Danfoss digs deep into environmental issues

Sylvia Aitken recently had the opportunity to pick the brain of Danfoss president, Sven Ruder. In part one of this revealing interview, we take a look at the company's successful philosophy and why the environment is a key concern to a number of its processes.

Thirty-five years of operation in Australia is highly commendable. What do you think is the key to Danfoss's success in Australia?

First and foremost, our success has been built on customer support. Having 'best in class' product quality and reliability is essential, but Danfoss Australia has always focused on the Danfoss global commitment to also deliver 'industry best' levels of customer service and support. Our future is based on our customer's production performance and that always remains clearly in our mind.

Environmental concerns and being responsible citizens feature high on the Danfoss agenda. How long has this been the case for the company?

This has been part of our company culture since the beginning. With a heritage starting in 1933 based in the midst of prime Danish agricultural heartland, our founder Mads Clausen was always profoundly aware of the need to balance the demands of building a strong industrial enterprise and the natural environment, therefore benefiting the society.

Danfoss initiated local environmental initiatives long before it was a popularist move. For example, our first move to implement factory wastewater treatment facilities was revolutionary in Europe at the time. Danfoss worked with the local council to formulate standards of water treatment which are still considered groundbreaking today.

Can you expand on the philosophy?

Environmental compatibility is one of the pillars supporting our development as a major global industrial enterprise.

Danfoss is in Danish terms a very large company in a small society. Many of the decisions made within Danfoss influence the society and we are very conscious about this. This consciousness also transfers to the rest of the world where Danfoss is present as is part of our global make-up.

The ethos 'Making Modern Living Possible' is so much more than fashionable words - it is part of our global psyche to improve the human society's quality of life in balance with natural environment.

In short, environmental concern has always been a high priority, directly at our factories and also by assisting our customers to improve both their bottom line and their environmental footprint.

What steps do you take in your manufacturing processes to minimise environmental impact?

We run a continued improvement process which means that we every year have new improved targets for environment impact. Here are some examples:

To assess the production's impact on the environment, Danfoss follows the ISO 14001 standards that deal with the use of energy, chemicals, emissions levels, machine safety, waste management and ergonomics.

The ISO 14001 standard is based on the methodology known as Plan-Do-Check-Act in order enable an organisation to develop and implement a policy and objectives which take into account legal and other requirements and information on significant environmental aspects.

There are many examples on how we put ISO 14001 into practice. We have reduced packaging consumption by 50% in Danfoss Silicon Power in Germany - new packaging can be returned to the factory for re-use. Another example is Danfoss Drives, which has reduced the weight of the largest frequency converter by 60% and the size by 38%, which lessens the impact on environment in terms of less energy and raw material used.

In all product development projects in Danfoss, the environmental impact is evaluated in order to minimise energy and raw materials, but also to consider hazardous chemical substances and materials.

Restricted substances and materials

Hazardous chemical substances and materials are banned or restricted in production (negative list). This list was worked out in 1998 and is a very important tool for developers, but also for purchasers when evaluating and approving the suppliers.

Examples of banned substances are perfluorocarbons - cooling material - compliant with EU decisions and the Kyoto Protocol. Another example is flame retardants, which are hazardous for our health.

Danfoss also goes beyond national and international regulations; one example is the chlorinated substance tetrachloroethylene, which is banned in all our factories, although it has not been banned in international regulations. The substance is used for de-greasing processes, but not in Danfoss as it is hazardous both to the environment (water) and to our health.

Today this list includes 42 substances/materials.

Suppliers and the environment

Suppliers are evaluated on quality, logistics, production, technology, management, employees and environment based on the principles of the UN Global Compact. Suppliers are required to comply with the negative list and are held responsible for meeting all relevant regulations.

WEEE

Waste Electrical and Electronic Equipment directive delegates responsibility to producers and importers to set up a system for recycling, re-use and financing of waste concerning electrical and electronic equipment. Danfoss products comply with the directive, if they are included.

RoHS

The Restriction of Hazardous Substances directive forbids the use of lead, cadmium, hexavalent chromium, mercury and the flame retardants PBB and PBDE in electrical/electronic equipment.

Danfoss Drives is leading the way in introducing alternatives to soldering materials with lead and has already successfully delivered its first products which meet the requirements in the RoHS directive.

Employee training

In 2006, more than 27,000 hours were used in the Danfoss factories for training employees in improving safety and environmental.

Audit and reporting

An external, third-party audit of the environment has been carried out for the last 10 years, with environmental issues included in the group's annual report.

Next month, Ruder discusses future trends in drive technology and just how the company can claim its new series of VLT drives can pay for themselves within nine months or less.