Protecting the climate and ensuring sustainability: “Doing nothing is not an option”

No matter who is talking about the issue – whether from the perspective of policy, media, or business: The terms “sustainability” and “responsibility” are almost always used in the same breath – at Krones, too. But why is that? Or, more specifically: Who’s responsible for what? Where does this responsibility come from? And what does responsibility look like?

Kramer: To answer that question, you have to look at the big picture. Because of globalization, we all live together within a single organization, so to speak. And when you look at problems like the climate crisis, you have to ask yourself: Who has contributed most to the problem and who has the power to effect the most change? That is true for people and businesses alike. Of course, businesses’ primary role is to generate profits. But they do that by using a variety of resources. And it is imperative that these two aspects be counterbalanced to a certain extent. If you take and consume resources, you bear responsibility to protect and preserve those resources. 

Steger: The notion of a footprint illustrates it quite well. Every company leaves behind a footprint on the world – a positive one in terms of the jobs and wealth created, taxes paid, et cetera. At Krones, we add to that the fact that we are part of a sustainable value chain. We help provide consumers with clean foods and beverages in hygienically safe packaging. But there’s also a negative side to our footprint that detracts from this sustainability. And that’s where responsibility comes in: We have to curb the negative impact of our activities so that, on balance, our footprint is a positive one.

Birk: Another important aspect is the Paris Climate Agreement, which establishes a legal requirement we must satisfy. We’re all responsible for doing our part. Whether individuals, governments, or businesses: We all have a clear duty to reduce our emissions. Individually and collectively.

Whether individuals, governments, or businesses: We all have a clear duty to reduce our emissions. Individually and collectively. Martina Birkenviro Officer

And what is Krones doing to fulfill that duty?

Steger: In 2020, we adopted a new climate strategy and set binding targets for reducing emissions. We aim to cut the greenhouse gas emissions caused at our own facilities – that is, Scope 1 and Scope 2 emissions – by 80 percent by 2030. Our reduction target for Scope 3 emissions – emissions in our upstream and downstream value chain – is 25 percent, focusing primarily on emissions resulting from the use of our products.

That sounds pretty ambitious. But is it realistic?

Kramer: Krones has been practicing sustainability for a very long time. We launched the enviro sustainability programme in 2008, which means that Krones was already addressing the issue long before there was a legal obligation to do so. When in 2017 the CSR Directive Implementation Act (CSR-RUG) came into force, it professionalized and standardized non-financial reporting. We took a long, hard look at the issues subject to mandatory reporting – and our own performance in this regard – and developed a suitable, group-wide system of sustainability management. In assessing the current situation, we naturally compared our performance with that of our peers. And we concluded that we have done a very good job in terms of sustainability so far. But nevertheless – or precisely for this reason – we have to be even bolder and step up our activities, even if it requires considerable effort.

We have done a very good job in terms of sustainability so far. But nevertheless – or precisely for this reason – we have to be even bolder and step up our activities, even if it requires considerable effort. Welf KramerHead of Corporate Governance

Birk: With respect to our climate targets, we all really knew right away that we wanted to achieve the science-based targets, which aim to limit global warming as a result of the greenhouse effect to 1.5 degrees Celsius. And that can only happen if we ourselves meet specific reduction targets.

How do you go about distilling specific targets for your own company from a globally focused project like the science-based targets?

Steger: That is a rather complex process. The SBTi issues a comprehensive questionnaire, and to enter some meaningful answers, you first need a soundly based stock of data from which to then calculate what is realistically feasible over the next few years. Building on this, we drafted a proposal and had it checked by the SBTi specialists. The gratifying result of around two months of validation was this: We may officially call our climate goals science-based targets.

And what measures do you intend to take to achieve these targets?

Birk: As far as Scope 3 is concerned, meaning a reduction in the emissions caused by our products, our enviro program has already yielded impressive results, in that it has systematically downsized consumption levels and emissions. But since enviro was launched a very long time ago and meanwhile covers our entire product portfolio, it is getting harder and harder to find more potential for optimization – at least as far as machines are concerned. That is why our Scope 3 reduction target is considerably lower than those for in-house emissions. After over ten years of enviro, there is simply not much room left for further reductions. However, this also goes to show that we have done a good job over the past few years. Yet it does not mean we are going to rest on our laurels. Quite the contrary: We now have to look at the big picture and transfer the idea behind enviro to entire lines and factories.

Steger: In regard to in-house (Scope 1 and 2) emissions, energy-efficiency is the most important aspect to tackle. Rendering our buildings and production lines more energy-efficient is in my view the most honest approach, which also provides a return on investment because it helps cut costs. Another significant leverage point is self-sufficiency of supply, meaning sustainable in-house energy generation, for example with photovoltaic systems or block-type cogeneration plants. And the amount of energy we additionally need but can’t produce in-house must be purchased against sustainable criteria – the greener, the better.

What do you mean when you say that upgrading energy-efficiency levels is the “most honest approach”?

Steger: This must be seen in the context of how we understand the term “climate neutrality”. A very popular (because relatively easy) way to improve one’s climate footprint is to pay compensation. This means you offset your emissions by financially supporting climate-related projects. Let’s be quite clear about this: Rain forest reforestation or digging wells in dry areas are important measures – and money sensibly spent. But we have deliberately opted for a different approach because we do not want to take the easy way out. Instead of paying for emissions caused by our group, we think it is better to avoid them right from the start. Therefore, we want to achieve our climate targets as far as possible by in-house efforts.