Focus Topics – Environmental matters

Climate action

Science-based targets for decarbonisation

Management approach

Our goal is to decrease CO₂e emissions in Scope 1 and 2, originating mainly from our internal production processes, as well as in Scope 3, associated with the upstream and downstream activities related to our products. We consider all GHGs as per GHG Protocol¹. Zehnder’s primary focus is on improving energy efficiency and increasing the proportion of renewable energy.

We also estimate and report the amount of energy saved through heat recovery by our ventilation systems. These systems operate through a counter-current temperature exchange, allowing for air exiting the building via the ventilation system to efficiently transfer its heat to air entering the building, thus maintaining a greater amount of heat within the system and saving considerably on heating energy and costs, while reducing local heat pollution into the air. Over the course of their lifetimes, our heat recovery systems sold in 2023 will save our customers approximately 8.9 times as much energy as they consume compared to traditional ventilation and the subsequent replacement of lost heat, resulting in 39.2 million gigajoules of avoided energy consumption. Overall, heat-recovery ventilation releases considerably less CO₂e than traditional ventilation, as the savings in heating emissions are greater than the increased electricity consumption of a heat-recovery system. Our heat-recovery ventilation units are calculated to produce approximately 369,055 tCO₂e over the course of their lifetimes, whereas traditional ventilation units plus replacement of lost heat are calculated to produce approximately 2,290,633 tCO₂e over the same period. This results in 1,921,578 tCO₂e of avoided emissions, or a ratio of emissions produced by HRV to emissions produced by traditional ventilation and replacement heating of 1 to 6.2².

Our strategic goal is to boost Zehnder’s resilience to climate-related risks. Climate change was the most discussed topic amongst stakeholders during the double materiality assessment, reflecting the importance of action in this field. These changes are vital both to reduce Zehnder’s impact and contributions to climate change, as well as to meet new regulations and adapt to the changing market as customers seek to reduce their own emissions.

In June 2023, Zehnder committed to set net-zero climate targets with the SBTi, a collaboration between the Carbon Disclosure Project, the UN Global Compact, the World Resources Institute and the World Wide Fund for Nature (WWF). The SBTi provides a methodology for companies to define science-based emission reduction targets in accordance with the Paris Climate Change Convention 1.5-degree target. The target Zehnder plans to submit for validation in early 2024 incorporates both near- and long-term emission reduction pathways as well as an overarching trajectory, aiming for a net-zero state by 2050.

Each of Zehnder’s Competence Centres as well as the Group Executive Committee are responsible for achieving the targets regarding climate action. They manage and coordinate the implementation of measures across the Group, aggregate and analyse respective KPIs from the production sites and regularly report to the Sustainability Steering Committee. Due diligence processes include the annual collection of climate-related data from our business units and an internal and external review in accordance to an internal procedure. Furthermore, most of our environmental data (energy, waste and GHG emissions) are audited by an external assurance company (see the Limited assurance report).

¹ Carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PCFs), sulphur hexafluoride (SF₆) and nitrogen trifluoride (NF₃).
² Emissions and energy consumption are calculated for the full product use phase, and do not include emissions at other phases such as production, transport or disposal. Grid emissions are split by country and are calculated at 2021 levels for the full product lifetime (source: Department for Environment, Food and Rural Affairs (DEFRA)). Lost heat is replaced by heating systems, split between heat pumps (Energy Efficiency Ratio (EER) = 3 as a conservative choice for renewables) and natural gas heaters (85% conversion efficiency). Natural gas heaters were selected as the conservative choice for fossil-based heating. The ratio of natural gas heaters to heat pumps is country-dependent and is generated using values provided by the Institute of Building Technologies and Energy at Lucerne School of Engineering and Architecture (HSLU), Switzerland, based on current national ratios of fossil-to-fossil-free heating methods.
Data sources for heating per country: USA: US Energy Information Administration; Canada: Canada Energy Regulator; China: US Energy Information Administration; EU: EuroStat; UK: Statista; Switzerland: Energie Schweiz; Other: Assumption 80-20 split between fossil and fossil-free.
Assuming exclusively heat pump heating and global grid decarbonisation (20g CO₂e/kWh) reduces the ratio to 1 to 3.5.
These calculations and the assumptions made therein have been verified by the Institute of Building Technologies and Energy at Lucerne School of Engineering and Architecture (HSLU), Switzerland.

Implementation and outlook

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

Ambition: Reduce greenhouse gas emissions and achieve net-zero emissions by 2050 for Scope 1, 2 and 3

Submit science-based targets for validation by the SBTi
Status:
Our objective, which is yet to be approved by the SBTi, is to achieve a 55% reduction in Scope 1 and 2 emissions and a 33% reduction in Scope 3 emissions by 2033, compared to the 2023 baseline. This aligns with the SBTi pathway for the Scope 1 and 2 near-term target that limits global warming to 1.5°C (above pre-industrial levels) and the Scope 3 near-term target that limits global warming to well below 2°C (above pre-industrial levels). This corresponds to an annual reduction target between 2023 and 2033 of 5.5% for Scope 1 and 2 and 3.3% for Scope 3 emissions. The target also means full decarbonisation of Zehnder’s operations and value chain, mandating an emissions reduction of 90% by 2050 across all Scopes, with any residual emissions neutralised through carbon removals. Emphasising our commitment, we have linked parts of the long-term bonus of our Group Executive Committee to achieving our science-based targets for Scope 1 and 2. An integral approach to curbing our Scope 1 and 2 emissions entails a steadfast commitment to enhancing energy efficiency, phasing out fossil-based energy and elevating the proportion of renewable energy (standing at 22% in the reporting year). The focus lies on our radiator manufacturing, which accounts for the majority of our total Scope 1 and 2 emissions.
In 2023, we further improved the quality of our corporate carbon footprint calculation for Scope 1, 2 and mainly Scope 3, in adherence with the GHG Protocol, as the aim is to use the reporting year 2023 as our base year for our science-based targets. This prompted a few methodological changes, leading to a restatement of the 2022 figures for improved comparability with 2023. Total 2023 Scope 1, 2 and 3 emissions amounted to 2,740,926 tCO₂e, reflecting a 13% increase from 2022 (restated, more details can be found in the footnotes of the GRI 305 tables). With our refined methodology in place, we are poised to consistently report data from 2024 onward.
The Scope 1 GHG emissions in 2023 amounted to 9,290 tCO₂e, indicating an 8% decrease from 2022 (restated, more details can be found in the footnote of the GRI 305-1 table). The Scope 2 GHG emissions (market-based) in 2023 amounted to 8,290 tCO₂e, which represents a 17% decrease from 2022 (restated, more details can be found in the footnote of the GRI 305-2 table). The decrease in both Scope 1 and 2 emissions is mainly due to less fossil fuel for heat and less electricity consumption caused by a lower production volume.
Scope 1 and 2 emissions still account for less than 1% of our total Scope 1, 2 and 3 carbon footprint (0.64% in 2023).
For Scope 3, we considered all applicable categories according to the GHG Protocol (see footnote in the GRI 305-3 table). The Scope 3 GHG emissions of the reporting year amounted to 2,723,347 tCO₂e, which is more than 99% of Zehnder’s total carbon footprint. The largest contributor (78% of our total carbon footprint but also of Scope 3 emissions) is the emissions generated throughout the use phase of the electrical products sold across their lifetime. The GHG emissions from the use phase increased by 9% from 2022 (restated, more details can be found in the footnote of the GRI 305-3 table). This increase is mainly due to a change in emission factors (source: International Energy Agency (IEA)), while activity data remained roughly the same. The second-largest contributor to our Scope 3 emissions is purchased goods, constituting approximately 19% of the total emissions. The primary categories include metals, plastics and electronics. These emissions increased by 32% from 2022 (restated, more details can be found in the footnote of the GRI 305-3 table). This increase is due mainly to methodological changes and more appropriate emission factors.
Outlook:
In 2024, we plan to submit the established targets for validation to the SBTi and aim to develop a decarbonisation roadmap. This roadmap will in particular cover energy reduction, with a focus on improving our energy mix and implementing efficiency initiatives by 2033 to achieve our near-term Scope 1 and 2 targets. To lower energy consumption, we will persist in investing in energy-efficient equipment, including improved lighting and cooling/heating systems and transition to chemical paint removal as an alternative to thermal processes. For instance, we have replaced the refrigeration system at our site in Bolesławiec (PL) to decrease the energy needed for cooling. Also, we will continue to invest in photovoltaic systems at our production sites. In Vaux-Andigny (FR), we will assess the possibility of replacing our gas-powered heating with geothermal systems by conducting a feasibility study in 2024. Beyond this, we plan to switch from gas to electricity to power the furnace in 2025 in Vaux-Andigny (FR). Finally, we plan to install a heat pump to further reduce emissions in Zwolle (NL).

Ambition: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters

Analyse the recommendations of the Task Force on Climate-related Financial Disclosures and further embed climate risks into risk management process and internal control system
Status:
In the reporting year, we started to create a roadmap along which we would like to adhere to the TCFD’s recommendations as well as to further integrate our climate risks into our internal risk management procedures.
Outlook:
To prepare our TCFD reporting in 2024, we will analyse climate-related risks and opportunities based on their likelihood and severity. In addition, we will include climate-related risks in our regular risk assessment processes and in our internal control system.

GRI 302: Energy 2016
Disclosure 302-1 Energy consumption within the organisation

GRI 302: Energy 2016
Disclosure 302-2 Energy consumption outside of the organisation

GRI 302: Energy 2016
Disclosure 302-3 Energy intensity

Energy circularity
Renewable energy

GRI 305: Emissions 2016
Disclosure 305-1 Direct (Scope 1) GHG emissions

GRI 305: Emissions 2016
Disclosure 305-2 Energy indirect (Scope 2) GHG emissions

GRI 305: Emissions 2016
Disclosure 305-3 Other indirect (Scope 3) GHG emissions

GRI 305: Emissions 2016
Disclosure 305-4 GHG emissions intensity