Our Environment

Implementing environmental management systems and improving our performance

Our approach

There is a general expectation by our stakeholders that, as a large, multinational company, Amcor will continuously improve and report on the environmental performance of our operations and will meet or exceed the environmental regulatory requirements of the regions in which we operate.

Our commitment to environmental sustainability is embodied in the Amcor Code of Conduct and Ethics Policy, which states: ‘Amcor is committed to managing its operations in an environmentally responsible manner.’ Our Group-wide Environmental Policy reinforces this commitment and includes specific environmental management requirements. These policies outline a range of precautionary principles that guide our operational planning and management.

Amcor maintains environmental management systems appropriate for each site’s operations and for the country in which the site is located.

Multiple groups across Amcor play critical roles in driving strategy, operational and product improvements and policy initiatives related to environmental responsibility. Our Occupational Health, Safety and Environment (OHS&E) function has primary responsibility for environmental management systems and environmental compliance at our manufacturing and warehousing sites. All sites are required to have an environmental management system in place and to comply with the Amcor standards for: environmental discharges, community impact, and cooling tower management.

Amcor sites without ISO14001 certification are required to conduct self-audits annually. Regional OHS&E coordinators also conduct site audits, the frequency of which is determined by the risk associated with each site.

The Amcor Board of Directors is responsible for the regular monitoring of environmental exposures and compliance with environmental regulations. To enable it to meet its responsibilities of oversight, the Board has established an internal reporting process. Environmental performance is reported from each site up through OHS&E management to the Board on a regular basis and is included in the annual OHS&E Board report.

Our OHS&E team also participates in due diligence tasks as part of our merger and acquisition activities and is heavily involved in the integration of acquired sites.

How we are doing

To date, 118 Amcor sites (approximately 40% of all Amcor manufacturing sites) have achieved ISO 14001 accreditation for their Environmental Management Systems (EMS), representing our key sites in Europe, Australia, Asia and South America, and some sites in other regions. The percentage of sites that are certified changes each year due to the acquisition and divestment of sites.

Many of our other sites have environmental management systems accredited to other environmental standards. The remainder are either working towards an independently certified EMS or have processes and systems in place to ensure compliance with local regulations and to identify environmental improvement opportunities. These sites are regularly inspected by national, state and local environmental regulatory agencies.

This year, we developed and released an audit protocol for use during internal audits of site’s environmental management systems, with the aim of standardising our audits across all sites.

We monitor and undertake remediation activities on sites that have been contaminated by past practices to enable ongoing use of the land for industrial purposes. Many of these practices related to operations before Amcor’s ownership. Active monitoring and/or remediation is underway at two sites in Australia, ten legacy sites and one currently operating site in North America and two legacy sites and three currently operating sites in Europe. Legacy sites include those previously owned by Amcor and sites that have been closed.

In FY2011/12, reported non-compliance with environmental laws or regulations resulted in one Amcor site in North America incurring a fine totalling USD11,250 and one Amcor site in Europe incurring a fine totalling €750. Further information about compliance with significant environmental regulations is contained in the Director’s report within Amcor’s 2012 Annual Report.

There were no significant spills that resulted in non-compliance with environmental laws during FY2011/12.

During FY2011/12 we settled three of the seven US EPA Superfunds liabilities in which we had been is named as a potentially responsible party.

CERCLA is the US federal government’s program to clean up the nation’s uncontrolled hazardous waste sites. CERCLA imposes joint and several liability on each potentially responsible party (‘PRP’), that actually contributed hazardous waste to a site. Customarily, PRPs will work with the EPA to agree on and implement a plan for site investigation and remediation. Liability was realised for these sites through acquisition and relates to historical activities prior to Amcor’s ownership. We continue to meet our obligations by way of payment of financial assessments.

Selected information on this page pertaining to the number of ISO14001 accredited sites, significant spills, the development of an internal audit protocol, and the settlement of US EPA superfund liabilities, has been assured by Net Balance.

Regularly setting and working towards our EnviroAction targets

Our approach

Amcor’s global EnviroAction program is designed to drive continuous improvement in environmental performance throughout Amcor’s operations. The EnviroAction program sets short and long term reduction targets for greenhouse gas emissions, municipal water use and waste to landfill. In FY2010/11, at the end of the first five-year EnviroAction period, we had reduced our waste to landfill intensity by 59% and our water consumption intensity by 46% whilst our greenhouse gas emissions intensity decreased by 4.5% from the baseline.

During the 2010/11 year, Amcor established EnviroAction targets for the 2011/12 to 2115/16 period. For these targets, we adopted a financial intensity measure, replacing the previous production-based intensity indicator. We chose gross profit as the denominator for this indicator because it is centrally consolidated and can therefore be used as a common indicator across Amcor businesses. In addition, gross profit is externally audited as part of our statutory accounts.

The advantage of using gross profit instead of other commonly used financial measures such as Profit Before Interest and Tax is that gross profit is more likely to correlate with production volumes and variations in sales revenue are likely to be offset by corresponding changes in the cost of goods (raw material inputs). As a result, gross profit provides the best indicator of the environmental intensity of our production processes i.e. how efficiently, in environmental terms, Amcor converts raw materials into packaging products.

The FY2010/11 EnviroAction baselines for Amcor are:

5,400 tonnes GHG emissions (CO2-e) per $ million gross profit;

38 tonnes waste to landfill per $ million gross profit; and

21.1 megalitres of water consumption per $ million gross profit (Amcor Australasia only).

EnviroAction targets

Greenhouse gas (GHG) emissions

10% reduction in GHG emissions intensity from 2010/11 by 2015/16; and,/p>

60% reduction in GHG emissions intensity from 2005/06 by 2030.

Waste to landfill

50% reduction in waste to landfill intensity from 2010/11 by 2015/16; and

Zero waste to landfill is the long-term objective.

Water consumption

25% reduction in water consumption intensity from 2010/11 by 2015/16 (Amcor Australasia only); and other regions are implementing water management plans.

To measure our progress against the targets, data on our greenhouse gas emissions, waste to landfill and municipal water use is continuously consolidated in a central database and our progress is reported to the Global Management Team annually. Key activities are included in monthly management reports compiled by each Amcor business.

Our global Sustainability Leadership Council is responsible for coordinating improvements in operational efficiency at our manufacturing sites, resource efficiency throughout our value chains and product stewardship. This is done in close collaboration with Operations, Research and Development and Sales and Marketing teams.

Our Group Internal Audit function includes the auditing of data entered into the central database when they visit sites as part of their annual audit schedule (refer to the Governance section for more about our Internal Audit function). The assurance of this report includes assurance of our reporting of our global, consolidated greenhouse gas emissions , energy usage, waste and water use.

How we are doing

Greenhouse Gas Emissions

The majority of Amcor’s GHG emissions are indirect (scope 3) emissions, attributable to the production of raw materials and are therefore impacted by manufacturing volumes, product mix and recycling/recovery rates. Emissions attributable to the transport of raw materials and waste disposal make a minor contribution to our scope 3 GHG emissions but are included in our reporting. Other scope 3 emissions, such as those associated with packaging end-of-life are difficult to estimate due to the range of possible end-of-life scenarios (e.g. recycling, land fill and incineration with or without energy recovery), which depend on the type of packaging and the region or market in which they are sold. As such these emissions are not included in our reporting

Energy for on-site production of heat is the major source of our direct GHG emissions (scope 1) and we have significant indirect GHG emissions attributable to purchased electricity (scope 2). A variety of sources meet these energy needs based on local fuel availability and electricity generation infrastructure.

Total (scope 1, 2 and 3) absolute GHG emissions in FY2011/12 were 10.9 million tonnes, with scope 1 + 2 representing 24% of total emissions. This does not include sites acquired from Aperio in May 2012, however initial estimates indicate that the new sites represent an increase in total CO2 emissions of only around 2%. This will be incorporated in to the Amcor data in FY2012/13, including baseline recalculation in accordance with the GHG Protocol.

Compared with our FY2010/11 baseline, our GHG intensity has decreased by 6.8%. This is the result of both a decrease in absolute emissions, and increase in gross profit.

Emissions reduction projects

Each Amcor business group has a GHG emissions reduction target to support the global Amcor target. To achieve these targets, the business groups have developed plans and targets for their sites, where appropriate. For example, within our Tobacco Packaging business, each site will conduct an energy use self-assessment. Based on the self-assessments, detailed energy audits will then conducted at sites with the greatest potential for reduction.

This is driving many energy efficiency projects, examples of which include:

Our Tobacco Packaging site in Izmir, Turkey implemented a project to optimise the temperature of the driers used to dry ink. They determined that optimising the temperature of the driers reduced the energy required for that production process without impacting printing quality. This change is now being rolled out across other sites.

Waste from our operations

Waste produced by Amcor sites goes to a variety of destinations. Where possible, it is recycled either internally or by external parties. Waste that cannot be recycled is sent to landfill or incineration, often with energy recovery, depending on local waste management infrastructure. Waste classified as hazardous is sent to approved hazardous waste treatment facilities.

The majority of Amcor’s waste to landfill is produced by our Australian paper mills. This is due to contaminants in the recycled paper feedstock. Absolute waste to landfill FY2011/12 was 83 thousand tonnes, up by 7.8% from 77 thousand tonnes last year. This was primarily due to an increase in waste from the Botany, Australia paper mill. Compared with our FY2010/11 baseline, waste to landfill intensity increased by 1.0%. We expect that waste to landfill will decrease in FY2012/13 as the new paper mill in Botany comes online.

Helping customers reduce waste

We often work with our customers to optimise their manufacturing processes, which can result in reduced waste. For example, in Indonesia, our Flexible packaging business has a Technical Service team, who assist customers in setting up their packaging machines to run our packaging materials in order to reduce rejection, waste and to increase machine running speed.

Water consumption

Water conservation is a critical issue for sites in the water-stressed areas of Australia, parts of the southern USA, Mexico and some areas of South America.

The majority of Amcor’s municipal water is consumed by our Rigid Plastics business in the Americas, where it is mainly used for evaporative cooling, and by our Paper and Board Business Unit in Australia - paper manufacturing processes are inherently water intensive. Alternative water sources, such as recycled water supplied by the local water authority, ground water and river water, are used for cooling at the three Paper and Board mills and at other manufacturing sites.

During FY2011/12, we conducted an assessment of all our manufacturing sites using the World Business Council for Sustainable Development Global Water Tool. Of the 34 sites in regions identified as water stressed or water scarce, 11 are covered by the Amcor Australasia water consumptions target. Further investigation is being conducted to determine if local water consumption targets should be set at the remaining sites. Pie chart from data below: Amcor Ltd. Water Consumption by Source, Total Water Consumption was 15,544 mega litres

Supply of recycled water to our Petrie (near Brisbane), Australia mill significantly decreased in FY11/12. In response to extremely high rainfall in the region, the local water authority scaled back production of recycled water, substituting it with municipal water from local catchments. Accordingly, we revised our FY2010/11 water consumption intensity baseline to include all water sources, so as not to skew our water consumption intensity performance.

Amcor Australasia’s restated FY2010/11 water consumption is 21.2 megalitres per AUD million gross profit, corresponding to absolute water consumption of 5,325 megalitres. Compared with this baseline, Amcor Australasia’s absolute water consumption decreased by 1.5% to 5,246 megalitres water, however water consumption intensity increased by 5.6% due to a slight decrease in Amcor Australasia’s gross profit. Performance is shown in the graph below.

Water management plans have been implemented at 89% of sites not covered by the Amcor Australasia reduction target. No water target has been set for our Rigid Plastics business as the majority of sites are not in regions identified as water stressed or scarce. However water consumption in Amcor Rigid Plastics intensity continues to decrease.

Other impacts

The most significant non-GHG air emissions from our operations are volatile organic compounds (VOCs) from the evaporation of solvents during printing processes. In FY2011/12, the total fugitive VOC emissions were estimated at 22080 tonnes. Ozone-depleting substances are not used at a material level within Amcor.

Selected information on this page pertaining to the EnviroAction baselines and targets, Greenhouse gas emissions data including total fuel use and energy sources, waste by Amcor business group, waste consumption by source, water consumption by source and water consumption performance data has been assured by Net Balance.

Working across value chain to reduce environmental impacts of our products

Our approach

Reducing the environmental impacts of our value chains requires consideration of the total life cycle impact of packaging. We work closely with our with our customers to identify and develop lower impact packaging solutions and we routinely consider the environmental impact of the purchase and delivery of high-risk goods, such as hazardous substances, as part of environmental management of our operations.

How we are doing

Suppliers

During FY2011/12 year we developed an Amcor-wide Supplier Code of Conduct. Implementation of the Code commenced within Amcor’s Flexibles Europe and Americas business and will continue in Amcor’s other businesses in accordance with procurement plans.

Customers

Read more about our total life cycle approach to packaging sustainability and how we work with our customers to offer responsible packaging in the ‘Our marketplace’ section of this report.

Raw materials and waste associated with our products

We work closely with our customers to influence how our packaging products are disposed of at the end of their life. We undertake life cycle assessments and recommend recyclable or recoverable (e.g. suitable for energy recovery or composting) materials where appropriate, and add suggested disposal messages and logos on our packaging products, in conjunction with customer requirements and applicable regulations and standards.

A large percentage of Amcor’s products are recyclable in many regions of the world. However, local infrastructure varies, which makes it difficult to quantify actual global recycling rates for different packaging solutions, especially as some packaged products are exported.

Amcor used a total of 3.4 million tonnes of raw materials in FY2011/12, mostly fibre and polymers. The average recycled content of the materials varies, with Amcor’s products ranging from zero to 100% recycled.  More information about the recycled content of the materials we manufacture and their recyclability can be found in the table below.

We also discuss our fibre purchasing in the “Our Marketplace’  section of this report.

The recycled content and recyclability of our products

Selected information on this page pertaining to the development of an Amcor-wide supplier code of conduct has been assured by Net Balance. assured by Net Balance.