Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate
• Community
• Compliance

Environmental Achievements

• Reduced operational CO² emissions from Scope 1 and 2 by 7.6% compared to 2022.
• Increased share of self-produced electricity from 12.9% to 14.6% by installing further PV systems.
• Reduced heating oil consumption for heat production by 32.0%.
• General electricity consumption was around 9.5% lower than in the previous year.
• Significant improvement in data situation in Scope 3, collecting valid data for all relevant categories in accordance with the Greenhouse Gas Protocol.
• Climate Division is the first radiator manufacturer to obtain an Environmental Product Declaration (EPD) for its steel radiators.
• Doors Division's two new biomass combined heat and power plants at Prüm and Garant will provide more sustainable heat and electricity in the future.

Social Achievements

• Average employee tenure is 12.1 years.
• Various work and part-time models offered, enabling mobile working where technically feasible.
• Kermi declared an “Inklusionsmotor 2023” (driver of inclusion) for outstanding social engagement in employing people with disabilities.
• Close collaboration with trade unions in all operating countries.
• Development of a redundancy program for closing radiator production in Dilsen (BE).

Governance Achievements

• First time reporting in accordance with the Taskforce on Climate-Related Financial Disclosures (TCFD) requirements.
• New materiality analysis conducted, identifying nine material topics.
• Introduced a supply chain policy for minerals from conflict and high-risk zones, as well as for products or services with a risk of child labour.
• Quantitative climate targets integrated into variable compensation for Group Management.
• Improved whistleblowing concept based on the EU Whistleblowing Directive and national regulations.
• Introduced compliance e-learning courses for office employees and a training video for production employees.

Climate Goals & Targets

Environmental Challenges

• Shortage of skilled workers.
• Tight recruitment market.
• Volatile energy and material prices.
• Geopolitical events affecting procurement activities.
• Increasing customer expectations regarding sustainability and legal requirements.
• Market distortion and supply chain problems causing material price increases and product unavailability.
• Staff absences and departures.
• Potential risks related to climate change (physical and transition risks).

Mitigation Strategies

• Focus on employer branding and new recruitment channels.
• Intensified efforts to cover all requirements relating to value creation.
• Preference for suppliers from the EU or EEA, ideally from countries with Arbonia production sites.
• Scientifically substantiated climate targets, improved data situation, and corresponding measures.
• Improved data quality and quantity for more detailed information on material risks.
• Flexible workplaces, mobile working options, and various flexible working hour models.
• Redundancy program, close collaboration with trade unions.
• Supply chain policy for conflict minerals and child labor, risk management system, and risk assessments.
• Integration of climate-related risks into group-wide risk management activities.
• Development of a standardized process to identify and evaluate risks at regular intervals.

Supply Chain Management

Supplier Audits: Around 70% of purchasing volume in German companies or 50% of the global purchasing volume covered by EcoVadis or comparable ratings.

Responsible Procurement

• Supplier Code of Conduct committing suppliers to the Universal Declaration of Human Rights, UN Convention on the Elimination of All Forms of Discrimination Against Women, and UN Convention on the Rights of the Child.
• Increasing procurement of more sustainable products (e.g., decarbonised steel).

Climate-Related Risks & Opportunities

Physical Risks

• Production interruptions and damage due to flooding
• Increased electricity costs for cooling and air conditioning due to increasing heat and more frequent heatwaves

Transition Risks

• Impact of emission targets on financial valuations and creditworthiness
• Increased costs for emissions accounting and legal requirements

Opportunities

• Higher demand for air conditioning products due to increasing heat
• Increased demand for Arbonia products due to attractiveness of energy-efficient construction projects
• Generating 60% of Climate Division's net revenue via low-emission products by 2026
• Energy efficiency during the use phase as a strategic growth area

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD

Certifications: ISO 50001, ISO 14001, FSC, PEFC, RAL, NF, EHPA, DINCertco, Eurovent, IMQ, EPD

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 11 (Sustainable cities and communities)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

Arbonia contributes to these goals through energy-efficient products, sustainable production processes, resource efficiency, and community engagement.

Sustainable Products & Innovation

• Energy-efficient radiators, heat pumps, and storage batteries.
• Radiant heating and cooling systems.
• Ventilation and indoor air quality solutions.
• Doors with improved insulation and durability.
• Electrostatic filter system for reduced energy and resource consumption.

Awards & Recognition

• Kermi declared an “Inklusionsmotor 2023” (driver of inclusion)
• RWD Schlatter received a sustainability award for the use of Swiss wood in its construction work.