The prices for energy and raw materials are rising to record levels. What does that mean for Freudenberg?
Rising prices and disrupted supply chains naturally affect our company, our suppliers, and our customers. This shows once again how important it is to use energy and materials efficiently – that means, sustainably. It simply pays off. Our very own Freudenberg approach to sustainability and climate neutrality is based on two drivers: The first is our sense of social responsibility, which we as a company have embraced for generations. We want to play a role in maintaining our planet for the long term. The second relates to tangible economic interests. Sustainability means viability and competitiveness in the future – in many more dimensions than one.
Sustainability means viability and competitiveness in the future – in many more dimensions than one.
What dimensions are these?
For one, our customers are requiring us to do our part in their value chain when it comes to making contributions to efficiency and energy savings. Major automakers have set up sustainability programs that hold us, their supplier, accountable in very specific ways. In other words: Only by acting sustainably can you gain an admission ticket to this market. The regulations of the European Union, ranging from emissions limits to taxonomy, are moving in the same direction. Beyond these concrete requirements, our customers also expect us to provide sustainable product solutions and performance. Ergo: All products that we want to sell in the future need to be sustainable. Ensuring this happens requires innovation and constitutes a huge opportunity for us as a technology group. I am particularly excited about our solutions in the fields of battery and fuel cell – two areas in which we can draw on extensive knowhow that we can combine into hybrid solutions. In so doing, we are paving the way for the mobility of tomorrow, not just for cars but for trucks, buses, and trains all the way to container and cruise ships. In other areas, too, we are doing our part, including when it comes to the recycling of PET bottles. To us, these bottles are not waste: They are a raw material. Freudenberg was a pioneer in this area and continues to set new standards right down to the here and now. Not only do we recycle five billion plastic bottles each year, during the same timeframe, we save 155 kilotons of CO2.
We want to work as energy-efficiently as possible, saving as many resources as we can and in so doing steadily shrink our own environmental footprint all the way to climate-neutrality. That is something we as Freudenberg want to achieve by 2045.
Freudenberg uses the terms “footprint” and “handprint” to refer to the two sides of the sustainability coin you are describing.
Correct. They are the two dimensions on which we ourselves have a direct influence – which is why we are focusing on them so intensively. We want to work as energy-efficiently as possible, saving as many resources as we can and in so doing steadily shrink our own environmental footprint all the way to climate-neutrality. That is something we as Freudenberg want to achieve by 2045. At the same time, our products and innovations help our customers become both more efficient and more sustainable. That is what we refer to as handprint.
You have mentioned several innovative products that are examples for our handprint. How does Freudenberg minimize its own CO2 footprint?
The process consists of multiple steps that at times can run parallel to one another. Our “Be energy efficient” initiative – “Bee” for short – constitutes the first step. Using a standardized approach, our sites systematically uncover opportunities for improvement, with a focus not just on material, building and energy efficiency, but also on lowering our own energy consumption. The experience to date shows a potential yield of up to 25 percent in savings, on average, after improvements have been made. Our facility in Oberwihl in southern Germany is going even one step further and will meet its own heating and warm water demand in a uniquely climate-friendly way in the future by having woodchips from the Black Forest replace the fossil fuel-based heating oil. Two furnaces will turn biomass into more than 300 kilowatts of heat output. A special, small, combined heat and power plant, also fueled by woodchips, will cover the heating demands of an entire year. Beyond such efforts, for all our new building projects, whether at Vibracoustic in Hamburg or EagleBurgmann in Wolfratshausen, we are relying on highly efficient building technology.
What other steps is Freudenberg taking to minimize its footprint?
Step two consists of electrifying our remaining energy supply wherever possible. In a third step, we want to cover as much of our energy demand as possible through “green electricity”, a term used to describe electric current derived out of renewable or regenerative energy. At more than 346 gigawatt hours, the share of green energy used at Freudenberg already stood at 21 percent of the total in 2021, and is expected to rise to up to 50 percent by 2025. As part of a sound energy purchasing strategy, we have signed several long-term delivery contracts with energy suppliers. Partnerships of this kind give us supply security and offer cost stability. Where processes cannot be electrified or green electricity is not available, we will initially achieve climate neutrality by means of compensation programs.
Achieving climate neutrality can be compared to a long-distance run – we cannot leave everything up to the final sprint. It is important that we measure and document our progress in a verifiable manner.
One interim goal Freudenberg has set on the road to climate-neutrality is to reduce CO2 emissions by 25 percent by 2025 compared to 2020. That is an ambitious plan, especially considering that CO2 emissions were already down during that first year of the pandemic.
Yes, but delays are simply not an option. We don’t want to run a flimsy greenwashing initiative. We are serious about climate protection. The more ambitious we are, and the faster we progress, the better. Achieving climate neutrality can be compared to a long-distance run – we cannot leave everything up to the final sprint. It is important that we measure and document our progress in a verifiable manner. We welcome the fact that our activities can be checked and audited by independent institutes – that alone shows how serious we are about this topic. To set the foundation, we are introducing an electronic sustainability-reporting system.
You mentioned speed. Are all Business Groups moving ahead uniformly?
Each Business Group defines its own path to climate neutrality, since their individual starting points differ. Production processes vary in terms of their energy intensiveness, and different technological hurdles require overcoming. Customers also place different demands on different Business Groups. Some of them, like Freudenberg Medical, whose comparatively low energy volume has already been largely electrified, will achieve climate neutrality quicker than others. These pioneers – to which Klüber Lubrication also belongs – will motivate those Business Groups who have a longer and more challenging path ahead of them.