Focus Topics – Environmental matters

Resource-efficient production

Using ecological resources responsibly

Management approach

Using the planet’s resources responsibly is mandatory for all our business units. We set specific targets to significantly reduce our energy consumption (see Climate action), waste generation, use of hazardous substances, polluting air emissions and water consumption.

Local and national laws and regulations guide our policies for waste, hazardous substances, air emissions and water. These regulations establish minimum standards for wastewater and pollutant emissions, which we continually monitor in collaboration with the relevant authorities. All our sewage sludge and waste are treated and disposed of properly and therefore do not pose health or environmental risks. To reduce our own waste from packaging and purchased primary products, we work to reduce rejects in our production, develop circular products and introduce reusable pallets.

To measure the water stress at our sites, we assessed all our site locations with the Aqueduct Water Risk Atlas¹. We flagged 14 sites in locations which have a water stress ranking of “high” or “extremely high”, meaning that the percentage of total water demand compared to available renewable surface and groundwater supplies was 60% or higher. Three of the 14 are radiator production sites with water-intensive processes such as painting, plating and cutting. The flagged sites are radiator production sites in Manisa (TR), Vaux-Andigny (FR) and Dachang (CN). The other eleven sites in water stress locations either do not use water in production or are offices.

For radiator production, water for the processes is extracted from springs or the drinking water supply network. We introduced a new target to minimise freshwater consumption in our radiator production sites by increasing water reuse and recycling as well as regular leakage checks to achieve closed water circuits. Wastewater is pre-treated at our sites in Manisa (TR), Vaux-Andigny (FR), Bolesławiec (PL), Gränichen (CH) and Lahr (DE) and finally processed by a public sewage treatment plant. The efficiency of the pre-treatment is monitored by the responsible public authority. At all our operations, independent bodies regularly test the quality of our wastewater to ensure compliance with legal obligations.

Each of Zehnder’s Competence Centres and production units is responsible for achieving the targets regarding resource-efficient production. They manage and coordinate the implementation of measures across the Group, aggregate and analyse respective KPIs from the production sites and routinely report to the Sustainability Steering Committee. Due diligence processes include the certification of our sites. Nine of our 24 production sites are certified according to ISO 14001 on environmental management systems, including all radiator production sites in Europe and China. Also, environmental data is collected annually from our operations and verified thoroughly at Group level. Furthermore, most of our environmental data (energy, waste and GHG emissions) are audited by an external assurance company (see the Limited assurance report).

¹ The 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

To implement the above management approach and policies, we formulated an ambition which is supported by five targets and monitored via specific KPIs.

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

Increase waste recycling
Status:
In 2023, the share of waste to recycling or recovery amounted to 84%. Regarding radiators, we have established programmes to repair production rejects, preventing waste and reintegrating the product into the manufacturing process. While this is time-consuming and sometimes more expensive than producing a new part, it helps us to reduce the amount of steel and aluminium scrap in production. At our production site in Lahr (DE) we have been able to reduce the number of leaking and scrapped elements significantly.
Outlook:
By 2025, we want more than 90% of the waste from all our production sites to be recovered and recycled rather than incinerated or sent to landfill. In the medium term, we strive to end sending waste to landfill by 2028 and to have the first waste-free production site by 2030.

Reduce product returns and increase resale potential
Status:
We try to prevent product returns from our customers after delivery. If products are returned, they should go to resale. However, in 2023, we noticed that the number of product returns on a consolidated level was not insignificant and that most returns had to be scrapped due to the lack of coordinated processes on how to bring the products back to the manufacturer to ensure they were ready for resale.
Outlook:
We are aiming for a significant reduction of unwanted product returns from customers and to increase the resale portion of these returns significantly. As a basis, we will analyse the factors contributing to returns and assess the condition of the returned products.

Replace hazardous substances with non-hazardous substances
Status:
We aim to replace hazardous substances in our operations with less hazardous options. We identified that one of the hot spots for hazardous substances is chroming operations in radiator production.
Outlook:
Our target is to substitute 30% of the replaceable hazardous substances with non-hazardous substances by 2025 in our radiator production sites and we are aiming to replace 100% of the technically replaceable substances by 2030.

Reduce polluting air emissions
Status:
We set the target to define measures to reduce polluting, non-GHG air emissions, i.e. nitrogen oxides (NOx), sulphur oxides (SOx), persistent organic pollutants (POP), volatile organic compounds (VOC), hazardous air pollutants (HAP), particulate matter (PM) and others¹.
Outlook:
Our aim is to understand the root cause of our polluting air emissions and achieve a 20% reduction in polluting air emissions in our radiator production sites by 2025 as compared to 2023 and a further significant reduction by 2030.

Decrease water withdrawal in production sites located in water-stress areas
Status:
In 2023, we started a study to optimise water-intensive processes and determine the financial implications of increased water recycling at our individual sites.
Outlook:
Our target for our three sites in water-stress areas – Manisa (TR), Vaux-Andigny (FR) and Dachang (CN) – is to reduce water withdrawal by 10% by 2025, compared to 2023. Furthermore, we strive to reduce the Group-wide water withdrawal by 20% by 2028.

¹Ozone-depleting substances are not produced, imported or exported. GRI 305-6 is thus not material.

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	2023		2022	Change from prior year
Surface freshwater withdrawal (≤ 1,000 mg/L total dissolved solids)	ML	–	✔ PwC CH	n/a	n/a
Other surface water withdrawal (> 1,000 mg/L total dissolved solids)	ML	–	✔ PwC CH	n/a	n/a
Total surface water	ML	–	✔ PwC CH	n/a	n/a
Groundwater freshwater withdrawal (≤ 1,000 mg/L total dissolved solids)	ML	9.45	✔ PwC CH	n/a	n/a
Other groundwater withdrawal (> 1,000 mg/L total dissolved solids)	ML	–	✔ PwC CH	n/a	n/a
Total groundwater	ML	9.45	✔ PwC CH	n/a	n/a
Seawater freshwater withdrawal (≤ 1,000 mg/L total dissolved solids)	ML	–	✔ PwC CH	n/a	n/a
Other seawater withdrawal (> 1,000 mg/L total dissolved solids)	ML	–	✔ PwC CH	n/a	n/a
Total seawater	ML	–	✔ PwC CH	n/a	n/a
Produced freshwater withdrawal (≤ 1,000 mg/L total dissolved solids)	ML	0.33	✔ PwC CH	n/a	n/a
Other produced water withdrawal (> 1,000 mg/L total dissolved solids)	ML	0.03	✔ PwC CH	n/a	n/a
Total produced water	ML	0.36	✔ PwC CH	n/a	n/a
Third-party freshwater withdrawal (≤ 1,000 mg/L total dissolved solids)	ML	76.54	✔ PwC CH	n/a	n/a
Other third-party water withdrawal (> 1,000 mg/L total dissolved solids)	ML	64.80	✔ PwC CH	n/a	n/a
Total third-party water	ML	141.34	✔ PwC CH	n/a	n/a
Total freshwater withdrawal (≤ 1,000 mg/L total dissolved solids)	ML	86.32	✔ PwC CH	n/a	n/a
Total other water withdrawal (> 1,000 mg/L total dissolved solids)	ML	64.83	✔ PwC CH	n/a	n/a
Total water withdrawal	ML	151.15	✔ PwC CH	n/a	n/a