Focus Topics – Environmental matters

Circular products and innovation 

Impacts, risks, and opportunities

Impacts

Zehnder’s focus on circular products reduces waste, extends product life cycles, and minimises the need for new raw materials. The company promotes the reuse and refurbishment of products, which lowers resource demand and reduces embedded CO₂e emissions. By increasing repairability and recyclability, Zehnder helps mitigate environmental impacts across its product portfolio.

Risks and opportunities

Zehnder faces challenges in transitioning to circular products, including the high cost and limited availability of recycled materials, which can drive up production expenses and complicate circular product design. Meeting growing customer expectations for durability and repairability is also critical; failure to do so risks reputational damage and potential market share loss. Regulatory changes related to circular economy practices also pose a risk, as Zehnder must stay ahead of evolving standards.

Despite these challenges, adopting circular economy principles presents substantial opportunities. Designing products that are energy-efficient, durable, and repairable not only reduces waste and extends life cycles but also supports environmental goals while cutting costs. Circular product design enables innovative business models, such as product-as-a-service, aligning with the rising demand for sustainable and adaptable solutions. This shift toward circularity strengthens Zehnder’s market position as consumers and regulators increasingly prioritise sustainability.

Management approach

Zehnder is dedicated to enhancing its circular product portfolio by prioritising durability, repairability, and recyclability. The company has intensified efforts to ensure products are designed to last longer and can be efficiently refurbished or recycled at the end of their life cycle.

Alongside internal efforts, Zehnder collaborates with suppliers to source more sustainable materials, such as carbon-reduced steel, and to integrate recycled materials into new product developments. The company also seeks to minimise the use of primary raw materials, particularly in packaging, with ongoing projects focused on reducing material usage and increasing the proportion of recycled content.

Clean Air Solutions

This model facilitates the reuse of products through refurbishment and redeployment, offering customers clean air solutions while reducing the need for new resources. The service covers equipment installation, maintenance, air filter replacements, and air quality monitoring. Upon termination of service agreements, Zehnder recovers and refurbishes the equipment, promoting resource efficiency and providing customers with a flexible solution.

Circular Design Guideline

Zehnder’s Circular Design Guideline ensures sustainability is integrated into every stage of product development. It prioritises the use of recycled materials, extends product life cycles through repairability and refurbishment, and encourages circular business models. Competence Centres are responsible for applying these principles across product lines, supported by the Group Sustainability Engineer, who coordinates LCAs and builds internal expertise. This role focuses on improving recyclability, repairability, and raw material selection. Competence Centres implement sustainability initiatives, track KPIs, and utilise LCAs to create certified environmental product declarations, meeting both methodological standards and customer expectations.

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.

Targets

Ambition: Understand and improve the environmental impacts of our products

Target: Conduct life cycle assessments for each product family/technology

• Status: The target has evolved from completing one LCA per product family/technology to prioritising LCAs based on the Group Product LCA Directive. In 2024, eight LCAs were completed for all product groups, resulting in a total of eleven LCAs so far. This marks the completion of approximately one-third of the product families/technologies, with significant work still ahead of us.
• Outlook: In 2025, we will expand the scope of LCAs to include products from our overseas locations. We are focused to enhance our LCA expertise and aim to have a significant share of the outstanding analysis completed. We strive for a 20% improvement in our 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

Target: Develop and apply a Circular Design Guideline

• Status: Following the development of the Circular Design Guideline in 2023, the target has shifted to focus on its rollout and application across all new product development projects. The guideline has been successfully implemented within our Competence Centres, including Radiators Europe, Comfosystems Europe, Clean Air Solutions, and CORE. The Circular Design Guideline emphasises three main circularity topics: designing out waste and pollution, keeping products and materials in use, and regenerating natural systems. These topics are crucial for creating sustainable products that minimise environmental impact and support a circular economy. By focusing on eliminating waste and pollution through innovative design strategies, the guidelines aim to reduce the negative effects of production and consumption on the environment. Keeping products and materials in use involves extending their life cycle through reuse, repair, refurbishing, and recycling, ensuring that resources are utilised efficiently and effectively. Regenerating natural systems supports and enhances natural processes, helping to maintain environmental balance and promote ecosystem health. New business models are essential for enhancing circularity, yet they are challenging to develop in a way that creates a win-win situation for our company, our customers, and the environment.
• Outlook: In the coming year, we will further refine the Circular Design Guideline to provide stronger support for our development teams. We encourage them to explore innovative and sustainable approaches to minimise the environmental impact of our products.

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

• Status: Today all of our ventilation-as-a-service revenue is generated through our Clean Air Solutions business. However, we see potential for ventilation-as-a service and also refurbishment business models in our Comfosystems business where Zehnder traditionally sells ventilation units and air distribution equipment. This is why three pilot projects are in progress to further expand these offerings. It became evident that the enterprise resource planning infrastructure is not ready yet to scale these offerings in the future. Supplier interviews and market assessments are underway, although market readiness remains a challenge in certain areas. The Circularity Taskforce Netherlands has initiated stakeholder interviews to explore innovative circular business concepts, while the EMEA Workstream Circular Economy has broadened the initiative to a European level. So far, five potential business models have been identified – two at Comfosystems and three at Radiator sites.
• Outlook: While still in the early stages, these efforts are progressing with interviews being set up to further evaluate the feasibility and potential of the identified business models. Further insights will shape the development of scalable solutions. By 2030, we aim for a significant part of our net sales to stem from refurbished products/service business, including revenue from Clean Air Solutions.

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

• Status: Building on the achievements of 2023, which saw significant progress in integrating recycled aluminium into radiators and setting a 25% recycled polymer content requirement for new air distribution products, Zehnder is further advancing its efforts to increase the use of recycled raw materials across its product portfolio. The concept phase for products with more than 80% recycled raw materials and recyclability was launched in 2024 and is showing mixed results. Pilot projects have assessed the viability of eco-friendly materials, such as bamboo and cardboard, for alternative product components. For Comfosystems, progress is more advanced, with tools soon to be developed for a 100% recycled content air distribution duct.
• Outlook: We will advance concepts and trials for steel radiators and ventilation units and explore opportunities for heat exchangers. Regular assessments will support progress toward achieving >80% recycled content and recyclability targets. Our 2030 target is to use a significant share of recycled raw materials for most of our products.

Target: Increase the share of recycled packaging materials

• Status: Efforts to increase recycled and reusable materials in packaging are progressing steadily. In the Radiator division, stretch plastic was eliminated for white aluminium products, saving 4 tons of plastic annually. Packaging films and tapes now contain 50–70% recycled content and bubble nylon has been replaced with 100% recycled low-density polyethylene. Additionally, reusable plastic boxes have replaced cardboard for bracket sets, and strapping tape includes 30% recycled content. In CORE, new recyclable packaging features 71% recycled content in the main body, with fresh fibre paper ensuring quality for the inner and outer layers. The base and lid include 95% recycled content, and supports are made entirely from 100% recycled materials. In 2024, we achieved a Group-wide total of 54.2% of recycled packaging materials (excluding pallets), based on calculations (compared to the estimate of 54% in the previous year). The difference can be attributed to improved data quality, which provided a more accurate assessment of our recycled material usage.
• Outlook: We identified that almost 75% of our packaging materials (excluding pallets) used across the group are cardboard and paper, however not at the highest recycled content rate possible – this is an improvement potential we are going to utilise in 2025. Plans are underway to phase out styrofoam spacers for radiators from external suppliers and to eliminate heat shrink foil from all radiators by 2025. In Bolesławiec (Poland) a new packaging system will be commissioned in January 2025, removing the use of film around cartons. The protective film around radiators, however, will remain to ensure safe transport and safeguard the assembled units on-site until all construction work is completed, and the final handover takes place.
  
  In Clean Air Solutions, building on the existing reusable packaging system for filter frames, efforts are focused on expanding sustainable packaging options. This includes evaluating lightweight packaging films with recycled content to improve material efficiency and further reduce environmental impact.
  
  We aim to achieve 80% recycled or reusable packaging materials (excluding pallets) for outbound transportation by 2025, a goal established for our Competence Centres. For the remaining 20% of new (non-recycled) packaging materials, we are committed to adhering to the highest ecolabel standards.

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

• Status: The feasibility study on recycled content and reusability of pallets sets the foundation for our 2025 targets. It evaluates carbon impact reduction options, tracks pallet flows, and identifies suppliers for potential pallet return systems. Key challenges include standardising master data and addressing market barriers to efficient pallet returns. The study emphasises two main priorities – standardising pallets internally to minimise complexity and working with Commercial EMEA to develop a process for retrieving pallets from customers, with potential support from service providers such as Boomerang.
• Outlook: Next year’s objectives include launching an internal pallet standardisation project and collaborating with Commercial EMEA to design and test pilot concepts for customer pallet returns. These initiatives will be essential for establishing a sustainable and efficient pallet management system.

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