Energy and emissions

Meaningful progress

In 2024, the SFS Group reduced its Scope 1 and 2 greenhouse gas emissions by –38.8%. Compared to the 2020 reference year, this equates to a reduction of −74.6% in tons of CO₂ equivalents per value-added franc. This means that SFS has made significant progress toward achieving its target of reducing direct emissions by at least 90% by 2030. Scope 3 emissions were recorded in full for the first time and were reduced slightly on a like-for-like basis versus the previous year. The share of renewable electricity rose considerably and now stands at 75.2%. This means that SFS has already exceeded its target of drawing half of its power requirements from renewable sources by 2025.

In the area of sustainability, climate and environmental protection is a top priority for SFS. We use renewable energies, reduce our air emissions, develop sustainable solutions and optimize our supply chain management. In the last materiality analysis in 2022, the following four topics from “Environment” were identified as material:

• Emissions
• Energy
• Sustainable solutions
• Procurement

We outline our position on other relevant topics, such as water resources and biodiversity, in our sustainability guidelines. These topics are important to us, but were not identified by our stakeholders as material and will therefore not be covered in this report.

While the topic of “Emissions” has already been classified as material in 2019, SFS included “Energy” on its list of material topics for the first time in 2022. As a manufacturing company, we have high energy requirements and electricity consumption accounts for around two-thirds of our total energy consumption, which means that it is understandable that stakeholders attach the highest priority to this topic. Stakeholders believe that the SFS Group has the greatest environmental impact in the area of energy and emissions. Conversely, energy costs and the availability of energy have a high impact on SFS’s business activities. We are therefore striving to continually improve energy efficiency and increase the share of self-produced renewable energy.

We commit to the following undertaking in our sustainability guidelines: “We strive to use energy sustainably and are taking measures to reduce our energy consumption. We are looking for ways to obtain energy from sources that protect the environment. We have defined targets and taken measures to reduce greenhouse gas emissions and maintain air quality in accordance with the respective statutory and local regulations.”

The basic principles of our environmental management are enshrined in the guideline on “Quality, Environment, Occupational Health and Safety, and Information Security” and in the sustainability guidelines. SFS undertakes to manufacture and offer all products and services in compliance with statutory and official environmental protection and health and safety requirements.

Certification of the production sites in accordance with ISO 14001 is part of our environmental management system that aims to reduce our environmental impact. In the year under review, 2 (PY 12) additional locations were certified, with 3 further certifications planned.

The Group EHS Manager presents the emissions management approaches and measures to the Group Executive Board once a year. The targets are then reviewed and adjusted if necessary.

Scope 1 emissions further reduced

In the year under review, SFS once again reduced its direct emissions further and lowered its Scope 1 emissions on a like-for-like basis by −2.5% (PY –4.6%). Standing at –38.6%, emissions were mainly reduced in the “Operating fluid” category. This was largely achieved through a reduction in refrigerants.

GRI 305-1 Direct (Scope 1) GHG emissions

The following overview shows the substances that have a significant impact on air quality and their share of Scope 1 emissions. Nitrogen oxides from combustion-related activities make up 71.2% of our Scope 1 emissions and thus have the largest negative impact on air quality. All in all, a slight increase was recorded in all of the categories, which can be mainly attributed to the increased consumption of process gases.

GRI 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions

Scope 2 emissions cut in half

In 2024, we cut Scope 2 emissions by −55.3%. Adjusted for the new emissions factors in the ecoinvent dataset (a switch from the ecoinvent v3.10 database to the v3.11 database), this resulted in a total like-for-like reduction of –54.9% (PY –10.4%). The main driver of this huge improvement is the higher share of renewable energies used in the Engineered Components segment and mainly concerns our locations in China and the US. The further expansion of our photovoltaic systems and the switch to 100% renewable electricity at the location in Czech Republic have also contributed to this improvement.

GRI 305-2 Energy indirect (Scope 2) GHG emissions

Taken together, absolute CO₂ emissions in Scope 1 and 2 declined by –38.8% (PY −7.6%) in the year under review. Adjusted for the new emissions factors in the ecoinvent dataset (a switch from the ecoinvent v3.10 database to the v3.11 database), this resulted in a total like-for-like reduction of –38.5% (PY –8.7%).

Direct and indirect GHG emissions

On track to achieve our targets

Compared to the previous year, SFS was able to reduce the intensity of greenhouse gas emissions measured in tons of CO₂ equivalents per value-added franc by –38.8% (PY −19.6%). The SFS Group has set itself the target of reducing this figure by at least 90% by 2030 compared to the 2020 reference year. With a total reduction of –74.6% over the past five years, SFS is certainly on the right track, but will have to take further measures in the future in order to further reduce its emissions consistently. The major progress made on the greenhouse gas emissions intensity ratio can be mainly attributed to the –48.8% reduction in absolute emissions as well as to the increase in value creation.

GRI 305-4 GHG emissions intensity

Data basis for Scope 3 completed

In the year under review , SFS was able for the first time to map a complete data basis for Scope 3 emissions, which make up over 90% of the total emissions. The greenhouse gas inventory was expanded to include the categories “Use of sold products” and “End-of-life treatment of sold products” and was amended retroactively for 2023. In total, Scope 3 emissions declined by −2.4% on a like-for-like basis in comparison with the previous year. Our target is to reduce Scope 3 emissions per value-added-franc by at least 90% by 2040, with 2023 being used as the reference year.

The largest change was in the “Capital goods” category (−56.2%), which can be attributed to completed expansion projects in Nantong (China) and Heerbrugg (Switzerland).

We were also able to significantly lower emissions in the categories “Fuel- and energy-related activities” (−37.6%) and “Downstream transport and distribution” (−34.9%). This development can be ascribed to the increasing use of renewable energy sources as well as to the progress being made in the electrification of transportation.

GRI 305-3 Other indirect (Scope 3) GHG emissions

Interim target achieved in the area of renewable electricity

In the year under review, we increased the share of renewable energies to a total of 50.6%. We achieved our target of using at least 50% renewable electricity on a Group-wide basis by 2025 a year earlier, with the figure totaling 75.2%. We aim to draw 90% of our power consumption from renewable energy sources by 2030.

GRI 302-1 Energy consumption within the organization

Share of self-produced renewable energy expanded

SFS is aware that purchasing renewable energy alone will not be enough to sufficiently limit negative impacts on the climate. By expanding our own electricity production, we are taking responsibility for the environment and society and strengthening our autonomy. In the year under review, we increased the share of self-generated electricity by installing two new photovoltaic systems and expanding two existing ones. At the Wyomissing location (US), the new system covers approximately one-third of the electricity requirements, while the new system in Campia Turzi (Romania) covers around 22%. Thanks to the expanded photovoltaic systems in Heerbrugg and Schramberg (Germany), these systems now provide 12% and 7% of the electricity required in their respective locations. In total, SFS increased the amount of self-generated electric energy by 16.4% compared with the previous year. Our success story “Environmental impact reduced, employee health promoted” outlines the highlights realized in this area in the year under review.

Project for a wind power plant on company premises canceled

To supplement the large-scale photovoltaic installation, the SFS Group had, in recent years, planned to build a wind turbine on its premises in Heerbrugg. The aim was to produce 5 GWh of electricity per year and increase the share of self-generated electricity in Switzerland by approximately 10%. With this project, SFS wanted to fulfill its responsibility toward the environment and society and contribute to regional energy security and autonomy. After promising preliminary investigations into technical feasibility, the project’s compatibility with nearby settlements, the environment, and cost-effectiveness, we spent a year taking wind measurements and carrying out environmental studies, which went well. In the year under review, SFS published the extensive feasibility study for the project, which comprised twelve individual reports from independent experts. The results confirmed the findings from the preliminary study and demonstrated that the turbine would be cost-effective and environmentally friendly. A municipal petition for a referendum in the local community of Au-Heerbrugg proposed a minimum distance between wind turbines and residential buildings. On February 9, 2025, the initiative was passed with 50.1% of votes in its favor. As we would not be able to comply with the prescribed minimum distance of 500 m at the location where the turbine was planned to be built, the project was suspended. SFS will remain strongly committed to promoting climate protection and the expansion of renewable energies. The self-imposed target of producing 30% of the electricity consumed in Switzerland ourselves will be hugely challenging without the planned wind power plant.

Energy intensity further reduced

Compared to the reference year, we reduced energy intensity, i.e. absolute energy consumption in relation to value added, by –37.3%. This pleasing development can be mainly attributed to the acquisition of Hoffmann. The sustained efforts to make sparing and efficient use of energy also contributed to this positive performance.

GRI 302-3 Energy intensity

Data on energy consumption in Scope 3 completed

At approximately 3 TWh, the “Purchased goods and services” category accounts for more than 80% of energy consumption in Scope 3, which illustrates the considerable impact of the supply chain. Fortunately, energy consumption in this category declined by –3.0% and the total indirect energy consumption likewise fell by –7.2%.

Owing to the completion of investment projects, such as the expansions in Nantong and Heerbrugg, the SFS Group significantly reduced energy consumption in the “Capital goods” category in comparison with the previous year. The higher share of renewable energy sources also has a positive impact in the area of embodied energy and has contributed to the massive reduction of –64.9% in the “Fuel- and energy-related activities” category.

In the year under review, we analyzed energy consumption in the categories “Use of sold products” and “End-of-life treatment of sold products” and roughly calculated the carbon footprint for the first time. Following this analysis, the energy consumption of our products in both categories was classified as insignificant and thus does not have a value.

GRI 302-2 Energy consumption outside of the organization