Sustainability:

4 Steps to Climate Neutrality

Basic values and business interests are no contradiction for Freudenberg. Especially not when it comes to sustainability. Our commitment to climate protection makes good business sense and expresses the responsibility that we feel toward others and the environment. That is why Freudenberg is naturally committed to supporting the United Nations Global Compact.

Human-caused climate change is happening. It has to be stopped if we are going to meet our responsibilities to future generations.

The term sustainability has become a buzzword in politics, society and business. By definition, it deals with social, ecological and economic matters and is synonymous with fair, climate-neutral, committed and responsible conduct. Everyone is talking about sustainability, but that does not make it any easier to understand the term. But one thing has become clear: Sustainability is not easy to achieve. It is crucial to set goals, but the path to achieving them is at least as important.

Freudenberg’s position on this is clear. We would like to help keep our planet livable far into the future. This position is consistent with the UN's 1987 Brundtland definition of sustainability. It means producing as little waste and carbon dioxide as possible while minimizing the use of water, energy and materials. Our commitment to climate protection is necessary in a business sense as well. The more sustainably we operate, the more attractive we are to major automakers. They incorporate us as a supplier into their own sustainability programs. As we look ahead, this is even more clear: If we want to sell our products tomorrow, they will have to be sustainable. That will take innovation. The current situation represents a huge opportunity for Freudenberg as a technology company. That means there is no contradiction between responsible conduct toward others and the environment on one hand, and our business interests on the other.

Freudenberg takes climate protection seriously

Freudenberg wants to be a climate-neutral company by 2045. The seriousness of purpose that the company has shown is closely related to its basic values and its long-standing sense of responsibility. It is also uncovering the business opportunities that a consistent course toward sustainability offers.

Freudenberg has set a course for climate-neutral manufacturing. The first milestone is to reduce relative CO2 emissions, measured per million euros of revenue, by 25 percent, over the period from 2020 to 2025. Freudenberg intends to be a climate-neutral company by 2045. The company is laying the foundation for this ambitious goal with a wide-ranging project called “Sustainability drives Climate Action.” Since 2019, the opportunities and challenges that man-made climate change poses for Freudenberg have been analyzed. The company has turned to a multistep strategy: reductions in energy use, electrification, as well as the purchasing and self-generation of green electricity, and offsets for CO2 emissions. They are in part being implemented simultaneously.

Pursuing climate neutrality is a long-distance race. Freudenberg has no intention of relying on a last-minute sprint. Our philosophy is, the faster we progress, the better.

Many factors will determine when specific Business Groups will be manufacturing climate-neutrally. Their starting situations vary greatly, based on how much energy they require for their production processes, for example. The technological obstacles that need to be overcome in research and development are just as varied. Customers also play an important role.

Some pioneers are already placing demanding requirements on the Business Groups. That’s why we say that each Freudenberg Group company has to find its own way and set its own pace. What’s important is to be able to measure and document our progress verifiably so that each Business Group can contribute to our common goal of being climate-neutral by 2045.

Decreasing Energy Consumption at Every Site

The “Bee – Be energy efficient” initiative is laying the foundation for uniform and comparable energy standards within the Freudenberg Group. It is an important component of the “Sustainability drives Climate Action” project and has been uncovering energy-saving potential at Freudenberg locations since 2019. It especially considers the issues of energy consumption, process technology and the energy efficiency of existing buildings and new construction. So far, about 25 sites worldwide have participated in the program. The results show potential reductions in energy use averaging 25 percent. As part of the program’s next stage, energy-efficiency experts have developed a flexible consulting approach for the sites. It ranges from measures that can be quickly carried out, to decision-making aids for long-term investments in production facilities. The services are rounded out by the Bee Academy, a comprehensive online training program covering the fundamentals of energy management and energy efficiency.

Freudenberg has been a reliable partner to energy suppliers and was able to conclude long-term supply contracts for green electricity in 2021.

During 2021, the focus was mainly on pillars two and three of the four-step strategy: electrifying the energy supply and sourcing this electricity completely from renewable energy sources, such as wind, solar and hydropower.

Freudenberg is considered to be an especially reliable partner, which enabled it to conclude long-term supply contracts for green electricity with energy suppliers in 2021. In these so-called “power purchase agreements,” the price of electricity is fixed over a ten-year period. They are a cornerstone of Freudenberg’s effort to achieve its climate goals, and they make a major contribution to renewable energy’s steady growth. To highlight its progress on sustainability and improvements at its sites worldwide, Freudenberg incorporates many inputs into the calculation of its key performance indicators. In the current strategic period for 2021 through 2023, the company is introducing an electronic sustainability reporting system for all the Business Groups.

  • Functional principle of a fuel cell: Hydrogen splits into protons and electrons.

  • PET granulate made from recycled source material is used in the Vileda and O-Cedar brands from Freudenberg Home and Cleaning Solutions.

The Demand for Sustainable Products Is a Huge Opportunity

Even today, the focus of the company’s research and development departments is on viable, sustainable innovations. Products for batteries and fuel cells offer technical solutions to help us chart a course toward the new mobility, on land, on the water and in the air, with cars, trucks, buses, ships and aircraft. To date, as a pioneer in closed cycle management, we have been making progress with the recycling of PET bottles. Each year, we take five billion plastic bottles that would otherwise have ended up in landfills and process them into raw materials. In many respects, our own sustainable practices are an admission ticket to the markets of the future. The EU’s policy decisions and regulations, starting with emissions limits for vehicles, all the way to the Green Deal and its taxonomy, are heading in this direction. Freudenberg is bolstering these efforts in serious pursuit of its own climate goals.

Group-wide Key Performance Indicators on Sustainability

The three most important areas of activity for all the Business Groups are energy efficiency, CO2 emissions and waste. The company has introduced eight key performance indicators Group-wide that create transparency for improvements in these areas and help to drive sustainability at Freudenberg. 

The metrics from 2020 serve as the basis for the Freudenberg Group’s calculations and its goal of reducing the relative amount of its CO2 emissions per million euros of sales by 25 percent by 2025. The target is 65 tons of CO2 per million of euros of sales by 2025. If all the green electricity that Freudenberg obtained via certificates and direct purchases from energy suppliers in 2021 is included, the reduction comes to nearly 10 percent, which significantly exceeds expectations.

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Sustainability has two dimensions for the Freudenberg Group

First of all, the way the company shapes its processes and uses its systems to reduce the resource consumption (footprint). Second, Freudenberg offers many products and solutions that allow customers to manufacture more efficiently and sustainably or to make their products more resource-efficient (handprint).

Handprints and footprints are always a matter of resource and energy efficiency, and that invariably means technology.

By reducing its footprint and expanding customers’ handprints, Freudenberg is contributing to greater sustainability worldwide.

Materials

Materials efficiency
Recycled, renewable and substitute materials
End of Life (EOL) Product handling

Waste

Waste handling

Energy

Energy efficiency
Renewable energy

Emissions

Air pollution

Water

Water pollution
Water use

The five subject areas – materials, waste, energy, emissions and water – have the greatest relevance for the Freudenberg Group as a whole, since all the themes do not hold the same importance to particular Business Groups. For example, water is hardly used in some of them. But in others, it plays a major role, especially when production facilities are located in arid regions such as India. The picture is not uniform when it comes to materials either. Some can be recycled, but others such as elastomers (rubber, caoutchouc) cannot.

The UN Global Compact Progress Report 2021 by Freudenberg

This is how Freudenberg applies the United Nations Global Compact and the Sustainable Development Goals.