Good evening and thank you for the kind introduction. It’s truly an honor for me to represent United Technologies here this evening and we’re very proud of our relationship with EPA Climate Leaders, a relationship that dates back to 2003.
But let me start by thanking the EPA, in particular the administrator, Steve Johnson, and the deputy administrator, Marcus Peacock. Their leadership and the strong partnership between government and business is helping us collectively, all of us in this room, solve today’s most important environmental challenges. We’re looking forward to our continued work with EPA, as well as the other agencies, to accelerate the advancement of energy efficient technologies. And that’s really why we’re all here: the acceleration of energy efficient technologies.
As many of you know, UTC is a $48 billion global high-technology company and we’re well aware of how our products and technologies impact the environment. When we achieve greater efficiency, we produce less waste, and we can reduce our impact. Having the support of the EPA along the way really does help us achieve these goals that are so important to our company.
UTC’s commitment to the environment goes back a long way. Let me start in 1991 when we launched the first set of Environment, Health and Safety (EH&S) goals. We exceeded many of those goals ahead of schedule, and in the late 90s we expanded them. Those goals became what we in the company call our "10X" goals, for a ten-fold improvement in various EH&S metrics.
The goals in place from 1997 to 2006 included aggressive reductions in air emissions, energy and water use, as well as ten times improvement in key safety measures, all evaluated against our 1997 baseline numbers. We exceeded all of our environmental goals during that period, including a 56 percent reduction in energy usage; 72 percent decrease in water use; and a 69 percent reduction in air emissions, all normalized against revenue. Keep that normalization in mind; it’s an important point for the future.
Being a company founded on innovation, a company inspired by founders whose names still drive the businesses that make up UTC, our employees’ dedication brought about those results. I think in one of the sessions today you heard a little bit about one example, about our Chubb facility in Australia. It’s a facility that tests fire pressure hoses on an annual basis. You put a lot of water in a hose, you pump the pressure up, you test the hose to make sure it’s okay, and then you dump the water down the drain.
And the Chubb employees in Australia – one of the driest continents on earth – wouldn’t accept that way of doing business. They devised a system where the water is recaptured and reused. In the process of designing such a system into place, they also had to then put in place new pumps, more energy efficient pumps, pumps which also recapture rainwater along the way. And that resulted is a savings of 40,000 gallons of water from the over 3,500 hoses tested annually. That’s the kind of innovation that UTC employees bring to our jobs every day in achieving the Climate Leaders goals that we’re talking about here tonight.
Another amazing outcome is the direct result of our employees’ dedication to safety, metrics which have improved dramatically. Since 1997, our lost workday incident rate went down 80 percent and our U.S. recordable incident rate went down 78 percent. So it’s not just about Climate Leaders goals, it’s not just about energy goals; it’s also about the health and safety of all the employees in our company.
And as someone who’s fairly new to UTC, I have to say I’m extremely impressed by the engineering culture. It’s a culture based on continuous improvement. We set aggressive goals that we then exceed by the kind of engineering standards and scientific practices we follow every day. And we exceed those goals on an ongoing basis. UTC was founded on innovation and we've applied these engineering principles in our approach to the environment.
I’m equally excited about our new environmental goals and our commitment to developing more efficient products and services and solutions. This year we launched new, even more aggressive goals that will extend through 2010. These goals will be our most challenging goals yet. One marked change is that we will measure our metrics in absolute terms, rather than normalized for revenue. This means our target will remain the same as the company grows. And by the way, those of you on the business side recognize the pressure for growth won’t decline in a company like UTC – a company that has more than doubled its sales in that 10-year baseline reporting.
Since UTC believes that climate change is one of the biggest challenges to overcome, energy conservation and greenhouse reduction are important elements in these new goals. Our goal is to reduce absolute greenhouse gas emissions 12 percent by 2010. That’s 3 percent annually. That goes beyond the 2 percent annual reduction we delivered since 1997. And again, that’s an absolute reduction goal, not one that tracks with our expanding revenue.
With the new goals we’ll also set expectations for our top suppliers to reduce and, where possible, eliminate negative impacts caused by factory products and services from those suppliers. UTC’s products can be found in almost every country on earth, and since many of those products have very long life spans – elevators that can be in service for close to a hundred years, for example – we work hard to improve the efficiency of our products. Those products are then used to minimize our long-term impact on the environment.
Our 2010 goals include a 10 percent reduction in product packaging and a 10 percent increase in energy efficiency across the product family. Let me give you a couple examples of what we’ve done and what we’re continuing to do. Otis' Gen2 elevators recapture energy with descending loads. We have regenerative elevator technology, resulting in energy savings of 75 percent compared to similar models just a decade ago.
Carrier recently introduced its new Infinity heating and cooling systems, which are 20 percent smaller, 30 percent lighter and use 40 percent less refrigerant than comparable models. Think about materials and production; think about packaging – 20 percent smaller, 30 percent lighter; think about transportation – think about energy savings in transportation; and 40 percent less refrigerant than comparable models before the Infinity model was introduced.
Pratt & Whitney, our aircraft engine business, is participating in NASA’s Ultra-Efficient Energy Technology program, whose goal is to develop technology that will reduce fuel consumption on engines by 15 percent relative to today’s state-of-the-art engine. Think about the average 777 Boeing airliner. This will reduce fuel costs by about a million dollars a year, CO2 emissions by almost 12,000 metric tons.
Pratt & Whitney has also found a way to reduce pollutants during engine maintenance. EcoPower is a new on-wing engine wash system that cleans efficiently without harming the environment. Unlike traditional systems that use toxic cleaning chemicals, EcoPower uses pure atomized water to remove contaminants during engine maintenance and overhaul. This technology also allows the process to be completed up to six times faster. So, again, it benefits the company from an efficiency point of view; it benefits our customers from an efficiency point of view and it benefits our environment.
And we also balance our internal operations along with the products and solutions we deliver to our customers. UTC is incorporating LEED standards – Leadership in Energy and Environmental Design – into green building practices as part of our greenhouse gas reduction goals internal to the company. Supporting this effort, Otis is relocating its major manufacturing plant in China to the Tianjin District – the Tianjin Economic-Technological Development Area. Some of you know that as the TEDA installation. This is UTC’s first facility designed with a highly integrated green approach and it’s already exceeded the requirements for efficiency targets for the building operation and construction cost targets.
In 2006, UTC joined an alliance of leading global companies to determine how buildings can be designed and constructed to consume zero net energy. Along with Lafarge, UTC is co-chairing the Energy Efficiency in Buildings project with the World Business Council for Sustainable Development. This project will span three years and lead to the development of recommended standards for the creation of zero net energy building focusing on Brazil, China, Europe, India, and the United States.
Our efforts show what can happen when a company committed to research and development applies its technology not only to make better products, but to consider the impact of those products on the environment as well. For more than 15 years, discipline and focus have guided UTC’s environmental improvement performance, and we look forward to the new challenges and the achievement of those 2010 goals.
Fred Rentschler, the founder of Pratt & Whitney, once said, "Let’s stick with our own things. We know them best and we’ve only scratched the surface." I can’t think of a better way to describe UTC’s relentless pursuit of both profitability and environmental responsibility. Every honor and accolade we receive reinforces our commitment to doing business responsibly, and tonight is no exception.
UTC employees have an internal catchphrase, "What Unites Us." It’s a phrase that we use to bind the 215,000 employees who make up UTC into the enterprise that we are. Our success – our environmental success and our business success – is due to the sustained effort of those employees around the world, every one of whom lives and works in a fragile world, every one of whom shares a passion for making the lives of all of us better. On behalf of all those employees, I accept the recognition of this award tonight. Thank you very much.
