Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability

Environmental Achievements

• Continuously reducing energy consumed per ton of lubricant produced since 2010
• Reduced CO² emissions during the production process from 2010 to 2011 (remained constant since)
• Reduced water consumption per ton of lubricant output each year from 2010 to 2012 (increased in reporting year due to cooling processes)
• Slightly reduced waste generated per ton of lubricant produced in the reporting year compared to 2010
• Energy and water consumption, waste generation and CO² emissions significantly below the average in the chemicals industry

Social Achievements

• Continued projects in occupational health management, further training and reconciliation of family and working life
• Increased average number of further education hours per employee continuously since 2010 (17 hours in reporting year)
• Reduced number of work-related accidents with more than three days lost per 1,000 employees (16 in 2013 and 2012)
• Increased proportion of women in management positions at production sites from 19% in 2010/2011 to 20% in 2012/2013 (21% overall in the FUCHS PETROLUB Group)
• Supported social and voluntary commitment at company locations, promoting academic, cultural and social projects

Governance Achievements

• Continued development of corporate governance, including examination of stipulations of the Corporate Governance Code
• Submitted updated Declaration of Compliance pursuant to Section 161 of the German Stock Corporation Act (AktG)
• Implemented a Compliance Program with a Chief Compliance Officer and Compliance Organization, including a Compliance Officer for each national unit
• Established a Code of Conduct for ensuring lawful and social-ethical behavior

Climate Goals & Targets

Environmental Challenges

• Difficult macroeconomic conditions in some European countries
• Weaker business with industrial customers in the US at the start of the year
• Unexpected strength of the euro relative to a large number of currencies
• Sovereign debt crisis in Europe
• Geopolitical tensions
• Volatility in raw material costs
• Availability of raw materials
• Market changes
• Oligopoly situation of suppliers
• Price fluctuations
• Potential product and environmental protection risks
• Legal or regulatory risks
• Intense competition on local sales markets
• Increasing customer quality standards
• Technological progress
• Default and inventory risks
• High complexity and limited predictability of research and development projects
• Currency risks (transaction and translation)
• Pension risks
• IT risks (data loss/theft, business downtimes, system failure)

Mitigation Strategies

• Intensive monitoring systems (volume and margin management)
• Strict cost management and control
• Periodic reporting on net operating working capital (NOWC)
• Intensive communication with foreign subsidiaries
• Securing supply of base oils and chemicals via a broad procurement basis
• Searching for alternative suppliers
• Collaboration on technical committees to secure greater substitutability of base oils
• High technical (safety) standards when building, running and maintaining production equipment
• Consistent worldwide monitoring of quality requirements and standards
• Targeted measures to comply with soil and water protection regulations
• Insurance against potential loss
• Legal and insurance law advice
• Sufficient provisions for local tax risks
• Continuous innovation activities
• Partnership-based research and development work
• Application-based support
• Active NOWC management
• Collaboration with customers and research institutions on R&D projects
• Intellectual property protection
• Maturity-congruent or local currency financing
• Use of derivatives
• Transferring commitments for pensioners to external service providers
• Detailed backup and recovery procedures
• Virus scanners and firewalls
• Regular training events
• Worldwide IT security assessment

Supply Chain Management

Responsible Procurement

• Informing key suppliers about the FUCHS Sustainability Guideline and their compliance

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: KPMG AG Wirtschaftsprüfungsgesellschaft

Sustainable Products & Innovation

• RENOLIN Xtreme Temp 46 (fuel saving potential of 3% to 6%)

Awards & Recognition

• Gold at the ARC Awards for Annual Report 2012
• Silver at the FOX AWARDS and Vision Awards for Annual Report 2012
• GOOD DESIGN Award for Annual Report 2012

Environmental Metrics

ESG Focus Areas

• Sustainability

Environmental Achievements

• 60% of production locations are certified according to the ISO 14001 environmental management standard; six production locations in Europe are certified according to the ISO 50001 energy management standard.
• Continuous reduction in energy and water consumption, waste generation, and energy consumption-related CO2 emissions per ton of lubricant produced since 2015.
• New test facility at FUCHS SCHMIERSTOFFE GMBH’s Mannheim location awarded for comprehensive energy and CO2 saving measures.

Social Achievements

• Development of a concept similar to dual training in Germany with a subsidiary in South Africa.
• Implementation of projects in the fields of health management, continuing professional development, and work-life balance.
• Two teams received the FUCHS Sustainability Award.

Governance Achievements

• Implementation of a compliance management system (CMS) to ensure legally compliant and socially ethical conduct.
• Updated declaration of compliance in accordance with Section 161 of the German Stock Corporation Act (AktG).

Climate Goals & Targets

Environmental Challenges

• Increasing raw material costs that could not be passed on promptly.
• Changes in the mix impacting EBIT.
• Shortages of some base oils leading to sharp increases in raw material prices.
• Difficult business environment faced by the Swedish subsidiary.
• Difficult economic environment in Saudi Arabia and the weakness of the Turkish currency.

Mitigation Strategies

• Investing in state-of-the-art, safe systems for lubricant production and continuous process optimization.
• Developing special technologies to minimize energy and water consumption and waste generation.
• Working with strategic suppliers to improve ecological sustainability in the value chain.
• Developing new sensor technologies in research partnerships to enable forward-looking maintenance and servicing.
• Developing a new generation of high-performance cooling lubricants that do not require certain ingredients.

Supply Chain Management

Supplier Audits: Centrally managed FUCHS suppliers were assessed in the annual global supplier evaluation, including the carbon footprint of the raw materials supplied.

Responsible Procurement

• FUCHS calls on its suppliers to provide a written confirmation of their commitment to compliance with corporate ethical requirements and minimum social standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: DNK (German Sustainability Code)

Certifications: ISO 14001, ISO 50001, OHSAS 18001

Sustainable Products & Innovation

• New, environmentally friendly cooling lubricants free from certain ingredients.
• ECOCOOL GLOBAL S 240 (water-miscible high-performance cooling lubricant for wet machining of CFRP and GRP)

Awards & Recognition

• FUCHS 2016 Annual Report won awards from FOX FINANCE, LACP Vision Award, Annual Report Competition (ARC) Award, and GOOD DESIGN Award.

Environmental Metrics

ESG Focus Areas

• Economic
• Ecological
• Social

Environmental Achievements

• Reduced absolute CO2 emissions from FUCHS companies by nearly 3% in 2021, despite a 20% increase in production volume. This resulted in a 19% reduction in specific emissions.
• Reduced absolute energy consumption of FUCHS companies by 5% in 2021 with a production volume increased by almost 20%.
• Achieved 52% of FUCHS’ electricity consumption from renewable sources.
• Introduced a new core container for automotive lubricants with at least 30% post-consumer recycled content.

Social Achievements

• Supported 151 social projects globally, more than double the previous year.
• Reached 47% of the global workforce (including JVs) with sustainability training.
• Increased the number of ISO 45001 certified manufacturing companies to 50%.

Governance Achievements

• Implemented a Compliance Management System (CMS) based on IDW PS 980.
• Achieved a 78% training rate in online compliance courses.
• No confirmed incidents of corruption or anti-competitive behavior reported.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Lack of sector-specific standards for calculating Product Carbon Footprint (PCF).
• Challenges in achieving CO2 neutrality across the entire value chain ('cradle-to-gate').

Mitigation Strategies

• Started screening upstream emissions in the value chain in 2021.
• Developed a methodology for calculating PCF for lubricants, working towards industry-wide standardization.
• Offsetting unavoidable greenhouse gas emissions through investments in climate protection projects.
• Expanding the use of renewable energy sources.

Supply Chain Management

Supplier Audits: Annual evaluation of strategic raw material suppliers; more than 60% improved their sustainability rating in 2021.

Responsible Procurement

• Supplier Code of Conduct based on UN Global Compact principles; requirements regarding compliance, barring of discrimination and child labor, and compliance with laws and recognized labor and environmental standards.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards (2016)

Certifications: ISO 14001 (70% of manufacturing companies), ISO 50001 (six production sites in EMEA region)

Third-party Assurance: Limited assurance audit for ecological key figures in the 2021 annual report.

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 1
• Goal 11
• Goal 2
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13

FUCHS' CSR projects contributed to multiple SDGs, with a focus on good health and well-being, quality education, no poverty, sustainable cities and communities, zero hunger, affordable and clean energy, decent work and economic growth, industry, innovation and infrastructure, responsible consumption and production, and climate action.

Sustainable Products & Innovation

• Water-miscible high-performance cooling lubricant for wet machining of CFRP and GFRP; energy-efficient hydraulic oils.

Awards & Recognition

• German Sustainability Award (2016)

Environmental Metrics

ESG Focus Areas

• Sustainability
• Shift in mobility
• Digitalization
• Circular Economy
• CSRD

Environmental Achievements

• Reduced absolute gate-to-gate CCF by 7% in 2023 despite a 2% decrease in production volume, resulting in a 5% reduction in specific emissions.
• Achieved CO2-neutral “gate-to-gate” production since 2020.
• Reduced absolute energy consumption by 6% and energy intensity by almost 4% in 2023.
• Reduced absolute waste generation by 9% and waste intensity by 7% in 2023.
• Reduced water consumption by 11% and water intensity by 10% in 2023.
• Won the prestigious sustainability prize “Global Transition Award” in 2023.

Social Achievements

• Increased average further training and education per employee by 2 hours (15% increase).
• Reduced employee fluctuation from 6.6% to 5.6%.
• Reduced number of notifiable occupational accidents by a significant margin.
• Supported 298 CSR projects worldwide with 45 companies, primarily supporting UN SDGs 3, 1, and 4.
• 75% of all companies met the target of spending at least 0.1% of local EBIT on CSR projects.

Governance Achievements

• Expanded and extended share buyback program.
• Implemented a Group-wide compliance management system (CMS).
• Achieved high training rates for compliance e-learning courses (87% for basic compliance, 89% for corruption prevention, 87% for antitrust).

Climate Goals & Targets

Environmental Challenges

• Geopolitical uncertainties (war in Ukraine, Israeli-Palestinian conflict).
• Macroeconomic risks (high inflation, rising interest rates, weak economic data).
• Customer-related risks (competition, quality standards, technological progress).
• HR risks (staff availability, attracting and retaining talent).
• IT risks (cybercrime, cyberattacks).
• Production-related risks (incidents, environmental risks).
• Procurement risks (raw material availability, currency fluctuations).
• Product-related risks (liability, counterfeiting).
• Legal, regulatory, and compliance risks (changes in regulations, EU Taxonomy, CSRD).
• Inflation risks (energy, services, freight costs).
• Credit risks (customer payment obligations).
• Impairment risks (goodwill, market changes).

Mitigation Strategies

• Global presence and diversified portfolio to mitigate geopolitical and economic risks.
• Close monitoring of procurement markets and alternative sourcing strategies.
• Global IT strategy, robust backup procedures, and cybersecurity measures.
• High technical standards, insurance programs, and safety stocks to mitigate production risks.
• Global HR processes, talent management, and employer branding to address HR risks.
• Compliance management system (CMS) to address legal, regulatory, and compliance risks.
• Regular price calculations and cost management to mitigate inflation risks.
• Credit assessments, collateral, and credit insurance to mitigate credit risks.
• Annual goodwill impairment tests to mitigate impairment risks.
• Continuous development of the CMS and risk management system.

Supply Chain Management

Supplier Audits: Annual evaluation of strategic raw material suppliers; regional assessment conducted in EMEA region in 2023.

Responsible Procurement

• Binding supplier code of conduct based on UN Global Compact principles.
• Collaboration with suppliers to increase transparency and sustainability.
• Use of alternative raw material solutions from renewable sources.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Shift to electric mobility

Opportunities

• Development of energy-efficient products and services for renewable energy sectors (wind turbines, solar panels).

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 50001 (six production sites), ISO 45001 (17 manufacturing companies)

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• SDG 3
• SDG 1
• SDG 4

CSR projects primarily support Good Health and Well-Being, No Poverty, and Quality Education.

Sustainable Products & Innovation

• FUCHS BluEV EDF 7005 (Electric Driveline Fluid)
• FUCHS BluEV EG EDF 4100 and 4600 series (EDF for passenger cars)
• FUCHS BluEV TF 8025 (fluid for battery thermal management)
• TITAN ASF 776C (automotive hydraulic fluid)
• SOK AQUA 100, SOK AQUA 500, and SOK C 5 (concrete release agents)

Awards & Recognition

• Global Transition Award (2023)