Environmental Governance and Strategies
Toromont recognizes the important role we have in protecting and preserving our environment. The ESG Committee of our Board of Directors oversees environmental matters. The Executive Team provides leadership and oversight, collaborates to set meaningful objectives and shares responsibility for compliance with our business unit leaders and all employees. Management reports regularly to the Board of Directors on environmental performance.
As part of our strategic and annual business planning processes, we monitor and benchmark our environmental footprint and set goals for continuous improvement. The Toromont Cat environmental team is responsible for developing annual priorities to improve our environmental footprint, educating and training the workforce and performing compliance and audit functions under the auspices of a formal Environmental Management Program.
Toromont is subject to provincial, federal and state laws and regulations relating to emissions into water, air and land, the disposal of waste, and the handling, storage and transportation of hazardous materials and lubricants and fluids in bulk storage tanks. Management believes that Toromont complies with applicable environmental laws and regulations in all material respects. Toromont’s current costs of compliance, including under Federal and Provincial carbon tax regimes are not material. Although such costs are expected to rise in future years, we do not currently anticipate any material expenditures will be necessary to ensure future compliance with more stringent GHG regulations. To the extent more stringent regulations are enacted, Toromont intends to continue to address them in a proactive manner.
Beyond internal efforts, we recognize that climate change and government policy responses affect customers. As responsible, market-driven operators, we innovate in collaboration with our customers and supply partners to produce solutions that reduce greenhouse gas emissions and build a more efficient, sustainable future. This includes exploring opportunities to apply our equipment and product support in the field of alternative energy in our markets (for example, battery electric, wind, solar, landfill gas, and heat recapture).
2020 Environmental Actions and Outcomes
Toromont takes inventory of its corporate carbon footprint annually with the help of independent environmental engineering firms using evolving best practice quantification methods. These assessments provide us with data needed to set goals, analyze trends, evaluate the efficacy of management actions and generally position Toromont to identify new reduction and offset opportunities.
Our most recent three-year goal was to reduce Toromont Cat’s Greenhouse Gas (“GHG”) Emissions Intensity Ratio by 10% exclusive of operations acquired during the period. The annual GHG inventory report received in March 2020 indicated that we met this objective. We have now set a new three-year goal for further improvement. In line with the internationally recognized GHG Protocol, the baseline for our new three-year goal will be subject to adjustment as we continue to integrate recently acquired operations through 2021 and normalize levels to account for COVID-19-related impacts experienced since early 2020.
Annual GHG inventory reports segment our carbon footprint by business unit, country and source. As our largest business, Toromont Cat has the largest carbon footprint, followed by Battlefield Equipment Rentals and CIMCO. Energy sources included natural gas, fuel oil, diesel, gasoline, propane, landfill gas and electricity and were divided into direct emissions (fuel combustion and refrigerant losses), indirect emissions (purchased electricity, steam and cooling) and other indirect emissions (waste disposal, air travel). In a typical year, the greatest source of Toromont’s greenhouse gas emissions is fossil fuel usage in fleet vehicles, followed closely by diesel and natural gas combustion. Building energy sources (electricity and oil) represent a smaller percentage of the total and air travel was the smallest contributor. All are monitored and managed with a conservation mindset.
Our most recent company-wide inventory included, for the first time, most of the operations we acquired in 2017. In 2021, we will continue to work on completing this integration. For 2020, emissions from Scope 1, 2 and limited Scope 3 (i.e., air travel, upstream fossil fuel and electricity) sources were 75,454 CO2– equivalent tonnes.
To reduce emissions, Toromont:
- seeks to optimize fleet dispatch using intelligent dispatch software and by planning efficient routes
- uses telematics to track idling time and monitor for hard accelerations and speeding that are unsafe for our team and hard on the environment
- operates with an anti-idling policy for all company vehicles and vehicles on our properties
- creates driver awareness through training of the need to conserve fuel to reduce emissions
- employs Auxiliary Power Units on our service vehicles, alleviating the need to idle engines and needlessly burn fuel
- assesses fleet additions on total cost of ownership including fuel economy, which has led to the acquisition of smaller, more fuel-efficient field-service vehicles
- minimizes the release of nitrogen oxide and sulfur during generator and engine testing at Power Systems and Remanufacturing operations in Ontario using selective catalytic reduction equipment and optimizing test run times
In addition to these actions, Toromont benchmarks its use of utilities to spot anomalies in energy expenditures, manage price volatility and reduce usage. It also makes ongoing investments in energy-efficient HVAC systems, lighting, overhead doors and compressed air tools.
EV and Alternative Fuels
Toromont is embracing opportunities to develop the sales and service of battery electric (EV), hybrid (dual fuel) and other alternative energy machines in our territories. We work closely with Caterpillar, our largest business partner to grow the market for these products. In addition to collaborating on pilot and feasibility projects with Caterpillar and customers, we have installed one of the largest Cat fleets of electric drive hydraulic mining shovels, taken the lead on developing customer safety training standards for zero emission underground battery electric vehicles (BEV) and invested in infrastructure to support BEV maintenance. By partnering with specialized equipment manufacturers who are dedicated to developing low and zero emission equipment and developing capabilities that support customer purchase decisions, Toromont contributes to the advancement of alternatives to the internal combustion engine (ICE). Our support includes financial modelling and then providing lifetime service and maintenance. Electrification of machines provides opportunity for Toromont to learn and grow in the service of our customers and the environment. The transformation to EV and other alternative power sources will be a long-term process but is underway and we are capturing business and providing product support in various equipment markets for these sophisticated machines.
Remanufacturing and Recycling
We support and promote zero-waste behaviour through our organization. Remanufacturing is one of the most important contributions we make to the circular economy. Within our remanufacturing operations, we clean, rebuild and recondition highly worn engines, hydraulic cylinders and other equipment parts as many as four times over the product lifecycle. In 2020, these operations kept over three million tonnes of equipment from the scrap yard.
Additionally, through our remanufacturing process, we update engines used in underground mining equipment by making ventilation reduction modifications. Through piece-part changes to turbochargers and injectors, as well as software upgrades that modify fuel mapping, we reduce emissions. In the field, our product support operations closely monitor the condition of customer machines to assist in measuring, with greater precision, the remaining life of wear for parts and fluids. By regularly sampling fluids such as oil and other lubricants, we are better able to identify fluid change frequency needs and reduce waste and consumption as a result.
Toromont also draws attention to day-to-day habits that improve landfill diversion rates. In 2020, Toromont Cat Central branches joined other parts of the company in a Zero Waste program. Over the past three years, participating branches have increased landfill diversion by an average of 25%.
Helping Customers Reduce Their Carbon Footprint
Reducing GHG emissions is important for our customers and we are playing our part at seven landfills in Ontario, one in Québec and one in New Brunswick, where Toromont-supplied generators capture harmful methane that is transformed into electricity. In 2020, we also helped:
- General Motors Canada reduce its reliance on the electrical grid and take a bite out of local greenhouse gas through the installation of cogeneration capabilities at its St. Catharines, Ontario engine plant. Fuelled by methane gas from a local landfill operated responsibly by Walker Industries, four 1.6 megawatt Cat generators supply about 35% of the plant’s electricity needs while heat from the generators is captured to provide additional energy and reduce net GHG emissions by an estimated 70%.
- Brock University to extend the life of its cogeneration plant. When it was originally installed by Toromont 25 years ago, the plant operated with eight generators producing electricity and recovering energy within a thermal storage tank that is used to heat campus water and cool campus buildings. Reflecting technology gains, the same 6.4 megawatts of power is now produced with just four new generators.
In refrigeration, CIMCO educates customers on the Global Warming Potential (“GWP”) of various refrigerants – a measure of how much heat a greenhouse gas traps in the atmosphere relative to carbon dioxide – and employs integrated building design and heat recovery systems to lower the carbon footprint of its equipment. More specifically, CIMCO provides alternative natural refrigerants, such as ammonia and CO2 with a GWP of 1 and 0, respectively (a refrigerant with a GWP of 150 or above is no longer allowed in certain U.S. jurisdictions) and its patented ECO CHILL® lowers natural gas usage by capturing heat and applying it elsewhere within the building environment. In 2020, CIMCO made significant headway in broadening the use of natural refrigerants:
- Nine CO2 ice rink packages were sold in the United States, including in California which is a recognized leader in the use of environmentally sustainable products and, as part of the U.S. Climate Alliance, recently mandated the use of CO2 as a refrigerant in ice rinks.
- A large retailer became the first industrial purchaser of a full CO2 package for its new cold storage facility in British Columbia. Over the past 15 years, we estimate that customers using ECO CHILL have cumulatively offset more than 1 million CO2-equivalent tonnes (the same amount produced by approximately 240,000 cars operating for one year) compared to traditional refrigeration and saved almost 20 billion cubic feet of natural gas. By comparison, Toromont’s entire annual emissions footprint is 71,125 CO2-equivalent tonnes. As the world moves towards net zero emissions, we will play our part through the use of eco-friendly refrigerants and ability to recover and repurpose heat.
Toromont’s operations are not water intensive. We recognize the far-reaching implications that water scarcity may have in the future and have taken steps to reduce consumption. Toromont businesses use a variety of techniques to conserve, reclaim and treat water. In 2020, the Battlefield Equipment Rentals store in Barrie, Ontario added a wash bay system to recycle water, bringing to 15 the number of stores with this equipment. The largest store reduces water consumption by over 1.4 million litres per year using this system. Toromont Cat conserves water and reduces chemical usage during component cleaning through steam and pressure washers. Water and oil interceptor systems capture oil, sediment and water runoff in service bays and separate the ingredients for safe disposal.