Texan by Nature is excited to recognize Alamo Group Inc as a 2023 TxN 20 honoree for their leadership in conservation and sustainability. Alamo Group Inc.’s commitment to conservation, their projects, programs, best practices, and lessons learned are an example and inspiration for us all.

Honoree Industry and Size: Manufacturing– Mid

Company Overview
Founded in 1969 and headquartered near San Antonio, Texas, Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for vegetation management, infrastructure maintenance, and other applications. Our products include truck and tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements, forestry equipment, and related after-market parts and services. 

What is Alamo Group’s conservation and sustainability mission and why is it important to your culture?
Alamo Group has long served those who use our products to maintain vital infrastructure, forests, and productive agricultural lands. Whether that work is measured as lane-miles of snow cleared from a highway system, or acres of crop stubble a farmer needs to shred to prepare fields for the next planting, what we provide to our customers is a means to getting their specific jobs done.  

It is through this lens that our company views its sustainable purpose. First, we recognize the need for this work to be performed. From recycling waste wood and creating fire breaks in forests to removing sewer line debris and sweeping toxins from city streets, the end users of our equipment have important jobs to accomplish. Second, we must also recognize that the snowplows, mowers, tree chippers, vacuum trucks, excavators, and street sweepers we manufacture have an environmental footprint, both in their production and during use over their product life cycle. Our sustainability goals balance the need to minimize the negative impact of these footprints, particularly with respect to climate, biodiversity, resource depletion, and human health, with end users needing to complete their essential work.

Our sustainability mission also seeks positive impacts on the health and well-being of our workforce, other members of our value chain, and the communities where we and our products operate. Providing employees with safe and inclusive workplaces, customers with safe and durable products, and promoting quality of life and economic opportunity in our communities are important sustainability objectives.

How is conservation and sustainability a part of Alamo Group’s business strategy?
We integrate conservation and sustainability objectives into our strategic planning and risk assessment processes to address the social and environmental impacts of our supply chain, production processes, and the products we produce. Our value chain consumes and converts mainly steel materials and steel components to produce highly engineered products that, today, are predominantly powered by internal combustion engines. The most significant environmental impact of our value chain is greenhouse gas emissions. We recognize that end users burning diesel fuel to operate our products is the most significant climate impact, about ten times the amount of greenhouse gases emitted by those who produce the inputs we use to manufacture them which, in turn, is about ten times the total greenhouse gas emissions of our manufacturing, distribution and office facilities and processes combined.  

Accordingly, energy transition by our customer base looms large, both as a threat and opportunity, in the markets we serve. Strategic alliances with key supply chain partners are critical to addressing these significant upstream and downstream transitional risks and opportunities. Our strategic objectives also include taking care of our own house and our communities by reducing our impacts, not only with respect to energy consumption and climate, but also by engaging our employees and communities to improve other resource efficiencies, foster biodiversity, create circular economies, and promote safe, diverse, and inclusive working environments. Such actions improve workforce diversity and help us attract and retain the talent we need to achieve our strategic objectives.

What are Alamo Group’s short and long-term goals as they relate to conservation and sustainability?
In our 2022 Sustainability Report published earlier this year, Alamo Group updated our 2025 and 2030 targets focused on total energy consumption, renewable energy percentage of total electricity consumption, Scope 1 & 2 GHG (greenhouse gas) emissions, landfill waste generated, percentage of total waste recycled, and water consumption. While we disclose our actual measurements in both absolute terms and as measures of intensity, our goals are expressed mainly as measurements of intensity and all reduction goals use 2019 as the baseline year. 

The activity base we used for the intensity measurement is per 1000 hours worked, which includes the hours worked by both permanent and temporary (or contract) employees.

Our 2025 targets include a 35% reduction of Scope 1 & 2 GHG emissions intensity from base year, a 19% reduction in total energy consumption intensity from base year, and an increase of renewable electricity to 40% of total electricity consumption.

Our 2030 targets include a 50% reduction of Scope 1 & 2 GHG emissions intensity from the base year, a 33% reduction in total energy consumption intensity from base year, and an increase of renewable electricity to 50% of total electricity usage. Our landfill waste intensity goals are a 32% reduction from base year by 2025 and a 50% reduction by 2030.  We also published goals to increase the percentage of recycled waste to total waste to 87% by 2025 and 90% by 2030. 

Our total water usage goals are 80,000 cubic meters by 2025 and to 75,000 cubic meters by 2030, with both targets more than 20% lower than base year usage of 105,096 cubic meters. 

While the company hasn’t disclosed specific goals with respect to the environmental impacts in its upstream and downstream value chain, we have publicly discussed several of our sustainable product development initiatives including actual and projected market introduction dates, as well as the estimated emissions greenhouse gas emissions reductions of several products already in the field.  As the needs of our customers develop with respect to sustainable products, it is always our goal to have the right product available to meet that need, and to stay a step ahead of our competition. 

Who at Alamo Group is leading your conservation and sustainability efforts and what are some examples of employee engagement in conservation and sustainability at Alamo Group?
The integration of sustainability into Alamo Group’s strategic planning and risk assessment processes begins with our Board of Directors and our Chief Executive Officer, Jeff Leonard, who has been a champion for Environmental, Social, and Governance (ESG) initiatives across the company. Our Board of Directors, acting through its nominating and governance committee, provides oversight of the company’s ESG initiatives, planning, and performance.

Our sustainability executive team is led by Dan Malone, Executive Vice President and Chief Sustainability Officer, who oversees the sustainability, health & safety, strategic supply chain, and information technology groups. Mr. Malone also works with Alamo Group’s General Counsel and the Vice President of Human Resources to develop and implement the company’s comprehensive approach to environmental, social, and governance objectives. 

Alamo Group owns and operates 27 manufacturing locations in seven countries. Each Alamo Group business unit has a designated sustainability representative who is responsible for the monthly tracking and reporting of sustainability metrics, as well as for the oversight of sustainability projects.  Each unit has a “Green Team” whose members collaborate within their business units as well as among other Green Teams members to plan and implement innovative sustainability initiatives. Members of the Corporate Sustainability Team engage regularly, at least monthly, with local leadership and Green Teams members to share ideas and best practices, and to maintain accountability and visibility of the progress Alamo Group is making towards achieving our sustainability goals. 

All of us at Alamo Group are committed to reducing the impact of our company’s operations on the environment, and the climate while making a meaningful, positive social contribution to the communities where we operate.  We have implemented a number of projects to reduce our consumption of natural resources, minimize carbon emissions and other waste streams that we generate, and make our workspaces safer for our employees. In recent years, we have been accelerating our investments in these areas not only because it’s the right thing to do, but also because it’s good for our employees, our families, our communities, and of course it’s good for our bottom line as well. While we have much more to accomplish in these areas, we are proud of what we have accomplished to date through the commitment and creativity of our employees. As we look to the future, we will redouble our efforts and investment in the sustainability of our operations to improve corporate performance, enhance the lives of all of our stakeholders, and promote a healthier world for all humanity.

– Jeff Leonard, Chief Executive Officer, Alamo Group

In September 2022, Alamo Group employees kicked off the first day of Autumn by planting 1,000 Norway Spruce trees on nearly three acres of land surrounding our manufacturing facility in Winn, Michigan. We continued this initiative in 2023, just in time for Arbor Day, and with the help of employee volunteers once again, we were able to plant 5,000 more trees on our property. Everyone was proud that they successfully planted five times the number of trees they did the first time. Due to their long lifespan, these Spruce trees absorb a large amount of carbon dioxide throughout their lifetime. As these trees reach maturity, they will absorb up to 70 kgs of CO2 a year, with an individual spruce tree, or on average around 36 tons of CO2 during its lifespan. The 6,000 trees we planted in the past 12 month alone should sequester over 216,000 metric tons of carbon dioxide during their lifetime.

What conservation and sustainability programs and projects does Alamo Group lead and participate in?
Alamo Group leads and participates in a wide variety of sustainability projects. While our mission-critical projects address energy efficiencies and climate impacts of our products and operations, we have also completed several projects promoting circularity, biodiversity, reforestation, and educational opportunities in the communities where we live and work.  Here are a few examples of our recent initiatives:

Sustainable Product Development – The Schwarze M6 All-Electric Sweeper
Collaborating with our partner, Daimler Trucks North America, Alamo Group developed and introduced a fully electric Schwarze M6 sweeper prototype at the ConExpo Show last March. This version of our M6 sweeper is mounted on an all-electric Freightliner vocational chassis and is designed to do the same job the comparable diesel-powered sweeper does today. The prototype is currently being used to test electric sweeping and chassis operations in various field-use environments. The sweeper design uses electric motors to drive all brooms and sweeper operations, and it eliminates 90% of the hydraulics deployed in the legacy product, increasing energy efficiency by 35% and eliminating the need for a secondary engine. The truck and sweeper prototype carries a 240kWh battery capacity, though the final battery size will be determined after field testing. The design also features 48V isolated ground sweeper voltage for safety, serviceability, and manufacturability. We expect to receive production quantities of electric truck chassis from Daimler in the second half of 2024 and begin filling customer orders shortly thereafter.

Circularity – Landfill Waste Reduction in Virginia
While many of our facilities decreased absolute landfill waste by 10% or more, Alamo Group’s undisputed champion of landfill waste reduction was our Old Dominion Brush (ODB) manufacturing facility located in Richmond, Virginia. In 2022, this one facility accounted for 56% of Alamo Group’s absolute reduction of landfill waste, reducing the amount of waste they sent to the landfill by 75%, or nearly 178 metric tons. They achieved this impressive performance by reusing 100% of their Gaylord boxes, recycling 100% of their purchased pallets, and using returnable dunnage for 20% of the inbound materials they receive. ODB also utilized the services of a mobile trash compaction service to further reduce the number of trips required to haul their remaining landfill waste.

Sustainable Product Development – Sugar Cane Transshipment Truck Collaboration in Brazil
Our operating company in Brazil, collaborated with key supply chain members to develop an innovative fleet of autonomous transshipment trucks. Their contribution to the 20 Ton Grain Transshipment collaboration was the novel cage construction utilizing high-strength steel and reducing unit weight by 8,818 lbs. The weight reduction, combined with the usage of more efficient truck engines, contributes to 50% better fuel efficiency in transshipment operations.  Truck tires cause less soil compaction, promoting soil health and preserving the crop area, the product offers a longer service life than tractor alternatives.  With over 1,000 units currently in service, these products already reduce our customers’ annual fuel consumption by about 9 million gallons and their annual greenhouse gas emissions by about 90,000 metric tons.

“We are honored to be recognized in the TxN 20 for a second time.  While it still feels like we are just at the beginning of our journey toward a sustainable future, and certainly there is a lot of heavy lifting ahead of us, we appreciate the recognition as an indication that our company is on the right path. As a fifth-generation native Texan, it is particularly gratifying to me that we are being honored by folks from my home state.  We look forward to growing our engagement with Texan by Nature and other like-minded organizations across many of the communities our employees call home.”

– Dan Malone, Executive Vice President and Chief Sustainability Officer, Alamo Group

How do you see the future of conservation and sustainability evolving, and what role will Alamo Group play in that progress?
Alamo Group’s view of its role in a sustainable future hasn’t changed much in the past few years, with energy transition in product offerings and operations being the primary risk and opportunity.  On par with energy transition risk is our ability to attract and retain the talent necessary to navigate these uncharted waters, which is also of paramount importance to our future success. That said, energy transition is just one piece of the puzzle, and there are many other areas of conservation and sustainability, such as regenerative agriculture, wildfire management and biodiversity preservation, where we are developing solutions that can also have a lasting positive impact.  We believe that we have the expertise and resources to develop and produce successful, environment-friendly innovations in infrastructure adaptation and maintenance, as well as sustainable forestry management and agriculture.

How does Alamo Group quantify investment and return on conservation and sustainability?
As a for-profit business, Alamo Group doesn’t look at a return on conservation and sustainability any differently than it does any other investment. Every investment is evaluated by its projected risk-adjusted financial returns. What has changed recently is the scope of risks under consideration. Higher risks surrounding resource availability, supply chain resiliency, inflation, changing customer requirements, talent acquisition and retention, company reputation, and shareholder activism must be considered. The “Triple Bottom Line” is alive and well at Alamo, and we believe that investments that are good for people, planet, and profit are not only sustainable but enhance long-term economic value creation. 

Since 2019, Alamo Group has made significant investments in energy efficient lighting and production equipment.  We have reduced our consumption of electricity by 5.2 million kWh despite a 6% growth in factory output.  These reductions are already saving the company over $700,000 annually, and this savings is expected to grow into seven figures as we complete these projects and realize full year benefits. Through leak repairs, recycling, rainwater catchment and other conservation initiatives, we have reduced our annual water consumption by 25,000 cubic meters and decreased our water bills by over $40,000. Through the implementation of returnable dunnage with certain suppliers, investment in cardboard shredders to reuse inbound materials for outbound shipments, and enhanced recycling methods, we have also reduced the amount of material we annually send to landfills by 680 tons, saving the company another $40,000 in waste removal fees.  

We do not take for granted our social license to operate. Being a good corporate citizen and doing the right things to benefit stakeholders throughout our communities is not only morally correct, but also enhances our ability to secure the community support and human resources needed to prosper. We always want to be the supplier or employer of choice, not of last resort.  

What is the one lesson that Alamo Group has learned from your conservation and sustainability efforts that others can take back and think about applying within their own space?
One of the lessons we recently learned is: do not underestimate market demand for sustainable products. Our folks in our Alabama-based street sweeper business went along with our first electric sweeper product development, in part because it was being pushed by our CEO and the development was resourced at the corporate-level, and in part because they believed that their main competitor was also developing a similar product. However, we never saw true excitement about the project from this group until we visited our booth on the second day of the ConExpo show last March. By then they knew that we had developed a better solution than our main competitor, and that we could have written orders for over $50 million on the first day of the show had we been ready to commit to a firm price and delivery date. Overnight, they went from “going along” to pressing our partner Daimler for production quantities of the electric truck chassis we need to build our new product and fill customer orders. Immediate demand from early adopters can generate excitement and provide a very quick payback on product development costs. A little advanced market research might change your perception of your opportunity. 

Why is Texas an important home or base of operations for Alamo Group?
As our name suggests, Alamo Group is a homegrown Texas company. We are headquartered near San Antonio, with executive and administrative offices in both New Braunfels and Seguin. Alamo Group employees about 300 people at their Seguin, Texas plant and corporate headquarters. Our manufacturing plant in Seguin produces most of the boom-mounted specialty roadside mowing equipment used by contractors and governmental customers throughout North America. The company was founded in 1969 by a native Texan and San Antonio entrepreneur, Donald Douglass, who was born in Gonzales and grew up in Corpus Christi. The company began as a Texas-based manufacturer of tractor-mounted mowing equipment serving mainly state and local government and agricultural customers. While the company has grown exponentially and added a much wider variety of products that are manufactured and sold throughout the world, we have never lost our focus on our core markets or our Texas roots.    

Learn more about Alamo Group’s conservation and sustainability efforts here.