Three main sources of energy use contribute to our GHG emissions: electricity, natural gas and fuel. In 2015, the 2.9 million megawatt hours of electricity used to operate our retail locations and other facilities continued to represent our most significant environmental impact and the largest contributor to our carbon footprint. Our fleet used 10.6 million gallons of fuel to distribute product to our stores, another contributor to our footprint.
Electricity use in 2015 stayed flat compared to 2014 amidst an increase in overall square footage of 1.8% and the introduction of open-air refrigeration units in 450 stores. Our performance is at least partly attributable to store energy efficiency initiatives, including lighting retrofits and enhancement of our Energy Management Systems (EMS) controls.
We plan to drive energy efficiency in 2016 through a number of initiatives. These include fast-tracking the completion of our lighting retrofit program, integrating our EMS into our newer acquisitions, and exploring opportunities to balance shifting energy needs in our retail locations.
Use of natural gas decreased in 2015, likely due to warmer weather, which resulted in a 10% decrease in heating degree days between 2014 and 2015. Heating degree days is a measure that indicates the overall heating demand required to heat a building.
Given continued growth in our retail locations, we remain focused on achieving energy efficiency in operational areas where we can have the biggest impact, including lighting and the centralized management of energy use, as well as through transportation and distribution efficiencies.
Greenhouse Gas Emissions, Energy, and Water Data Analysis
Total Energy Usage, by Type, for 2010–2015*
* 2010–2013 data represents all CVS distribution centers, stores and administrative locations, LL Paid facilities and Caremark locations. 2014 data included the addition of operations in Brazil. 2015 data includes the addition of Coram and Navarro locations. This data includes Scopes 1, 2, and 3 as detailed below.
Greenhouse Gas Emissions by Scope*
* In 2012, emissions from Private and Dedicated Delivery Fleets were both reported under Scope one as part of Private Delivery Fleet. In 2013, emissions from Dedicated Delivery Fleet were moved to Scope 3.
Total Carbon Footprint and Carbon Intensity Measurement
* Carbon Intensity Goal: Reduce carbon intensity by 15% by 2018, based on 2010 figures.
** Adjusted from figure reported in the company’s 2013 CSR report due to minor (~5%) updates as a result of CVS Health’s third-party verification process.
*** 10-K shows 79.4M SF, but includes 1.3M SF for Target pharmacies acquired on 31 December 2015, which are excluded for the purposes of the intensity target calculation.
Water Use Intensity Measurement for 2010–2015
* Company’s 10-K reports 79.4 million sq ft, but this figure includes 1.3 million sq ft for Target pharmacies acquired on December 31, 2015, which are excluded for the purposes of the intensity target calculation.
Energy Management System
In 2015, we enhanced the controls of our EMS, which operates in more than 95% of our retail locations. We will look to integrate our EMS platform into our Coram and Omnicare facilities in the near future.
The EMS monitoring platform allows us to manage, monitor and adjust lighting, HVAC and other systems from a central location, thus helping us drive energy efficiency consistently across our stores, distribution centers and other facilities.
A significant amount of energy is used to light our facilities. Our strategy, given the scale of our footprint, is to build long-term success through sustained year-over-year investments in proven lighting technologies.
In 2015, we implemented a new LED lighting strategy that will provide long-term value in terms of energy efficiency and operational cost. The decision followed the success of a 2014 LED interior lighting retrofit pilot, which yielded a 10% increase in efficiency using LED technology compared to high-efficiency florescent solutions. We completed lighting retrofits in 854 stores in 2015, of which 349 used LED lighting. In 2016, we plan a significant increase in the number of LED retrofits with an accelerated timeline.
In 2015, we also completed an interior and exterior LED lighting retrofit at our corporate headquarters in Woonsocket, and in 2016 we will evaluate opportunities and establish a standard for lighting retrofits at our other main corporate locations.
Our lighting retrofit program saved us $1.7 million in energy costs in 2015, and nearly $15.9 million since 2011.
CVS Health depends on a fleet of more than 760 company-owned and third-party tractors and 1,800 company-owned and third-party trailers to deliver products from our 22 distribution centers to store locations in 46 states. This includes deliveries to Navarro locations in Florida and our newly acquired Omnicare business, but excludes Target pharmacies. They will be included in our transportation footprint in our next report.
In 2015, transportation services related to our distribution network consumed more than 10.6 million gallons of fuel and covered 50.8 million miles. We are continuously looking for innovations and technologies to help us reduce the contribution from or mitigate the impact of these activities on our total GHG emissions. For example, in 2015 we began implementing improved routing software in our fleet, which allows us to track and optimize miles driven, fuel efficiency, average cost per load and on-time service delivery. With 50% program completion at the end of 2015, we saved approximately 34,450 gallons of fuel, which resulted in an estimated cost savings of $173,000. We expect to complete implementation in 2016.
This new software is also helping us establish Routing Centers of Excellence through the realignment of distribution centers and delivery routing. This strategy helps us manage the environmental impacts of our growing business, while also supporting our growing number of delivery locations, the increasing diversity of merchandise we ship, and our investments in cold chain technology in logistics centers to better serve our medication distribution channels.
We have long known that excessive idling is an inefficient and expensive use of diesel fuel and a preventable source of GHG emissions. On average, an idling diesel engine consumes 0.8 gallons of fuel per hour and emits more than 18 pounds of CO2. In 2015, we upgraded our in-cab computers to support energy efficiency by monitoring truck idle time and route compliance.
Our company-owned fleet is an Environmental Protection Agency SmartWay Carrier Partner for the sixth year in a row, receiving the highest carrier rating of Level 1 for emissions control. CVS Health has been a SmartWay Shipping Partner since 2012.
We also continue to monitor the environmental and economic payback of new technologies and alternative energy sources, adapting our outlook in 2015 to declining energy prices. We are constantly evaluating opportunities through renewable technologies, renewable energy credits, power purchase agreements, and tax credits.
Our renewable energy program, which includes five stores powered by rooftop solar panels (four in Hawaii and our Leadership in Energy and Environmental Design (LEED) Platinum-certified store in West Haven, CT) and a sixth store under construction in California, also informs our strategic thinking in this space.