Focus Topics – Environmental matters

Circular products and innovation

Impacts, risks, and opportunities

Impacts

Zehnder Group’s focus on creating circular products helps to reduce the environmental impact of its entire portfolio. Improving repairability and recyclability enables products to be reused or refurbished, extending their life cycles. This approach reduces waste generation and, where recycled materials are used, lowers the need for virgin raw materials. New product developments increasingly incorporate recycled content, with technical feasibility largely confirmed; economic viability and scaling are being further evaluated, supporting a gradual reduction in the CO₂e footprint over time.

Risks and opportunities

The transition to circular products presents several challenges. Depending on the mechanical and optical requirements, materials with high recycled content can be costly or limited in availability, which could make product design more complicated and increase production costs. Circular products must also meet rising customer expectations regarding durability and repairability in order to avoid reputational risks and loss of market share. Furthermore, Zehnder Group must remain vigilant and compliant with evolving circular economy regulations as standards continue to develop.

Despite these challenges, however, the circular economy presents significant opportunities. Energy-efficient, durable, and repairable products support environmental goals and can generate long-term cost savings. They also enable innovative business models, such as “product-as-a-service” meeting the growing demand from consumers and regulators for sustainable, adaptable solutions. This strengthens Zehnder Group’s competitive position and supports long-term value creation.

Management approach

In line with its ambition to understand and improve the environmental impact of its products, as well as to increase their durability and circularity, Zehnder Group is strengthening its circular product portfolio. The company is doing this by designing long-lasting, repairable, and recyclable items that can be efficiently refurbished or recycled at the end of their life. The Group Sustainability Engineer coordinates life cycle assessments (LCAs), develops internal expertise, and assists the Competence Centres in implementing measures and developing related projects.

Life cycle assessments

LCAs are a core tool for understanding and improving the environmental impact of our portfolio. We prioritise LCAs for key product families and new developments, using the results to inform design choices on materials, manufacturing processes, energy efficiency in use, and end-of-life options. Completed LCAs also provide the basis for third-party certified environmental product declarations (EPDs), meeting customer and regulatory expectations for transparency. Over time, we are expanding LCA coverage and strengthening internal expertise so that environmental performance is consistently reflected in product roadmaps and investment decisions.

Circular Design Guideline

Zehnder Group’s Circular Design Guideline embeds sustainability at every stage of product development to minimise environmental impact and underpin a circular economy. It promotes durability plus reuse, repair, refurbishment, recycling, and recovery to extend product life, cut primary raw material use, and enable circular business models. The Guideline organises action under three themes: design out waste and pollution, keep products and materials in use, and regenerate natural systems to help restore environmental balance. It has been implemented across the major Competence Centres: Radiators Europe, Ventilation Europe, Clean Air Solutions, and CORE.

Circular business models

Zehnder Group is expanding its take-back and refurbishment programmes to keep its equipment in service and conserve resources. Clean Air Solutions operates a clean-air-as-a-service model that includes air quality monitoring, installation, maintenance, and replacement of air filters. At contract end, equipment is recovered, refurbished, and redeployed. By combining robust product design, a rental and take-back scheme, and demand-based control, we aim to provide efficient, on-demand clean air so that equipment runs only when needed and can be recovered, refurbished, and redeployed at the end of the contract. To extend circular offerings, pilot projects are testing ventilation-as-a-service and refurbishment models in the Ventilation business (Netherlands). Scaling these models will depend on technical feasibility, customer acceptance, and economic viability.

Materials and packaging

Our circular product work is reinforced by our collaboration with suppliers to source lower-impact and recycled materials, such as carbon-reduced steel, recycled aluminium for radiators, and recycled polymer content for new air distribution products. Our goal is to minimise our use of primary materials in packaging while increasing the recycled content. We are redesigning packaging designs to make them more recyclable, considering the inner and outer materials separately. Business Units report annually on the proportion of recyclable materials used, enabling progress to be monitored.

Implementation and outlook

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

Targets

Ambition: Understand and improve the environmental impacts of our products

Target: Conduct life cycle assessments to reduce environmental footprint

• Status: A total of twelve LCAs were completed this year (five locally and seven by the Group). LCAs for overseas locations are still in progress. The assessments provided valuable insights into energy use in production, enabling optimisation across sites. The product use phase was confirmed to have limited influence, as it largely depends on user behaviour. Development teams now place stronger emphasis on designing products that support energy-efficient operation and on raising user awareness through improved guidance and settings. The LCAs also highlighted electronics and galvanisation as key contributors to material-related environmental impacts.
• Outlook: Future LCA efforts will focus on new product developments, where design decisions can meaningfully influence environmental performance. Additional LCAs will be conducted selectively, guided by market demand for EPDs and potential for improvement. Our goal is to achieve a 20% reduction in the environmental impact of new products launched after 2025, based on the Environmental Footprint method (EF 3.1). Initial assessments show that this level of improvement is not yet reached over the full life cycle (including electricity use), but is already exceeded on a cradle-to-gate basis (i.e. raw material extraction to end of manufacturing). Pre-gate, impacts are estimated to be around 45% lower for the analysed product.

Ambition: Increase the durability and circularity of our products by promoting reuse, repair, refurbishment, recycling, and recovery

Target: Pilot ventilation-as-a-service and refurbishment business models in the Netherlands

• Status: Pilot projects for ventilation-as-a-service and refurbishment business models in the Netherlands are being developed through ongoing dialogue with customers. Following an evaluation of five potential business models, ventilation spare parts refurbishment was selected as first priority for the circular economy concept. The business case is currently being finalised.
• Outlook: The pilot will continue to be developed and refined, with a focus on establishing viable service models and scaling refurbishment solutions. The aim is to increase the share of net sales from refurbished products and the ventilation-as-a-service business by 2030 for the entire group.

Target: Increase the share of recycled raw materials in our products

• Status: Today our purchased materials contain an estimated 18.8% recycled material (2024: 17.5%¹), with the actual figure likely being higher but lacking full documentation. Zehnder Group has advanced the concept phase for new products designed to contain over 80% recycled raw materials and be over 80% recyclable at the end of their life, across multiple product families, including radiators, ventilation units, and heat exchangers. Recycled materials are increasingly integrated into the production process. Electric arc furnace steel has been tested and introduced to a limited extent in Germany and France, with positive results. It currently represents around 10% of total demand.
  
  In ventilation, several improvements have been achieved. The new ERV heat exchanger solution reduced weight by almost 60% compared with the previous model. In North America, UL-approved heat exchangers made from polyethylene terephthalate (PET) contain between 30% and 70% recycled content and new infrared welding technology enables the processing of recycled plastics in production. One of the air distribution components integrated into our systems is now made from 100% recycled material.
• Outlook: To achieve our goal of using a significant share of recycled content for our raw materials by 2030, our initial step is to ensure that new ventilation projects incorporate over 50% recycled content in all plastic components, while our next-generation climate solutions will feature natural refrigerants and reduced material usage (a 20% reduction in metal sheets, a 15% reduction in copper, a 20% reduction in plastic, and a 15% reduction in insulation materials).

Target: Increase the share of recycled packaging materials

• Status: For this year we aimed to achieve 80% recycled-content or reusable packaging materials for outbound transportation (excluding pallets), with the remaining 20% meeting the highest available ecolabel standards. While this target was not fully achieved, we have seen steady improvements in this area, particularly in recycled content, which has increased from 41.9% in 2024 to 54.5% in 2025. In addition, 13% of our cardboard is now confirmed to be FSC-certified. We have also reduced the purchase quantities of several of our plastic-based packaging materials, including bubble wrap (50 tonnes to 10 tonnes), polystyrene (17 tonnes to 9 tonnes), and shrink foil (199 tonnes to 139 tonnes).
  In this context, we continued to increase the proportion of recycled packaging materials used in production. In the Netherlands, the recycled cardboard content of fast-moving product packaging increased to 77%. We transitioned from white to more sustainable brown packaging and the lids of boxes from two ComfoAir product lines now contain 66% recycled material, though this is limited by strength requirements for lifting. In France, polystyrene wedges were replaced by honeycomb cardboard inserts consisting of a hexagonal paper core sandwiched between flat sheets of paper and bonded with water-based glue. This structure provides high compressive strength for its weight and can be produced largely from recycled fibre. The material is fully recyclable and in many cases biodegradable and compostable. Specifications for endless fanfold cardboard were successfully updated to achieve 100% recycled content in both France and Poland, and in Germany, the recycled content reached 91.6%.
• Outlook: Further improvements are planned with the aim of increasing recycled content in packaging materials by 2028. We are also assessing options to reduce or eliminate packaging where feasible and to expand the use of returnable solutions. The availability of research and development resources may limit implementation speed, but the focus will remain on phasing out remaining plastic components and increasing recyclability while maintaining packaging strength and functionality.

Target: Conduct feasibility study for reusable and/or recycled pallets

• Status: The feasibility study on recycled content and reusability of pallets forms the basis for our 2025 targets. It evaluates options for reducing carbon impact, tracks pallet flows, and identifies potential suppliers for pallet return systems. As part of the feasibility study for reusable and recycled pallets, a first delivery using returnable packaging was completed in the Netherlands for a prefabrication customer. Key challenges include standardising master data and overcoming market barriers to efficient pallet returns.
• Outlook: The concept will be further developed in 2026 based on the pilot results, with the aim of expanding the use of reusable pallet systems to additional customer segments and production sites. One business unit is also acquiring approximately 50% of its wooden pallets second-hand, providing them with a second life.

¹ The 2024 purchased goods figures have been restated due to cumulative errors of >5% to the original figures triggering a full restatement, incorporating corrections and methodology changes. Purchased goods recycled content was affected by the restatement. The original reported figure was 21.7% for 2024. For further information, see Restatements of information.

Metrics

GRI 301: Materials 2016
Disclosure 301-1 Materials used by weight

GRI 301: Materials 2016
Disclosure 301-2 Recycled input materials used

GRI 301: Materials 2016
Disclosure 301-3 Reclaimed products and their packaging materials