Environmental performance of plants and non-manufacturing processes

The Group sees its commitment to the environment and conservation of natural resources as essential to the process of sustainable development. That commitment includes research dedicated to ecological mobility and initiatives to minimize the environmental impact of manufacturing processes. Measurement of the Group’s environmental footprint and continuous improvement in environmental performance are an integral part of its overall industrial strategy.

Environmental Management System and World Class Manufacturing

Fiat Group’s Environmental Management System (EMS) formalizes its commitment to responsible management of the environment. Applied at all plants worldwide, the EMS consists of a system of methodologies and processes designed to prevent or reduce the environmental impact of the Group’s manufacturing activities through, for example, reduced emissions of greenhouse gases, conservation of energy and raw materials, and reduced water consumption and waste generation.

The Environmental Guidelines set out the correct approach to environmental management and provide clear instructions on setting environmental targets, developing new products, and conducting normal operating activities. During 2012, the Guidelines were expanded to integrate Chrysler Group’s Environmental Policies and to emphasize the importance of water management in conserving this increasingly scarce and precious resource.

The Group’s focus on environmental and sustainability issues is also reflected through the World Class Manufacturing (WCM) program, a structured, integrated and rigorous manufacturing methodology that involves the entire organization in areas ranging from safety to the environment, maintenance, logistics and quality. Through the Environmental Pillar, in particular, WCM requires development of tools and methodologies to reduce waste and optimize the use of natural resources.
During 2012, more than 1,950 projects were implemented under WCM targeted at reducing the environmental impact of manufacturing processes. Those initiatives yielded a significant reduction in energy consumption, which generated cost savings of €51 million and avoided 420,000 tons of CO2 emissions.

Energy Consumption and Emissions

Fiat Group worldwide (TeraJoule) 2012 2011(9) 2010(10)
Total energy consumption (*) 45,692 48,875 49,722
(*) Data for 2011 and 2010 has been recalculated based on the scope of reporting applied for 2012. (9) Includes Chrysler Group for the full year. (10) Restated to include Chrysler Group and exclude companies transferred to Fiat Industrial S.p.A. on 1 January 2011.

The Group is continually looking for new solutions to reduce the use of fossil fuels and emission of greenhouse gases in response to increasingly stringent regulations, while at the same time yielding energy-related cost savings.
As a result of the numerous energy efficiency initiatives in place, in 2012 the Group achieved a 6.5% reduction in total energy consumption over the prior year. In addition, utilization of renewable energy at plants increased to 20.5% of total energy consumed11.

11 Includes all plants of Fiat Group Automobiles, FGA Engines and Transmissions, Ferrari, Maserati, Comau, Magneti Marelli and Teksid.

In 2012, the Group also cut CO2 emissions by 5.5% over the prior year through reductions in energy consumption and use of cleaner sources of energy.

Total CO2 emissions
Fiat Group worldwide (thousands of tons of CO2)
2012 2011(9) 2010(10)
Total CO2 emissions (*) 3,965 4,196 4,383
(*) I dati 2010 e 2011 sono stati ricalcolati sulla base del perimetro di rendicontazione relativo al 2012.
Direct emissions of NOx, SOx and Dust
Fiat Group worldwide (tons)
2012 2011(9) 2010(10)
NOx(*) 1,235 1,335 1,349
SOx(*) 189 249 200
Dust (*) 70 77 72
(*) Data for 2011 and 2010 has been recalculated based on the scope of reporting applied for 2012.

In addition, the Group achieved a reduction in total NOX, SOX and dust emissions produced by plants with on-site energy generation facilities.

Emissions of Volatile Organic Compounds (COV)
Fiat Group worldwide (g/m2) 2012 2011(9) 2010(10)
Average emissions of COV 27.5 30.1 32.4

Other measures implemented by the Group to address climate change related to Volatile Organic Compounds (VOC), chemical compounds emitted into the atmosphere by paint shops that can indirectly contribute to the greenhouse effect. Through the implementation of technical and operational measures, the Group achieved an 8.6% decrease in VOC emissions over 2011 levels and 57% over 200712. Measures implemented at Group plants included introduction of advanced technologies and migration to paints with lower solvent levels.

12 Excludes Chrysler Group, which was not part of Fiat Group in 2007.

Water Management

Water conservation has become an issue of critical importance. As a result of population growth, water is becoming an increasingly scarce and precious resource. Fiat Group is aware that, to effectively address this issue, action needs to be taken to reduce total water consumption and ensure the highest quality of discharged water.

During 2012, the Group’s Water Management Guidelines were extended to Chrysler Group. The guidelines establish methodologies and procedures oriented toward maximizing water recycling and reuse.

For 2012, Group plants worldwide achieved 98.8% reuse of water utilized in the manufacturing cycle, resulting in total water savings in excess of 2 billion m3.

Water withdrawal and discharge
Fiat Group worldwide (thousands of m3)
2012 2011(9) 2010(10)
Total water withdrawal
25,874 29,862 34,198
Total water discharge
17,321 18,839 22,365

The Group reduced water withdrawal by 13.4% over 2011 and discharge by 8.1%, continuing the trend of reductions in both areas.

Measures implemented at the Cassino plant in Italy, for example, led to an increase in the recycling index with water consumption being reduced by 62.5% over two years. In addition, at the assembly plant in Kragujevac (Serbia), a treatment plant for discharged water was installed, making water recycling and reuse simpler and more economical and, thereby, reducing the quantity of water withdrawn.

Waste Management

One of the Group’s priorities is to prevent the level of waste generated in order to minimize consumption of raw materials. Efficient waste management practices, formalized in the Group’s Waste Management Guidelines, are oriented toward maximizing reuse and recovery for the production of new base materials. Where neither reuse nor recovery is possible, materials are disposed of using the method having the least environmental impact (waste-to-energy conversion or treatment) with landfills only being used as a last resort.

Waste
Fiat Group worldwide (tons) 2012 2011(9) 2010(10)
Total waste generated
1,760,737 1,855,312 1,712,011
of which hazardous 40,327 50,614 61,754
Total waste disposed
489,514 607,881 580,979
Total waste recovered
1,271,223 1,247,431 1,131,032

In 2012, rigorous waste management led to a 5.1% reduction in waste generated compared with the prior year. Due to the continuous improvement that has been achieved in this area, the percentage of total waste recovered has increased to 72.2% and waste sent to landfills reduced to 24.9%.

The Group seeks to reduce the quantities of hazardous waste generated. In 2012, the Group successfully reduced hazardous waste by 20.3% over 2011 and 34.7% over 2010. Those results were attributable to a number of initiatives implemented during the year, in particular at the Teksid foundry at Ingrandes-sur-Vienne (France), where an advanced sand regeneration plant was installed.

Logistics

Efficient and environmentally sustainable logistics processes are key factors in value creation.

In addition to minimizing cost and optimizing transport flows, the Group has also been working to reduce logistics-related emissions throughout the supply chain and minimize the use of non-reusable packaging. In 2010, the Group published the Green Logistics Principles as part of a process to coordinate the approach and methods of interaction with logistics partners. The Principles provide guidelines on reducing environmental impacts with a focus on four main areas: low-emissions transport, intermodal transport solutions, reduced use of packaging and protective materials, and optimized use of available transport capacity.

Specific measures taken by the Group to contribute to reducing CO2 emissions include: promoting the use of low-emission road vehicle; use of alternative modes of transport such as rail and sea; increased use of reusable containers; and optimizing utilization of available transport capacity, which increases efficiency and also lowers shipping costs.

Through the Streamlined Delivery Project, inbound transport flows have been contracted to a pool of logistics providers who coordinate material pickups from a number of suppliers. This project now covers around 71% of total inbound volumes shipped in Europe and, in 2012 for FGA, it resulted in a significant reduction in CO2 emissions (-7,135 tons), kilometers traveled (-7,180,000 km) and operating costs (-€8.7 million).

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