Climate change is one of the major challenges facing society in the 21st century. In 2015, the United Nations collectively agreed to take action to significantly limit the rise in global temperatures. Since climate action and energy efficiency will pay off in the long run – both for the environment and our business – we have also made it our mission to help stem the tide of climate change.
How we are taking climate action
We want to do our part to preserve the climate and comply with the Paris Agreement on climate change. Therefore, we have set our own objectives:
By 2030, we intend to lower our direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions by 50% compared with the basis year 2020. We aim to achieve this mainly by reducing process-related emissions, implementing energy efficiency measures and purchasing more electricity from renewable sources.
In May 2022, this goal for 2030 was approved by the Science Based Targets initiative (SBTi), which independently assesses and approves company targets based on its strict climate science criteria. This approval by SBTi confirms that we are contributing to limiting global warming to 1.5 °C, thus complying with the requirements of the Paris Agreement.
We also aim to cover 80% of our purchased electricity with renewables by 2030.
Moreover, we aim to reduce our Scope 3 emissions across the entire value chain by 52% compared with 2020 (per euro of gross profit) by 2030. This target was also approved by SBTi.
By 2040, we intend to have achieved climate-neutral operations throughout our entire value chain; this target covers our Scope 1, 2 and 3 emissions.
Roles and responsibilities
Corporate Sustainability, Quality and Trade Compliance is responsible for overseeing all climate action efforts throughout the Group, with our individual sites and business sectors worldwide implementing the necessary measures at the local level. More information can be found under Environmental Protection.
Our commitment: Standards and legal frameworks
We have three EHS standards in place to manage energy and process-related emissions consistently across the Group, specifically “Energy Management”, “Air Emissions” and “Emissions of Refrigerants”. We use an internal audit process to randomly check compliance with all EHS standards.
In addition to our own standards, we are subject to a wide array of national and international energy and climate regulations. At European level, for instance, we are required to comply with the EU Energy Efficiency Directive (2012/27/EU), which stipulates that companies must conduct regular energy audits or implement an ISO 50001-certified energy management system. The sites subject to these requirements are responsible for taking the requisite actions and furthermore undergo audits conducted by internal and external experts. In total, 14 sites have been certified in accordance with ISO 50001 to date.
Our co-generation plant in Darmstadt and heating plant in Gernsheim (both in Germany) have made it necessary for us to participate in EU emissions trading since 2005. The EU 2030 Climate and Energy Framework is designed to achieve the objectives of the Paris Agreement, with EU emissions trading playing a key role in this. The amended EU Emissions Trading Directive (2003/87/EC) took effect in April 2018, thereby updating the legal framework for the fourth phase of the EU emissions trading program (2021-2030) and tightening the rules for free CO2 allowances. Going forward, we will therefore increasingly have to purchase CO2 emission allowances.
Emissions reduced further
In 2023, we reduced our greenhouse gas emissions by nearly 17% compared with the previous year, emitting a total of approximately 1,463,000 metric tons of CO2 equivalents (CO2eq) (2022: 1,760,000).
Our direct emissions (Scope 1) totaled 1,236,000 metric tons of CO2eq (2022: 1,518,000), with process-related emissions accounting for 990,000 metric tons of CO2eq and fuel use accounting for the remainder. Indirect emissions (Scope 2) totaled roughly 227,000 metric tons of CO2eq (2022: 242,000) calculated according to the market-based method (approximately 381,000 metric tons of CO2eq according to the location-based method). Greenhouse gas emission intensity (Scope 1 and 2) amounted to 0.07 Kg of CO2eq per € of net sales in this period (2022: 0.08).
Greenhouse gas emissions in metric kilotons of CO2 equivalents, Scope 1 and 21
The Greenhouse Gas Protocol defines 15 categories for Scope 3 emissions from upstream and downstream activities. In 2023, these emissions totaled around 4,594,000 metric tons of CO2eq (2022: 6,680,000). Categories 1 and 2 (Purchased Goods and Services and Capital Goods) accounted for 62% (2022: 69%) of our total Scope 3 emissions in this period.
We currently calculate the majority of emissions based on "spend" data, with inflation causing an increase in emissions using this method. Our gradual plan involves shifting to a hybrid calculation of spend- and weight-based calculations and continue increasing share of primary data from our suppliers. More information on the Supplier Decarbonization Program can be found under Sustainable supply chain.
Greenhouse gas emissions 2023 in metric kilotons of CO2 equivalents, Scope 3
Reducing process-related emissions
Within our Electronic business, a key area of focus is mitigating Scope 1 emissions, primarily stemming from the production of specialized chemicals crucial to the electronics industry. Our previously commissioned pilot exhaust gas abatement unit in Hometown, Pennsylvania, USA, has demonstrated high efficiency of almost 99%. In 2023, we began planning to expand this technology to two sites that produce these chemicals. Once completed, this expansion will significantly reduce our process-related emissions in our Electronics business sector.
In our Life Science business sector, we are tracking process-related emissions primarily from the release of perfluorinated hydrocarbons (PFCs). Consequently, we replaced several emission-intensive production lines with equipment that does not emit PFCs, resulting in a reduction of CO2eq by 11,795 metric tons in 2023. We also continued developing methods to eliminate the remaining PCF emissions from these processes, which we plan to implement before 2030.
Reducing product-related emissions
We are working to reduce the carbon footprint of our products across all three of our business sectors. In 2023, we successfully completed a pilot project for an IT tool designed to calculate the carbon footprint of our product portfolios; one product family per business was used to evaluate the feasibility of the solution. This tool enables us to calculate and assign emissions at various steps of the product life cycle, from procuring raw materials to transport and processing, culminating in the finished product. Following the pilot, we have expanded this carbon footprint assessment to further products in our portfolios. To ensure we meet industry standards and use comparable data analytics and expert analysis, we collaborate in industry initiatives with our peer companies, including Together for Sustainability (TfS).
Reducing emissions within our supply chain
You can find more information on the Supplier Decarbonization Program under Sustainable supply chain.
Shifting to ocean freight
Building on the progress made with air-to-sea conversion of our Healthcare logistics routes, our Life Science business sector launched its global Mode Shift program in 2023 to transition from air to sea freight shipments where feasible. The rollout is continuing across our Life Science operations as a major decarbonization lever.
Evaluating investments for sustainability
In 2023, we again performed sustainability evaluations on all investment projects worth more than € 10 million. The shadow price that must be considered for these investment projects is € 100 per metric ton of CO2eq. With these measures, we aim to establish a clear focus on reducing CO2 emissions in all our large capital expenditure projects.
Transparency on CO2 emissions and energy consumption
We report to CDP on an annual basis. This organization assesses the ways in which companies are working to lower greenhouse gas emissions and minimize the risks and consequences of climate change, along with their strategy for doing so. Companies are rated from A to D-, with A being the top score. In 2023, we scored A- (2022: B) for climate change
Climate-related risks and opportunities
In order to comply with all disclosure requirements of the Task Force on Climate-Related Financial Disclosure (TCFD), we started with a detailed assessment of climate-related risks and opportunities. In 2022, we conducted our first analysis of qualitative climate scenarios and in 2023 we enriched our initial findings with a quantitative analysis. More information can be found under TCFD reporting.
Energy efficiency
In 2023, a variety of energy efficiency initiatives helped us save around 2,800 metric tons of CO2eq at our global headquarters in Darmstadt (2022: 3,000). For instance, we improved heating, ventilation and air conditioning systems and reduced base loads for compressed air systems.
Slight decline in energy consumption
We consumed 2,337 gigawatt hours of energy in 2023 compared with 2,432 gigawatt hours in 2022. As in the previous year, our energy intensity relative to sales remained at 0.11 kWh/€ in 2023.
Renewable Energy
In 2023, we further strengthened our focus on purchasing electricity from renewable sources. In this period, we sourced 51% of our purchased electricity from renewable energies, meaning direct supply contracts and energy attribute certificates (2022: 47%). The share of our total energy consumption by renewable energies increased to 23% in 2023 (2022: 20%).
In 2023, we signed virtual power purchase agreements (VPPAs) in Europe for a total of around 300 gigawatt hours (GWh) of renewable energy per year. This means that 100% of our electricity currently purchased in the European Union (EU) and Switzerland will be covered with renewable energy certificates as of 2025.
Our Life Science business sector addresses energy efficiency at our sites through its EDISON Program for energy and water efficiency, investing approximately € 10 million annually until 2030. For example, heat pumps were installed in 2023 at two buildings at our site in Molsheim, France, to reduce its dependency on natural gas.
At our site in Toluca, Mexico, we have also installed our first solar panels across our operations in Mexico. The 550 kW system is expected to account for almost 70% of the site’s annual energy consumption, and avoid approximately 170 metric tons of CO2 annually. In addition, we have set up solar parks at other sites in the network, for example in Mollet, Spain, which will generate up to 2,800 MWh hours per year of green electricity.
Furthermore, we are covering the power needs of multiple South American sites (for example in Argentina, Chile and Guatemala) through renewable energy certificates. The same applies to several of our sites in China. In order to advance the decarbonization of our own business operations and our supply chain, we have joined the Energize industry network as a sponsor. Details can be found in the Supply Chain Management chapter.
Employee incentives
We encourage our people to do their part to preserve the climate by providing helpful information and tips on our intranet. We consistently provide updates on company-wide climate protection initiatives within our internal sustainable network, which serves as a dedicated platform where employees who are passionate about sustainability convene regularly to exchange ideas and deepen their understanding of pertinent topics. Moreover, we support members of our workforce who are seeking greener modes of living:
- At our German subsidiaries, we offer a subsidy of € 150 towards monthly lease payments to employees who opt for an electric company car.
- For those on the road, we offer the “Laden@road” program, which enables our employees to charge their company or private cars at approximately 100,000 stations across Europe. Our approach includes helping employees switch to electric vehicles by providing charging facilities at various sites, for instance in Germany, France, Switzerland, the United Kingdom, and the United States.
- At our German sites, we also encourage employees to use climate-friendly forms of transportation through “bike4me”, a program enabling them to lease a bike at discounted rates with payments being deducted from their pre-tax income.
- German employees are also eligible to receive a Deutschland-ticket subsidy of € 10 per month to travel using regional and local public transportation.
- In the United States, our Life Science employees can choose from several subsidies including up to US$ 3,500 towards the purchase or lease of qualifying hybrid or electric vehicles, US$ 1,000 towards the installation of solar photovoltaic systems or solar thermal collectors at their homes and US$ 100 towards the cost of a home energy assessment.