Investment in renewable energy is key to maintaining a healthy planet. We have set goals to augment the percentage of renewable energy in our overall portfolio and increase the energy efficiency of our facilities and transportation fleet.
Our energy use has continued to decrease, from 13,437 billion British thermal units (BTUs) in 2010, to 12,655 in 2012, with a decrease of approximately 288 billion BTUs realized in 2012, despite a sales growth of over 9 percent since 2010. The decrease in energy use is due in part to reductions in energy demands from efficiency improvements, development of on-site clean or renewable energy sources and site closures. Efforts in 2012 that contributed to these reductions include a new initiative called Project COLD. Johnson & Johnson has had a formal enterprise-wide energy management program in place for about 30 years, and during that time, we have learned that a large portion of the energy we use within manufacturing and research buildings is associated with our air conditioning and process cooling systems; i.e. chilled water. Project COLD was launched to take advantage of new state-of-the-art control technology that allows us to continuously optimize our chilled water systems to maximize efficiency. After trials at several facilities, we decided to roll out Project COLD to all applicable locations over the next several years. The projects completed to date are averaging a four-year financial return on investment and all the potential projects have the possibility of reducing each site’s annual CO2 emissions by 6 to 8 percent.
In 2011, we eliminated the use of voluntary carbon offsets or renewable energy credits (RECs) as one pathway to reduce our carbon emissions, opting instead for Greenhouse Gas (GHG) emission reductions based on improved energy efficiency, conservation and utilization of clean or renewable energy. Within our new Healthy Future goals, voluntary offsets, RECs and “green” power based on RECs will not be purchased and used as offsets for Scope 1 or Scope 2 emissions. While we will not use voluntary offsets or RECs, we can make use of offsets that are part of a compliance system used to meet national or regional obligations required by law. Also, the direct purchases of electricity from renewable sources and renewable fuels will be considered carbon-free, so long as the carbon offset from those sources are “retired” by the Johnson & Johnson affiliate and not double-counted in any other compliance or voluntary system.
We have recalculated our 2010 baseline without voluntary offsets or RECs. We have established a Healthy Future 2015[hyperlink] goal to increase our on-site clean or renewable energy technology capacity to 50 megawatts (MWs). In 2012, we increased our on-site solar power capacity to 19 MWs. To date, we have 45.5 MWs of on-site clean or renewable energy capacity—38.0 MWs installed and 7.5 MWs approved or under construction—putting us on track to meet this goal.
Additionally, all new Johnson & Johnson construction projects as well as renovations costing $5 million or more must be certified to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) green-building standard. Our World Headquarters building has received the LEED Gold Certification for Existing Buildings.
We continue to maintain our CO2 reduction capital funding process, which provides a $40 million yearly budget for energy and greenhouse gas reduction projects across the Company. Over the last eight years, 139 energy reduction projects have been approved, and 100 have been completed. These completed projects will collectively reduce CO2 emissions emissions and cost in an effort to meet their ambitious goal of reducing their site CO2 emissions by 50 percent by 2015.
