Focus Topics – Environmental matters

Circular products and innovation 

Promoting sustainability through longevity, reuse and carbon reduction

Management approach

Zehnder works to reduce the environmental impact of its products along three axes: continuously improving the longevity, repairability and upgradability of new products to prolong the product life cycle, using recycled materials in production and refurbishment of products. These actions are key to improving the environmental impacts of our products and maintaining our market perception as a detail-oriented and high-quality company. These improvements are also necessary to avoid greenwashing, so that our products’ benefits and environmental credits can be honestly advertised and the financial benefits reaped accordingly.

To understand our products’ environmental footprint, we use life cycle assessments (LCAs). Our approach is to build inhouse know-how on LCAs to ensure a complete consideration of ecological aspects in all our processes.

A big part of the solution is to minimise the use of primary materials for products and packaging. Our greatest challenges are the limited availability and high costs of recycled materials. When the technology and capacities become available and economically viable, our goal is to incorporate carbon-reduced steel in a selected range of products. This steel will be produced using less CO₂e-intensive energy sources, such as hydrogen generated from renewable energies and electricity rather than heat derived from coal combustion. Currently, we are observing the market to determine the exact capacities and price development of more sustainable materials.

As for guidelines, the Group adheres to the regulations on repairability of the individual countries we operate in. Internally, we follow our Circular Design Guideline developed in the reporting year.

Zehnder’s Group Sustainability Engineer, a member of Group Sustainability, is responsible for LCA coordination and support of the Competence Centres. The position was newly created in 2023. The Group Sustainability Engineer is tasked with developing in-house LCA expertise, while the Competence Centres are responsible for achieving our targets regarding circular products and innovation. They manage and coordinate the implementation of measures across the Group, aggregate and analyse relevant KPIs from the production sites and regularly report to the Sustainability Steering Committee. Due diligence is applied through a close collaboration between the sustainability team and the Competence Centres, where products are evaluated on and improved for their environmental impact, as for example recyclability of materials, repairability of products and selection of raw materials. Completed LCAs of products serve as the input for environmental product declarations, which are being requested by customers and generally require certification, which ensures the quality and accuracy of the methodology and results of the documents at hand. In addition to this, data concerning recyclable input materials are collected from the business unit on an annual basis to monitor progress in this regard.

Implementation and outlook

To implement the above management approach and policies, we outlined two ambitions, each underpinned by one or more targets and monitored via specific KPIs.

Ambition: Understand and improve the environmental impacts of our products

Conduct life cycle assessments for each product family/technology
Status: 
Our target is to complete at least one LCA for each product family or technology. So far, three LCAs for radiators, one for an air ventilation product family and five for air distribution systems have been conducted. We built up expertise in LCAs and understand the main impact categories of our products. Today, our Group Sustainability Engineer and a team of five employees trained in this regard conduct LCAs internally and implement lessons learned. We are still behind our target to conduct one LCA for every product family.
Outlook: 
In 2024, we will continue our work towards achieving our ambitions by conducting further LCAs as per the priority list in the Group Product LCA Directive for 2024 and start conducting LCAs for products designed in our overseas locations. This will give us a thorough understanding of the status quo and lead the way for future improvements. We strive for a 20% improvement in environmental impact for new products launched after 2025 based on the EF 3.1 Environmental Footprint method recommended by the European Commission.

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

Develop and apply a Circular Design Guideline
Status:
As a first step we created a Circular Design Guideline to ensure that circularity is incorporated in all new product developments. The first draft was completed at the end of 2023. The guideline defines a set of deliverables for the development of new products and is a working document to be regularly updated based on new technological developments.
Outlook:
We will roll out and apply the Circular Design Guideline for all new product developments in our Competence Centres (Radiators Europe, Comfosystems Europe, Clean Air Solutions and CORE) to improve our productivity and product circularity in general and achieve the target for new product developments, i.e. 20% improvement in environmental impact for new products launched after 2025 as stated above.

Pilot ventilation-as-a-service and refurbishment business models
Status:
Today 5% of our total net sales stem from ventilation-as-a-service model, from our clean air solutions business. In addition, our team in the Netherlands maintains close communication with customers who express a preference for refurbished ventilation products over new ones. This is the reason for the tenders running in the Netherlands.
Outlook:
We aim to pilot business models for ventilation-as-a-service and refurbishment to gradually increase our revenue from this segment. By 2030, a significant part of our net sales should stem from refurbished products/service business, including revenue from clean air solutions.

Increase the share of recycled raw materials in our products
Status:
The share of recycled raw materials differs per product category, as do the measures aimed at increasing this share. A high percentage of the aluminium used in radiators consists of recycled material. As for air distribution products, Zehnder requires that new development projects have a recycled content of at least 25% of polymer. Nevertheless, for the majority of our products, we mainly use new materials for reasons related to cost, design and quality. Accordingly, the proportion of recycled plastic across the entire product portfolio is still very low. Securing reasonable and reliable data from our suppliers is challenging.
Outlook:
To further increase the share of recycled raw materials in our products, we will start a concept phase in our Competence Centres (Radiators Europe, Comfosystems Europe, Clean Air Solutions and CORE) for new products manufactured, with more than 80% of raw materials recycled and based on a design in which at least 80% of the components are recyclable. Our 2030 target is to use a significant share of recycled raw materials for most of our products.

Increase the share of recycled packaging materials
Status:
In 2023, we achieved a Group-wide total of 54% of recycled packaging materials, excluding pallets and based on estimations of our business units. Zehnder has successfully eliminated the use of Styrofoam. For radiator packaging materials, a project was initiated to achieve an 85% share of recycled packaging materials. Currently, our radiator products boast an 80% recycled material rate for cardboard and 5 to 10% recycled material rate for plastics. As for purchased primary products, the reduction of packaging materials is only possible to a certain extent, as packaging also serves as protection.
Outlook:
Our goal is to achieve 80% recycled or reusable packaging materials (excluding pallets) for both inbound and outbound transportation by 2025, a target that has been defined for our Competence Centres (Radiators Europe, Comfosystems Europe, Clean Air Solutions and CORE). For the remaining 20% of new (not recycled) packaging materials in 2025, we commit to striving for the highest ecolabel standards (excluding pallets).

Conduct feasibility study for reusable and/or recycled pallets
Status:
We realised in the reporting year that due to many reasons, our share of reusable pallets is relatively low for Europe, whereas all our pallets are made of used wood at our largest production site in Canada.
Outlook:
In 2024, we plan to do a feasibility study on whether and how we can increase the reusability of our pallets used in our inbound and outbound transportation. We will also assess the recycled content of the pallets currently in use to determine the feasibility of increasing this percentage.

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