Climate Change Data

Environmental Metrics

ESG Focus Areas

• Employees
• Responsible Conduct
• Environment
• Digitalization
• Customers

Environmental Achievements

• Reduced Lost Time Injury Frequency (LTIF) to 10.3 from 13.3 in the previous year. Target for 2020 is 10.01.
• Improved warehouse structure in eastern Germany, reducing internal transport.
• Consolidation of steel warehousing locations in Switzerland (from 11 to 3 regional centers), increasing truck capacity utilization.
• Kloeckner Metals UK attained BES 60013 certification for responsible sourcing.

Social Achievements

• Increased percentage of women in management positions from 8% in 2011 to 17% by the end of 2019 (aiming for 22% by 2022).
• Improved employee appraisal process, addressing lack of regular feedback.
• Launched a Country Talent Pool Program in all country organizations.
• Offered extensive online training courses through the “Digital Academy”.
• High employee satisfaction (78% happy to work for Klöckner & Co, 83% feel treated with respect).

Governance Achievements

• No serious breach of guidelines reported.
• No material antitrust risks or corruption/bribery infringements identified in 132 Internal Audit reviews.
• Introduced a Supplier Code of Conduct in 2018.
• Implemented a compliance management system based on OECD Principles of Corporate Governance.

Climate Goals & Targets

Environmental Challenges

• Climate change and its impact on logistics.
• Reducing CO2 emissions from trucking.
• Securing qualified talent in a changing demographic landscape.
• Maintaining high service levels while reducing costs and emissions.

Mitigation Strategies

• Optimizing logistics at three levels: receipt of goods, internal transport, and delivery to customers.
• Implementing transportation planning software for efficient route planning.
• Using on-board computers to monitor driving behavior and reduce fuel consumption.
• Offering extensive training and development opportunities for employees.
• Implementing a Country Talent Pool Program to support young talent.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct introduced in 2018
• Analysis of conflict minerals in products

Climate-Related Risks & Opportunities

Awards & Recognition

• One of Germany’s top employers in 2019 (FOCUS employer awards)
• One of Germany’s most attractive employers in 2019 (F.A.Z. Institute and IMWF Institute study)
• Five out of five stars in the 2019 Brigitte study
• Echo Klassik award (Ruhr Piano Festival education project)
• Junge Ohren Preis (Ruhr Piano Festival education project)
• MIXED UP Preis (Ruhr Piano Festival education project)

Environmental Metrics

ESG Focus Areas

• Employee Development
• Occupational Health and Safety
• Antitrust Risks
• Environmental Impact of Logistics
• Customer Satisfaction
• Digital Transformation
• Human Rights in the Supply Chain
• Corporate Governance
• Fair Working Conditions
• Demographic Change
• Social Commitment

Environmental Achievements

• Reduced LTIF (Lost Time Injury Frequency) to 9.7 from 10.3 in 2020. Achieved further efficiency enhancements in 2020 resulting in cost savings and better environmental stewardship through site optimization.
• Improved delivery route planning to reduce fuel consumption and CO2 emissions.

Social Achievements

• Launched Surtsey project to accelerate digital transformation, although this resulted in workforce reduction.
• Completed 46,000 in-house training courses, with a focus on security, compliance, and digital skills development.
• Improved employee survey results compared to 2019, with 80% of employees happy to work for Klöckner & Co.
• Continued Country Talent Pool Program and Emerging Leaders program for talent development.
• Implemented comprehensive safety and hygiene concepts during the COVID-19 pandemic.

Governance Achievements

• No serious breaches of guidelines reported in 2020.
• No antitrust risks or corruption/bribery infringements identified in 112 Internal Audit reviews.
• Implemented GAN Connect compliance platform.

Climate Goals & Targets

Environmental Challenges

• Workforce reduction due to Surtsey project.
• COVID-19 pandemic and its impact on operations and employee safety.
• Maintaining high service levels while reducing truck usage and CO2 emissions.

Mitigation Strategies

• Implemented comprehensive safety and hygiene measures during the COVID-19 pandemic.
• Optimized logistics processes and implemented transportation planning software to reduce fuel consumption and CO2 emissions.
• Site optimization and closure of underperforming branches as part of the Surtsey project.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Conflict Minerals Reporting Template
• Due diligence on intermediaries

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)

Commitment to UN Global Compact 'Business Ambition for 1.5°C' implies alignment with these goals.

Awards & Recognition

• Top ten companies in the Frauen-Karriere-Index (Women Career Index) for five consecutive years
• One of the best employers for women (Brigitte and Territory Embrace study)

Environmental Metrics

ESG Focus Areas

• Employee Development
• Occupational Health and Safety
• Antitrust Risks
• Environmental Impact of Logistics
• Customer Satisfaction
• Digital Transformation
• Human Rights in the Supply Chain
• Corporate Governance
• Fair Working Conditions
• Demographic Change
• Social Commitment
• Sustainable Business Models

Environmental Achievements

• Reduced LTIF (Lost Time Injury Frequency) to 6.9 from 9.7 in the previous year.
• Achieved carbon neutrality with regard to its own business activities (Scope 1 and 2 emissions compensated).
• Partnership with H2 Green Steel securing access to virtually carbon-emission-free steel.
• Kloeckner Metals UK achieved BES 6001 recertification for responsible sourcing at a higher “Good” standard.
• Kloeckner Metals UK Westok awarded the Steel Construction Sustainability Charter at Gold level.

Social Achievements

• Named one of the World’s Best Employers of 2020 by Forbes.
• Increased percentage of women in management levels one to three below board level from 8% in 2011 to 18% in 2021.
• Signed the Charta der Vielfalt (Diversity Charter).
• Launched a new program for daycare centers in Duisburg, Marxloh.
• Continued support for the ReDI School of Digital Integration.

Governance Achievements

• Established a Group-wide sustainability management system.
• Created a Strategic Sustainability department.
• Implemented a compliance management system (CMS) based on OECD Principles of Corporate Governance.
• No serious breach of policies reported.
• Introduced a Supplier Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• High volatility of energy prices.
• Growing relevance of environmental and sustainability issues (e.g., carbon pricing).
• Supply chain disruptions.
• Need to further integrate sustainability and climate risks into risk management.

Mitigation Strategies

• Further rollout of sustainability concept (tracking and monitoring carbon emissions, optimizing vehicle fleet and energy consumption).
• Setting ambitious climate targets (validated by SBTi).
• Centralization of energy procurement and transition to 100% green energy.
• Implementing innovative meeting and travel concepts.
• Compensating unavoidable Scope 1 and 2 emissions.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Due diligence for conflict minerals
• Restriction on cash payments to prevent money laundering
• Integrity screening of top management and board members

Climate-Related Risks & Opportunities

Transition Risks

• High volatility of energy prices
• Growing relevance of environmental and sustainability issues (e.g., carbon pricing)

Opportunities

• Decarbonization
• Development of sustainable products and services (green steel)

Reporting Standards

Frameworks Used: UN Global Compact, Science Based Targets initiative (SBTi)

Certifications: ISO 14001, ISO 45001, OHSAS 18001, BES 6001

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

The report highlights how Klöckner & Co's initiatives contribute to these goals through emission reduction, sustainable business models, digital transformation, and social commitment.

Sustainable Products & Innovation

• Green steel

Awards & Recognition

• Forbes World’s Best Employers 2020
• Frauen-Karriere-Index (Women Career Index) top ten companies (2015-2020)
• Johnson Controls Leadership Award in Shareholder Value (Kloeckner Metals Corporation)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Supply Chain Responsibility
• Occupational Safety

Environmental Achievements

• Reduced Scope 1 & 2 emissions by 43% compared to SBTi baseline year 2019
• Won the German Sustainability Award 2023 in the Climate Transformation category
• Net zero carbon targets recognized by the Science Based Targets initiative (SBTi) as science-based

Social Achievements

• Launched Nexigen®, a brand for sustainable products and services
• Improved safety performance, exceeding Group targets and reducing LTIF to 5.8
• Supported over 1,300 children and young people through social projects

Governance Achievements

• Implemented a comprehensive compliance management system
• Established a robust risk management system
• Improved data protection policies

Climate Goals & Targets

Environmental Challenges

• Macroeconomic challenges due to the war in Ukraine, energy crisis, inflation, and rising interest rates
• Supply chain disruptions
• High volatility of steel prices
• Overcapacity in steel production and distribution
• Geopolitical risks
• Skills shortage in the labor market
• ESG risks (environmental, human rights, regulatory, reputational)

Mitigation Strategies

• Consistent net working capital management
• Margin-over-volume strategy
• Active inventory reduction
• Diversification of customer industries and geographic regions
• Expansion of higher-value products and services
• Increased share of contract business
• Implementation of sustainability strategy
• Ambitious climate targets
• Strategic partnerships for procurement of CO2-reduced products
• Improved safety initiatives
• Enhanced compliance management system
• Strengthened data protection policies
• Revised Supplier Code of Conduct

Supply Chain Management

Responsible Procurement

• Revised Supplier Code of Conduct
• Screening of customer and supplier relationships against sanction lists
• Conflict Minerals Reporting Template

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• High volatility of energy prices
• Growing relevance of environmental and sustainability issues

Opportunities

• Sustainable business models
• Procurement of CO2-reduced products

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001, ISO 45001, TÜV SÜD

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Klöckner & Co's initiatives contribute to these goals through emission reduction, sustainable business models, employee development, responsible supply chain management, and community investment.

Sustainable Products & Innovation

• CO2-reduced steel and metal products
• Nexigen® PCF Algorithm

Awards & Recognition

• German Sustainability Award 2023

Environmental Metrics

ESG Focus Areas

• Climate Change
• Employee Matters
• Responsible Conduct
• Environmental Impact of Logistics
• Digital Transformation
• Customer Satisfaction
• Sustainable Business Models
• Conservation of Natural Resources

Environmental Achievements

• Reduced Scope 1 & 2 emissions by 52% compared to SBTi baseline year 2019
• 96% of global electricity consumption from renewable sources

Social Achievements

• Over 19,300 digital learning units completed at the Kloeckner Academy
• Over 47,100 in-house training units completed
• Launched two new courses focusing on sustainability at the Kloeckner Academy
• Reduced Lost Time Injury Frequency to 5.7 (target was 5.9)
• Supported over 1,500 children and young people through social projects

Governance Achievements

• Net zero carbon targets recognized by the Science Based Targets initiative (SBTi)
• Introduction of Calculation and management of product emissions (Product Carbon Footprint)
• Winner German Sustainability Award in the category “Transformation Field Climate”

Climate Goals & Targets

Environmental Challenges

• High volatility of energy prices
• Growing relevance of environmental and sustainability issues, such as carbon pricing
• Emissions from employee travel
• Emissions from the entire supply chain (Scope 3)

Mitigation Strategies

• Further rollout of sustainability concept, including tracking and monitoring carbon emissions and actions to optimize the vehicle fleet and energy consumption
• Setting ambitious climate targets
• Strategic partnerships for the procurement of CO2-reduced products
• Updated travel expense policy (no domestic flights within Europe, offsetting for flights >1,500 km)
• Promoting hybrid working
• Transitioning company car fleet to electric vehicles
• Offering “job tickets” for public transport
• Offsetting all Scope 1 and 2 carbon emissions

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Revised Supplier Code of Conduct (2022), focusing on human rights and environmental risks
• Screening customer and supplier relationships against sanction lists
• Restricting cash payments to prevent money laundering
• Integrity screening for top two levels of management and board members
• Tracking provenance of conflict minerals

Climate-Related Risks & Opportunities

Physical Risks

• High volatility of energy prices

Transition Risks

• Growing relevance of environmental and sustainability issues, such as carbon pricing

Opportunities

• Strategic opportunities presented by decarbonization
• Expanding portfolio of sustainable products and services

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001 (at many sites)

Third-party Assurance: PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (limited assurance)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

Klöckner & Co's sustainability initiatives contribute to these goals through emission reductions, renewable energy use, sustainable business models, employee development, and responsible supply chain management.

Sustainable Products & Innovation

• Nexigen® PCF Algorithm
• Nexigen® Data Services
• CO2-reduced steel, stainless steel, and aluminum products

Awards & Recognition

• German Sustainability Award 2023 in the Climate Transformation category