Lexmark continues to make progress toward our goal of being carbon neutral by 2035. We now have three facilities that have CarbonNeutral® certifications in accordance with The CarbonNeutral Protocol. Most recently, our Cebu, Philippines site earned CarbonNeutral® office certification. The Cebu site joins our Juárez, Mexico CarbonNeutral® manufacturer certified facility since 2022 and our headquarters in Lexington, Kentucky, which became a certified CarbonNeutral® office in 2023. Working with Climate Impact partners, this third-party CarbonNeutral® certification is the method by which we are achieving carbon neutrality. These three facilities with certification account for over 51% of our total operational carbon emissions. This accomplishment is due to years of dedication, analysis, sustainability strategies applied to daily work, innovative energy efficiency projects and an investment in certified projects to offset the remaining greenhouse gas emissions.
Lexmark is committed to carbon neutrality by 2035. In line with global standards, Lexmark is pursuing a net zero CO2 emissions goal for 2050 accompanied by rapid reductions in non-CO2 GHG emissions. Lexmark will continue to adjust our approach in line with external developments, new technologies and improvements in and better understanding of climate science. It is important to note that achievement of a 2050 net zero goal is highly dependent on the development of new emissions reduction, removal and capture technologies.
Lexmark has been committed to reducing Scope 1 and 2 emissions since 2005. At the end of 2023, we have reduced Scope 1 and 2 by 72% since 2005. We have grown our scope 3 knowledge and data collection. Lexmark engaged KERAMIDA to conduct an independent verification of Scope 1, Scope 2 and limited Scope 3 GHG emissions.
As we continue to reduce our emissions and energy consumption with efficiency projects, we will also utilize renewable energy, carbon credits and renewable energy certificates (RECs) to offset emissions.
Greenhouse gas emissions are a key focus for Lexmark throughout our value chain. We are committed to taking aggressive actions and making meaningful reductions. In 2023, our targets for scope 1, 2 and 3 received validation from Science Based Targets Initiative (SBTi). This includes reducing absolute scope 1 GHG emissions 27.5% by 2030 from a 2019 base year, increasing our annual sourcing of renewable electricity (Scope 2) from 0% in 2019 to 100% by 2030 and reducing absolute scope 3 GHG emissions from the use of sold products 22% per printer sold by 2030 from a 2019 baseline.
Scope 1 emissions (direct) include our use of fossil fuels, refrigerants and fleet vehicle transport based on available data. We use natural gas, diesel fuel and gasoline to generate steam, power backup generators, provide heat to certain Lexmark facilities and provide fuel for leased/owned vehicles.
Lexmark is committed to the Montreal Protocol, an international treaty aimed at reducing the use of ozone-depleting chemicals. We prohibit the use of such chemicals in the manufacture and development of our products; however, we use some ozone-depleting chemicals―specifically refrigerants―for the heating, ventilation and air-conditioning (HVAC) systems that cool our facilities. Lexmark cannot eliminate the use of refrigerants at this time because HVAC systems typically require the use of refrigerants for cooling. Lexmark purchases chillers that use environmentally preferable refrigerants with lower global warming potentials and monitors systems for leaks with stand-alone sensors. In 2023, refrigerant R-22 had ozone depletion potential greater than zero. Lexmark's refrigerant emissions for 2023 totaled 271 CO2e tons.
Our Scope 2 emissions (indirect) consist of electricity used to power operations at our sites. We primarily purchase electricity generated by a variety of nonrenewable and renewable primary-energy sources, including coal, nuclear energy, solar power, wind power, geothermal energy and hydropower sourced from the local grid. This includes renewable energy produced from our on-site solar arrays as well as procurement of energy attribute certificates.
We report Scope 3 indirect GHG emissions generated from our value chain related to business activities from sources not owned or directly controlled by Lexmark including product use, supply chain, employee commuting, business travel, transportation and distribution. We will continue to take proactive steps toward emissions avoidance in Scope 3 and capture reductions through data disclosure.
Click here for detailed GHG emissions data.
We aim to increase annual sourcing of renewable energy to 80% by 2025 and 100% by 2030. This will include on-site generated solar energy in Lexington and Cebu. The 2.0-megawatt solar array in Lexington became fully operational in November 2023. The solar array is expected to produce enough renewable energy to achieve a 10% reduction in the carbon footprint for the Lexington site. A 3.2 kilowatt solar array system resides on the rooftop at one of the Cebu, Philippines office buildings. A 0.5-megawatt solar array is planned for the Juárez, Mexico site. For 2023, we procured 51,587 MWh of Renewable Energy Certificates (RECs)1 and our solar array generated 255 MWh of renewable energy; this equates to over 40% of Lemark's 2023 Scope 2 emissions.
With the exception of third party steam used for heating our Boulder, Colorado site, Lexmark operations use electricity as its one indirect energy source. We primarily purchase electricity from local/regional energy providers. The electricity supplied is generated by a variety of nonrenewable and renewable primary energy sources, including coal, nuclear energy, solar power, wind power, geothermal energy and hydropower.
Lexmark's direct energy sources include natural gas, diesel fuel and gasoline. These nonrenewable energy sources are purchased from local vendors and then used to generate steam, power backup generators, provide heat to certain Lexmark facilities and provide fuel for leased/owned vehicles. We do not use renewable direct-energy sources such as biofuels (ethanol for example) or hydrogen.
Energy conservation is a priority in the workplace, through simple practices of improving lighting, electronics and equipment and powering off when not in use and using schedules and sensors for lighting and temperature control. These and many other initiatives assist in meeting targets. Some of our sites have employee incentive programs for site energy reductions, which include monetary incentives for employees when the overall annual energy goal is achieved. In addition to salary incentives, some of our sites promote employee energy awareness through healthy living and sustainable challenges, which provides monetary incentives for various levels of challenge participation.
Solar flower located at Lexmark headquarters, Lexington, Kentucky
We are conscious of the impact business travel can have on the environment and avoid it when possible with the use of lower impact, real time communication tools. We have collaborated with our vehicle and travel partner to calculate miles traveled with Lexmark-owned, -leased, and -rented vehicles, as well as air travel. Lexmark France participates in the BlueBiz CO2 Impact Programme. Through this program, companies can cash in blue credits earned from employee travel with Air France, KLM or Delta Air Lines to neutralize CO2 emissions of their flights.
Many Lexmark positions are open to Flex@Lexmark, giving employees the ability to work remotely two days a week. Sustainable commuting is encouraged. Biking to work is promoted at many Lexmark locations. At some locations, bike racks and showers are availble and indoor storage is an option. Challenge programs are available with opportunities to earn money or prizes for biking to work and/or carpooling. Lexmark's Boulder, Colorado site works with Smart Commute Metro North to promote alternative commuting options for employees such as ride sharing and transit travel.
Five electric car charging stations are in use at the Lexington, Kentucky campus. Each station is equipped with two charging points for registered employees and clients to use free of charge. Two charging stations are in use at Boulder, Colorado's campus. Since installation, 129.3 metric tons of greenhouse gase emissions have been avoided.
Physical worldwide shipping, handling and processing of products and distribution centers are a necessary part of Lexmark business. We have taken measures to lessen the environmental impacts associated with these activities and work with environmentally progressive partners who apply innovative ideas, best practices and new technologies to their transportation and logistics processes. Lexmark is working to quantitatively report the impact of product logistics.
Multiple TMSs are used at our WW regional distribution centers to optimize product transportation. TMS optimization software selects the most effective mode of transportation, automates carrier selection, reduces air shipments, combines same-customer shipments, improves trailer fill rate, decreases handling and travel distance and cuts logistics expenses while improving customer delivery.
Lexmark has been a U.S. Environmental Protection Agency (EPA) SmartWay registered partner since September 2008. Smartway, a collaborative program between the U.S. EPA and the freight industry, is chartered to increase the use of energy-efficient vehicles and has impressive goals to reduce GHGs and decrease air pollution.
Lexmark's strategy to combine inbound vendor shipments in ocean containers has resulted in improved space utilization in each container, a reduction in logistics expense and containers used, a smaller carbon footprint, and improved delivery time.
Lexmark announced the opening of a new warehouse for North America inventory in 2023, consolidating two previous warehouses and enabling faster delivery to customers. With this move, we are reducing our overall warehouse footprint in the U.S. by about 25% and taking advantage of the synergies of having everything under one roof and the same partner for inbound and outbound freight. The new warehouse is located in Jeffersonville, Indiana, just outside Louisville, Kentucky. Lexmark will use the new warehouse for North America inventory including hardware products, supplies and spare parts. The new warehouse will not only consolidate all inventory but will also manage value-added services like configuring printers with extra trays to fulfill orders.
Lexmark uses intermodal freight transportation to ship products by ocean, rail, air, inland water and roadways for inbound moves which saves time, money and fuel.
Direct shipping for high volume products from factory to customer destination reduces the total miles products must travel, as well as handling and warehousing en route, providing a better customer delivery experience and environmental benefits. We also see similar benefits from direct replenishment―whereby the factory ships direct to the country distribution center, bypassing the centralized regional center and reducing miles, handling and cycle time.
Lexmark’s Reverse Logistics and Returns operations continue to improve returns processing and the capability to reduce the number of shipments and mileage, thereby reducing energy use related to returned goods.
Lexmark partners with best-in-class Third Party Logistics (3PL) warehouse providers who have a shared sustainability focus. Lexmark’s 3PL providers manage, monitor, and execute targeted goals in sustainability to reduce the use of electricity, natural gas, propane, and water. They target improving and increasing recycling activities. They also manage their overall carbon footprint.
Lexmark uses a late manufacturing/late customization process for medium volume products in our regional distribution centers to be close to our customers, be flexible and efficient, provide a competitive advantage, and be more sustainable. Some of the benefits to this strategy are a reduction of space and inventory demand, a reduction of expedited and air freight, better container utilization footprint of shipments, a flexible manufacturing system, and customized customer solutions which include printer sustainability settings such as power settings, toner usage and longer life components.
Lexmark manufactured 95% of cartridges in region of consumption in 2023, maintaining the high rate of regional manufacturing targeted. Regional manufacturing improves supply chain efficiency and helps Lexmark respond more quickly to customer needs. It also benefits the environment by reducing GHG emissions and providing jobs for people in the regions where our cartridges are used most.
We test our products throughout their life cycle to ensure high quality. Realizing the impact of paper use on the environment, we are working to lessen this impact in our print testing. We use “paperless print” for some testing applications, which allows us to test certain features of our product without actually printing the page. We also reuse paper where possible. These methods of print testing helped us save over 11,900 trees2 and avoid over 4,190,000 kg of CO2 since 2019.
The service delivery team at Lexmark proactively identifies issues with devices under contract, often providing a fix before a service intervention is required. If a call is made to our technical support center, priority is placed on resolving the problem via phone versus dispatching a technician. If a part is required to fix the issue and can be replaced by the customer, technical support will provide step-by-step instruction or support resources, such as video, to help with replacement. Many teams and projects are focused on ensuring that correct parts are sent and unnecessary parts dispatch is avoided. Our focus on "remote fix" and parts accuracy helps reduce wasted resources, such as materials for parts manufacture, mileage associated with parts delivery and on-site service visits. This results in improved customer satisfaction and avoidance of GHG emissions.
Click here for detailed regulated air emissions data.
1 The RECs procured consist of Mexico I-RECs to offset Juárez, Mexico site's scope 2 and US Green-eRECs making up 40% of the Lexington site scope 2.
2 Environmental impact estimates of trees and CO2 were made using the Environmental Paper Network Paper Calculator Version 4.0. See www.papercalculator.org.
