How sustainability fits into business (Part 1)

The following conversation was edited for brevity and clarity from one of two concurrent Jan. 25 discussions at the 2023 Pit & Quarry Roundtable & Conference. Part two of this conversation can be found here.

PIT & QUARRY: What does ‘sustainability’ mean to your business, and do you feel outside pressures by regulatory bodies, communities or other entities to operate your businesses more sustainably?

JAMEN MCDERMOTT (SENSATA TECHNOLOGIES/PREVIEW RADAR): We’ve gone through a lot of processes and certifications for internal sustainability and being clean. Because of the breadth and scope of what’s inside of those overall and being in automotive and in heavy equipment, it has been for a long time. The drive and the push are there.

So, as we start to go over clean energy and look at emissions in all the vehicles that are in the world, we have to consider what we can do to improve on that. So, we look at clean energy solutions [and] electrification. Electrification and clean energy might very well be the biggest focus right now with all of the different companies within Sensata.

DAVID JONES (MCDONALD GROUP): We don’t focus on sustainability. We don’t feel pressure from anyone in our industry or outside the industry. But, having said that, we installed a 1.1-megawatt solar system to supplement the electric power draglines that we had in one of our plants. And we’re looking to do the same thing in our other two.

It’s all totally driven by USDA grants and the investment and the return on that. But if there wasn’t a grant, we wouldn’t even consider it. The grant was 25 percent in the first one. It’s moved up to 40 percent. So, it turns out to be a pretty decent investment considering we do a lot of timber investments, and those are usually less than a 10 percent return. This is north of a 10 percent return, and it’s really a good investment from the credit we get back. Plus, it’s a cost-saving deal.

So, sustainability is not really what we’re focused on. But from the outside looking in, you would think: ‘Wow, they’re really after it.’ But that’s not really what it’s driven by.

JEFF SIKORA (HAZEMAG): I think it’s safe to say this is a topic that is going to continue to gain momentum. I think we’re going to get hit with certain requirements and metrics; that if you want to comply and continue to do business, we have to meet certain conditions.

For all of us – regardless of how serious you take it or how serious you don’t take it – we’re going to be forced to make changes to go in this direction. I think that’s the way it’s going to happen, whether we like it or not. It is a good thing, in my opinion. I just think we’re going to be hit with certain regulations and guidelines that we have to adhere to.

DAMIAN MURPHY (PECKHAM INDUSTRIES): Our owners are certainly focused on it, and so is our board. But we’re not big enough to really move the needle. So, we look to our vendors and equipment manufacturers to help guide us on that.

One of our terms [is] a ‘sustainable view’ when we look at capital. We also look at the bigger producers in the sector to see what they’re doing and learn from them. We’re trying to move the needle in some of our capex decisions and our operating plans, changing some of our energy sources. At this point, though, we’re just not big enough.

We are trying to find opportunities in our downstream businesses to adjust to customers’ asks, particularly the public customer. We’re asking ourselves what we can do with sustainability. It could be recycled paving products. From the aggregate side of it, we’re just trying to learn from the vendors and the suppliers.

Our employees are certainly interested in this subject and how it pertains to our communities. We have to learn how to communicate with our communities about it. One thing we’ve just recently done is look at our own footprint and try to measure it – so we have a basis to talk from. We don’t know where we’re going to take that yet, but you’ve got to know what you’re doing to be able to have the conversation.

AMY ASSELIN (JOHN DEERE): From an enterprise standpoint, we have sustainability goals by 2030. As we look at what sustainability means, we’re looking at the whole ecosystem. It goes beyond zero emissions. We’re looking on the ag side how we can reduce the amount of fertilizer and herbicides. This has an impact on sustainability.

If we think about this industry, the challenge is ROI. At this point, customers aren’t going to pay twice as much for a battery-electric machine that probably doesn’t perform like the diesel machine, right? There’s got to be more value there, and I think that’s going to take time for the cost-value ratio to come down.

We’re asking ourselves what else can we enable. There are other benefits besides zero emissions when you start using that kind of technology. So that’s kind of our focus, identifying what are the other things that can add value to solve problems and expand how equipment can be used. We’re trying to look at the total picture and not just focus on the emissions piece.

GEORGE REDDIN (FMI CAPITAL ADVISORS): For asphalt producers and pavers and the ready-mixed concrete guys, sustainability is a big deal. There’s a battle on carbon footprints, and the cement industry is facing a challenge there. The IIJA (Infrastructure Investment & Jobs Act) is all about recycle, repair and maintenance. We’re seeing a big push on recycling-type products, which reduces the need for liquid asphalt production and then conversion activities. At your customer level, sustainability is a big deal.