LEGO attains positive ROI on sustainable production facilities
In the future, all of LEGO Group’s manufacturing facilities will have sustainability as the guiding principle. This is a good investment – both for the environment and for LEGO. Based on five business cases, Ramboll have helped LEGO identify the tangible value of more sustainable development of production facilities.
Sustainable production by 2030
LEGO has decided to certify their buildings according to sustainability standards. This decision contributes to the company’s objective to make its core production sustainable by 2030.
New buildings as well as renovated ones, will be certified according to the sustainability standard LEED (Leadership in Energy and Environmental Design).
Ramboll has formulated the basis for decision making, which using real business cases, puts a tangible value on certification of the company’s buildings and thus illustrates how sustainability efforts can be quantified with measurable investment value.
Choosing the right certification
”We decided to verify sustainability of our manufacturing facilities globally, by a third-party according to acknowledged certification standards, to ensure measurable and visible results. The decision to attain certification obligates all parties involved in the projects – both internally and externally – and as a company, we establish a benchmark on which we can ensure a continuously sustainable development of our building portfolio. This will also make it more credible to communicate externally, having an independent source to verify our efforts,” says Anders Krebs Thomsen, Senior Manager, Environmental Impact and Operations, LEGO-Group.
With a worldwide building portfolio, the choice of a certification system is a significant decision. That’s why a thorough preparation was essential.
Business cases as a cornerstone
Ramboll carried out a comprehensive analysis of selected solutions based on strategic parameters that are important for the LEGO Group. The analysis was supported by five business case simulations, that give insight into the costs and benefits related to implementing the selected system according to various levels of ambition.
"On the basis of the five business cases, we made our recommendation for the choice of a certification system and process for implementation,” says Pernille Louise Klausen, who is client advisor and Ramboll’s project manager on this assignment.
The project was carried out in close collaboration between technical experts in Ramboll’s Building division and business finance experts in Ramboll Management Consulting.
Implementing the needed changes
The next step for the LEGO Group is to implement LEED in the processes they use for their building projects and to ensure that it is implemented in the individual projects.
The business case simulations carried out have provided the LEGO Group with a strong indication of which investments they should expect to carry out in the individual projects, to ensure that the long-term effects can be realised.
The LEGO Group has selected the certification system, based on a five-step process.
Ramboll’s five-step approach
A comparative evaluation of various sustainability programmes was conducted to identify a system that supports the LEGO Group’s corporate vision and focus areas. In this step, the parameters to evaluate the system were identified in cooperation with a wide variety of the LEGO Group’s stakeholders.
Step 2 - Screening of existing facilities:
Ramboll screened LEGO Group’s existing facilities in terms of performance based on the perspective of the selected sustainability programme, to establish a basis for comparison.
Step 3 - Definition of ambition level:
Together with the LEGO Group, Ramboll defined the level of ambition; on what level the LEGO Group would like to perform within the chosen sustainability programme level (silver, gold or platinum) and how to achieve this through the system’s most relevant sustainability parameters.
Step 4 - Development of five business case scenarios:
Once the ambition level was defined (silver and gold), Ramboll identified the necessary construction- and building-related investments to attain silver and gold levels within three of the company’s current in three countries. Ramboll developed five scenarios in all – according to LEGO Group’s request for three gold scenarios for all factories together, with an extra extended gold and silver scenario for one of the factories.
Step 5 - Cash flow analysis:
In the final step, Ramboll carried out a cash flow analysis based on the necessary changes in CAPEX and OPEX investments for each of the five different scenarios. This resulted in five net present values (NPV) for each scenario, of which three were positive.
LEGO and sustainability
The LEGO Group was founded in 1932 by Ole Kirk Kristiansen. The company has passed from father to son and is now owned by Kjeld Kirk Kristiansen, a grandchild of the founder.
The company has grown to become a global enterprise that is now one of the world’s largest manufacturers of toys. Lego has a strong focus on being front runners within sustainability.
Therefore the company has formed an ambitious sustainability mission, stating that all LEGO® bricks must be sustainable by 2030.
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