Pirelli's commitment to sustainability ranges from climate action to protection of the natural world, and from innovative new tyre products to an industry-leading, people-first culture. The company has recently set out highly ambitious targets for sustainability, not only for its own operations, but also for every part of its supply chain. Its head of sustainability and future mobility, Matteo Battaini, describes how Pirelli aims to make reality of its ambitions.
You have many key sustainability targets to achieve by 2030 – what are they and how close are you to achieving them?
We've done a lot of work on our four main sustainability pillars of people, climate, nature and products. We now have more than 25 key targets in these areas and are well on our way to meeting them. One aspect that we have further enhanced is setting targets in terms of the people in the organisation – including the number of women in management. We also have firm targets on emissions, not just our Scope 1 and Scope 2 emissions, but also for indirect Scope 3 emissions in our value chain. On these climate targets we're already in line with the top automakers and far ahead of our direct competitors. On products we've analysed all of the characteristics that can make a tyre sustainable. These include the percentage of materials from recycled or bio-based sources, as well as the tyre's efficiency, which determines its contribution to fuel consumption. And we have a flagship P Zero E product that's a big part of the journey to a 100 per cent non-fossil fuel tyre. We have set new environmental targets on water use and water risks, and a forestry strategy that will see 100 per cent of the rubber used in our European plants coming from natural sources certified by the Forest Stewardship Council™ (FSC™) by 2026.
What are the biggest challenges in meeting Pirelli's targets of net carbon neutrality by 2030 and net zero by 2040 for its own Scope 1 and Scope 2 operations?
The first thing to say is that the challenge is partly organisational. Not just understanding how to set realistic targets, but also how to create action programmes, finance them and staff them. In fact, we have more than 90 individual factory efficiency projects running now, with a budget of over €50 million for 2022to 2025, and these are about understanding the carbon footprint of every facility and addressing it. That might mean anything from switching to more efficient lighting systems to redesigning production to eliminate heat loss. It's about looking at every part of our operations and how to manage those operations to reduce emissions.
Pirelli has also set a net zero target for suppliers' Scope 3 emissions by 2040 – that's a very big cut in supplier emissions from the anticipated level in 2030. How can this be achieved?
It is a steep curve, but many of our suppliers are already on the journey. We have big chemicals suppliers, big multinationals, who are already very advanced when it comes to decarbonisation, they understand exactly what they need to do. Then there's a smaller group of suppliers who are not so advanced and, in those cases, we are engaging with them, showing them how the world is changing and what customers are demanding. And they can see that if they want to stay in business they will have to decarbonise, too – it's really a simple concept that everyone can understand: decarbonisation is about survival.
As well as carbon emissions, the UN SDGs address water use and biodiversity. What specific initiatives does Pirelli have planned or underway in these areas?
I think everybody knows that water will be the next big sustainability emergency we face. We have set a water-use reduction target of 60 per cent by 2030, and since 2020 we've been running programmes in all our facilities aimed at reducing water stress and also improving the quality of water that's returned to the environment. I think we have to be ready for tougher regulation on water use and water quality, and the cost of water is likely to rise as well. Meanwhile, on biodiversity, we've already embarked on a Biodiversity Action Plan whereby we are aligning our reporting with guidance from the World Business Council for Sustainable Development and mapping the biodiversity impact of all our industrial sites, with a target of having a complete impact map by next year. This is an area where everybody needs to act now, given that there's been a loss of around 69 per cent of global wildlife populations since 1970.
Pirelli has been very active on forestry issues. What is the current plan, given that there's a new EU forestry regulation coming into force later this year?
We certainly welcome the regulation, which is going to mean that companies have to show that products like timber or palm oil or rubber are not contributing to deforestation. On rubber in particular there's a long and vulnerable supply chain involved, and it is necessary to conduct step-by-step checks to ensure this entire supply chain is compliant with rigorous standards on everything from legal ownership of the land to human rights and child labour. We welcome our most advanced suppliers being FSC™-certified, but we are also moving towards closer control of the supply chain right at the source. For example, last year we acquired Hevea-Tec, the biggest independent Brazilian processor of natural rubber, to help guarantee certification at every stage of production.
Let's talk about product innovations, how can they contribute to improving sustainability?
A couple of years ago, Pirelli decided it was time to make a tyre that was truly sustainable. Now what does that mean? We reviewed all of the different ways a tyre could contribute to sustainability and the result is the P Zero E tyre. This is different from anything else on the market, in terms of materials, emissions in the production chain, and rolling resistance, which influences fuel consumption. It has a European A-class rating for rolling resistance, the highest level of energy efficiency, so it reduces tailpipe emissions, and the wear rate has been reduced by 42 per cent compared with earlier products, reducing particulate emissions from the tyre itself. The P Zero E is already made from more than 55 per cent non-fossil-fuel materials. By 2030 we will have a new tyre product that is more than 80 per cent fossil free.
On that question of particulate emissions, what is the latest progress?
This is part of the lifetime management of the tyre. Reducing wear rate through the use of new compounds is only one part of the solution. We are actively engaged in industry initiatives, such as the Tire Industry Project, a CEO-led forum to proactively identify and address potential environmental impacts from tyre and road-wear particles. We are examining whether it is possible to change the generation models of the particles that are emitted – because the smaller the particle, the greater the potential hazard to health – as well as looking at increasing the biodegradability of tyre particles. This is where using natural rubber instead of synthetic materials can be important, because natural rubber is biodegradable. At the same time, we are looking at the other element of lifecycle management, which is about improving the recyclability of tyres, finding new and better ways to recover carbon black, which is the reinforcement and pigmentation material used in tyres.
If we look at all the work being done on sustainability today, do you think the auto industry is moving fast enough?
We are not just moving fast – we are moving incredibly fast. On the one hand, there is a huge change in the way companies are doing business and a new understanding that we really do have to be different. On the other hand, there is a window of opportunity that has opened up, where what looked like costs of transition are actually opportunities. All our stakeholders understand this. The regulators, the investors, the customers, they all understand it. The shift to sustainability is like a wheel – and it's moving faster and faster.
