Sustainability and Proactive Product Stewardship at Navistar, Both Now and in the Future

Sustainability and Proactive Product Stewardship at Navistar, Both Now and in the Future Extended Abstract Control #: 201 Thomas W. Hesterberg, William B. Bunn, Edith Ardiente, Thomas Slavin, Jack Shih, John Martinicky, Daniel Pikelny, Puneet Goenka, Ferdinand Alido Navistar Incorporated, 303 E. Wacker Drive, Suite 360, Chicago, IL 60601

Debra A. Kaden DakTox, LLC, 61 Piedmont Street, Arlington MA 02476

INTRODUCTION Sustainability is the ability to meet the needs of today’s people and environment without compromising that of subsequent generations. For business, sustainability means ensuring success in the present without compromising the future. Navistar is making progress in all three major areas of sustainability: environmental, social, and economic. The company has improved it’s sustainability by reducing environmental impacts of its operations and products, while at the same time promoting local community goals, creating favorable workplace environments, and creating economic rewards for reducing greenhouse gases (GHGs). In a business context, the pursuit of sustainable strategies should improve sales, reduce costs, reduce product and facility environmental impacts, improve employees’ health and safety, and invest in the well-being of plant communities throughout the world.

OVERVIEW Three major areas need to be considered when assessing the a company’s sustainability: Environmental sustainability, Social sustainability, and Economic sustainability (see Figure 1). While sustainability is most often viewed through the environmental lens, sustainable business practices should satisfy economic and profit goals, while at the same time limiting the harmful side effects of this activity on local air quality and ecosystems, limiting pressure on ultimately exhaustible resources, and limiting the accumulation of climate-altering GHG in the earth’s atmosphere. More broadly, sustainable business practices also promote local community goals and create a better and healthier working environment for employees. Thus, implementing a sustainable business program requires integrating environmental, health, and community considerations into investment and operational decisions, primarily through defining targets for reducing a company’s environmental footprint over time together with metrics for gauging progress on broader social and community goals.

Environmental Sustainability: Product stewardship supports clean air, and fuel economy goals. Navistar’s policy when producing new products is to reduce overall environmental impacts and promote sustainable development. Through advances in diesel trucks, school buses and engines, improving diesel technology has many environmental benefits. Modern diesel engines are very fuel efficient, using 30-40% less fuel than gasoline engines, with corresponding reductions in carbon dioxide emissions. Navistar has pioneered innovations that consistently meet or exceed government regulations for clean air quality, often in advance of government deadlines. Particulate matter (PM) emissions overall have been reduced by more than 99% since the advent

1 of diesel engine emissions regulations in the US (Figure 2). To meet federal 2007 standards for PM and hydrocarbons, Navistar developed a catalyzed diesel PM filter to be used in conjunction with ultra-low sulfur diesel fuel. This technology made it possible to meet federal standards six years ahead of government requirements. For school buses, a recent study found that PM emissions per vehicle mile with this technology were about one-fifth of the level for a bus operating on compressed natural gas, and one-eighteenth the level obtain by a conventional diesel bus.2

Figure 1. Components of sustainability (adapated from van der Linde and Danskin 20061)

After-treatment technologies such as advanced exhaust gas recirculation eliminate virtually all NOx emissions to meet more rigorous federal standards.4 New engine design also contributes to improved fuel economy. Development of innovative diesel hybrid technology, such as school buses and commercial vehicles with hybrid-electric powertrains promise to achieve fuel economy gains of 45% to 50% while reducing emissions of the GHG carbon dioxide by 40%. Navistar was selected by the U.S. Department of Energy to develop a plug-in hybrid electric school bus to be used in fleets across the country. Such plug-in hybrid electric vehicles will play an important role in achieving America’s energy independence by reducing petroleum use and will also reduce GHG emissions.

Sustainability and product stewardship require evaluation, research and action. To follow these principles, responsible manufacturers must examine whether their products have the potential to cause environmental or health problems, then address those issues. One example is the diesel exhaust research program. Diesel has changed considerably in amount and composition over the years, with post-2010 engines using low sulfur fuel, producing 99% less PM and NOx than the older engines. Navistar therefore proposed research to perform comprehensive emission analyses and speciation/toxicity studies of prototype 2007-2010 engine technologies operating on ultra- low sulfur diesel fuel. This effort, the Advanced Collaborative Emissions Study (ACES), is funded by multiple stakeholders and overseen by the Health Effects Institute and the Coordinating Research Council.

2 Another research effort involved studies examining exposure to diesel exhaust from school busses using tracers to determine whether diesel exhaust measured inside buses originated from the school bus’ diesel engine or from other sources. Two studies used minute amounts of tracers: one used a tracer in the diesel fuel (iridium) only, the other used tracers in both the fuel (iridium) and the engine oil (deuterated n-hexatriacontane), to allow differentiation of sources of PM originating from the school bus and outside the bus. Emission rates for fine PM mass, organic carbon, and elemental carbon were determined for the tailpipe emissions, crankcase vent, inside the buses, and ahead of the buses on the highways. Concentrations were highest when the windows were closed, as compared to open. Researchers concluded that particle levels inside the school buses were generally quite low, and that the crankcase vent contributed more particles to the air inside the bus than the tailpipe. 5,6

Social sustainability Sustainable business practices promote local community goals and create a better and healthier working environment for employees. Navistar’s commitment to society encompasses the health, education and well-being of its employees and communities. Employees benefit from a wellness focus, aimed at preventing smoking, obesity or other risk factors, activities which manage or reduce the risk factors in order to prevent disease, and activities aiming to manage disease in order to prevent catastrophic consequences. Helping employees maintain a healthy lifestyle minimizes absenteeism, improves productivity, and keeps health care costs manageable for the company and employees alike. By initiating health research studies based on careful analysis of company medical claims data, Navistar actively contributes to global knowledge on workplace health issues.

Navistar facilities are actively involved in the local community through diversity and technical education programs, which help foster economic opportunities for young people. Navistar also supports military veterans and families and facilitates employee collection of needed personal items for the troops. Industry leaders at Navistar help promote career opportunities for students in under-served public school systems in the U.S. and abroad by providing training programs.

Navistar also supports diversity. Total annual purchases from minority- and women-owned suppliers are in excess of $1 billion. Navistar was recognized as one of the 50 best companies for minority engineers in 2006. International Truck and Engine has been recognized by Diversity Inc as one of the leading companies in the United States for supplier and employee diversity.

Economic sustainability Factoring environmental, health, safety, security, and local community goals into business decisions also benefits a company’s financial position. Establishing a reputation for business practices that promote broader social objectives creates goodwill among key stakeholder groups, and may result in the ability to better attract and retain high quality socially-conscious employees. Similarly, socially-conscious investors may be more attracted to the company, and a

3 sustainability strategy may also provide a competitive advantage for product marketing over other companies among socially-conscious customers.

Through the Business Roundtable’s Climate RESOLVE program, which focuses on monitoring and reducing emissions of GHGs from facilities and products, Navistar facilities proposed capital investment projects to improve financial performance and reduce GHG. These efforts not only serve the environment, but also pay for themselves through reductions in energy use. A total of $1,999,185 in up-front costs was invested in energy conservation projects, with projected annual savings of $1,177,507 and 17,146 tons of carbon, or about 0.8 percent of total company GHG emissions.

SUMMARY AND CONCLUSIONS: BROADER ECONOMIC BENEFITS OF A SUSTAINABILITY PROGRAM There are three stages of management that companies go through on the way to striving for excellence in becomming more sustainable.7 The first stage is to focus on compliance, where the company reluctantly does the minimum required. The second stage is following the example of leaders in the field. In the third stage a company integrates sustainability into its unique culture and turns it into a competitive business advantage. Navistar’s continuously evolving approach to sustainability embraces this third stage, striving to meet the needs of today without compromising the ability to meet the needs of tomorrow. These efforts encompass environmental, social, and economic arenas.

Navistar’s environmental sustainability program seeks to meet or exceed the regulatory pollution mandates for their heavy duty engines using a combination of innovative product design (aerodynamic design changes, electric/diesel hybrid technology), and proactive implementation of emissions-reduction after-treatment control technology. These efforts have resulted in significant reductions in emissions of PM, NOx, CO2and other pollutants. In addition, Navistar has continued to investigate the human health implications of exposure to diesel exhaust, a complex mixture that changes considerably with technology advances. Navistar’s proactive research program addresses the impact of these changes, including altered amounts, composition, potential toxicity, and fate of the resulting emissions.

Navistar’s social sustainability program strives benefit both employees and communities in areas where Navistar has facilities. Whether it involves employee healthcare or wellness programs, leadership participation in the broader scientific community, community education and involvement programs, or contributions to global safety and security, Navistar is active in efforts to benefit today’s society and that of the future.

Finally, Navistar’s economic sustainability program strives to save money for the both the company and its customers. Through its focus on energy conservation at manufacturing facilities, Navistar has targeted energy-saving projects, which will not only save money, but will also reduce greenhouse gas emissions. The financial savings on these projects are projected to pay for their cost within two years, and continue to pay off for years to come.

4 The projects evaluated in this report are consistent with the company’s goals for sustainable investment strategies. Credibility and respect are earned through responsible behavior. There is no shortcut. Having behaved responsibly, a company must communicate incessantly.

REFERENCES 1. Enhancing sustainability: Resources for our future. van der Linde, H.E.; Danskin MH. editors. IUCN Sustainable Use Initiative. SUI Technical Series. Gland, 1998:178 pages. 2. Bunn, W.B.; Slodowske, W.; Hesterberg, T.; C L. Reducing diesel engine emissions using catalyzed diesel particulate filter technology. Environ. Mgr. 2004, May, 29-32. 3. Hesterberg TW, Bunn III WB, Chase GR, Valberg PA, Slavin TJ, Lapin CA, Hart GA. A critical assessment of studies on the carcinogenic potential of diesel exhaust. Crit Rev Toxicol 2006, 36(9),727-776. 4. Hesterberg, T.W.; Lapin, C.A; Bunn, W.B. A comparison of emissions from vehicles fueled with diesel or compressed natural gas. Environ Sci Technol 2008,42(17),6437- 6445. 5. Zielinska, B.; Campbell, D.; Lawson, D.R.; Ireson, R.G.; Weaver, C.S.; Hesterberg, T.W.; Larson, T.; Davey, M.; Liu, L.J. Detailed characterization and profiles of crankcase and diesel particulate matter exhaust emissions using speciated organics. Environ Sci Technol 2008,42(15),5661-5666. 6. Ireson, R.G.; Ondov, J.M.; Zielinska, B.; Weaver, C.S.; Easter, M.D.; Lawson, D.R.; Hesterberg, T.; Davey, M.E.; Liu, L.J.S. Measuring in-cabin school bus tailpope and crankcase PM2.5: A new dual tracer method. In press. 7. Veltri, A. Transforming safety strategy and structure. Occupational Hazards 1991, 53(9), 149.

KEYWORDS Sustainability, diesel, PM, environmental, economic, social