New CO2 strategy
Continuous contribution to global climate goals
For many years now, Geberit has been striving to reduce its environmental impact. The continuous contribution to the UN 2030 Agenda for Sustainable Development and to the global climate goals – as set out in the agreement reached at the Paris Climate Conference in 2015 – is an integral part of Geberit’s Sustainability strategy. Since the acquisition of the energy-intensive ceramics production in 2015, CO2 emissions in relation to currency-adjusted net sales (CO2 intensity) have fallen by an average 7.7% per year. In comparison with 2015, this represents a reduction of 38.3%. This means the targets of the CO2 strategy 2015–2021 were exceeded. Similarly, it was possible to reduce the absolute emissions to well under the target value of 240,000 tonnes CO2/year at 217,009 tonnes in 2021. These results mean that between 2015 and 2021, Geberit overfulfilled the target (Scope 1 and 2) specified in the Science Based Targets Initiative (SBTi) of limiting global warming to “well below 2°C” above pre-industrial levels.
New CO2 strategy for further reduction of emissions
The Geberit Group stands for an ambitious and implementation-oriented approach in its activities. This also applies to the new CO2 strategy. The central element is the integration of the CO2 strategy in all relevant and existing business processes as well as the handling of CO2 emissions as external costs by means of internal CO2 pricing. In this way, Geberit wants to ensure that the procedure of reducing the company’s carbon footprint is widely supported within the company, incorporated in daily business activities, and that the measures taken have a long-term, sustainable effect.
The new CO2 strategy thus combines ecological and economic sustainability and focuses on short- and medium-term, realistic and measurable objectives. The goal is to reduce CO2 intensity by an average 5% per year. As a result, absolute CO2 emissions will be reduced long term to 136,000 tonnes by 2035 if the short- and medium-term goals are achieved. In comparison with the reference year 2015, the relative CO2 emissions will be reduced by 70% by 2030 and by 80% by 2035. The envisaged reduction (Scope 1 and 2) is in line with the target specified in the Science Based Targets Initiative (SBTi) of limiting global warming to “well below 2°C” above pre-industrial levels.
Geberit relies on transparency and the assumption of responsibility. Internal reporting will be significantly expanded: from now on, key performance indicators on CO2 emissions will be integrated into the regular monthly reporting and forecasting processes. The annual achievement of CO2 reduction objective will now be integrated as one of five equally weighted criteria in the calculation of the Group bonus. The annual emission reduction goals are thus bonus-relevant with a weighting of 20% for the entire Group management (around 220 managers) as well as for the employees in Switzerland (a total of 1,500 employees).
The internal CO2 pricing is a new measure of key importance. Once a year, the Group Executive Board defines a CO2 reference price as part of the budget – EUR 60 per tonne for 2022. This is based on the price of the European Emissions Trading System (ETS) for CO2. The internal CO2 reference price embodies the reference costs for saving one tonne of CO2. An implicit CO2 project price is calculated for each project using an economic efficiency calculation. This serves as a basis for deciding on investments in measures to reduce energy or CO2. The lower the CO2 project price, the more attractive the project, whereby the price for implementing a project has to be under the CO2 reference price.
Pivotal in the CO2 strategy are measures for saving energy, increasing efficiency and procuring energy in the plants. The corresponding measures are implemented using an energy master plan and a rolling CO2 forecasting of the significant plants. The proportion of renewable energies is being further increased throughout the company, always taking the internal CO2 reference price and the economic efficiency of the planned projects into consideration. There are various ways of doing this: purchasing high-quality green electricity with certificates, long-term Power Purchase Agreements (PPA) with selected operators, or the installation of proprietary photovoltaic systems on the roofs of the production plants to generate electricity to be used within the company. For 2022, it is planned to increase the purchase of green electricity even more, from 85 GWh in 2021 by a further 20 GWh in 2022 (previous year +17 GWh).
The area of ceramics, which accounts for around two-thirds of all Geberit CO2 emissions, accordingly has the largest structural savings potential. This includes a special focus on the reduction of scrap rates. The firing process and the use of the resulting waste heat will be further optimised. This can be used for other process steps, such as the drying of the cast ceramic appliances. Furthermore, projects were launched to investigate the possibilities of switching to renewable energy sources – for example, hydrogen – in the long term as well as the systematic reuse of ceramic waste.
Geberit also contributes to reducing Scope 3 emissions. This principle is known as eco-design and is based on the continuous improvement of product design. All products have been developed consistently in line with this principle since 2007. Seen across the entire life cycle, each product must be better than its predecessor from an ecological perspective – and all without sacrificing on quality, functionality or durability. With regard to the individual areas in the upstream and downstream value chain, the planned measures are aiming for the following improvements:
- Reduction of the quantities of material used
- Increase in the proportion of recycled material
- Simplification of dismantling and recycling products and their components
- Ensuring durability and repairability
- Increasing the energy efficiency of the products
- Reduction of water consumption in the product use phase
- Reduction of packaging material
- Optimisation of transport routes and maximising shipping container utilisation