Protecting the Climate & the Environment

The Blue Planet Commitment

As a manufacturing company in our value chain, we are committed to managing our impact on the environment and preserving ecosystem services we depend on.

Fulfilling our legal obligation regarding environmental legislation is the minimum standard we set for ourselves to make a real impact. Our environmental strategy, Blue Planet Commitment, outlines our approach to reducing our environmental footprint and acting as a sustainability enabler for our customers. This strategy reflects our values and our commitment to decarbonisation, eco-design, an environmental value proposition in full transparency.

04.1

Advancing our decarbonisation commitment

Reducing carbon intensity is a prerequisite for achieving our science-based absolute emission reduction targets.

In 2022, Hager group has submitted its near term target in terms of GHG emission reduction to the Science based target initiative (SBTi). In early 2023, this target has been approved by SBTi as aligned with a 1.5 C° trajectory, currently the most ambitious designation available through the SBTi process.

In this context, Hager group commits to reduce absolute scope 1 and 2 GHG emissions by 50% by 2030 Compared to 2021 as a base year. The Group also commits to reduce absolute scope 3 GHG emissions 25% within the same timeframe¹⁷.

Our Carbon Footprint

Hager Group updates its end-to-end carbon footprint (Scope 1, 2 and 3) annually and obtains a “reasonable assurance” from Carbone 4, an independent third party verifier on all figures.

The carbon footprint of Hager Group is significant due to our operations and production processes, but in particular the nature of our products activities in the electrical equipment industry. The assessment has been calculated according to the widely used global standard for GHG accounting and reporting, the Corporate Accounting and Reporting GHG Protocol Standard. This provides a comprehensive framework for us to understand and quantify our GHG emissions and to develop strategies to reduce them.

Hager Group Energy Mix in 2021

The chart below represent our carbon footprint on Scopes 1, 2 and 3, including all greenhouse gas emissions (GHG), from the upstream activity of all its suppliers to the use and end of life of its offers sold to customers. Analysing the scope of the group’s carbon footprint, several factors must be considered, including:

• The use of our products requires energy: 61% of our Carbon Footprint comes from the “use of sold products”. The carbon intensity of the electricity grids where our products are used is out of our control (hence the important role of countries to pursue their efforts in the energy transition – decarbonization is a collective challenge) but our efforts are focused on eco-design principles to improve the energy efficiency linked to the operations of these devices. Our products are long lasting, and we have to take the total life cycle of the product into consideration in the calculation. It is true to say that products with a twenty-year life span emit more than those with a two-year one, however, lowering the life span of our products and solutions is not the solution as this would generate more production of said products and solutions and the use of more raw materials to satisfy the same needs).
• Purchased goods and services is our second most important impact covering 23% of our carbon footprint. The embedded carbon footprint of our raw materials is important which highlights the role of eco-design and responsible sourcing mitigating our overall carbon footprint.
• Transportation: Hager Group’s products are transported globally, which results in emissions from shipping, trucking and other forms of transportation. Hager Group’s products are transported globally, most of them by road, mainly within Europe, others by sea and in some rare cases by air. Even if Hager’s freight „only” represents 2% of the overall GHG emissions, acting on reducing emissions will require actions in the whole value chain.
• Energy consumption: Hager Group’s energy consumption also contributes to our carbon footprint. The company uses large amounts of energy to power its production processes, which results in considerable emissions.

Hager’s 2021 GHG footprint: 2.709 ktCO₂e

Our Decarbonisation plan

Our decarbonisation strategy science based targets rely on decarbonising the operations of our current plants but also set sustainability requirements for our new investments. From 2021 to 2022, our efforts have contributed to reducing 8% of our scope 1 & 2 emissions.

6 Factories at the heart of our strategy

Representing 70% of our energy related emissions, the 6 selected manufacturing sites have developed low carbon roadmaps in order to contribute to the ambitious objective of halving our Scope1&2 emissions by 2030. For each site, energy usage in particular was analysed and corresponding decarbonisation levers were studied economically and technically. In the period between 2023 and 2028, the plan is to activate three levels: heat pumps installations – PV energy supply – Power Purchase Agreements from renewable energies. Short-term levers include thermal leaks detection, the stoppage of equipment when possible, reducing heating demand, introducing LEDs, and lowering lighting intensity. Long-term levers include an overall reduction of energy consumption and switching to alternative (clean) energy sources.

This photo was taken on the roof of Hager Forum in Obernai, France. Hager Forum is first and foremost a meeting place, it also serves as a catalyst for the development of Hager Group. The roof hosts 440 photovoltaic panels that transform solar energy into electric energy. They cover 40% of Hager Forum’s energy consumption needs.

New plant in Poland to increase production capacity: Bieruń

To meet increasing customer demand and support growth, Hager Group is building a new plant in Bieruń, Poland. This allows us as a group to increase our production capacity and further develop our product portfolio. The new plant will cover more than 21.000 square metres, of which 1.000 square meters will be storage and production space. About 1.000 employees will work in the Bieruń site. By using modern technologies that ensure the highest level of energy efficiency, we reduce our impact on the environment. The building will be one of Hager Group’s most modern and efficient. As part of our sustainability strategy, we use the Building Research Establishment (BREEAM) environmental assessment methodology to ensure we are effectively measuring and reducing the impact of our buildings. As such, we create greater added value and reduce the risks for people and the environment in the region. The rating we hope to achieve is “Excellent”. In conjunction with a photovoltaic system on the roof with a capacity of 750 kilowatts peak, our energy-efficient buildings will help avoid CO₂ emissions into the atmosphere by around 900 tons in comparison to other similar buildings with a lower environmental performance.

Bischwiller: regional biomass energy supply to cover 100% in heat energy needs

In order to accelerate the decarbonisation of Bischwiller’s industrial site in France, and reduce its dependence on natural gas, Hager Group has connected its heating network to that of the Sonnenhof foundation in collaboration with ES Energy Services. The objective for the site is multiple: reduce the carbon footprint as well as dependence on natural gas, pool the energy network with local players and develop a circular economy. By switching from town gas to biomass, more than 300 tonnes of CO₂ emissions per year will be avoided. 500.000 € have been invested in the necessary infrastructure, supported by nearly 150.000 € in public aid, in particular from ADEME. Eventually, the site’s current heating units operating mainly on natural gas will be dismantled and recycled. The Bischwiller industrial site is the first of the group’s 22 production sites to benefit from this type of investment. This approach is part of Hager Group’s environmental strategy aimed at reducing its industrial greenhouse gas emissions by 50% (scope 1 & 2) by 2030.

Protecting climate and environment

04.2

Eco-design to embed life cycle thinking in our engineering functions

Looking at how important the group’s scope 3 emissions relative to other scopes are, an Eco-design approach considering the entire life cycle of our products, from their raw material extraction and production to their disposal is necessary to assess our environmental impacts and to minimise them, especially their carbon footprint. Embedding life cycle thinking into engineering departments is crucial to our eco-design approach:

Eco-design Training:

Educating and raising awareness among engineers about the importance of life cycle thinking and eco-design is key. Workshops, training sessions, and online courses are organised with eco-relays¹⁸ to provide engineers with the knowledge and tools they need to integrate eco-design into their work.

Incorporate Life Cycle Assessment (LCA) into the Design Process:

LCA is a systematic approach to evaluate the environmental impact of a product throughout its entire life cycle. By incorporating LCA into the design process, engineers make informed decisions about the materials and processes they use, based on their environmental impact. In 2022, 23% of our references were covered by a PEP Ecopassports¹⁹. The objective is to cover 80% of our references with LCA reports by 2024.

Providing the right tools and resources:

engineers have access to the right tools and resources to effectively implement eco-design into their processes. In addition to Hager Group’s specific Eco-design Handbook serving as a reference document describing process flows to embed eco-design principles in our products, an ongoing flagship project is the Sustainable Materials Toolbox that is expected to support in setting clear metrics and targets to our Eco-design approach.

Coverage of our high-runner references with LCA reports

Eliminating Non Recycled Plastic Packaging

How:

Sustainable packaging alternatives

Sustainable Packaging: eliminating non-recyclable plastic

Materials used to produce and package Hager Group’s primary products in 2021

In line with our eco-design approach, we aim to phase out non-sustainable packaging from our products. While plastics have many benefits to our industry, they can cause irreversible negative consequences if they become waste or pollution²⁰.

The main objective of our approach in introducing sustainable packaging solutions to our value chain is to innovate to ensure that the plastics we do need are recycled, reusable or recyclable. This requires a combination of redesign and innovation in business models, materials, packaging design, and reprocessing technologies.

While improving recycling is crucial, we cannot recycle our way out of the plastic issues we currently face. Wherever relevant, reuse business models are explored as a preferred solution (or ‘inner loop’ in circular economy terms), reducing the need for single-use plastic packaging.

A flagship ongoing project is eliminating non recycled plastic packaging (NRPP). At Hager Group we aim to making our packaging 100% sustainable by 2025. In 2022, we have exceeded our annual NRPP elimination target in product and logistics packaging by 12%, eliminating 112 tons of our yearly consumption.

04.3

Environmental Value Proposition

This pillar is introduced and explained with more detail in the first chapter. The development of an Envrionmental Value Proposition roadmap is an ongoing project. Validation and launch is expected in 2024.

04.4

Water and Biodiversity

Water management

Since 2021, we made several improvements to optimise water usage across our factories. A good example of these efforts is our factory in Obernai in France where a rain harvesting system is channeling rainwater for use in sanitary purposes. In Huizhou, China several underground water tank leakages have been identified and repaired leading to savings amounting to 10 ML per year.

Water Withrawal Operations in Hager Group

Water scarcity assessment

In 2022, we conducted a water scarcity assessment to identify sites operating in areas with high water stress risks. The assessment determined that a total of 3 Hager Group manufacturing sites were located in areas of high or extreme high water stress basins. We will continue to prioritise the implementation of water efficiency improvements at 5 factories identified to be using more than 80% of the total reported water withdrawn.

A key aspect of efficient resource use is water withdrawal, an integral issue for all industries working with and in manufacturing. In the reporting period, we have withdrawn 292.295 Megalitres of fresh water, of which 33.438 were from ground water. Of the total we withdrew, 1.891 Megalitres from areas with high water stress, primarily at our locations in La Roca del Valles (Spain), Pune (India) and Caltanissetta (Italy).

Biodiversity screening

We also conducted an assessment, mapping biodiversity sensitive areas in close proximity to our manufacturing sites. We will use this assessment to evaluate the need for additional mitigation measures together with opportunities for enhancing biodiversity in some of the areas.

The category End-of-life treatment of sold products will be excluded from the targets due to the lack of leverage to reduce emissions from this source. (It represents 9% of scope 3 emissions).

Eco-relays are contact point engineers in different functions implementing eco-design measures co-developed under with a dedicated environmental project manager.

PEP Ecopassports are environmental declarations for products and references in the electrical equipment industry.

World Economic Forum, Ellen MacArthur Foundation and McKinsey & Company, The New Plastics Economy – Rethinking the future of plastics (2016)