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Parker Hannifin 2012 Sustainability Report

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Sustainability, the concept of being profitable without compromising our future, has become increasingly important to our shareholders, customers, employees and communities in which we operate. This report, which covers fiscal year 2012, highlights achievements and progress made in the area of environmental stewardship, product stewardship, social responsibility and employee empowerment, safety, wellness and diversity.

The report is available electronically on www.parker.com under the About Parker section (LINK TO REPORT).
http://www.parker.com/parkerimages/Parker.com/About%20Us/Literature/Parker%20FY12%20Sustainability%20Report.pdf

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Parker Hannifin 2012 Sustainability Report

  1. 1. 2012 Sustainability ReportMaking a Meaningful and Positive Impact on the World
  2. 2. About this ReportThe information in this reportaddresses how Parker is makinga meaningful and positive impacton the world by applying itscore technologies and creatingexciting growth potential. All datacorresponds to Parker’s fiscal year2012 (July 1, 2011 through June 30,2012) unless otherwise noted. Thelast report published correspondedwith Parker’s fiscal year 2011.Parker’s intention is to report on anannual basis.Report ScopeThe data provided in this documentreflects Parker’s global manufacturingoperations in which Parker hasmore than a 50 percent controllinginterest or majority ownership. Italso includes employees in thoseoperations and the associatedheadquarters and distributioncenters under Parker ownership.The scope does not include Parkersuppliers, customers, distributors,contractors or joint ventures in whicha minority ownership is held.Contact UsParker welcomes your commentsand questions about this documentand its sustainability efforts by e-mail:rtaylor@parker.comTable of ContentsAbout Parker ............................................ 2Message from the Chairman,CEO and President .................................... 4Sustainability ............................................ 6Governance and Compliance..................... 8Product Stewardship .............................. 10Environmental Stewardship .................... 14Parker People ......................................... 16Social Responsibility ............................... 20 1
  3. 3. About Parker A Meaningful and Positive Impact on the World With approximately 60,000 people in 48 countries around the world, Parker can be found on and around everything that moves. Parker is the When you view the world as global leader in motion and control Parker does, through the lens of a technologies, providing precision- broad range of motion and control engineered solutions for a wide technologies, you can see a vast variety of mobile, industrial and number of engineering challenges. aerospace markets. By applying decades of technological For fiscal 2012, Parker had annual expertise, Parker is not only sales of $13 billion. Parker is a developing solutions to these company with a deep rooted belief challenges, but making a meaningful that premier customer service and difference in our lives. engineering spirit will sustain success going forward. Further, Parker The search for more efficient ways realizes that a sustainable company to deliver power from traditional is one that has an ongoing need, energy sources; the development and obligation, to manage natural of wind, solar and a host of other resources efficiently, attract and renewable energy platforms; the retain talented employees, engineer desire to produce and distribute products that will help the world clean water; new drug discovery thrive and support the communities and medical advances; the building in which Parker operates. of infrastructure and transportation to support a developing world; Parker’s employees bring it all the safe cultivation, transportation together, partnering with customers and preservation of food sources; to help solve some of the world’s emerging needs and developments greatest engineering challenges. in defense; and the protection of the environment. These challenges create opportunities that push the bounds of Parker’s capabilities. It’s what drives Parker people forward – seeking new ways to innovate by combining technologies, collaborating, developing systems and partnering with customers. In doing so, Parker creates exciting growth potential and makes significant contributions to the world, for this generation and for generations to come.2 3
  4. 4. Message from the Chairman, CEO and President Financial Highlights The principles of sustainability are deeply rooted in Parker’s 95 Operating Data 2012 year history. These principles are Net sales .................................................................................................................................................. $ 13,145,942 maintained today by our adherence Gross profit .............................................................................................................................................. 3,187,605 to a set of core values that promote Net income attributable to common shareholders .................................................................................... 1,151,823 a winning culture grounded by Net cash provided by operating activities ................................................................................................. 1,530,385 integrity, honesty and respect, and our aspiration to raise the standard Per Share Data of living through responsible, global Diluted earnings ....................................................................................................................................... $ 7.45 stewardship. Sustainability is also Dividends ................................................................................................................................................. 1.54 embedded within our operating Book value ............................................................................................................................................... 32.72 framework, the Win Strategy, which emphasizes premier customer service, operational excellence that reduces our costs and environmental impact, and innovation Examples of our sustainability efforts The Win Strategy in new product development for a in the past year include: Built on long established Parker goals of premier customer service, financial performance and profitable growth, better world. All this is supported the Win Strategy is a disciplined and consistent business strategy that has transformed the company and improved by empowered employees who • Introducing new, innovative • Strengthening environmental operations worldwide since it was initiated in 2001. Designed as an instrument of operational change, the Win Strategy make our organization and the products such as the Parker protection through continued is a powerful document adopted by all Parker locations worldwide. communities in which we operate a RunWise System that reduces waste management, waste better place. fuel consumption up to 50 minimization efforts and Empowered employees represent the foundation of Parker’s strategy and the key to sustained success, as they have percent and lowers a single environmental management remained steadfast in their dedication to the strategy’s implementation. Empowered employees work to execute the Within this report for our fiscal truck’s emissions by up to 48 systems. Win Strategy by taking responsibility, accepting accountability for results and supporting a culture of respect for the year 2012, you will get a complete tons per year, making the contribution of every person. understanding of sustainability at drive train more efficient and • Supporting employee Parker. You will find examples of contributing to a greener volunteerism in their local how Parker products are having a environment. communities. meaningful impact on the global environment and on people as we • Using lifecycle assessment and Every day Parker employees around Parkers Win Strategy direct our technologies to solving material optimization to give our the world, in the 48 countries where the world’s greatest engineering customers a selection of product we operate, are striving to drive our challenges. When we integrate that offers premium performance company forward, partnering with Vision The #1 Motion & Control Company sustainability into our products and while minimizing environmental our customers to help them become systems, we reduce our customers’ impact. more productive and profitable, and Goals #1 Premier Customer Service Financial Performance Profitable Growth environmental impact, improve along the way, have a positive and our competitiveness and create meaningful impact on our world. It is customer value. this drive and passion for excellence S ◆ Quality Products on Time ◆ Suppliers: Strategic Procurement Internal T Acquisitions Globalization in all that we do that will sustain our R ◆ Value Added Services A ◆ Operations: Lean You will also understand some of the company beyond the next 95 years. T ◆ Best Systems - PHconnect ◆ Innovative Products initiatives we have in place for our E ◆ Customers: Strategic Pricing ◆ Systems Solutions G employees that ensure we create an I empowered workplace that drives E ◆ European Initiatives ◆ Strong Distribution S our success. Don Washkewicz, Chairman, Chief Executive Officer and President4 March 2013 Empowered Employees 5
  5. 5. CASE STUDY CASE STUDY Kirklees Excellence in the Parker Racor Super Impactor Sustainability Environment Awards 2012 BEEA Award Parker manufactures products for Stakeholder Engagement motion and control applications. Parker engages a number of The Parker Racor Filter Division Parker Racor Filter Division Europe To be successful, the company stakeholders in the development of Europe took home a total of five was awarded the Grand Prix at needs a supply of raw materials, its sustainability goals and objectives. awards presented at the Kirklees the British Engineering Excellence the ability to attract talented people Contributing stakeholders include: Excellence in the Environment Awards (BEEA), which aim to promote to design, make and sell the employees through a biannual Awards. The event, hosted at the the quality of engineering design product and viable communities global survey; the management Cathedral House in Huddersfield, UK, within the UK. The Parker Racor in which to operate. A shortage team through interviews and polls; recognizes businesses for their green Super Impactor crankcase ventilator, or loss of any of these elements customers through direct feedback and corporate social responsibility a breakthrough in engine design, was would jeopardize the company’s from the marketing and sales credentials. recognized for its ability to reduce ability to sustain a successful and team, as well as selected phone diesel engine emissions. The device prosperous organization. Each of interviews; and supply chain through Parker Racor’s Dewsbury location reduces the production of harmful these aspects of operations have feedback in their compliance with has been a part of the community pollutants. clear, sustainable parameters which the sustainability requirements for over a decade, and management is why sustainability is a key element in Parker’s supply chain portal. recognizes the obligation to have Parker Racor’s project was the result of Parker’s business model. Additionally, Parker analyzes a positive impact on the local of a collaborative partnership with information from sustainability environment. This commitment is Leeds University and has taken a Key Opportunities ratings/shareholder feedback and shared by all employees, and each multifaceted approach to design There are a number of opportunities benchmarks with its industrial peer plays a part in contributing to the that emphasizes sustainability associated with sustainability: group. division’s sustainability initiatives. throughout all stages of the product’s lifecycle. The Super Impactor does • Parker’s technological expertise The current engagement process The Kirklees Excellence in the not feature any rotating parts or helps customers respond to their is informal. The stakeholders that Environment Awards recognize the electrical components, and it does unique business challenges. By have been identified as most significant resources Parker Racor not require a filter, which would need focusing on new products and important to Parker are the customer, has invested in waste reduction to be replaced annually in traditional the sustainability of materials the employee, the supplier, the and education, pollution prevention, designs. It is even made from nylon and resources, Parker minimizes shareholder/investment community, sustainable purchasing and PA66, a recyclable material that can waste while providing high the management team and transportation reduction, as Parker be melted and reused at the end of quality, cost-effective solutions competitors. These stakeholders finished third overall in the Green its life. for customers. The opportunity were identified by evaluating the Business of the Year Award. to differentiate products and requirements of the stakeholder The Super Impactor is compatible rapidly adapt to changing needs against the importance and influence with a range of engines, as its is a key opportunity. in which they impact the company. modular design allows engine manufacturers to adapt the device • A passion for innovation enables Two key areas of focus that have to their manufacturing processes. Parker to have a meaningful been identified in Parker’s stakeholder With over 30 million diesel engines and positive impact on solving engagement efforts have been: manufactured each year, the some of the world’s greatest Super Impactor has the potential to engineering challenges. • Need for additional emphasis on significantly reduce overall engine product stewardship emissions. • Parker employees are continuously originating new • Need to have more visibility ideas to make both the and opportunity to engage in workplace and their communities community involvement more sustainable. These ideas are extremely valuable and help create a culture where employees are empowered to look for better, more efficient ways of doing things.6 7
  6. 6. Whether Parker is solving the world’s a formal follow-up process. The Labor Relations greatest engineering challenges, responsible business or functional Parker has established a labor relations delivering on world class customer leader must present a corrective action program, which is managed by the service or supporting its communities, plan to senior leadership when a Vice President of Global Labor and Parker strives to do what is important business or function receives an audit Employee Relations, and has for the company and its stakeholders. grade signifying that the business or established global policies for human function needs improvement. rights and labor standards. Parker is in Parker is committed to the highest the process of deploying these policies standards of ethical behavior and Parker management has embraced throughout the organization and corporate conduct. Parker’s directors, Sarbanes-Oxley requirements, which providing appropriate education. The officers and employees have a includes quarterly self-assessment policies largely align with standard ILO responsibility to serve stakeholders in and reporting of key financial risks and UN Labor and Human Rights in all aspects of their jobs with honesty, and controls by management, and is accordance with local laws and to the fairness and integrity. Parker is augmented by ‘peer’ testing of controls extent in which they are consistent with Parker’s Board of Directors governed by an 11 member Board of at all Parker reporting locations. Parker’s Code of Conduct. Further, Among Highest Rated for Directors. Ten of the 11 directors are Parker is aligning current labor relations Board Governance Capacity of “independent” based on the applicable In fiscal year 2012, management language in the supply chain to the new America’s Largest Companies independence standards of the New completed peer tests of controls at 218 global standards. York Stock Exchange and Parker’s locations (divisions, sales companies Parker was ranked in the top Independence Standards for Directors. and shared service centers), nine Reporting Violations ten in all three evaluation Parker’s Chairman, CEO and President, corporate departments and four IT Parker has established an Integrity categories in The Weight Don Washkewicz, is the only Parker centers. Line that is open to everyone, inside of American Boards 2012 employee on the Board. or outside the company, to report report, an independent study Integrity and Ethics any concerns about possible illegal, of America’s 500 largest Each director must stand for election Parker believes that a sustainable unethical or improper conduct. The companies conducted by annually. The board has responsibility company is built on a foundation Integrity Line is administered in most James Drury Partners. The for overseeing the business and of good governance that promotes countries, includes a web-based study measures the experience affairs of the company. To meet ethical behavior at all levels. The reporting tool and allows callers the and business acumen of board Parker’s Board, visit www.phstock.com/ company took an important step in option of remaining anonymous. These members. Parker’s Board corporategovernance. its governance efforts in August 2012 numbers are available 24 hours a day, was ranked #1 in the Average by creating an Office of Integrity and seven days a week. Parker’s Enterprise Director Weight category that Audit and Internal Controls Ethics that is separate from Audit and Compliance Office treats Integrity Line evaluates the experience and Parker’s Audit and Compliance Office Compliance operations. The move was calls seriously and follows up on every business acumen of each is responsible for overseeing all internal made not in response to any problem, call received. director on the Board and investigations of suspected ethics but in recognition of the critical role was ranked second in the and compliance-related misconduct, that integrity and ethics play in the Enterprise Compliance Composite Weight category including violations of law or Parker’s success of a sustainable company. The Parker has an established, and that assesses a Board of Code of Conduct and related policies. company recently hired its first Vice continuously evolving, compliance and Directors overall governance The Audit and Compliance Office has President of Integrity and Ethics. ethics infrastructure. Parker’s Enterprise Governance capacity. established processes and procedures Compliance Network consists of the to ensure that all internal investigations Code of Conduct Board of Directors, Senior Parker The final report included are conducted by qualified personnel Parker’s ethics initiatives are built Leadership, Office of Audit and & Compliance evaluations of 4,564 directors who have been trained to conduct around the principles in its Code of Compliance, the Legal Department, sitting on the boards of 466 of investigations lawfully, promptly, Conduct. Parker puts these principles local Compliance Officers and local America’s largest companies, thoroughly, professionally, fairly and into practice through a comprehensive Compliance Administrators. The Vice and places value on current confidentially. training regimen that is proliferated President – Audit and Compliance has and past professional throughout Parker, including annual a solid-line reporting relationship to the achievements. Extra weight The Vice President – Audit and training on the Code. Parker’s Code Chief Financial Officer and a dotted was given to directors with Compliance reports to the Audit of Conduct is an evolving document line reporting relationship to the Audit accomplishments in high Committee of the Board of Directors. that is updated periodically to respond Committee of the Board of Directors. revenue organizations, noting In fiscal year 2012, Internal Audit to changing conditions and to reflect the complexity of corporate completed 186 audits. Audit topics changes in law. Compliance Officers provide overall governance in the largest included anti-bribery, anti-corruption, leadership direction for Parker’s companies. The fundamental anti-trust, information systems security Parker’s Code of Conduct is available compliance program. They create the premise is that director and financial reporting. online at www.parker.com and is provided foundation for, encourage and stimulate business acumen is the most to employees globally in 14 languages a culture of compliance behavior important factor in calibrating To ensure management has addressed and is available to suppliers. throughout Parker. Compliance governance capacity and8 therefore maintaining identified risks and implemented Administrators are individuals at Parker 9 corrective action, Internal Audit has locations assigned to specific areas of shareholder value for the compliance oversight. most complex businesses in America.
  7. 7. CASE STUDY CASE STUDY Palletized Multi-function Fuel Cell RunWise ® In the airline industry, where Although nobody looks forward to a passenger safety and aircraft good night’s sleep being cut short reliability are paramount, changes by refuse trucks rumbling down in aircraft design are implemented the street before sunrise, noise only after careful consideration, pollution is far from the biggest substantial research and intensive challenge facing the fleet of trucks testing. Parker and partner Airbus that transport waste and recycling. are at the forefront of one such Refuse trucks consume roughly breakthrough, developing an 8,600 gallons (32,554 liters) of fuel innovative aircraft system that utilizes each year and emit a significant power generated by a palletized amount of greenhouse gases in the multi-function fuel cell. process. Considering emissions and fuel dependency are two major From an environmental perspective, issues, refuse trucks emerged as the multi-function fuel cell system an ideal place to start developing a provides benefits in several ways. solution. First, despite being fundamentally Product inefficient, it has long been standard Upon braking, Parker’s RunWise practice to utilize an aircraft’s main system works seamlessly with the jet engines during taxiing. The multi- refuse vehicle’s standard friction Stewardship function fuel cell system may provide braking system using pressurized power directly to electric motor-driven hydraulic fluid to decelerate the wheels which move the plane on the vehicle, while simultaneously ground, significantly reducing fuel transforming and storing the vehicle’s consumption and emissions, and kinetic energy in accumulators for eliminating noise generated by the use when the vehicle starts moving Product innovation at Parker is Parker has consistently introduced large engine turbines. again. targeted at solving some of the products across a wide array world’s greatest engineering of business segments that are The multi-function fuel cell system The system is able to capture and challenges and is centered on the more energy efficient, weigh less also replaces the small engine reuse more than 70 percent of the concept of designing products to and save space and energy; with located near the rear of the aircraft energy generated during braking, meet the needs of the customer. significant focus on the reduction of known as the Auxiliary Power Unit which would otherwise be lost as A new dimension to that core hazardous materials in products and (APU). The APU provides power to heat. The more stops a vehicle makes competency is the concept of manufacturing processes. start the main aircraft engines, and during the day, the more efficient integrating sustainable design generates electricity used to operate the system becomes relative to a practices into the innovation process. Today, Parker is placing further accessories such as air conditioning conventional drive train. Parker realizes that there are emphasis on this aspect of design. before the aircraft has taken flight. aspects of its products in use and With the development of tools and Replacing the APU with a multi- The results are significant, as end life that have impacts to the systems that identify and quantify functional fuel cell system will enable RunWise reduces fuel consumption environment and recognize there product impacts in application, emission-free ground operation, up to 50 percent and lowers a single are opportunities associated with Parker can develop products that drastically improving air quality in truck’s emissions by up to 48 tons creating customer value. create value for the customer metropolitan areas where airports are per year. For perspective, this is and reduce the impact on the located. equivalent to removing nine mid- Parker has been a champion of environment. sized cars from the road, or planting product design for the environment Parker’s multi-function fuel cell 1,100 trees and letting them grow for throughout the company’s history. Parker Energy Systems system is anticipated to reduce fuel ten years. The system also reduces Early on, Parker eliminated Parker has a business unit consumption and emissions up to brake wear, helping to minimize hexavalent chromium and cadmium dedicated to innovating and 25 percent, providing a solution to maintenance and downtime. from its industrial fittings. Recently, creating more energy efficient significantly increase the efficiency Parker has largely eliminated and sustainability of the world’s By reducing fuel consumption and10 systems as well as converting 11 chlorinated solvents from its conventional systems into airline fleet. emissions, RunWise is contributing to manufacturing processes. renewable energy solutions. a greener environment.
  8. 8. Life Cycle Assessment for Compact Spiral ™ Hose CASE STUDY CASE STUDY Life Cycle Assessment for LIQUIfit ® Fittings (Normalized to Max) (Parker Legris vs. Market Standards) CC RMD Compact Spiral Hose™ LIQUIfit ® Fittings CE OD HWP ED 80 Parker’s Compact Spiral Hose is one At first glance, Parker LIQUIfit of the most significant developments fittings look much like any other 60 in hydraulic hose technology in instant fitting on the market. It may FD HT decades. Developed by engineers at not be immediately apparent how WE WD 40 Parker’s Hose Products Division, the this particular fitting from Parker Compact Spiral Hose has half the Legris is setting a new standard for 20 bend radius of conventional hoses sustainable design without sacrificing with one-third less effort, reducing a performance. MD PO customer’s hose needs by as much as half. The outside diameter is nearly Further inspection would reveal the 30 percent smaller, enabling it to fit body and threads of LIQUIfit fittings WT GW into tight spaces or even allowing are manufactured from a bio-based a customer to increase a hose size polymer. This material, a unique for better flow characteristics. It has bio-based high performance polymer WD TA twice the impulse life of other hoses, produced entirely from renewable as well as a highly abrasion-resistant plants, eliminates the use of fossil- cover, greatly extending time between based resources in manufacturing, AA OD replacements and minimizing reducing carbon dioxide emissions up FE FWE to five times in the process. downtime. Parker Legris TE POC AT Parker Compact Spiral Hose While it is certainly a revolutionary This bio-based polymer is perfect Market Standards product from an operational for water and beverage applications, Conventional Hydraulic Hose perspective, the environmental offering both high mechanical benefits of the Compact Spiral strength to endure demanding RMD Raw Material Depletion Hose are equally impressive. performance requirements and ED Energy Depletion CC Climate Change Advancements in design and ensure long-term resistance, as WD Water Depletion OD Ozone Depletion construction have contributed to a well as perfect chemical resistance GW Global Warming HT Human Toxicity hose that utilizes 40 percent less to compounds such as chlorine, OD Ozone Depletion PO Photochemical Oxidant Formation material and weighs 25 percent chloramines, UV, alcohol and others. AT Air Toxicity TA Terrestrial Acidification less than a conventional spiral hose, offering significant savings in Parker LIQUIfit fittings set the POC Photo Ozone Creation FWE Freshwater Eutrophication shipping and packaging costs. The standard for quality components AA Air Acidification TE Terrestrial Ecotoxicity weight reduction also significantly in water and beverage delivery WT Water Toxicity FE Freshwater Ecotoxicity improves efficiency, which reduces systems. These low-pressure WE Water Eutrophication WD Water Depletion fuel consumption and emissions. fittings are available in a variety HWP Hazardous Waste Production MD Metal Depletion These improvements equate to a 90 of shape and size configurations, 101 Smart Products FD Fossil Depletion percent reduction in carbon footprint and are ideal for use in a range of View additional examples of CE Cumulative Energy Demand (fossil) over the life of the hose. applications including point-of-use Parker innovations that are water softeners and purification creating a more sustainable With an incredibly diverse range systems, water heaters and coolers, future and making our world a of applications stretching from industrial water treatment systems better place to live. “Sustainable agriculture and construction to and beverage dispensers, offering Business: 101 smart products injection molding, mining and oil field premium performance while from the global leader in motion service, the long-term environmental minimizing environmental impact. and control technologies.” is benefit of the Compact Spiral Hose available by scanning this tag may be difficult to measure but is or visiting: impossible to overstate. www.parker.com/smartproducts12 13
  9. 9. Environmental CASE STUDY CASE STUDY Stewardship Parker Canada Reduces Energy Consumption By 15% O-Ring “We Care” Scrap Recycling Program To take advantage of energy The Parker O-Ring Division’s Lebanon, rebates and minimize their impact Tennessee plant receives over Parker respects the needs of the Future efforts will be to further Parker’s Energy Index on the environment, Parker Canada one million tons of raw production communities in which employees evaluate water, packaging and 250 developed a plan to reduce energy materials each year, and after finished live and work. This is exemplified electronic waste and to identify other consumption and utility costs. products for customers are packaged in the company’s long standing opportunities in waste minimization and distributed, they are left with a tradition of protecting the quality of and recycling. 200 A key opportunity to improve lighting large quantity of byproducts ranging the environment. Parker’s products, conditions was quickly identified by from metals, cardboard and skids to services and manufacturing methods Energy Management Environmental Management employees at the facility. Inadequate liquids, gases and hazardous waste. reflect this concern and the belief Energy use awareness, legislation 150 Parker is currently involved in lighting was contributing to problems that what is good for the environment and increased costs have all environmental remediation at various beyond rising costs, as employees To address the issues of rising waste is good for Parker. Sound waste raised the importance of energy manufacturing facilities presently, came forward to voice concerns disposal costs and the associated management and source reduction reduction initiatives for manufacturing or formerly, operated by Parker and 100 regarding safety and quality control impact on the environment, Parker practices, recycling and energy operations at Parker. has been named as a “potentially due to outdated fixtures and bulbs. created the Waste Elimination and conservation are Parker’s primary responsible party,” along with other Cost Awareness Reward Everyone sustainability objectives. Across the enterprise, Parker is using companies, at off-site waste disposal 50 The first step was to upgrade (We Care) program. energy more efficiently and reducing facilities and regional sites. from 400 watt metal halide bulbs In meeting that commitment, Parker direct and indirect emissions of to T8 fluorescent, which provide The objective of the We Care team, has a public policy for environmental greenhouse gases (GHGs) globally. 04 05 06 07 08 09 10 11 0 As of June 30, 2012, Parker had better lighting and utilize energy a cross-functional High Performance management which includes Parker’s Energy Index = Total Energy Used (MWh equivalent) divided by a reserve of $11.9 million for Total Net Sales (millions of dollars). more efficiently. The combination Team, is to analyze the plant’s waste provisions to minimize resource use Results Carbon Disclosure Project environmental matters, which are of improved bulbs and a new light stream and identify opportunities as well as impact on the environment Since 2004, Parker’s energy use, probable and reasonably estimable. 80 fixture layout allowed for a reduced to generate income or alternative to the extent reasonable. This as measured by its energy index This reserve is recorded based number of total fixtures. uses for the byproducts that would translates into internal procedures (MWh/Sales), has decreased by 47 70 upon the best estimate of costs to otherwise be discarded. for sound waste management, percent while sales have increased be incurred in light of the progress Parker Canada took advantage waste minimization efforts and 77 percent over this same period. 60 made in determining the magnitude of energy rebates to adhere to a Last year, the We Care program environmental management systems. of remediation costs, the timing and 50 two-year payback requirement generated more than $100,000 in Parker Energy Policy extent of remedial actions required in carrying out an overhaul of the revenue for the division, a combination • Over 40 percent of Parker’s New for 2012, the Parker Energy 40 by governmental authorities and lighting conditions, a project which of value added from scrap revenue global operations are ISO Policy covers issues related to the amount of Parker’s liability in started with the Parker Grimsby and the elimination of waste collection 14001 certified. energy reduction. The policy 30 proportion to other responsible and Parker Milton locations but will and handling costs. Of the total contains protocols for Parker division parties. 20 be implemented at Parker facilities byproducts produced at the facility, • Parker recycles over 80 percent leadership, energy procurement, across the country. To date, Parker 60 percent were recycled and just of the waste generated from data collection, energy efficiency and Parker’s estimated total liability 10 Canada has achieved energy 40 percent were sent to the landfill. manufacturing operations. energy/carbon reduction goals. for environmental matters ranges 08 09 10 11 12 0 from a minimum of $11.9 million to reductions of over 1.2 million kilowatt The program also allows other Parker hours per year, saving over $130,000 divisions to send scrap byproducts to • Parker’s energy reduction efforts The Parker Energy Policy requires a maximum of $71.5 million. The Bloomberg annually. the Lebanon facility for consolidation have helped avoid over 500,000 each Parker division to nominate largest range for any one site is and shipment to scrap purchasers. metric tons of CO2 emissions an “energy leader” who is then 60 approximately $6.1 million. The actual While utility costs were recently one from direct and indirect energy responsible for implementing the costs to be incurred by Parker will of the biggest issues facing Parker Despite the success of We Care, the use. energy/carbon reduction at each be dependent on final determination 50 Canada, they now look forward to team is continuously looking for new of their locations. These duties of contamination and required their monthly bill as it solidifies the ways to expand and improve the • Parker aims to minimize water include assisting in or identifying remedial action, negotiations with 40 results of their efforts to decrease program by developing a market and use in its operations. reduction opportunities, prioritizing governmental authorities with energy consumption. Through careful generating revenue from materials opportunities and communicating respect to cleanup levels, changes in planning and implementation, Parker that are currently unable to be • Parker has been able to largely performance information to division 30 regulatory requirements, innovations Canada was able to reduce lighting recycled. eliminate highly hazardous management and employees. in investigatory and remedial costs, improve working conditions substances, such as chlorinated 20 technologies, effectiveness of and decrease their energy use. With the We Care program, the O-Ring solvents, cadmium and remedial technologies employed, the Division is setting the precedent for hexavalent chromium, from its ability of other responsible parties to 10 a recycling program that could be14 products and processes. pay and any insurance or other third- 15 adopted by other Parker facilities, 09 10 11 12 0 party recoveries. improving the company’s operations and impacting the environment on a global level.
  10. 10. Employee Empowerment enables the Win Strategy and creates expectations for how employees work together. It is what differentiates Parker and creates a competitive advantage by reflecting Parker People its unique values, promoting a structured approach to teamwork, recognizing the contribution of all employees and holding employees accountable for results. Values Parker’s core values center on a Winning Culture, Passionate People, Valued Customers and Engaged Leadership. Deeply rooted in Parker’s Empowerment Workplace Safety All business units worldwide report lost workdays rate but it is only a history, these are the principles that executive management model, Empowered employees are the The safety of employees is a Parker their accident rate monthly into the portion (35 percent) of the recordable that guide employees’ behavior and define Parker employees. foundation of Parker and work priority. Parker works to provide management scorecard. From 2003 accidents rate. Results to date show to support the Win Strategy by all employees with a safe and until 2010, the reporting metric was a greater than 75 percent reduction Inclusive Culture taking responsibility, accepting secure workplace. Each of Parker’s accidents involving lost days of in lost workdays rate over a ten year Diverse perspectives are important, contribute to Parker’s culture accountability for results and facilities around the world develops work normalized to 100 employees period and a 32 percent reduction in and can help Parker develop unique solutions. The similarities and supporting a culture of respect for and administers its own safety per year. Starting in 2010, Parker recordable accident rate over a differences among Parker people are valued and respected. the contribution of every person. and emergency plans to prevent switched the metric to all recordable three year period. workplace accidents and injuries. accidents requiring medical treatment High Performance Teams & Leaders In recent years, an Employee In the event of an accident, Parker beyond first aid. Parker continues to Collaborative decision making and problem solving, through a Empowerment Council has been ensures injured employees receive monitor the accidents with structured approach to team work, leverage the power of collective formed to bring greater clarity the care they need. effort and individual ideas. and definition to what employee empowerment means and to Parker introduced an enterprise- Accountability coordinate a range of initiatives wide workplace safety Parker’s employees are accountable for delivering the value and aimed at increasing the level of initiative in 2003. results stakeholders expect. empowerment among leaders and Recordable Accident Rate employees. Elements of these principles and standards are embedded within Recordable Accidents Recordable Accidents with Lost Time Parker’s Code of Conduct, Parker’s Ethics Policy and are the foundation to the Win Strategy. 3.0 Major global empowerment initiatives underway, or completed, include 2.5 the deployment of High Performance Teams, diversity and inclusion training of leaders, the establishment and communication of Parker Values and a comprehensive employee empowerment survey. 2.0 1.5 1.0 0.5 0.0 2009 2010 201116 17

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