Climate Change Data

LKQ Corporation

Climate Impact & Sustainability Data (2021, 2022, 2023)

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:261,952.96 tCO2e (Scope 1 & 2)
Scope 1 Emissions:261,952.96 tCO2e
Scope 2 Emissions:69,111.92 tCO2e
Scope 3 Emissions:12,265.34 tCO2e
Renewable Energy Share:5.1% (Europe)
Total Energy Consumption:4,682,755 GJ
Carbon Intensity:30% GHG emissions intensity reduction goal per revenue dollar by 2030

ESG Focus Areas

  • Environment
  • Social
  • Governance

Environmental Achievements

  • Recycled approximately 90% of materials from total loss and end-of-life vehicles.
  • Implemented a propane delivery fleet, reducing emissions compared to gasoline.
  • Opened a state-of-the-art central distribution center in the Netherlands with photovoltaic panels.
  • Acquired Green Bean Battery, expanding hybrid battery reconditioning.

Social Achievements

  • Launched a global employee engagement survey ('Your Voice Matters') with a 74% engagement score.
  • Launched the LKQ Safety Pit Stop program to improve workplace safety.
  • Launched the LKQ Cares Holiday Vote, donating to ten global charities.
  • Offered paid parental leave and enhanced mental health benefits.

Governance Achievements

  • Established an ESG Advisory Committee and Working Groups.
  • Integrated ESG metrics into incentive compensation plans for senior executives.
  • Created a new policy portal on the company website.

Climate Goals & Targets

Long-term Goals:
  • Achieve net-zero emissions by 2050.
Medium-term Goals:
  • Reduce global Scope 1 and Scope 2 emissions by 30% by 2030.
  • Achieve 78% participation and 78 engagement score in employee survey by 2030.
Short-term Goals:
  • Achieve 73% participation and 76 engagement score in employee survey by 2025.

Environmental Challenges

  • Supply chain disruptions due to the COVID-19 pandemic.
  • Lack of charging infrastructure for electric vehicles.
  • Need to reduce carbon emissions across operations.
Mitigation Strategies
  • Implemented dynamic routing software to optimize deliveries.
  • Purchased alternative energy vehicles (propane and electric).
  • Developing emissions reduction targets aligned with the Paris Climate Accord.
  • Exploring renewable energy sources for facilities.

Supply Chain Management

Responsible Procurement
  • Developing a global Supplier Code of Conduct.

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather and natural disasters
Transition Risks
  • Regulatory changes, market shifts related to emissions
Opportunities
  • Increased demand for environmentally compliant products.

Reporting Standards

Frameworks Used: SASB (Multiline and Specialty Retailers and Distributors), TCFD

Certifications: BREEAM Excellent (Netherlands CDC)

UN Sustainable Development Goals

  • SDG 3 (Good Health and Well-being)
  • SDG 4 (Quality Education)
  • SDG 5 (Gender Equality)
  • SDG 7 (Affordable and Clean Energy)
  • SDG 8 (Decent Work and Economic Growth)
  • SDG 9 (Industry, Innovation, and Infrastructure)
  • SDG 11 (Sustainable Cities and Communities)
  • SDG 12 (Responsible Consumption and Production)
  • SDG 13 (Climate Action)

The report details how LKQ's initiatives contribute to these goals.

Sustainable Products & Innovation

  • Remanufactured parts
  • Reconditioned hybrid batteries

Awards & Recognition

  • 5-Star Employer (WorkBuzz)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:356,104 MT CO₂e
Scope 1 Emissions:279,546 MT CO₂e
Scope 2 Emissions:76,558 MT CO₂e
Renewable Energy Share:19.55% (Europe)

ESG Focus Areas

  • Recycling
  • Energy Management & Carbon Emissions
  • Health & Safety
  • Diversity & Inclusion
  • Employee Engagement
  • Supply Chain
  • Board & Leadership

Environmental Achievements

  • Increased global consumption of renewable electricity by 358% since 2021
  • Reduced diesel consumption in North America by over 7%
  • Increased proportion of renewables in Europe's energy mix from 5.1% in 2021 to 19.55% in 2022
  • Remanufactured over 1 million items with a collective weight of nearly 56 million pounds of materials, keeping these items out of landfills
  • Recycled parts from over 700,000 used vehicles annually
  • Reuse and recycle approximately 90% of the materials from total loss and end-of-life vehicles

Social Achievements

  • Achieved an overall engagement score of 74 in the Your Voice Matters employee engagement survey
  • Launched LKQ Connect, a new HR information system in Europe
  • Launched Inspired to Thrive – Wellbeing Program (Europe)
  • Launched LKQ Veterans’ Network
  • Partnered with Women’s Industry Network
  • Awarded a 5-Star Employer rating by WorkBuzz in North America, Mexico and India

Governance Achievements

  • Added relevant ESG metrics to incentive compensation plans for certain senior executives
  • Established an Inclusion Council
  • Adopted a Global Supplier Code of Conduct policy
  • Recognized as an AAA-rated organization by MSCI

Climate Goals & Targets

Long-term Goals:
  • Achieve net zero emissions across own operations by 2050
Medium-term Goals:
  • Reduce global Scope 1 and Scope 2 emissions by 30% compared to the 2021 baseline relative to revenue by 2030
  • Achieve 78% participation in employee engagement survey and overall engagement score of 78 by 2030
Short-term Goals:
  • Achieve 73% participation in employee engagement survey and overall engagement score of 76 by 2025
  • Establish a published roadmap to achieve the 2030 30% reduction of Scope 1 and 2 emissions by 2025
  • Increase the global female representation in the workforce to 20% by 2025

Environmental Challenges

  • Supply chain disruptions (higher freight costs, capacity constraints, labor shortages, port slowdowns)
  • Increased overall CO₂ emissions in 2022 compared to 2021 (due to expanded data availability)
  • Vehicle range and charging infrastructure challenges in transitioning to electric vehicles
  • Higher initial purchase price for EVs
  • War in Ukraine impacting operations and employees
Mitigation Strategies
  • Implemented a state-of-the-art logistics network to improve delivery efficiency
  • Expanding the use of alternative fuels (propane)
  • Implementing a range of measures and software solutions for more granular carbon reporting
  • Transitioning combustion engine fleet to alternative fuel vehicles in Europe
  • Providing support to Ukrainian colleagues (financial aid, relocation assistance, etc.)

Supply Chain Management

Supplier Audits: 4,217 suppliers analyzed on the EcoVadis IQ platform in 2022; 70% processed for further compliance or financial-health check analysis

Responsible Procurement
  • Global Supplier Code of Conduct
  • Supplier risk and sustainability assessment process using EcoVadis IQ platform

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather and natural disasters
Transition Risks
  • Regulatory changes
  • Market shifts
Opportunities
  • Increased demand for environmental compliance-related products

Reporting Standards

Frameworks Used: SASB for Multiline and Specialty Retailers and Distributors, TCFD

Certifications: ISO 9001 + ISO 14001 (Atracco), UNI ISO 45001 (Italy)

UN Sustainable Development Goals

  • Goal 3: Good Health and Well-being
  • Goal 4: Quality Education
  • Goal 5: Gender Equality
  • Goal 7: Affordable and Clean Energy
  • Goal 8: Decent Work and Economic Growth
  • Goal 9: Industry, Innovation, and Infrastructure
  • Goal 11: Sustainable Cities and Communities
  • Goal 12: Responsible Consumption and Production
  • Goal 13: Climate Action

LKQ's initiatives contribute to these goals through various programs and actions described in the report.

Awards & Recognition

  • AAA rating from MSCI
  • 5-Star Employer rating from WorkBuzz

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:297,060 tCO2e/year
Scope 3 Emissions:2.4 million mt CO2e/year (estimated Category 1)
Renewable Energy Share:3.8% of total energy use
Total Energy Consumption:4,358,139.5 GJ/year
Waste Generated:932 tons/year (scrap)
Carbon Intensity:22.3 mt CO2e/$m revenue

ESG Focus Areas

  • Climate Change
  • Pollution
  • Circular Economy
  • Own Workforce
  • Workers in the Value Chain
  • Consumers and End-Users
  • Business Conduct

Environmental Achievements

  • 12% decrease in global Scope 1 and Scope 2 emissions compared with the prior year; -22% reduction in Scope 2 emissions vs 2022 due to increased use of renewable electricity and property efficiency upgrades.
  • Processed over 766,000 vehicles in 2023
  • Remanufactured over one million items with a collective weight of nearly 26,500 metric tons of materials

Social Achievements

  • 89% participation rate and an overall engagement score of 74 in the 2023 employee engagement survey.
  • Launched the Inspired to Thrive initiative, encompassing five key areas to enrich the lives of team members.
  • Awarded 375 Joseph M. Holsten scholarships totaling $937,500.

Governance Achievements

  • 100% of salaried, office and sales-related team members completed Code of Ethics attestation in 2023.
  • Established a ‘Respect and Inclusivity Commitment’ for employees.
  • Implemented a “You Said. We Delivered.” initiative based on employee engagement survey results.

Climate Goals & Targets

Long-term Goals:
  • By 2050: Achieve net zero emissions across operations.
Medium-term Goals:
  • By 2030: Reduce global Scope 1 and 2 emissions by 30% compared to the 2021 baseline relative to revenue; achieve 78% participation in employee engagement surveys with a score of 78.
Short-term Goals:
  • By 2025: Establish a published roadmap to achieve a 30% reduction of Scope 1 and 2 emissions by 2030; achieve 73% participation in employee engagement surveys with a score of 76; increase global female representation to 20%.

Environmental Challenges

  • Scope 3 emissions from upstream and downstream activities account for a significant majority of total emissions.
  • Potential for business disruption from extreme weather and natural disasters.
  • Evolving regulatory landscape related to climate change and sustainability.
Mitigation Strategies
  • Initiated measurement and management of Scope 3 emissions, starting with Category 1 (Purchased Goods and Services).
  • Regularly assess potential for business disruption due to extreme weather and natural disasters.
  • Actively monitoring and adapting to new disclosure rules and regulations (CSRD, SEC climate rules, California SB 253 and SB 261).

Supply Chain Management

Supplier Audits: Pilot phase of risk and sustainability assessment on 4,210 suppliers (Europe) using EcoVadis IQ platform; aiming for 100% coverage by end of Q1 2025.

Responsible Procurement
  • Global Supplier Code of Conduct
  • Integration of sustainability into procurement decisions
  • Inclusion of Supplier Code of Conduct in all new contracts and contract renewals.

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather and natural disasters
Transition Risks
  • Regulatory changes
  • Market shifts related to electric vehicles and emissions reduction
Opportunities
  • Increased demand for salvaged products

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Unaudited

UN Sustainable Development Goals

  • Goal 4
  • Goal 11
  • Goal 12
  • Goal 13
  • Goal 5
  • Goal 9

Details provided in the report on how LKQ's actions support these goals.

Sustainable Products & Innovation

  • Remanufactured parts
  • Reconditioned hybrid batteries

Awards & Recognition

  • 5-Star Employer (North America, Mexico, India)