Manufacturing & Suppliers Overall the Group's environmental performance improved during 2016 and the investments and new suppliers will be included in the audit program to secure the supply chain integrity. Energy consumption, carbon emissions and water consumption are the most significant contributors to ASSA ABLOY’s environmental impact. Several initiatives have been introduced across the Group during 2016 to address these issues and manage the company's expansion while reducing the impact. ASSA ABLOY will also continue to grow on new markets. As a result of for example acquisitions, new suppliers need to be included in the audit program. It becomes increasingly important to ensure a consistent approach for securing supply chain integrity. Focus areas ASSA ABLOY focuses on the following environmental areas within manufacturing: Reducing energy consumption Reducing carbon emissions Improving water and waste management Phasing out hazardous chemicals Systematic reporting and management processes in place In order to work efficiently with sustainability performance and to achieve the Group’s environmental targets, ASSA ABLOY has implemented a new sustainability reporting system. Also, over the years an increased number of entities have become covered by environmental management systems (ISO14001). Environmental challenges ahead ASSA ABLOY’s major environmental challenges are: Reducing its environmental impact while simultaneously increasing capacity. ASSA ABLOY is also expanding to new markets such as China, where the energy mix is dominated by fossil fuels. Outsourcing and an expanding in low cost countries results in increased transportation and carbon emissions. The reduction of suppliers and an improved logistic set up will balance the effect. A diminishing supply of resources could lead to increased prices. ASSA ABLOY’s ability to run its business in an efficient and environmentally sensible manner is closely linked to the cost of resources. Increased taxes on emissions and oil prices as a result of diminishing supply of resources ASSA ABLOY meets these challenges by investmenting in better technology and by creating synergies for a more efficient process.