Climate Change Data

Nemak, S.A.B. de C.V.

Climate Impact & Sustainability Data (2022, 2023)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:5,183,702 tCO2e/year (market-based)
Scope 1 Emissions:630,313 tCO2e/year
Scope 2 Emissions:493,904 tCO2e/year (location-based), 377,036 tCO2e/year (market-based)
Scope 3 Emissions:4,176,353 tCO2e/year
Renewable Energy Share:17%
Total Energy Consumption:16.01 Million GJ/year
Water Consumption:7.59 k megaliters/year (withdrawal)
Waste Generated:704,646 tons/year (materials used)
Carbon Intensity:9.65 tons CO2eq/tons produced (2022)

ESG Focus Areas

  • Climate Change
  • Diversity & Inclusion
  • Responsible Supply Chain Management
  • Occupational Health and Safety
  • Business Ethics
  • Circular Economy
  • Community Engagement

Environmental Achievements

  • 17% of total electricity consumption from renewable sources globally.
  • Reduced GHG emissions (market-based) by 4% compared to 2021.

Social Achievements

  • 76% of employees covered by a collective bargaining agreement.
  • Implemented various employee well-being and development programs.
  • 82.97% of employees receive regular performance reviews.

Governance Achievements

  • Integrated the achievement of climate-related targets into its compensation via annual performance-related bonuses.
  • Nemak’s Global Code of Conduct is approved by the CEO.

Climate Goals & Targets

Long-term Goals:
  • Not disclosed
Medium-term Goals:
  • Not disclosed
Short-term Goals:
  • Not disclosed

Environmental Challenges

  • Incomplete data for other emissions (NOx, SOx, etc.) due to not all sites reporting.
  • Water is not considered a main resource in its operations.
Mitigation Strategies
  • Improving data collection processes for better data quality.
  • Screening suppliers using EcoVadis criteria for environmental and social aspects.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement
  • Screens suppliers using EcoVadis criteria.

Climate-Related Risks & Opportunities

Physical Risks
  • Not disclosed
Transition Risks
  • Not disclosed
Opportunities
  • Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: External verification of Nemak’s Scope 1 and 3 GHG emissions from 2018-2022

UN Sustainable Development Goals

  • Goal 4
  • Goal 8
  • Goal 12
  • Goal 13

Not disclosed

Sustainable Products & Innovation

  • Not disclosed

Awards & Recognition

  • Not disclosed

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:5,134,270 tCO2e/year (location-based Scope 2)
Scope 1 Emissions:666,356 tCO2e/year
Scope 2 Emissions:536,162 tCO2e/year (location-based)
Scope 3 Emissions:3,931,752 tCO2e/year
Renewable Energy Share:17% of total electricity use
Total Energy Consumption:16.93 million GJ/year
Water Consumption:8.18 thousand megaliters/year
Waste Generated:969 k Tons/year
Carbon Intensity:GJ intensity per tonne produced dropped by 1% in 2023 relative to 2022

ESG Focus Areas

  • Climate protection
  • Circularity
  • Innovation and products
  • Diversity, inclusion and talent development
  • Occupational health and safety
  • Corporate citizenship
  • Business integrity
  • Responsible supply chain
  • Sustainable leadership

Environmental Achievements

  • Reduced Scope 3 emissions by 6%
  • Improved EcoVadis rating to Platinum (top 1% of companies)
  • Achieved CDP ratings of “B” for Climate Change Governance
  • Completed Aluminum Stewardship Initiative (ASI) audits for three facilities
  • Implemented 83 energy efficiency projects in 2023 across the EU, resulting in an 8% improvement in NG efficiency and 3% in electricity at European sites
  • Contracted a US Long REC Purchase Agreement (2026-2035) 100GWh/year, decarbonizing 50% of the electricity consumption in the US

Social Achievements

  • Initiated the Mentoring and Female Talent Leadership Journey programs
  • Defined a new Corporate Citizenship Policy
  • Updated the Global Human Rights Policy and established a Human Rights Due Diligence Process
  • Secured ‘Top Employer Certification’ in the US and Mexico for a second consecutive year, and in Germany for the first time

Governance Achievements

  • Improved integration of sustainability within the Company through inclusion of the topic within the strategic Transformation Management Office
  • Integrated corporate sustainability into the quotation process

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions by 2050
Medium-term Goals:
  • Reduce Scope 1 & 2 carbon emissions by 28% and Scope 3 by 14% by 2030 (2019 baseline)
  • Source 25% of electricity from renewable resources by 2025, 100% by 2030
  • Increase electrified portfolio to 60% by 2030
  • Achieve an ‘A’ level at the Carbon Disclosure Project (CDP)
Short-term Goals:
  • Reduce water consumption by 2% yearly at two sites in Mexico
  • Certify all Mexican locations with ISO 50001 by 2024/2025
  • Conduct Cradle-to-Gate LCA’s for all electrified portfolio products by 2030

Environmental Challenges

  • Appreciation of the Mexican peso against the U.S. dollar
  • Persistent inflation
  • Automotive industry’s shift towards vehicle electrification
  • Rising costs related to carbon pricing systems
  • Global semiconductor chip shortage
  • Conflict between Ukraine and Russia impacting production costs
Mitigation Strategies
  • Commercial negotiations to address inflationary pressures
  • Investment in research and development for electric vehicle components
  • Adaptation to carbon pricing models in several markets
  • Implementation of financial flexibility and operational efficiency initiatives
  • Price negotiations with customers

Supply Chain Management

Supplier Audits: 129 suppliers audited in 2023

Responsible Procurement
  • Global Business Code for Suppliers
  • Global Sustainable Purchasing Policy
  • EcoVadis assessments
  • ASI certification for critical aluminum suppliers

Climate-Related Risks & Opportunities

Physical Risks
  • Heat stress
  • Flooding
  • Wildfire
Transition Risks
  • Shift towards vehicle electrification
  • Rising costs of carbon pricing
Opportunities
  • Development of energy-efficient products
  • Growth in the EV/SC segment

Reporting Standards

Frameworks Used: GRI, TCFD, SASB, ESRS

Certifications: ISO 14001, ISO 50001, IATF 16949, ISO 27001

Third-party Assurance: Apex Companies LLC (limited assurance for Scope 1, 2, and 3 GHG emissions)

UN Sustainable Development Goals

  • SDG 4
  • SDG 8
  • SDG 9
  • SDG 12
  • SDG 13

Alignment of material topics with SDGs; signatory to the UN Global Compact

Sustainable Products & Innovation

  • FAAR-WE E-Bracket for BMW
  • All-aluminum single-piece sub-frame

Awards & Recognition

  • EcoVadis Platinum Medal
  • Dow Jones MILA Pacific Alliance Index (5 consecutive years)
  • CDP Climate Change rating of 'B'
  • Altair Enlighten Award (runner-up)
  • PACE Awards finalist
  • Top Employer Certification (US, Mexico, Germany, Poland, Brazil)