Note 4: Resource productivity

We launched our resource productivity program three years ago as a key accelerator to deliver on our sustainability objectives and contribute to the company’s Winning together: 15 by 20 ambition.

The program aims to maximize raw material and process efficiency, eliminate waste and drive reduced energy, carbon footprint and VOCs (volatile organic compounds) across the whole integrated supply chain (ISC).

We use our company-wide continuous improvement program ALPS (AkzoNobel Leading Performance System) to drive the resource productivity agenda. We continuously measure and report our performance on a range of environmental and financial indicators. The four key indicators are: waste, energy use, water use and VOC emissions, for which clear targets are set. Over the last few years, we’ve delivered on our targets thanks to a wide range of improvement projects introduced as part of the resource productivity program. These projects (currently more than 500), at global, regional and site levels, are monitored monthly to assess progress with regard to environmental impact and financial benefits. The savings from projects directly related to waste and energy reduction alone totaled more than €9 million in 2019.

As well as reducing the environmental footprint of our activities, resource productivity contributes to business performance by driving continuous improvement and reducing operating costs.

We’ve increased our focus on material efficiency and are maximizing the conversion of raw materials into final product by optimizing raw material use and solving the root cause of material losses. This helps to cut down the amount of waste and waste water generated, as well as reducing the carbon footprint. It also contributes to lower manufacturing costs.

Reducing waste

Waste reduction has been a focus area since 2010 and many improvements have been made at our sites which have led to significant achievements. Since 2011, we have successfully reduced our waste per ton of product by nearly 40%.

Waste reduction is one of our main environmental indicators, with zero waste to landfill being one of our key ambitions for 2020. In 2019, total waste volume and waste per ton of production generated were down by 0.9% and up by 0.1% respectively. Recent acquisitions had a detrimental effect of 1%.

Our objective is to have zero hazardous waste to landfill at our locations in 2020.

Hazardous waste per ton of production decreased by 0.7% in 2019. The majority of our locations worldwide contributed to the reduction in waste generation. Examples of waste reduction projects include solvent recovery, reducing packaging waste by moving from smaller paper bags or metal drums to bulk deliveries of raw materials, and reworking obsolete finished goods. To increase our contribution to the circular economy, new outlets were identified for materials which otherwise would have been disposed of, resulting in over 6 ktons less waste. In total, 34 ktons of our waste in 2019 was reusable, making our contribution to the circular economy 40 ktons.

Raw material flow

in kilotons

Total waste

in kilotons

Hazardous waste

in kilotons

Reducing energy and greenhouse gas emissions

Energy use is another key environmental indicator included in our Resource Productivity program.

In 2019, our energy consumption per ton of production, as well as absolute energy consumption, were down 3% (absolute) and 2% (relative) compared with 2018. The improvement was negatively impacted by product mix and our value over volume strategy. Our total share of renewable energy use is 31%, with 33 of our locations now using 100% renewable electricity.

Since 2017, we have increased the number of locations with solar panels. By the end of 2019, 14 sites had solar panels as their own renewable energy source. We have a global program in place to install solar panels at more sites, which will significantly increase this number in the near future.

Energy use

in 1000 TJ

Greenhouse gas (GHG) emissions from our facilities are primarily related to electricity consumption and fuel used for heating. Total GHG emissions per ton of product and absolute GHG emissions both decreased by 16%.

Greenhouse gas emissions

in million tons

Decreasing volatile organic compounds (VOC)

Air emissions generated from our operations are primarily volatile organic compounds (VOC). In 2019, we exceeded our target by decreasing both our total VOC emissions, and our VOC emissions per ton of product, by 24% (target: 10%). This reduction was delivered via product design, improved VOC modelling, driven by research and development (see Note 1), good management practices and environmental controls at our manufacturing sites. In China, significant investments were made on new VOC abatement systems at two sites, resulting in a reduction of more than 100 tons of VOC emissions in 2019.

Volatile organic compounds

in kilotons

Water and waste water management

Sustainable water supply is essential to life and our business. We rely on water for, among others, raw material production, product formulation and manufacturing, cooling, cleaning and transportation. Currently, 63% of our fresh water intake is from surface water, from which 74% is used for cooling purposes.

Our water use, excluding cooling water, decreased by 16% in 2019. We introduced recycling of wash water at 11 sites to reduce waste water and recover the paint included. Meanwhile, a significant improvement in cooling water use was achieved at our Kristinehamn site in Sweden.

Our locations process their waste water using an on-site waste water treatment plant, or via third party waste water treatment.

Water flow

in million m³

Fresh water use

in million m³

Soil and groundwater remediation

Mandatory annual environmental liability reviews are conducted to evaluate risks associated with historical soil and groundwater contamination. We monitor progress in resolving liabilities and assess changes in company exposure. A group of legal and environmental experts assess, manage and resolve environmental liabilities. In line with IFRS accounting rules, we make provisions for environmental remediation costs when it’s probable that a liability will materialize and the cost can be reasonably estimated. We have set aside €75 million, which we believe is sufficient for the sites where we have ownership or responsibility (see Note 19 of the Consolidated financial statements).