How Dover Innovates for Sustainable Products
The product management and research and development (R&D) teams at our operating companies lead innovation and product development, including with respect to sustainability. Product management and R&D teams regularly engage with our customers to assess ways we can help them achieve their business and sustainability objectives. These efforts are complemented with internal analysis of potential opportunities and unmet market needs.
Since 2021, four of Dover's largest operating companies by emissions have participated in quarterly workshops to discuss new methods for integrating sustainability considerations into product development and design. During these meetings, leaders from our operating companies and the Dover corporate center review emissions from the use of sold products, identify opportunities to consider sustainability at R&D checkpoints in new product development, and discuss initiatives to reduce product energy usage. As part of these quarterly meetings, operating companies learn and share best practices in new product development and sustainable innovation from industry and other operating companies. These meetings are an important component of our pathway to achieving Dover’s 2030 Scope 3 science-based target.
Our Scope 3, Category 11: Use of Sold Products emissions decreased by approximately 2% from 2019 to 2022. However, our Scope 3, Category 11: Use of Sold Products emissions increased compared to the previous reporting year. We conducted an analysis to understand the trend and have identified a few primary causes, including improved data collection and revenue growth from additional product sales as operations continue to rebound from the global COVID-19 pandemic. Furthermore, while our operating companies are working hard to innovate more sustainable products, there is a notable time lag in the product development process between the inception of a sustainable product idea and the realization of emissions reductions associated with that product. On average in our industries, the time from ideation to products in-use at scale is approximately 5-10 years. However, we are beginning to see our team's sustainable innovation come to market, including the recent launch of Environmental Solutions Group's electric refuse collection vehicle (eRCV). The eRCV is a significant milestone in the decarbonization pathway for the waste and recycling industries. Dover is currently considering a full re-baseline of 2019 data to adjust for updated methodologies used in 2022, which could result in a shift in the emissions trend. For more information on Dover’s progress toward our science-based target, see our Energy and Emissions webpage.
In 2022, R&D spend, including qualifying engineering costs, represented 1.9% of our annual revenue. Dover has maintained relatively consistent investment in R&D for the past several years and has increased R&D spend from 2015 levels, when it averaged 1.7% of annual revenue, partly in response to customer needs for more efficient, safer, and sustainable products. Ultimately, we view R&D as critical to maintaining the long-term growth and competitiveness of our product offerings in the marketplace as the global demand for more sustainable solutions continues to increase.