Climate Change Data

AB SKF

Climate Impact & Sustainability Data (2015, 2016, 2019, 2020, 2022, 2022-01 to 2022-09, 2023, 2024)

Reporting Period: 2015

Environmental Metrics

Total Carbon Emissions:502,038 tCO2e/year (Scope 1 and 2)
Scope 1 Emissions:58,098 tCO2e/year
Scope 2 Emissions:443,940 tCO2e/year
Scope 3 Emissions:106,112 tCO2e/year (goods transportation)
Total Energy Consumption:1,620 GWh/year
Water Consumption:5,558,000 m3/year
Waste Generated:9,043 tons/year (sent to landfill)

ESG Focus Areas

  • Economic performance
  • Energy and emissions
  • Occupational health and safety
  • Employment practices
  • Training and education
  • Diversity and equal opportunities
  • Responsible sourcing
  • Local communities
  • Ethical business conduct
  • Human rights
  • Environmental compliance of products

Environmental Achievements

  • Reduced energy use by 17% compared to 2006
  • Achieved 80% recycling rate for grinding swarf
  • 100% recycling rate for turning chips and other metal scrap
  • Reduced CO2 per tonne-kilometre for goods transport by 15% (2012-2014)

Social Achievements

  • Significant improvement in accident rate since 2000
  • Improved employee retention rate
  • Increased percentage of employees covered by individual development plans and performance reviews
  • Implemented local community engagement programs in 34 countries

Governance Achievements

  • 100% of SKF’s employees communicated SKF’s Anti-fraud and Anti-Corruption policy; 75% completed anticorruption training
  • Established a global framework agreement with the World Union Council
  • Updated Code of Conduct in 2014 in light of the UN Guiding Principles on Business and Human Rights

Climate Goals & Targets

Medium-term Goals:
  • Reach total revenues of the SKF BeyondZero portfolio solutions of SEK 10 billion in 2016
Short-term Goals:
  • 5% reduction in absolute energy use in 2016 vs. 2006
  • Reduce energy use per production output by 5% year-on-year
  • 30% reduction of CO2/tonne-kilometre for goods transport by 2016 compared to 2011
  • Achieve at least an 80% recycling rate for grinding swarf by 2016
  • 50% reduction of solvents by 2016 compared to 2007

Environmental Challenges

  • Increasing energy and emission costs in the medium to long term
  • Challenges in achieving 50% reduction of solvents by 2012 (target extended to 2016)
  • Challenges related to achieving at least an 80% recycling rate for grinding swarf due to regional legislation and volatile scrap prices
  • Challenges in aggregating data on employee turnover by age group and minority due to differences in human resource and salary systems
  • Challenges in certain countries regarding union membership and level of independence of trade unions
  • Difficulty in collecting reliable data on CO2 emissions from business travel outside Europe, US, and China
Mitigation Strategies
  • Active approach to energy efficiency at its own facilities and suppliers
  • Extended target for solvent reduction to 2016
  • Maintaining the 80% recycling target for grinding swarf until year-end 2016
  • Working to implement common systems and job roles in countries with significant operations to improve data collection
  • Pragmatic work with the World Union Council and union representatives to address challenges related to union membership
  • Focusing on transport works efficiency (CO2 per tonne-kilometre) as the main performance indicator for goods transportation

Supply Chain Management

Supplier Audits: Over 500 audits between 2012 and 2015

Responsible Procurement
  • SKF Code of Conduct for Suppliers and Sub-contractors
  • Risk-based approach focusing on suppliers in high-risk regions

Climate-Related Risks & Opportunities

Transition Risks
  • Increasing energy and emission costs
Opportunities
  • Opportunities for growth through contributing to climate change mitigation through products and solutions

Reporting Standards

Frameworks Used: GRI G4 Core application level

Certifications: ISO 14001, ISO 50001, OHSAS 18001

Third-party Assurance: PricewaterhouseCoopers AB (limited assurance for sustainability disclosures)

Sustainable Products & Innovation

  • SKF BeyondZero portfolio solutions

Reporting Period: 2016

Environmental Metrics

Total Energy Consumption:1683 GWh/year
Water Consumption:5.5 million m3/year
Waste Generated:446,000 tons/year

ESG Focus Areas

  • Climate Change
  • Diversity & Inclusion
  • Governance
  • Occupational Health and Safety
  • Community Investment
  • Supply Chain Responsibility

Environmental Achievements

  • Reduced energy use in operations by 14% below 2006 levels.
  • Reduced CO2 emissions per tonne-kilometre for all transport managed by SKF Logistics Services by 31% below 2011 levels.
  • Achieved 74% recycling rate of grinding swarf (target 80%).
  • Reduced use of solvents in SKF operations by 49% (target 50%).
  • 83% of energy-intensive major suppliers certified according to ISO 50001 (target 100%).
  • SEK 6.8 billion revenue from SKF BeyondZero customer solutions (target SEK 10 billion).

Social Achievements

  • Launched SKF Quick Collect, a hand-held condition monitoring device.
  • Improved Automotive business profitability through the Turn Around Plan.
  • Implemented a new simplified and customer-focused organizational structure.
  • Continued divestments of non-core businesses.
  • Invested in world-class manufacturing technologies in Gothenburg, Schweinfurt, and Flowery Branch.
  • Accident rate of 0.87 (target Zero).

Governance Achievements

  • Implemented a new ERP system (Unite).
  • Strengthened ethics and compliance programs with anti-corruption training for over 16,000 employees.
  • Conducted 43 Code of Conduct reviews at SKF sites.
  • Completed cost-reduction program with annualized cost savings of SEK 1,187 million.

Climate Goals & Targets

Long-term Goals:
  • New climate targets for 2025 (details on page 45 of the report).
Medium-term Goals:
  • Achieve 12% operating margin.
  • Achieve 5% organic growth in local currencies.
  • Achieve 16% return on capital employed.
  • Achieve 25% net working capital.
Short-term Goals:
  • Harmonize all major bearing factories according to SKF Production System by 2018.

Environmental Challenges

  • Lower sales volumes primarily in North America and Asia.
  • Higher costs for the Unite IT project and general cost inflation.
  • Counterfeit products in markets with lower availability of genuine parts.
  • Economic downturn or global events impacting customer demand.
  • Political and regulatory risks associated with wide geographical presence.
  • Antitrust investigations in the US, Korea, Brazil, and India.
Mitigation Strategies
  • Implemented a new simplified and customer-focused organizational structure.
  • Continued divestments of non-core businesses.
  • Increased investments in new technology and automation of manufacturing facilities and distribution centers.
  • Implemented cost-reduction programs.
  • Strengthened awareness-raising efforts to combat counterfeiting.
  • Diversified customer base and manufacturing locations.
  • Proactive approach to ethics and compliance with training and audits.

Supply Chain Management

Responsible Procurement
  • SKF Code of Conduct for Suppliers and Sub-contractors
  • ISO 14001 and ISO 50001 certifications for major suppliers

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather events disrupting facilities, distribution, or supply chain
Transition Risks
  • Increased energy and environmental costs due to legislation
Opportunities
  • Development of energy-efficient products and solutions

Reporting Standards

Frameworks Used: GRI G4 (Core)

Certifications: ISO 9001, ISO 14001, OHSAS 18001, ISO 50001

Third-party Assurance: PricewaterhouseCoopers AB (Limited Assurance)

Sustainable Products & Innovation

  • SKF BeyondZero customer solutions
  • New spherical roller bearings for wind turbine main shafts
  • SKF Insight sensor technology

Reporting Period: 2019

Environmental Metrics

Total Carbon Emissions:417,108 tCO2e/year
Scope 1 Emissions:57,879 tCO2e/year
Scope 2 Emissions:359,229 tCO2e/year
Scope 3 Emissions:141,730 tCO2e/year (Goods transport and business travel)
Renewable Energy Share:80% (Bangalore and Mysore plants)
Total Energy Consumption:1,686 GWh/year
Water Consumption:2,789,000 m3/year
Waste Generated:139,146 tons/year
Carbon Intensity:0.91 tCO2e/tonne of bearings sold in 2019

ESG Focus Areas

  • Climate change
  • Circular economy
  • Social responsibility
  • Governance
  • Cleantech

Environmental Achievements

  • Reduced CO2 emissions from operations by 36% since 2015 while revenue grew by 13%
  • Tudela Factory in Spain became carbon neutral in 2020
  • Bangalore and Mysore plants using more than 80% renewable energy
  • Reduced CO2 emissions in manufacturing by 36% compared to 2015
  • Reduced CO2 emissions in goods transport by 2% compared to 2015
  • 83% of major energy-intensive suppliers certified according to ISO 50001

Social Achievements

  • Launched SKF Care agenda supporting UN Global Compact and Global Goals for 2030
  • Accident rate reduced to 0.77 per 200,000 worked hours (from 0.81 in 2018)
  • 83% of users had documented performance reviews
  • Continued investments in manufacturing technology and automation
  • Development of region-for-region manufacturing footprint
  • Several new fee-based contracts with customers
  • Acquisitions of RecondOil and Presenso Ltd strengthening REP and remanufacturing offers
  • Launched a Green finance framework and issued a green bond

Governance Achievements

  • Established a Remuneration Committee consisting of independent Board members
  • Adopted principles of remuneration for Group Management linked to predetermined and measurable criteria, including sustainability
  • Implemented a Performance Share Programme 2019 for senior managers and key employees

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions
Medium-term Goals:
  • Achieve 40% reduction of CO2 emissions from manufacturing per tonne of bearings sold by 2025
  • Achieve 40% reduction of CO2 emissions from goods transportation per tonne of shipped products by 2025
Short-term Goals:
  • Reduce water consumption at sites with significant water risks
  • Eliminate solvents from washing processes by 2025
  • Reach and maintain 80% recycling rate of grinding swarf

Environmental Challenges

  • Lower demand in the second half of 2019
  • Global economic downturn
  • Terrorism and natural disasters
  • Regulatory requirements and trade barriers
  • Antitrust investigations in Brazil and India
  • Class action lawsuits in the United States
  • Lawsuit from Bosch AG
Mitigation Strategies
  • Consistent focus on cost reduction
  • Investments in factories and technologies
  • Diversification of products, markets, and currencies
  • Integrated approach to business risk management
  • Implementation of IFRS 16
  • Strengthening the focus on strategic product lines
  • Cost competitiveness activities

Supply Chain Management

Responsible Procurement
  • SKF Code of Conduct for suppliers
  • ISO 50001 energy management standard for energy-intensive suppliers

Climate-Related Risks & Opportunities

Physical Risks
  • Flooding
  • Strong wind
Transition Risks
  • Increased energy costs
  • CO2 taxation
Opportunities
  • Development of energy-efficient products
  • Participation in renewable energy and electric vehicle industries

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: ISO 14001, OHSAS 18001 (soon to be ISO 45001), ISO 50001

Third-party Assurance: Limited assurance by SKF’s auditors

UN Sustainable Development Goals

  • Goal 5: Gender equality
  • Goal 7: Affordable and clean energy
  • Goal 8: Decent work and economic growth
  • Goal 12: Responsible consumption and production
  • Goal 13: Climate action
  • Goal 16: Peace, justice and strong institutions

SKF’s initiatives contribute to these goals through various programs and activities related to climate change, circular economy, social responsibility, and governance.

Sustainable Products & Innovation

  • SKF RecondOil
  • SKF Presenso
  • BlueSonic BWMS
  • Food Line ball bearing units – Blue Range
  • Low-friction tapered roller bearings

Awards & Recognition

  • SKF Pulse Plant Engineering product of the year
  • Elgin’s SKF Aerospace Sealing Solution operations recognized by Sikorsky as an Elite Supplier
  • PEER Bearing earned recognition in the John Deere Achieving Excellence Program

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:381,794 tCO2e/year (market-based)
Scope 1 Emissions:50,285 tCO2e/year
Scope 2 Emissions:331,509 tCO2e/year
Scope 3 Emissions:356,000 tCO2e/year (estimated)
Total Energy Consumption:1,561 GWh/year
Water Consumption:3,078,000 m3/year
Waste Generated:124,511 tons/year (non-hazardous)
Carbon Intensity:0.88 tCO2e/tonne sold products (2020)

ESG Focus Areas

  • Climate Change
  • Circular Economy
  • Cleantech
  • Employee Well-being
  • Safety
  • Compliance
  • Human Rights

Environmental Achievements

  • Reduced CO2 emissions by more than 35% since 2015.
  • Two carbon-neutral factories operating.
  • Aim to achieve a fully carbon-neutral manufacturing footprint by 2030.
  • Reduced CO2 emissions from goods transportation per tonne of shipped products by 3% compared to 2015.

Social Achievements

  • Launched SKF Team Pulse survey for quarterly employee feedback.
  • Implemented more than 15,000 wireless vibration and lubrication devices in Latin America.
  • Improved accident rate by 2.5% in 2020 vs 2019 (0.75 per 200,000 worked hours).

Governance Achievements

  • Implemented enterprise risk management (ERM) process.
  • Received Platinum rating from EcoVadis.
  • Rated A– in the Carbon Disclosure Project (CDP) rating system.

Climate Goals & Targets

Long-term Goals:
  • Carbon neutral manufacturing by 2030.
Medium-term Goals:
  • Reduce CO2 emissions from manufacturing per tonne of bearings sold by 40% by 2025 (from 2015 baseline).
  • Reduce CO2 emissions from goods transportation per tonne of shipped products by 40% by 2025 (from 2015 baseline).
  • Achieve 80% recycling rate of grinding swarf.
  • Eliminate solvents (VOCs) from washing processes by 2025.
Short-term Goals:
  • Reduce water consumption by various means at 11 sites in water stressed areas.

Environmental Challenges

  • COVID-19 pandemic significantly impacted demand.
  • Increasing cyber security threats.
  • Increasing requirements from customers and governments to adhere to information security standards.
  • Introduction of disruptive and quickly changing new technologies.
  • New online channels disrupting existing channels to the aftermarket.
  • Changing demographic in combination with “the war of talent” and the need of a digital competence shift leading to difficulties to attract and retain talented employees with the right skills.
  • Demand chain interruption. Sanctions, tariffs and other trade barriers.
  • Climate change, pandemics, war and other major events.
Mitigation Strategies
  • Implemented measures to reduce costs and increase flexibility.
  • Continuously measure and evaluate effectiveness of protection mechanisms and invest in new solutions to meet the changes in threat landscape.
  • Strengthen the information security awareness and continue to implement controls according to SKF’s Information Security Management System (ISMS).
  • Strategic initiatives in place to ramp-up digitalization including strengthening capabilities, investing in digital talents, modernizing, harmonizing and simplifying the IT landscape.
  • Acquisitions and partnerships to help SKF make step changes in new technology areas.
  • Establish a process to systematically look for new opportunities.
  • Maintain existing channels to market, and at the same time work strategically with new digital channels.
  • Give the SKF channel partners a competitive advantage through online tools.
  • Ensure leadership across full SKF value chain and focus on application specific offers which bring differentiation/uniqueness making it harder for digital channels to take market shares from SKF.
  • Implement a sourcing strategy with reduced single sourcing and regionalized supplier base.
  • Implement a systematic process to manage supply chain disruption situations.
  • Modernize, harmonize and simplify the IT landscape to reduce risk of system failure.
  • Regionalize SKFs manufacturing footprint and supplier base.
  • Prepare for a situation where US technology cannot be used in China.
  • Focus on business that will benefit on the increased climate focus.
  • Policies & instructions combined with management commitment and a strong tone from the top.
  • Employee training, audits and the SKF Ethics & Compliance Reporting Line.

Supply Chain Management

Responsible Procurement
  • SKF Code of Conduct for suppliers
  • ISO 14001 and 50001 standards for energy-intensive suppliers

Climate-Related Risks & Opportunities

Physical Risks
  • Flooding
  • Strong wind
Transition Risks
  • Increased energy costs
  • Regulatory changes
Opportunities
  • Development of energy-efficient products
  • Growth in cleantech industries

Reporting Standards

Frameworks Used: GRI Standards (Core option), TCFD

Certifications: ISO 14001, OHSAS 18001 (transitioning to ISO 45001), ISO 50001

Third-party Assurance: PricewaterhouseCoopers AB (Limited Assurance)

UN Sustainable Development Goals

  • Goal 7 (Affordable and Clean Energy)
  • Goal 9 (Industry, Innovation and Infrastructure)
  • Goal 12 (Responsible Consumption and Production)
  • Goal 13 (Climate Action)

SKF's initiatives contribute to these goals through energy efficiency, cleantech solutions, circular economy practices, and climate action.

Sustainable Products & Innovation

  • SKF BlueSonic BWMS
  • Remanufactured bearings
  • RecondOil

Awards & Recognition

  • Supplier of the Year by General Motors, American Axle & Manufacturing, John Deere and AGCO.

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:312,166 tCO2e/year (market-based)
Scope 1 Emissions:52,816 tCO2e/year
Scope 2 Emissions:259,350 tCO2e/year
Scope 3 Emissions:1,294,825 tCO2e/year (direct material suppliers only)
Renewable Energy Share:>50%
Total Energy Consumption:1,699 GWh/year
Water Consumption:3,163,000 m3/year
Waste Generated:125,805 tons/year (non-hazardous)
Carbon Intensity:0.55 tCO2e/tonne sold products in 2022

ESG Focus Areas

  • Economic Performance
  • Anti-corruption and competition law
  • Enabling cleantech growth
  • Energy use and efficiency, climate change and greenhouse gas emissions
  • Material, water, effluents and waste, environmental compliance
  • Employment
  • Labour management relations
  • Occupational health and safety
  • Training and education
  • Diversity and equal opportunity
  • Human rights and non-discrimination
  • Supplier assessments
  • Socioeconomic compliance

Environmental Achievements

  • Reduced CO2e emissions despite increased production output due to increased energy efficiency and renewable electricity share.
  • Improved energy performance in Europe by 4.6%.

Social Achievements

  • Improved accident rate to 0.68.
  • Continued work on gender diversity, launching initiatives like the Elevate program.

Governance Achievements

  • Updated SKF Code of Conduct for Suppliers & Subcontractors.
  • Launched mandatory e-learnings on Conflict of Interest, Export Control, and SKF Code of Conduct.

Climate Goals & Targets

Long-term Goals:
  • Net zero greenhouse gas emissions (from raw material to finished product) by 2050
Medium-term Goals:
  • Net zero GHG emissions for SKF operations (scope 1 and 2) by 2030
  • 32% reduction in CO2e from direct material by 2030
  • 35% reduction in transport-related CO2e by 2030
Short-term Goals:
  • 40% reduction in CO2e emissions/tonne of sold product by 2025
  • 40% reduction in CO2e per tonne of goods shipped by 2025
  • Eliminate solvents from washing processes by 2025
  • Achieve grinding swarf recycling rate above 80% year by year

Environmental Challenges

  • Increased cost of energy due to climate change.
  • Supply chain disruptions due to climate events and geopolitical factors.
  • Shortage of critical capabilities in the labor market.
  • Difficulty in achieving 80% recycling of grinding swarf due to regional legislation and scrap prices.
  • Lack of transparency and traceability in the supply chain, making it difficult to identify human rights risks.
Mitigation Strategies
  • Reducing energy demand.
  • Implementing ISO 50001 energy management standard for energy-intensive suppliers.
  • Working with suppliers to reduce carbon intensity of materials.
  • Strengthening efforts to be an attractive employer.
  • Initiating a program to define SKF's higher purpose.
  • Joining the Responsible Steel Initiative (RSI) to address human rights risks in the steel supply chain.
  • Conducting on-site audits and training for suppliers.

Supply Chain Management

Supplier Audits: 117 physical audits conducted in China in 2022 (additional audits conducted elsewhere)

Responsible Procurement
  • SKF Code of Conduct for Suppliers and Subcontractors
  • Risk-based approach focusing on tier one and sometimes tier two suppliers
  • Minimum criteria related to Code of Conduct and quality demands for potential suppliers

Climate-Related Risks & Opportunities

Physical Risks
  • Flooding
  • Water shortages
  • Forest fires
Transition Risks
  • Increased cost of energy
  • Carbon taxes
  • EU Carbon Border Adjustment Mechanism (CBAM)
Opportunities
  • Development of energy-efficient products
  • Participation in renewable energy markets

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD framework

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 50001:2018

Third-party Assurance: Deloitte AB (limited assurance)

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Automated lubrication systems
  • Bearing remanufacturing
  • RecondOil solution

Awards & Recognition

  • Not disclosed

Reporting Period: 2022-01 to 2022-09

Environmental Metrics

Total Carbon Emissions:5900 tCO2e (Scope 1 & 2, Jan-Sep 2022)
Total Energy Consumption:670 GWh (Scope 1 & 2, Jan-Sep 2022)

ESG Focus Areas

  • Net zero emissions by 2030
  • Cleantech revenues
  • CO2 emissions reduction

Environmental Achievements

  • Produced a Spherical Roller Bearing (SRB) with 90% less emissions than its standard SRB bearing.
  • Continued progress towards the Group’s goal to be net zero for Scope 1 and 2 CO2 emissions by 2030.

Social Achievements

  • Considerable reduction in accident rate over the past 5 years.
  • Initiated a group-wide program to increase flexibility and reduce fixed costs, with expected restructuring costs of approximately SEK 1 billion and a net reduction of approximately 1,000 positions.

Governance Achievements

  • Issued its second Green Bond, raising EUR 400 million to fund eligible green projects.

Climate Goals & Targets

Medium-term Goals:
  • Net zero for Scope 1 & 2 CO2 emissions from all SKF manufacturing and logistics units by 2030.

Environmental Challenges

  • Severe cost inflation, especially in Europe, negatively impacting results (SEK 2.9 billion in Q3).
  • High levels of cost inflation, supply chain bottlenecks and volatile demand.
  • Geopolitical uncertainty and volatility in the markets.
Mitigation Strategies
  • Successfully increased prices and pruned portfolio to strengthen business and market position (SEK 1.8 billion positive price/mix contribution in Q3).
  • Initiated a group-wide program to increase flexibility and reduce fixed costs across the Group, especially in Europe (expected SEK 2 billion savings by end of 2023).
  • Prioritizing customers, reducing excess stock and optimizing supply chains.
  • Investing in regional manufacturing capabilities and making factories more efficient.
  • Consolidating footprint (closing factories in Avon, Avallon, Poggio Rusco and Pianezza).

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

  • Magnetic bearings for high-speed turbo motors (reducing CO2 emissions).

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:253,740 tCO2e (market-based)
Scope 1 Emissions:204,024 tCO2e
Scope 2 Emissions:49,716 tCO2e
Scope 3 Emissions:1,614,721 tCO2e (direct material suppliers in scope)
Renewable Energy Share:64%
Total Energy Consumption:1,557 GWh
Water Consumption:2,673,000 m3
Waste Generated:127,287 tons (non-hazardous)
Carbon Intensity:0.49 tCO2e per tonne of bearings sold (2023)

ESG Focus Areas

  • Climate change
  • Circularity
  • Health & safety
  • People
  • Ethics
  • Compliance

Environmental Achievements

  • Reduced scope 1 and 2 GHG emissions by 4.7% in 2023 vs. baseline.
  • 64% of electricity used from renewable sources.
  • 3 bn SEK decarbonization investment frame.

Social Achievements

  • Launched SKF Team Pulse, a quarterly employee satisfaction survey with 7.9 engagement score (above manufacturing benchmark).
  • Defined new SKF Purpose: Together, we re-imagine rotation for a better tomorrow.
  • Revised SKF Values and Employee Value Proposition.

Governance Achievements

  • Implemented a Group-wide compliance program.
  • Launched mandatory e-learnings on various compliance topics.
  • Established a Human Rights Officer position.

Climate Goals & Targets

Long-term Goals:
  • Net-zero greenhouse gas emissions across the value chain by 2050 (base year 2019).
Medium-term Goals:
  • Reduce absolute scope 3 emissions by 31% by 2030 (base year 2019).
  • Reduce emissions from direct material by 32% by 2030 (base year 2019).
Short-term Goals:
  • Reduce emissions from forgings and rings suppliers by 15% by 2025.
  • Reduce CO2e emissions per tonne of goods shipped by 40% by 2025 (base year 2015).
  • Decarbonized operations by 2030 (95% reduction in scope 1 and 2 emissions).

Environmental Challenges

  • Reducing upstream scope 3 emissions from purchased goods and services.
  • Achieving 100% renewable electricity by 2030.
  • Phasing out direct fossil fuel use by 2030.
Mitigation Strategies
  • Working with suppliers to reduce their emissions.
  • Investing in energy-efficient equipment and optimizing energy use.
  • Developing a roadmap for 100% renewable electricity.

Supply Chain Management

Supplier Audits: 138 physical audits in 2023

Responsible Procurement
  • SKF Code of Conduct for suppliers and subcontractors.
  • Risk-based approach focusing on tier one and sometimes tier two suppliers.
  • On-site audits and training.

Climate-Related Risks & Opportunities

Physical Risks
  • Flooding
  • Water shortages
  • Forest fires
Transition Risks
  • Carbon taxes
  • Increasing cost of energy
  • Transformation of the automotive industry
Opportunities
  • Growth of cleantech industries
  • Increased demand for energy-efficient products and services
  • Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD

Certifications: ISO 14001:2015, ISO 45001:2018, ISO 50001:2018

Third-party Assurance: Deloitte AB (limited assurance)

UN Sustainable Development Goals

  • Not disclosed

Not disclosed

Sustainable Products & Innovation

  • Magnetic bearing technology
  • Remanufactured bearings
  • RecondOil

Awards & Recognition

  • Not disclosed

Reporting Period: 2024

Environmental Metrics

Total Carbon Emissions:3.5 million tonnes of CO2e/year (2019)
Scope 1 Emissions:58,606 tonnes CO2e/year (2019)
Scope 2 Emissions:361,960 tonnes CO2e/year (2019)
Scope 3 Emissions:3,080,883 tonnes CO2e/year (2019)
Renewable Energy Share:Over 50% (2022)

ESG Focus Areas

  • Climate Change
  • Supply Chain Sustainability
  • Energy Efficiency
  • Renewable Energy
  • Steel Decarbonization

Environmental Achievements

  • Reduced scope 1 and 2 emissions by 15% in 2022 despite increased sales and production volumes.
  • Increased renewable electricity share from 40% in 2020 to over 50% in 2022.
  • Gothenburg facility became the 3rd factory with decarbonized operations in January 2022.
  • Produced Spherical Roller Bearing (SRB) with 90% less emissions than standard SRB bearing (collaboration with Ovako).

Social Achievements

  • Included net zero performance in short- and long-term bonus program for over 9500 employees.
  • Launched interactive CO2e dashboard to help customers understand their GHG impacts.

Governance Achievements

  • Formal approval of near- and long-term climate targets by the Science Based Target Initiative (SBTi).

Climate Goals & Targets

Long-term Goals:
  • Achieve net zero emissions throughout the value chain by 2050.
Medium-term Goals:
  • Decarbonize operations by 2030 (95% reduction in scope 1 and 2 emissions from 2019 baseline).
  • Reduce direct material-related GHG emissions by 32% by 2030 (from 2019 baseline).
  • At least 40% absolute reduction in embodied CO2e from forgings, rings, and rolling elements by 2030 (from 2019 baseline).
  • At least 50% of sourced steel to be Responsible Steel certified, from companies with approved SBTi targets, or low embodied carbon steel by 2030.
Short-term Goals:
  • Reduce direct material-related GHG emissions by 13% by 2025 (from 2019 baseline).
  • All suppliers with annual energy use over 10 GWh to have emissions reduction plans by 2025.
  • Reduce embodied CO2e by at least 15% in forgings, rings, and rolling elements by 2025 (from 2019 baseline).

Environmental Challenges

  • Significant carbon dioxide emissions from steel production.
  • Global disruption to logistics.
  • Decarbonizing global steel production requires trillions of euros and several decades.
  • Limited unilateral influence on steel supply chain.
  • Complexity of quantifying indirect use phase emissions.
Mitigation Strategies
  • Joined SteelZero and ResponsibleSteel initiatives to advocate for structural changes in steel industry.
  • Working directly with major steel suppliers to understand their energy and CO2e performance and reduction plans.
  • Prioritizing actions with the biggest impact, avoiding unintended negative trade-offs.
  • Focusing on direct SKF action and industry-wide changes.
  • Using a combination of direct means and advocacy.

Supply Chain Management

Responsible Procurement
  • Requiring major energy-intensive suppliers to adopt ISO 50001.
  • Incorporating emissions reduction plans into supplier selection and development process.
  • Giving preference to suppliers with proactive approaches to energy and carbon efficiency.

Climate-Related Risks & Opportunities

Transition Risks
  • Regulatory changes
  • Market shifts
Opportunities
  • Development of energy-efficient products and services
  • New revenue streams from sustainability initiatives

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, SBTi

Certifications: ISO 50001 (44 factories)

UN Sustainable Development Goals

  • Goal 7 (Affordable and Clean Energy)
  • Goal 9 (Industry, Innovation, and Infrastructure)
  • Goal 13 (Climate Action)

Initiatives contribute to these goals through renewable energy use, energy efficiency improvements, and decarbonization efforts.

Sustainable Products & Innovation

  • Low-emission SRB bearing
  • Products enabling clean technology industries