Focus Topics – Environmental matters

Resource-efficient production

Impacts, risks, and opportunities

Impacts

Many of Zehnder Group’s operations involve significant resource use, particularly in radiator manufacturing. Radiators are made from aluminium and steel, whose extraction generates substantial CO₂e emissions and pollution. Production is energy- and water-intensive, involves hazardous substances, and generates waste, wastewater, and air pollutants including nitrogen oxides (NOx), sulphur oxides (SOx), and volatile organic compounds (VOCs).

In contrast, ventilation system manufacturing is mainly assembly-based and less resource-intensive, though it relies heavily on electronics that contain scarce and potentially conflict-affected materials, making sustainable sourcing essential.

Zehnder Group also operates chroming facilities, which produce wastewater and sludge; proper treatment ensures their environmental compatibility.

Overall, Zehnder Group aims to reduce resource requirements by extending product lifecycles and using durable materials.

Risks and opportunities

Given the resource-intensive nature of several activities, Zehnder Group is exposed to a range of risks linked to resource-efficient value creation. Stricter emissions and water-use regulations may increase operating costs if resource consumption is not reduced. In addition, inadequate waste or pollution management can lead to reputational risk.

At the same time, improving resource efficiency offers significant opportunities. By optimising production processes and reducing waste, Zehnder Group can strengthen regulatory compliance and lower operating costs. Product innovations that enhance energy efficiency, durability, and repairability also support the growing demand for circular solutions, improving the company’s competitiveness.

Management approach

In order to significantly reduce energy use, waste, hazardous substances, emissions, and water consumption, Zehnder Group promotes resource efficiency through continuous process monitoring and improvement. Due to differences in production processes, technologies, and product mix, performance varies by site, so each production site is responsible for implementing tailored reduction measures and reporting progress to the Sustainability Steering Committee. Regular due diligence, including environmental certifications, underpins this approach. All European radiator production sites are certified to ISO 14001 for environmental management.

Reducing pollution

Radiator manufacturing is energy-intensive and can generate hazardous emissions. To reduce impacts, we are trialling alternative surface treatments, such as physical vapour deposition (PVD) coating, to reduce our reliance on chroming, a process that produces wastewater and sludge. We monitor and reduce emissions of NOx, SOx, and VOCs wherever feasible, and all our sites operate in full compliance with applicable local environmental regulations.

Water use and wastewater treatment

We periodically assess our environmental impact using the Aqueduct Water Risk Atlas¹, a global database developed by the World Resources Institute and widely used for evaluating local water risk, to identify sites where contextual water stress is elevated. The 2025 update identified 14 sites in areas of high or extremely high water stress, where human demand exceeds 60% of the renewable supply. While twelve of these sites are offices or non-water-intensive facilities with comparatively low water withdrawal and minimal process effluent, two sites – Manisa in Türkiye and Vaux-Andigny in France – are radiator production plants. As radiator manufacturing involves water-intensive processes such as painting, plating, and cutting, these locations have a higher operational exposure and therefore receive enhanced management attention.

At highly exposed sites, our focus is on reducing the withdrawal of freshwater and controlling effluent quality. Water for radiator production is sourced from springs or the drinking water network. Wastewater from our radiator production sites is pre-treated before being processed by public sewage plants, and the efficiency of this process is monitored by public authorities. Independent bodies regularly test our wastewater to ensure it complies with legal standards.

Waste management and recycling

Zehnder Group is committed to manufacturing in a way that is efficient in terms of resources and reduces waste, hazardous substances, and other manufacturing impacts. We have implemented a consistent approach to waste sorting and are using more sustainable materials. We are redesigning packaging to make it easier to recycle, for example by replacing protective films with cardboard solutions, increasing the use of recycled/recyclable materials, and reducing rejects through more precise cutting of media. We are also piloting refurbishment and component-recovery programmes in the Ventilation and Radiator segments. These programmes aim to keep materials in use and minimise end-of-life waste across the value chain. Our original focus on reducing returns has evolved into a life-cycle approach that captures value at the take-back, repair, and reuse stages. For more detail, see Circular products and innovation.

¹The Aqueduct Water Risk Atlas developed by the World Resources Institute is an online global database of local-level water risk indicators and a global standard for measuring and reporting geographic water risk.

Implementation and outlook

Implementation of the above management approach and policies is structured around two focus areas with defined targets and KPIs.

Targets

Ambition: Significantly reduce our energy consumption, waste generation, use of hazardous substances, polluting air emissions, and water consumption

Target: Increase waste recycling

Status: In 2025, the percentage of waste directed to recycling or recovery was 75%, compared to 77% in 2024 and 84% in 2023. The decline reflects improved data quality and corrections of previous misclassifications at several sites. Year over year, total waste rose by 9%, and hazardous waste rose by 14%, largely due to one-time dismantling activities at our Swiss production site. Notably, this included streams such as heavy metals (e.g., copper cables), electronics, used oil and emulsions, and solvents and chemicals. These activities temporarily increased fractions with limited recycling options.

To increase waste recycling across our production sites, we have analysed waste categories in more detail and are implementing improvements step by step in close cooperation with suppliers. Some constraints remain due to national legislation and local waste or energy recovery priorities.

At our radiator production sites, several tangible measures were introduced. In France, landfilling of sludge and paint powder was discontinued and expanded polystyrene (EPS) was removed from packaging. Waste sorting was improved both on the shop floor and in offices. In Poland, shrink foil was eliminated from the packaging process.

In our ventilation business, hazardous foam packaging in the Netherlands was replaced with cardboard inlays and preparations are underway for more recyclable packaging and automated box folding. In the UK, reusable plastic boxes are replacing cardboard transit boxes, and digital scanning will reduce paper use. In Finland, energy efficiency improved through automation of lighting and ventilation systems and the installation of a new high-efficiency heat exchanger.
Outlook: We continue to strive toward a Group-wide average recycling and recovery rate of 90%. Planned measures include the introduction of recycled pallets and revised waste concepts at selected sites. Looking ahead, we are committed to eliminating landfill waste by 2028 and to achieving our first waste-free production site by 2030.

Target: Introduce circular business models including refurbishment to leverage product returns

Status: As part of the EMEA Circular Economy project, five ideas were developed, one of which was selected for implementation: the refurbishment of ventilation spare parts, initially focusing on fans. A first market test will be carried out in early 2026 in the Netherlands, where refurbished fans will be offered by Zehnder Group’s service technicians at a 15% discount compared with new spare parts, with the same warranty as new spare parts. This test is designed to assess customer acceptance of refurbished components. The team is also defining logistics and product master data management processes, while exploring ways to expand the limited annual return volume of around 50 units, for example through installer involvement.

Zehnder Group has also been invited to join the Fraunhofer Institute’s E² Cycle project, which aims to build multi-stage value retention networks enabling high-value product and component recovery.
Outlook: Next steps include advancing the refurbishment offer for high-demand spare parts and exploring further circular concepts such as update kits for ventilation units. In addition, a new replacement and product-as-a-service model is being developed, offering system replacements with take-back and reconditioning. Integration of return processes into SAP value flows is also under review to ensure efficient implementation.

Target: Replace hazardous substances with non-hazardous alternatives

Status: Across production sites, 160 hazardous substances were identified, and 48 have already been eliminated. Product Business Units are now identifying further candidates for substitution with non-hazardous alternatives.

Tests with PVD coating as a substitute for chrome plating on towel radiators showed good quality and feasibility, though large-scale use remains limited by vacuum chamber capacity. Alternative finishes such as polished stainless steel are being explored.
Outlook: We aim to expand the substitution of hazardous substances by advancing the use of non-chrome coatings and alternative surface finishes. Further assessments will determine technically and economically viable replacements for remaining toxic substances, ensuring continued progress towards safer and more sustainable production. Our goal is to replace 100% of technically replaceable hazardous substances by 2030.

Target: Reduce polluting air emissions

Status: We revised the target to provide a comprehensive view of all Zehnder activities. Since the use of petrol and diesel in the vehicle fleet generates a larger share of harmful air emissions than production gas use, the scope now covers all air pollutants and uses the EU Environmental Footprint indicator in millipoints (EF 3.1 [mPt]), which weights pollutants by their environmental and health impact (lower is better), rather than a simple sum of tonnes. The target is to reduce NOx, SOx, POPs, NMVOCs, HAPs (Pb), PM2.5, CO, and NH₃ by 20% by 2025 compared to 2023.

The EF 3.1 score decreased by 5.4% compared to the 2024 baseline and by 18.4% compared to the 2023 baseline, leaving us just short of the 20% goal. The largest reduction potential remains in the vehicle fleet. In the meantime, we are continuing to reduce the energy used for room temperature control at production sites.
Outlook: Further reductions are expected from optimising process temperatures, for example by switching to low-temperature powder coatings. Additional potential lies in investing in solar thermal systems and heat recovery technologies to further decrease energy use and associated emissions. In line with these measures, our aim is to reduce polluting air emissions significantly by 2030.

Target: Decrease water withdrawal by 10% in facilities where water is used in production and that are located in water-stress areas

Status: The amount of water withdrawn at our production sites where water is used in water-stressed areas (currently Türkiye and France) was 30,830 m³, compared to 77,130 m³ in 2024, which represents a decrease of 60% and 59% below the 2023 baseline. Türkiye achieved its site-level reduction target for 2025; France has not yet met its target.

At our production site in Türkiye, which accounts for the largest proportion of our total water usage, water withdrawal decreased by 67% from 64,800 m³ in 2023 to 21,461 m³ in 2025. The site continued implementing measures such as improved leak detection, process optimisation, and reduced irrigation times.

At our production site in France, withdrawal decreased by 4%, from 9798 m³ in 2023 to 9365 m³ in 2025. The target was partly not achieved due to production being relocated from Switzerland. While combined withdrawal across both locations in France and Switzerland fell by more than 10%, the shift concentrates demand in a water-scarce region, resulting in a negative impact from a water-resource perspective. Mitigation measures included installing water meters with automated reporting in all critical processes and completing a detailed mapping of consumption. Cleaning frequencies in the autophoretic process were reviewed to reduce water use and filtration replaced water exchange in the leak test area.
Outlook: In Türkiye, additional water meters will be installed at 11 locations within the production area to enable more detailed monitoring and analysis. Both the France and Türkiye sites will continue focusing on optimising process control, enhancing leak detection and identifying further opportunities to reduce water consumption. These measures underpin our aim to cut group-wide freshwater withdrawal by 20% by 2028 compared to 2023.

Metrics

GRI 303: Water and Effluents 2018
Disclosure 303-3 Water withdrawal
Disclosure 303-3a Total water withdrawal from all areas

Indicator description	Unit of measure	2025	2024	Change from prior year		2023	Change from base year
Surface freshwater withdrawal (≤ 1000 mg/L total dissolved solids)	ML	0.17	0.15	15.2	%	-	n/a
Other surface water withdrawal (> 1000 mg/L total dissolved solids)	ML	-	-	-		-	-
Total surface water	ML	0.17	0.15	15.2	%	-	n/a
Groundwater freshwater withdrawal (≤ 1000 mg/L total dissolved solids)	ML	9.33	9.48	–1.6	%	9.45	–1.3	%
Other groundwater withdrawal (> 1000 mg/L total dissolved solids)	ML	-	-	-		-	-
Total groundwater	ML	9.33	9.48	–1.6	%	9.45	–1.3	%
Seawater freshwater withdrawal (≤ 1000 mg/L total dissolved solids)	ML	-	-	-		-	-
Other seawater withdrawal (> 1000 mg/L total dissolved solids)	ML	-	-	-		-	-
Total seawater	ML	-	-	-		-	-
Produced freshwater withdrawal (≤ 1000 mg/L total dissolved solids)	ML	-	-	-		0.33	–100.0	%
Other produced water withdrawal (> 1000 mg/L total dissolved solids)	ML	0.02	0.03	–50.0	%	0.03	–50.0	%
Total produced water	ML	0.02	0.03	–50.0	%	0.36	–95.6	%
Third-party freshwater withdrawal (≤ 1000 mg/L total dissolved solids)	ML	56.48	68.25	–17.2	%	76.54	–26.2	%
Other third-party water withdrawal (> 1000 mg/L total dissolved solids)	ML	22.84	70.62	–67.7	%	64.80	–64.8	%
Total third-party water	ML	79.32	138.86	–42.9	%	141.34	–43.9	%
Total freshwater withdrawal (≤ 1000 mg/L total dissolved solids)	ML	65.98	77.87	–15.3	%	86.32	–23.6	%
Total other water withdrawal (> 1000 mg/L total dissolved solids)	ML	22.86	70.65	–67.6	%	64.83	–64.7	%
Total water withdrawal	ML	88.84	148.52	–40.2	%	151.15	–41.2	%