

  • Cube Utilization – Maximizing the use and capacity of containers for the transport of our products is an effective practice we have adopted to handle more cubic feet of freight per container shipment.
  • Direct Ship Model – In the direct ship model, our goal is to reduce the total mileage our products travel by utilizing direct ship and direct import models. Delivery service providers move freight directly from the port to the customer’s destination, which ultimately eliminates warehousing en route. Similarly, in the direct import model, ocean carriers pick up customer-directed products at key supplier points and transport the goods directly to the ultimate consignee, eliminating inland cargo moves that increase energy usage and air emissions.
  • Intermodal Freight Transportation – Lexmark is expanding the use of intermodal freight transportation, an approach that optimizes the transportation of freight per vehicle by using multiple modes of transportation, such as ocean, rail, air, inland water and road. Also referred to as multimodal, this approach reduces the miles a container travels as well as the number of times a product is handled during shipment, which saves time, money and fuel.

Supplier Locations

In the interest of efficiency, cost effectiveness and environmental benefits, Lexmark engineers are encouraged to select suppliers that are close to the location where their products will be shipped (such as to a manufacturing location) when possible. The use of locally* based suppliers is both environmentally and financially preferable, resulting in reductions in transportation impact and cost.

2011 Air Emissions Unit: Tons per year
  Lexington Boulder Cebu Juárez
Methane 0.16 0 NR
Volatile Organic Compounds (non methane) 0.44 6.06 0.001 23.6
SOx 0.12 0 0.03 0.25
NOx 7.75 0 0.14 2.29
CO2 8,342 13,908 127.13 3,087
Particulate Matter(PM10) 0.59 0.07 0.02 0.28
Hazardous Air Pollutant 0.12 0.45 NA NA
Toxic Release Inventory NA 1.9 NA NA

Regulated Air Emissions

Lexmark is committed to the Montreal Protocol, an international treaty aimed at reducing the use of ozone-depleting chemicals. Lexmark prohibits the use of such chemicals in the manufacture and development of its products. The Company does use some ozone-depleting chemicals, specifically refrigerants for HVAC systems that cool our facilities. Lexmark cannot eliminate the use of refrigerants at this time since all HVAC systems require the direct or indirect use of refrigerants. Reported refrigerant emissions in 2011 resulted in an ozone depletion potential of 18 pounds of CFC-11 equivalent and we are taking steps to minimize their usage. Lexmark monitors HVAC systems for leaks using stand-alone system sensors. We also choose to purchase chillers that use environmentally preferable refrigerants. For example, in 2008, Lexmark installed chillers that use refrigerant R-134a, a hydrofluorocarbon (HFC) refrigerant, replacing previous chillers using R-11, a clorofluorocarbon (CFC) refrigerant. (CFC refrigerants have the highest Ozone Depletion Potential [ODP]. The refrigerant used in the new chiller has an ODP of zero.) As an added benefit, these new chillers have variable frequency drives, enabling less electrical demand at part load than previous chillers without frequency drives.

  1. The definition of local varies depending upon the availability of services. In some cases, local is considered 'in country' and in other cases, local is considered 'in geographic' (geographic = Europe, Middle East and Africa; North America; Asia Pacific; Australia, New Zealand; Latin America)
  2. Emissions Scope Canada, China, France, Hungary, India, US, Mexico, Geneva