Johnson & Johnson

Sector: Corporate

Employees:

> 121,000 people

Carbon Footprint:

> 810,248 metric tonnes CO₂e (2006)

TARGETS

> 7% absolute reduction in greenhouse gas emissions by 2010 on 1990 baseline (achieved).
> Increasing production and purchase of renewable energy (either directly or through credits).
> Developing off-site mitigation projects in partnership with other companies.

Achievements

> Company CO₂ emissions reduced by 16.8% from 1990 to 2006 while sales increased by 372%.
> 39% of worldwide electricity from renewables.
> The second largest user of solar PV for a non-utility in the United States.
> In 2006, Johnson & Johnson companies completed 20 capital projects through the greenhouse gas-reducing capital funding process. After a full year of operation, these projects will save an estimated 34,500 metric tonnes of CO₂.
> Named the Green Power Partner of the Year by the U.S. Environmental Protection Agency and Department of Energy.

Benefits

> US$30 million saved annually through energy efficiency measures over the last 10 years.
> Greenhouse gas reduction projects are achieving an average 16% internal rate of return.
> Strengthened internal and external public relations.

Low Carbon Solutions

Background

Founded in 1886, Johnson & Johnson, through its operating companies, is the world’s most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical and medical devices and diagnostics markets. The company has more than 250 operating companies in 57 countries around the world employing approximately 121,000 people and sells products throughout the world. Johnson & Johnson understands that climate change could negatively affect human health. Through efforts to improve energy efficiency within its operations, the company is saving an average of US$30 million each year. It has also significantly de-coupled its greenhouse gas emissions from production, making investments in renewable power generation and the purchase of clean energy.

Johnson & Johnson has found that energy efficiency projects are at the core of reducing emissions and obtaining a low-risk return on investment. Johnson & Johnson is saving approximately US$30 million annually through its energy efficiency projects.
One of Johnson & Johnson’s facilities, Janssen Pharmaceutica NV, in Geel, Belgium, achieved a significant energy reduction by upgrading old equipment. Standard refrigerant chillers in use at the facility consumed about 52% of the plant’s total electrical energy. By replacing three of these with two ammonia-operated chillers, as well as automating all plant utility systems, the plant expects to save US$374,000 in energy costs and avoid 1,061 metric tonnes of CO₂ emissions annually. Other benefits to the plant are significant noise reductions, a US$43,000 decrease in annual maintenance costs and the avoidance of future carbon taxes.

In 2003 Johnson & Johnson decided to set individual company and business unit CO₂ targets, and introduced a Climate Friendly Energy Policy signed by the Chief Financial Officer and the Vice Chairman of the Board of Directors. Under this policy, individual companies are encouraged to take on projects in five areas: energy efficiency, cogeneration, on-site renewable technologies, green electricity purchasing, and carbon trading and sequestration.

In addition to the policy, specific measures have been put in place to expand the number of projects undertaken by the individual companies of Johnson & Johnson. These include the provision of historical emissions data, assistance with launching projects and initiatives, the development of custom finance models, and the linking of individual performance to environmental and social criteria. It is hoped that these measures will motivate individual companies to reduce their emissions on absolute terms while allowing them to continue to grow their business worldwide.

The Johnson & Johnson strategy calls for its companies to begin by addressing energy efficiency and then move towards co-generation, renewable energy and carbon trading. The primary reason: projects tend to be most cost effective in that order.

Johnson & Johnson support the Carbon Disclosure Project and have made annual reports since 2004.

Though Johnson & Johnson is not an energy intensive organisation, the company has had a corporate energy programme in place since 1973. This programme was initially established to ensure reliable energy supply and cost for Johnson & Johnson companies in response to rising oil prices. Energy efficiency became a renewed priority for the company in the 1990s, due to increased concern over environmental issues and climate change. During this time the company engaged in a series of major partnerships including the US Environmental Protection Agency’s Green Lights and Energy Star programmes and the World Wildlife Fund’s Climate Savers Programme.

Johnson & Johnson was a charter member of both The Climate Group and the World Resources Institute (WRI) Green Power Market Development Group.

Johnson & Johnson has taken advantage of the progressive policies established in US states such as California and New Jersey, where the company currently uses solar and fuel cells. For its Neutrogena facility in California, the company received partial funding from the Los Angeles Department of Water and Power to help install a US$1.4 million, 200KW solar photovoltaic (PV) system. In addition to reducing operating expenses, increasing reliability and preventing CO₂ emissions, the project also generated a tremendous amount of publicity and the value of this unexpected benefit actually exceeded the capital expense necessary to install the solar PV system.
In 2006, Johnson & Johnson neared completion of a 260KW rooftop system for a research and development facility in La Jolla, California, U.S., and began design of a 1.1MW ground-mounted solar tracking system in Vacaville, California, U.S. The Vacaville solar field will be the largest privately owned system in California and will provide 50% of the electric load during peak hours to its pharmaceutical manufacturing facility. With the anticipated completion of that project in the summer of 2007, Johnson & Johnson operating companies will have 3.5MW of solar photovoltaic panels installed in the United States. According to the World Resources Institute, Johnson & Johnson is now the second largest user of solar PV for a non-utility in the United States.

Johnson & Johnson has strategies for sourcing 100% renewable energy. To achieve this, in addition to producing renewable energy on-site, Johnson & Johnson is also purchasing green electricity from utilities on both sides of the Atlantic.

Through WWF’s Climate Savers Programme, Johnson & Johnson set a corporate goal for greenhouse gas emissions, pledging a 7% absolute reduction by 2010 on a 1990 baseline, a goal that the company has already achieved.
Initially the company set out a ten stage framework of 245 practices. It was thought that if all of these practices were implemented by the individual companies, Johnson & Johnson would be able to reach its corporate wide goal. However, in 2002 Johnson & Johnson realised that given the growth of the company, these efforts would not be sufficient. Between 1990 and 2003 the company’s revenues had increased 274%, and in turn its global greenhouse gas emissions had risen by 26%. Individual targets were therefore set for Johnson & Johnson’s 200 operating companies.

Johnson & Johnson has four facilities certified under the Leadership in Energy and Environmental Design (LEED) Green Building Rating System of the U.S. Green Building Council.

News Story: JOHNSON & JOHNSON ONE OF LARGEST RENEWABLE ENERGY PURCHASERS IN US

Corporate Case Study: Johnson & Johnson
Produced by the Green Power Market Development Group - Europe, in collaboration with WRI.

Corporate Case Study: DePuy (Johnson & Johnson)
Produced by the Green Power Market Development Group - Europe, in collaboration with WRI.

Inspection of the cogeneration system at Johnson & Johnson Pharmaceutical Research & Development, La Jolla, California, US.

Fuel cell installation at Johnson & Johnson Headquarters, New Brunswick, New Jersey, US.

Neutrogena’s Solar Photovoltaic System, California, US.