Magna International (MG-T) is taking a major step forward in its mission to achieve a net-zero future. The Aurora, Ont.-based global auto parts manufacturing giant will submit its carbon emissions targets for validation by the Science Based Targets initiative (SBTi).
The company has set 2030 as the target date for 100 per cent renewable electricity use in its global operations and expects to achieve that goal in Europe as early as 2025. In specific terms, Magna says it is undertaking measures that, as of 2030, will deliver a 42 per cent reduction in its Scope 1 and 2 emissions while also lowering its Scope 3 emissions by 25 per cent.
"Magna has focused on creating a better world of mobility, and the company’s pursuit of net-zero emissions reflects this commitment," Magna CEO Swamy Kotagiri said in the announcement. "To reach this ambitious target, we are addressing not only the emissions we produce within our own facilities but also those of our entire supply chain, while supporting the industry move to low-carbon mobility technology."
"By embracing sustainable practices, shifting to renewable energy sources, making our manufacturing processes more efficient and partnering with our customers in the transition to electric vehicles, we want to make a positive impact on the planet and future generations," he added.
Sustainability ingrained in Magna's corporate culture
Under the leadership of Kotagiri, sustainability has been ingrained in Magna’s corporate culture and embedded in company policy. In April 2021, he declared achieving carbon neutrality is "both a social responsibility and a business imperative in the fight against climate change."
Moreover, he identified the need to pursue "a science-based approach that aligns with the Paris Climate Accord and places us among industry leaders in Europe and North America."
The company has already seen 30 of its international divisions achieve carbon neutrality. This year, the company expects to reach its previously stated goal of a 10 per cent reduction in energy intensity (energy consumption per unit of output or activity) in its worldwide manufacturing facilities.
It expects to double these efficiency gains to 20 per cent by 2027.
The person behind Magna's sustainability drive
Heading up Magna's sustainability effort is Ahmed Elganzouri, the 33-year-old carbon specialist who previously spent seven years as environmental engineer at General Motors' Oshawa plant.
Elganzouri joined Magna last July as global director, sustainability and energy, to coordinate the complicated task of bringing into alignment the company's various international divisions as well as its affiliated partners along the supply chain.
"We know we can’t fight climate change alone, which is why we are working with our customers and partners, including 10,000 supplier companies, to optimize our natural resources," Elganzouri said. "Beyond Magna, I see a true cooperative spirit across the industry to identify the challenges and address them together."
Elganzouri has already overseen gains in Magna's renewable electricity usage. As of 2023, renewables account for 19 per cent of Magna's global energy consumption and the company will need to maintain steady progress over the remainder of this decade as it transitions toward its 100 per cent target by 2030.
His confidence regarding Magna's environmental progress is bolstered by the fact the company is on track for a 10 per cent energy efficiency gain this year, he told SustainableBiz.
"All of our manufacturing plants have really kind of embarked on this journey and have been very excited about it and are investing in energy reduction," he said.
"With respect to HVAC, that's another component we're examining which can be broken down into two aspects. One is that we are becoming very energy efficient with our HVAC units in terms of our building maintenance, heating and cooling. We have a number of divisions that have been putting in automated building management systems."
Seeing the sustainable "big picture"
Elganzouri sees his role as that of a "big picture" overseer whose primary task is to coordinate Magna's across-the-board sustainability efforts among its seven main corporate divisions.
He heads an eight-person team charged with maintaining the company's steady ESG progress.
"My role (as leader of the sustainability team) is to provide the tools and the resources to Magna's seven operating groups across all regions. Each of the regions has a sustainability lead and they know their business, they know what they need and need to do, and know where they need to go from here," he said.
"I'm here mainly to provide liaison and guidance, provide the tools, state what the challenges are, and examine how we can solve those challenges. I rely on the sustainability leads across all of our groups and the regions and the divisions, so the liaison aspect is extremely critical."
Pushing suppliers to follow the sustainability road map
Magna is North America's largest auto parts manufacturer and ranks fourth globally with over $51.57 billion in annual revenue in 2022. Its 351 manufacturing operations are spread out over 30 countries with a total workforce of 174,000 employees.
This gives it enormous influence in the automotive sector and by collaborating with suppliers, Magna believes it can help push the industry closer to the point where cutting edge sustainable practices are entrenched at every level of operation.
"Magna is a major partner of an industry association called Suppliers Partnership for the Environment as well as the Suppliers Carbon working group. We and a bunch of other suppliers are looking at how we tackle this one issue together and how we are working with our customers, the automakers, to reduce our emissions and in turn their emissions," Elganzouri explained.
"Accordingly, we are going to be rolling out a supplier sustainability roundtable which will bring together 10 to 12 of our global suppliers from different sectors. I want to have a very open and frank conversation and we are going to start rolling out some important carbon and ESG requirements.
"I want to make sure that whatever we're putting in place is going to actually be fruitful and bring tangible results in the near term and the long term. In order to implement an effective strategy like that, you need that open dialogue and trust.
"That's what we're looking to build over the next few months and to hear the challenges firsthand from the suppliers."