Focus Topics – Environmental matters

Biodiversity 

Contributing to biodiverse ecosystems

Management approach

Our aim is to reduce our impact on nature and biodiversity. To run a successful business, it is vital to protect, restore and promote sustainable use of Earth’s ecosystems, sustainably manage forests, combat desertification and halt and reverse land degradation and biodiversity loss. Not only does our business depend on the resources and economic stability afforded by healthy ecosystems, but as a business we have an ethical and legal obligation to maintain the health of these ecosystems while conducting our business. Our management approach underpins our efforts towards resource-efficient production. Through the adopted measures related to water, waste and pollution, we prevent damage to natural habitats from our activities.

International and local regulations and frameworks guide our biodiversity efforts. We closely follow the developments at a European level regarding biodiversity measures, particularly the Science Based Targets for Nature and the Taskforce on Nature-related Financial Disclosures (TNFD).

We checked whether our operating sites are located close to environmental protection areas and areas of high biodiversity value. Based on the database of the Protected Planet platform¹, none of our operating sites is located in or in the immediate vicinity of protected areas. However, three sites are adjacent to a protected area. These are our business units in Rancate-Mendrisio (CH), in Udenhout (NL) and in Mechelen (BE).

In 2023, we used the WWF Biodiversity Risk Filter to identify biodiversity risks – including physical environmental, socio-economic and socio-environmental factors – and prioritise corporate action on biodiversity. We assessed our 24 production sites in 12 countries as well as 20 of our tier 1 suppliers’ sites from 11 countries across our main raw material groups like electronics, steel and polymers as well as prefabricated aluminium radiator bodies. For Zehnder Group’s production operations, pollution² was identified as the most significant physical biodiversity risk. Our site in China – producing radiators and ventilation units near the Yellow Sea and the East China Sea – scored highest for total physical risks. Regarding reputational risk, media scrutiny³ was unanimously identified as the most impactful category. Our site in British Columbia, Canada, engaged in appliances and general goods manufacturing with the North Pacific as its seascape, is particularly exposed. Other significant risk types are landslides, water condition, fire hazards and protected areas.

For Zehnder Group’s tier 1 suppliers, it was also pollution that was identified as the most significant physical biodiversity risk. One site in Poland, engaged in metals and mining operations and situated near the river Oder, is particularly at risk. In terms of reputational risks, media scrutiny is unanimously identified as the most impactful category, with the highest score recorded for a metals and mining site in the Netherlands, near the North Sea. Other significant risk types are water scarcity, water condition, landslides, protected areas as well as sites of international interest. The eight sites in the metals and mining industry have the worst impacts. Out of these, seven sites are located in Europe with one in the United States.

Group Sustainability in close collaboration with Group Purchasing are responsible for achieving the targets regarding biodiversity. They manage and coordinate the implementation of measures across the Group, aggregate and analyse respective KPIs from the production sites and suppliers and regularly report to the Sustainability Steering Committee. So far, the only due diligence processes in place are that our production units always comply with local legislations when it comes to wastewater treatment, waste disposal or exhaust air of production processes.

¹ The Protected Planet platform is the authoritative source of data on protected areas and other effective area-based conservation measures (OECMs), where users can search the World Database on Protected Areas, the World Database on OECMs, the Global Database on Protected Area Management Effectiveness and other information on biodiversity. 
² This indicator is based on nutrient, pesticide and air pollution. In our analysis, it mainly refers to air pollution.
³ Media scrutiny indicates whether there has been documented negative news (e.g. incidents, criticism) related to environmental and social issues that can affect a company’s reputation. A high-risk score for this indicator is a result of the high dependency of an industry on media scrutiny in combination with a high location risk score.

Implementation and outlook

To implement the above management approach and policies, we defined an ambition that is supported by one target and monitored via specific KPIs.

Ambition: Halt biodiversity loss around our operations and supply chain and integrate nature into our decision making

Assess our main supply chains for materials that are a risk to biodiversity and define measures to improve hot spots
Status:
Based on the WWF Biodiversity Risk Filter assessment we found out that our main impacts on biodiversity are in the deeper supply chain, however, not among the tier 1 suppliers. This is why it is key to expand the assessment beyond tier 1 suppliers and address the topic with the highest-risk suppliers.
Outlook:
By 2025, we want to assess and understand our key materials’ supply chains regarding biodiversity impacts, risks and opportunities, which are steel, aluminium, polymers and electronics. We will further analyse in detail our tier 1 suppliers for these materials and collaborate with our suppliers to further identify potential hot spots beyond our direct suppliers. Also, as we identified the main biodiversity risks of our own production units, we will analyse the site-specific physical and reputational risk topics with the sites’ management to assess resiliency and elaborate measures. In addition, we want to raise awareness of biodiversity and habitat loss within Zehnder Group and develop measures to help protect species at our sites.