Fiscal Year 2015
How We View Sustainability
President and CEO
Sustainability is a core value at Schnitzer. Our social, environmental and economic performance is essential to our future growth and success. Awarded "Scrap Company of the Year" in 2011 and 2013 by the American Metal Market (AMM) and named a 2015 and 2016 World's Most Ethical Company by the Ethisphere Institute, our commitment to reclaim, recycle and remanufacture scrap metal, safely and sustainably, is widely recognized.
For fiscal 2015, we are publishing our second annual sustainability key performance indicators (KPIs) to enhance the transparency of our environmental footprint and to form a basis for ongoing communication with our various stakeholders. Our sustainability KPIs have been selected to align with internationally recognized standards, and the metrics we are reporting have been assured by independent analysis.
Our Sustainability Report focuses on:
- Environmental Performance
- Employee Health & Safety
- Ethics and Compliance
- Community Alliance
Schnitzer creates value through recycling every day, and we are committed to operating our businesses in a safe, efficient and environmentally responsible manner. These are the principles underpinning more than a century of success at Schnitzer.
As you review our Sustainability Report, we hope you gain a broader insight into our role in promoting sustainability as one of North America's largest recyclers of metal products.
President and CEO
Recycling is one of the most efficient ways to protect the environment. Steel and other metal products naturally enable resource conservation through their durability and recyclability. We manage the scrap metal we collect, process and recycle not as a waste product but as a value-added commodity. Recycling metals has substantial environmental, economic and social value. Each year, more steel is recycled than paper, aluminum, plastic and glass combined. Using recycled scrap steel in steel manufacturing saves up to 65% in primary energy input and reduces water use up to 91% as compared with processes using newly mined iron ore. Additionally, steel manufacturing using scrap steel generates up to 92% less waste.
At Schnitzer, our recycling research has pioneered such innovations as advanced nonferrous metal recovery technology to increase the amount of metal we divert from the waste stream and stormwater treatment systems to protect waterways. In fiscal 2015, we initiated the installation of best available technologies for stormwater treatment at six of our operating facilities.
In addition to our operational efficiency, we put our technologies to work in the environment as well with projects such as:
Operational excellence is a continuous improvement challenge that encourages constant collaboration across our Company. One recent project illustrates our focus on sustainable innovation and collaboration: the installation of EcoPro's Ultraburn Combustion Catalyst Systems and HEPO Oil Bypass Filtration Systems in our truck fleet. The goals of this project were to improve air quality, conserve finite natural resources, and deliver cost savings. Schnitzer began installing these advanced systems in 2011, outfitting both on-road trucks and off-road equipment. Through fiscal 2015, we estimate that the project has resulted in the avoidance of approximately 15 million pounds of carbon dioxide emissions, conserved more than 665,000 gallons of fuel, and reduced operating expenses by approximately $2.5 million. Sustainability initiatives will continue to support our operational success for many years to come.
Employee Health & Safety
Schnitzer's goal is to create an injury-free workplace. Each and every day, regardless of job function, all employees have a common responsibility for workplace safety. Our safety culture is a cornerstone of our success, benefiting our employees, customers and suppliers while supporting our operational efficiency and performance. In fiscal 2015, we were extremely proud to be recognized as an industry leader:
In fiscal 2015, we continued to maintain the highest standard for our safety performance. We are pleased with these positive results but our goal will always be zero injuries at every location. To achieve such an exceptional goal takes a very broad view. At Schnitzer, safety management is not proprietary. We actively collaborate with other industry leaders on best practices, reporting standards, benchmarks, and increasing the dialogue on ways to prevent life-altering incidents more effectively. Our safety engagement strategy connects us all by our actions, from home to work and everywhere in between.
Ethics and Compliance
Integrity is a core value of our Company and we treat employees, customers, suppliers, the public and investors with respect and fairness. Our Directors, the Executive Team and each and every employee is responsible for adhering to our Code of Conduct, all applicable laws and regulations, and maintaining our high standards of ethical behavior and business practices. Simply stated, everyone on the Schnitzer team is expected to do the right thing every day as we serve our customers, business partners, investors, and communities.
Schnitzer maintains a robust and effective Corporate Compliance Program, led by our Chief Compliance Officer, which focuses on:
- Ethics – Compliance with our Code of Conduct, communication and education on making ethical decisions, and fostering an environment where employees feel free to report concerns, including through our whistleblower hotline.
- Anticorruption – Risk assessment and management tools to ensure strict adherence to anticorruption and anti-bribery laws and regulations, including through maintaining adequate books and records.
In 2015 and 2016, Schnitzer was named a World's Most Ethical Company by the Ethisphere Institute, an international think tank focused on ethics and compliance. This prestigious award is given exclusively to companies that have a material impact on the way business is conducted by fostering a culture of ethics and transparency at every level of the company. Specifically, winners must demonstrate leadership in five key categories: ethics and compliance; corporate citizenship and responsibility; culture of ethics; governance; and leadership, innovation and reputation. Only 131 companies worldwide were honored in 2016. Schnitzer is the first and only metals recycling company to be among the winners.
Schnitzer also earned the Ethics Inside® Certification and the Anti-Corruption Program Verification™ for 2015-2016. These designations are awarded exclusively to companies that can demonstrate the existence of a superior employee and leadership culture that promotes ethical business practices. In addition, these companies are able to prove that they have designed, implemented, and enforced a robust, best-in-class anticorruption program that is capable of reasonably detecting and preventing bribery and corruption.
At Schnitzer, our people are our passion. Our employees are dedicated to operational excellence and to the communities in which we live. Our employees pioneer and support many efforts to contribute to local communities through their direct involvement in community initiatives and participation in numerous charitable organizations. Some examples include:
- National Food Bank Drive – Schnitzer employees across all regions and Divisions donate non-perishable food items as well as their time to help put food on peoples' tables and support local food banks.
- Fishing for Energy – Schnitzer participates in this program that recovers old fishing gear from the ocean and turns it into feedstock for renewable energy.
- Gun Destruction – Boston Police bring illegal weapons to Schnitzer, and we destroy them and recycle the metal portions.
- Scrap Drive – This Schnitzer program allows non-profit organizations to raise money by collecting scrap metal which we then purchase for recycling.
By The Numbers
In our fiscal year 2015 Sustainability Report, we present our environmental footprint across our enterprise. These metrics provide insight into our environmental performance – but in practice every aspect of our operations is focused on resource recovery, recycling and reuse. Our metals recycling facilities divert steel and other metals from landfills by processing 3.7 million tons of ferrous and 585 million pounds of nonferrous metal annually into raw material for new products. Our auto parts stores recycle nearly 350,000 cars annually and reduce the need to manufacture new parts by providing affordable used auto parts to consumers across the U.S. and Canada. Our steel manufacturing facility produces up to 800,000 tons of new steel annually from recycled metals.
Our key performance indicators focus on carbon emissions disclosures, energy management, and efficiency, water conservation and quality, resource recovery, and waste diversion.
Our 2015 fiscal year (September 1, 2014 through August 31, 2015) represents our second annual year for public disclosure of Scope 1 and 2 greenhouse gas emissions, water consumption, and waste generation.
Schnitzer's direct (Scope 1) emissions largely result from our consumption of diesel fuel in on-road transportation fleets and off-road production equipment, our consumption of natural gas in steel manufacturing, and carbon emissions inherent in the steel manufacturing process. Efforts to minimize these emissions are ongoing, often through the retirement of older equipment and the installation of technologies which conserve fuel and/or reduce emissions.
Schnitzer's indirect (Scope 2) emissions result solely from our use of grid-purchased electricity. Electricity demand is highest at our steel manufacturing facility which utilizes an electric arc furnace. However, this operation, based in McMinnville, OR, utilizes grid electricity generated from 86% renewable energy sources, including 85% hydro-power generation. Ongoing efforts to minimize Scope 2 emissions include installing on-site electrical substations at our shredder facilities, retrofitting and redesigning our facilities' lighting systems, and using more energy-efficient electrical motors and other equipment. Our metals recycling facilities and auto parts retail and dismantling facilities have small building footprints. Scope 2 emissions generated from electricity usage by these facilities include office and security lighting systems, building heating and cooling systems, and computer systems. These systems provide a safe, secure and productive environment for our employees and visitors.
Sources of Electricity
Used by Schnitzer
In fiscal 2015, Schnitzer's energy use totaled 3.25 million gigajoules of energy, at a 1.1 : 1 ratio between fossil fuel consumption and electricity usage. Our fossil fuel consumption reflects a 56% utilization of natural gas, a 38% utilization of conventional gasoline and diesel fuel, and an 6% utilization of alternative bio-fuels. Our electricity source mix reflects a renewable energy source mix of approximately 76% – hydroelectric, wind, solar, biomass, and geothermal.
Fuel conservation and electricity efficiency is a priority for Schnitzer. We have implemented creative solutions to save energy at many of our facilities. Some of these solutions have included diesel-engine combustion catalyst systems, variable frequency drives, electrical motor efficiencies, on-site renewable energy technologies, upgrades/retrofits to building envelopes and lighting systems, and on-road transportation fleet tracking systems. Meanwhile, we are constantly developing new solutions to conserve more energy.
We recognize that through efficient energy use and conservation efforts, we can extend the useful life of energy consuming assets, minimize maintenance and new equipment purchasing costs, and better manage risks associated with volatile/fluctuating fossil fuel and electricity prices. Our energy use strategy is a collaborative effort across the organization involving each business segment and all business activities.
Ensuring water efficiency in our operations is central to our water quality and conservation efforts.
At our metals recycling facilities, water use demands are concentrated on the cooling needs of our mega-shredders and dust suppression. Efforts to improve the water use efficiency of the metal shredding process are ongoing and include: directing flow nozzles/sprinklers to eliminate overspray; recycling and re-use of overspray from around metal shredding areas; and the collection and harvesting of rainwater as a substitute for fresh water and well water resources.
Water usage in our steel mill accounts for approximately 68% of the water usage across our Company. However, municipal water supply represents only 2% of the facility's total water usage due to state-of-the-art water-recycling capabilities. Water usage is negligible at our metals recycling collection facilities and auto parts stores. Nevertheless, we are fully engaged in eliminating wasteful water usage when and wherever feasible. Water usage at our facilities encompasses environmental best practices, such as reducing dust from roads, trucks, and stockpiles. Wastewater and rainwater is collected, stored, and reused where feasible. Storefront landscape and irrigation systems are closely monitored for malfunctions and overwatering, particularly in times of severe drought. A significant capital project was initiated in fiscal 2015 to implement a large-scale stormwater recycling program at our Everett, MA shredder and port facility.
METALS RECYCLING PROCESS
- Fluids and hazardous materials are removed. Reusable parts are removed and reused.
- Cars, appliances, and other salvage material are shredded into fist-sized pieces. Scrap is separated into ferrous and nonferrous metals and other materials.
- Ferrous metal scrap is melted in furnace at over 3000° F and then re-formed / cut into new finished steel products.
- Recycled steel is used in new buildings, bridges, cars, appliances, containers — wherever steel is used.
By weight, nearly all of the materials processed by our metals recycling facilities are recycled. Only 1% of our total processed materials are directly disposed of in landfills. The majority of generated landfilled waste comes in the form of shredder residue, the output of our shredding practices. The typical composition of shredder residue is similar to municipal solid waste (trash) – small pieces of plastic, foam, fabric, rubber, glass, wood, paper, residual metals, soil, gravel, and rocks.
Our steel manufacturing facility recycles more than just steel. Our robust recycling program includes commonly co-mingled recyclables, paper and cardboard, wood pallets, batteries and electronics, paints and solvents, and print toner cartridges just to name a few.
Our Pick-n-Pull auto parts stores drain, recover, remove, and recycle hazardous materials from the end-of-life vehicles (ELV) they procure. These vehicles often come littered with household trash and non-reusable consumer products discarded by prior owners. Our facilities carefully sort all of materials, re-using and recycling where feasible and properly disposing of what remains.
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