Emissions

Target achievement for 2) and 3) is measured using the “Percentage of renewable energy sources” indicator. SFS’s goal is to achieve at least 50% by 2025 and more than 90% by 2030. Efforts to optimize the company’s performance 1) are aimed at reducing CO₂ emissions (Scope 1 & 2) by at least 3% per year. Emissions savings are calculated based on the tons of CO₂ equivalent per franc of value added. The starting point for each of these targets is the 2020 reporting year.

Implementation of the roadmap on track
Each program begins with an evaluation of the available potential in order to systematically document any initiatives already implemented in the individual facilities and to generate additional points of leverage. Some examples from the plants include optimization of compressed air and vacuum systems, replacement of the lighting systems (LED), optimization of the cooling, heating and ventilation systems, material recycling and wastewater treatment. SFS was able to complete the potential check in 2021. This has resulted in many investment projects, which will be implemented successively in the year under review and in subsequent years. SFS will make targeted investments, particularly in the further expansion of photovoltaic systems. At the end of the reporting year, the Electronics division alone invested in photovoltaic systems with an installed capacity of more than 5 MWp. Investments were also made in heat pumps to use waste heat and in the first energy storage systems.

To improve its own performance, SFS follows the “Lean & Green Approach”, which combines lean management approaches with environmental and sustainability-related aspects. Here, a material flow analysis is performed to look for further potential within the processes, while simultaneously incorporating the use of lean methods. This approach focuses on recycling opportunities and seven “possible sources of waste”: energy, water, materials, waste, transport, emissions and threats to biodiversity.

Reducing emissions in the supply chain
In the year under review, SFS evaluated suitable software for managing sustainability in the supply chain. This covers all three pillars of sustainability and is intended to meet current and future regulatory requirements such as the EU’s Supply Chain Act. Supplier evaluations performed with the help of the new software as well as compliance with the SFS sustainability guidelines will serve as a basis for deciding whether to collaborate with a supplier in the future.

Another component is the development of a training course on the topic of sustainability. Employees in Switzerland are currently gaining an in-depth insight into global developments and getting to know the points of leverage where they can help SFS achieve its ambitious goals. In the future, this training will also be made available to employees and suppliers internationally.

Achieving goals through shared responsibility
In order to lend greater weight to environmental and social aspects within the framework of corporate governance, specific ESG targets have been included in the target agreement for the entire Group Executive Board since 2021 and form part of the individual targets.

All divisions are responsible for reducing emissions in line with the defined targets by 2030, 2035 or 2040 and therefore for achieving the corporate targets. By drawing up their own roadmap, they have defined measures and projects that take the specific characteristics of the divisions’ businesses into account. The performance assessment is carried out using the management-by-objectives approach. The EHS (Environment Health Safety) peer group helps the divisions plan and implement measures. The Group EHS Manager works together with the divisions’ or locations’ EHS managers to define the general approach. Progress is monitored, corrective measures are taken if necessary and best practices are shared at regular peer group meetings.

GRI 103-3 Evaluation of the management approach
The emissions management approaches and measures described in GRI 103-2 are presented annually to the Group Executive Board by the Group EHS Manager and the achievement of roadmap targets and initiatives is assessed and adjusted in this context. That includes reviewing environmental performance: ISO 14001-certified locations, for example, report on their progress in reducing CO₂ emissions.

Consolidation approaches harmonized
The consolidation approach was brought in line with the principles of financial controlling, which are also applied when preparing the annual report. That also paved the way for integrated reporting in the future. The resulting differences are disclosed in each report.

Those primarily relate to an adjustment in how the 50% stake in the joint venture “Sunil SFS” in TianJin is taken into account. Only 50% of the CO₂ values are now factored in, which is commensurate with the financial stake in the company. The CO₂ equivalents shown in the following tables have been adjusted for previous years, as well.

Data collection process improved
SFS has made major progress in collecting Scope-3-specific data. A great deal of relevant data was collected for the first time (transport, commercial products, services, etc.). Improvements were made not only to the quality of the data, but also underlying data for consumption figures from the Group’s own vehicle fleet and process materials. The business model for recording and calculating CO₂ emissions was created using Sinum’s expert system and the ecoinvent database, version 3.8. Changes made included adjustments to the modeling (such as to the granularity of waste disposal) as well as an expanded business model and the addition of numerous new measurement points (for product transport and commuter traffic, for example). The model’s main objectives are to expand the scope of data and improve data quality in order to establish an information system that serves as the basis for internal and external sustainability-related communication. It also creates important prerequisites for the establishment of a combined or integrated reporting system. The activities of the SFS Group in Switzerland (12 locations) and the most important international locations (currently 26 locations) were examined. This report provides an LCA-based (lifecycle assessment) overview of the material environmental aspects at both divisional and Group level for 2021 as well as a comparison with previous years. Data was collected 38 locations during the year under review (2020: 34 locations) with 9,455 employees in FTE (2020: 8,956). This corresponds to around 90% (2020: 84%) of SFS’s entire workforce. The goal is to include all relevant locations by 2025, thus achieving a degree of coverage of more than 95%.

Implementation of ISO 14001 certification
At present, 21 production sites (PY 20) currently have an ISO 14001-certified environmental management system. The aim is to expand the environmental management system to all material production sites by 2025 and to certify them in accordance with ISO 14001. The following diagram shows the current status with regard to planning and actual certification by segment:

GRI 305‑1 Direct GHG emissions (Scope 1)
Data collection in Scope 1 has achieved a high degree of coverage. There are still gaps in the collection of data regarding operating supplies and information on fuel consumption for the company’s own vehicle fleet. The plan is to collect the missing information by 2023 and complete the database. This objective only applies to organizations that were already part of the SFS Group in the year under review, however. There were no biogenic CO₂ emissions in the reporting period.

The table below illustrates the significant increase in the amount of data collected regarding sources of emissions (especially for process gases, fuels and process materials), emissions increasing by more than 46% compared to the previous year. In a “like-to-like” comparison, which only considers the figures that had already been collected in the same period of the previous year, emissions increased by merely 4.3% with organic growth of 16.8%. The savings were achieved through many small projects relating to consumption attributable to heating and to process gases. For example, heat exchangers are only run in summer and replaced by thermal heat pumps in winter. The waste heat generated by the thermal heat pump is stored in buffers and used to heat the buildings. At the location in Korneuburg (Austria), for example, gas consumption for heating was reduced by approximately 80%. The roll-out is currently underway at our plant in India, with initial savings of 88% reported.

GRI 305-2 Energy indirect GHG emissions (Scope 2)
The trend in Scope 2 emissions shows the positive effects of measures implemented to reduce CO₂ emissions. Overall, SFS recorded an increase in absolute CO₂ emissions of just 2.5%, which accompanied growth in value added of 16.8%. The purchase of renewable electricity (71,511 MWh) and the expansion of in-house electricity production (5,129 MWh) contributed significantly to this. The share of renewable electricity was increased from 6% to a total of 36%, bringing the proportion of renewable energy to 23% (previous year: 4%). Nearly 100% of Scope 2 energy is obtained in the form of electricity, with district heating playing a minor role in the company.

305-3 Other indirect GHG emissions (Scope 3)
SFS is publishing data on Scope 3 emissions for the first time. As expected, efforts to optimize data quality and completeness have more than doubled the volume of data already collected internally. Here, too, the company aims to further reduce any existing gaps by 2023. This goal only applies to organizations that were already part of the SFS Group in the current reporting year, however.

In terms of Scope 3 emissions (in CO₂eq), the material sources are currently the purchase of goods and services (e.g., raw materials, external processing), which come in at around 81%, followed by commuter traffic at around 9% and the purchase of fuel and energy-related services (not included in Scope 1 or 2) at around 5%. Other relevant areas are waste disposal (2.31%) as well as upstream and downstream transport (2.4%).

GRI 305-4 GHG emissions intensity
SFS made some initial progress with a reduction of –4.5% on its way to reducing CO₂ emissions by at least 90% by 2030 (2020 reference). Excluding the emissions from Scope 1, which the plants reported for the first time, the result would actually be –11.9%. Energy savings at the locations and purchases (34%) of renewable Scope 2 energy made a material contribution to the reduction. The installation of photovoltaic systems increased the proportion of self-generated renewable electricity from 1.4% (2,560 MWh) to 2.5% (5,129 MWh) compared to the previous year.