Environmental Focus

Core Lab UN Global Compact

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere. This ever-increasing understanding is reflected in the Global Compact's rapid growth. With over 8700 corporate participants and other stakeholders from over 130 countries, it is the largest voluntary corporate responsibility initiative in the world. The Global Compact is global and local; private and public; voluntary yet accountable.

The Global Compact incorporates a transparency and accountability policy known as the Communication on Progress ("COP") which is mandatory to communicate to our stakeholders. In 2002, certain operations within our Reservoir Description business segment joined the UN Global Compact.

Consistent with the requirements of Global Compact membership, it is the policy of Core Lab to conduct our business in a manner uniform with applicable environmental regulations. In areas where environmental regulations do not exist, we will exercise practical care in its efforts to protect employees and preserve the environment. Country managers will manage their business in a manner consistent with established company policies and applicable laws and regulations.

Managers have a responsibility to maintain a safe working environment for their employees and to implement programs and procedures as necessary to ensure that their operation meets the environmental goals of the company and applicable regulatory requirements.

We provide guidance to managers and employees regarding environmental issues. We provide for employee training and conduct audits to ensure compliance. Each employee will be responsible for performing their job function with constant consideration of our commitment to this policy.

Sustainability Management

Core Laboratories sustainability management system focuses the Company’s efforts to reduce our environmental footprint, increase performance and improve the sustainability of our Company. It is a conviction that these principles drive Company success by reducing waste, consumption of non-renewable resources, and even the cost of operations. These principles make our Company stronger, socially responsible, efficient and profitable well into the future.

Respecting and Minimizing Community and Environment Impact

We recognize the diversity the communities and people where we operate. We commit that we will act responsibly and will obey all applicable laws, minimize the impact of our operations on the environment, protect the communities' health and safety and respect cultural backgrounds.

Our operational footprint is primarily its office buildings and laboratories rather than field locations. Our six Advanced Technology Centers (“ATC”) located in Aberdeen, Abu Dhabi, Calgary, Houston, Kuala Lumpur, and Rotterdam along with our Production Enhancement manufacturing facility in Godley, Texas comprise our more significant operating locations. The primary type of energy consumed by these facilities is electricity. However, low-carbon emission natural gas also consumed for heating the facilities in some regions.

We may choose responsible alternative sources of electricity when there are options available, in contribution to our efforts to reduce greenhouse gas (GHG) emissions. For example we may have the option to use electricity from a renewable source in place of electricity generated from a non-renewable source, such as coal. A second alternative may be an option to elect electricity sourced from natural gas (reduce GHG emissions) compared with electricity sourced from coal. As natural gas continues to be one of the most environmentally friendly and cost efficient fossil fuel sources of electricity, this reduces our environmental footprint.

We also consume fuel to operate field vehicles, however this is limited to our staff working in the field, and is not a significant emission component of our total operations.

Our operations outside of our offices are conducted on our clients’ property. Although those operations are not conducted within our own facilities while we are on our clients’ property, we continue to follow our corporate policies regarding health and safety as well as our Code of Ethics and Corporate Responsibility. For the most part, we remain in our locations for extended periods of time, decades in many cases. In the event we do leave a particular location, we ensure that the land and building are properly put back to their agreed condition. We also take steps to ensure that any potential environmental conditions have been dealt with as required by local regulation and standards.

Given that we do not have locations under our control that are in a natural, rural environment, we do not have programs regarding restoration or rehabilitation of natural lands.

Company Environment Goals and Achievements

With respect to our six ATCs, our Aberdeen facility continues to lead our effort in reducing our energy consumption and reduce our GHGs by completing their ISO 14001 Environmental Management system certification audit and setting aggressive targets to reduce energy consumption and surpassing those targets.

Operational and Value Chain Footprint

To better understand the Company impact, we engaged Trucost, a sustainability data company. With their expertise, we are able to assess Core Lab's operational and value chain greenhouse gas emissions in line with the WRI/WBCSD Corporate Standard (Scope 1 and 2) and Corporate Value Chain (Scope 3) Guidelines (GHG Protocol). The assessment allows us to report Scope 1, 2 and 3 GHG emissions in annual accounts and to the CDP Climate Change Questionnaire.

We have already been reporting company-wide Scope 1 and 2 GHG emissions to the CDP since 2014. Currently, we use estimates of companywide emissions based on our sector of operation and revenue for reporting purposes. Engaging Trucost allows us to improve our operational (Scope 1 and 2) GHG emission quantification methodology by integrating primary data. Furthermore, Trucost quantified Scope 3 GHG emissions according to the fifteen Scope 3 categories outlined in the Guidelines to help understand and disclose its Scope 3 emissions for the first time. This operational and value chain GHG emission footprint will focus on our six Advance Technology Centers (ATCs) which comprise our more significant operating locations.

Finally, Trucost has helped us set science-based targets for its Scope 1 and 2 emissions. Science based targets aim to help companies to work towards limiting the increase in global average temperatures to below 2°C, a limit agreed upon by leading climate scientists and governments to ensure long-term sustainability and profitability.

Use of Electricity

In 2014, we were able to reduce our total usage of electricity for these six ATCs by approximately 2.5% compared to 2013 consumption levels, while activities for these regions increased. These improvements were achieved through internal efforts by executing a focused plan of educating staff, and installing more efficient system of timers and switches for electricity and natural gas heating equipment. This has been a great success story internally and has raised the bar for our other facility management teams to set aggressive goals and execute their energy management plans. The actual electricity usage from our six ATCs is summarized below:

Electricity Usage (MKWhs) 2013 2014 2014 vs 2013
Advanced Technology Centers (six largest locations) 22,943 22,373 -2.49%

With the start of this program back in 2012, we continue to see the expanded use of energy from non-fossil fuel and renewable sources, and reductions in the use of electricity sourced from the burning of coal. Although, the source of the electricity is often limited to what the local providers are able to offer, since 2012, we have seen a reduction in the use of electricity sourced from coal by over 6% and our use of electricity sourced from renewables and non-fossil fuel sources has increased by 46% over this same 2 year time period. So currently, in our six ATCs, almost 60% of our electricity was sourced from renewable sources and low-carbon emitting natural gas. Our renewable portion was just over 20% in 2014, is up from 18% and 14% in 2013 and 2012 respectively. The following table summarizes the source of electricity used over the last 3 years in our six ATCs, and reflects the Company’s efforts to indirectly reduce the emissions of GHGs and minimize our environmental footprint.

Electricity Source 2012 2013 2014
Coal 43.3% 42.5% 40.6%
Change from prior year -1.8% -4.4%
Natural Gas 43.0% 39.6% 39.2%
Change from prior year -7.9% -0.9%
Renewables and non-fossil fuel sources 13.8% 17.9% 20.1%
Change from prior year 29.9% 12.4%
Total 100% 100% 100%

Electricity Usage Targets

As part of our commitment to the environment we have set targets to reduce our electricity consumption in our 6 Advanced Technology Centers (ATCs), primary manufacturing facility and other significant operating facilities. These facilities produce the majority of our revenues and our plan is to both reduce energy consumption by 7.5% over 5 years while creating operational excellence through the management and investment in our facilities, electronic equipment, and operational processes utilizing sustainable resources when available and appropriate.

Electric Usage

It is also important to note that energy consumption for the company is a very small component of our operations. We are able to show the total costs for electricity, natural gas and water consumption, which has been less than 1% of our total costs for the last 5 years, but also trending down each year. This also helps to understand why gathering emissions data and tracking this information for our smaller operations has not been a primary focus for the company.

Energy Cost

Water Consumption Efforts

In 2014, we made an investment in our Reservoir Description laboratories-based business to reduce the use of water that is used in the cooling process of equipment. The Company’s initial investment was in our Calgary based facility, where we have invested in cooler units which allow the water to be recycled through the system used to cool the equipment. This has resulted in a reduction of almost 65% of the water normally used in this process and also an annual cost savings in excess of US $100,000 for water and sewage expenses in just one facility. This new program and investment is being expanded globally to our other laboratory facilities, and helped us achieve more than a 43% reduction in water consumption for our six ATCs in 2014 as compared to 2013.

2013 2014
Water Consumption – ATCs (cubic m) 133,975 75,698

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