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SustainabilityClimate and Nature

Acting for Climate and Nature

Sustainability@ZF

Our Important and Ambitious Goal is to be Climate Neutral by 2040.

This includes not only ZF itself and our production, but also the emissions of our value chain. We record emissions from start to finish, from those of our suppliers through logistics all the way to the use phase of our products in vehicles and technical systems. At ZF, we focus on sustainably generated energy for our plants, increasing the energy efficiency of our processes, the electrification of a large proportion of our products, and the use of recycled materials.

Climate Action

One of the most essential tasks and at the same time one of the greatest challenges of our time is climate protection. Our climate strategy is correspondingly ambitious: we want to become climate neutral across all emission categories by 2040. Climate neutral means that our business activities do not increase CO2 concentration either upstream or downstream.

In our sustainability strategy, we are guided by the Sustainable Development Goals (SDGs) agreed by the UN in 2015 as well as the requirements of the Science Based Targets Initiative (SBTi), the CDP (Carbon Disclosure Project) and the Task Force on Climate-Related Financial Disclosures (TCFD).

4 = Quality education // 7 = Affordable and clean energy

8 = Decent work and economic growth // 9 = Industry, innovation, and infrastructure

11 = Sustainable cities and communities // 12 = Responsible consumption and production

13 = Climate action // 17 = Partnerships to achieve the goals

Reduction of CO2e Emissions

By 2030, ZF will reduce production-related emissions by
80 %
compared to 2019.

ZF is working intensely to reduce CO2e emissions in all three scopes of greenhouse gas emissions - Scope 1, 2 and 3.

  • ZF’s emission reduction targets are validated by SBTi
  • Scope 1 includes direct emissions, for example from the combustion of fossil fuels in ZF production.
  • Scope 2 concerns emissions from purchased energy, for example electricity.
  • Scope 3 refers to "indirect emissions". They arise from purchased goods, such as components from our suppliers ("upstream") and from emissions from ZF products during their use phase ("downstream"). We only have an indirect influence on these emissions.
ZF Scopes

The largest share of Scope 3 is attributed to indirect emissions from supplies ("upstream" Scope 3) and emissions from ZF products in their use phase ("downstream" Scope 3). In order to meet our responsibility with regard to Scope 3 emissions in accordance with ZF's climate neutrality strategy, we aim to reduce Scope 3 greenhouse gas emissions by 40 percent per million euros of sales by 2030 compared to 2019.

ZF regularly reports on the status of CO2e emissions and target achievement through CDP.

Energy Consumption and Green Energy

In order to achieve our ambitious emission reduction targets, we at ZF are focusing on the two main contributors for scope 1 & 2: greater energy efficiency and the switch to green power and energy.

By 2025, ZF will source
100
%
of its electricity from renewable energy sources.

This approach applies to all ZF locations worldwide: to production and administration facilities as well as to research centers. The goal is to reduce Scope 1 and Scope 2 emissions by 80 percent by 2030 compared to 2019. To achieve this, we are increasing the energy efficiency of ZF plants worldwide - by 20 percent in 10 years. Secondly, we will obtain 100 percent of our electricity from renewable sources.

Supply contracts with renewable energy providers will provide the German ZF plants with up to 210 gigawatt hours of green electricity each in the period from 2022 to 2025. The agreed purchase volume corresponds to the electricity consumption of 72,000 households. This reduces CO2 emissions by 80,000 tons per year.

This strong focus on green electricity is an excellent match for the company's technological leadership as a global manufacturer of gearboxes for wind turbines. Today, 25 percent of all wind turbines worldwide are already equipped with ZF transmissions. These turbines alone can supply up to 100 million households with renewable energy - and another million are added every month.

Sustainable and Circular Products and Operations

Our sustainability strategy goals are closely interlinked. For example, a functioning, sustainable, circular economy is an integral part of achieving our climate goals and decoupling resource consumption from growth. For us, the circular economy is a systematic approach in which we use fewer resources for longer and multiple times.

Increasing material efficiency and reducing volumes of waste ultimately lead to reduced raw material extraction and CO2e emissions. If a product can no longer be used, repairing, reuse, remanufacturing of the product and recycling of materials close the loop.

Circular Economy

The circular economy aims to keep valuable raw materials and resources in the economic cycle for as long as possible. Products are not simply thrown away after use (linear economy), but shared, reused, repaired, refurbished and recycled for as long as possible. This approach not only reduces resource consumption, emissions and waste volumes, but also lowers material costs.

While ZF is increasing its efforts in all areas of a circular economy, the Group has a long history of remanufacturing. Our aftermarket activities cover more than 250 product families supported at 25 remanufacturing locations in 15 countries. Products from Bielefeld (Germany), one of our leading remanufacturing locations, have already been certified in accordance with the cradle-to-cradle (C2C) standard.

Use of Recycled Materials Conserves Resources and Saves CO2

With raw materials increasing in scarcity, efficient use is becoming more and more crucial. At the same time, materials must conform not only to stringent quality and safety but also to environmental and social standards and regulations.

Another lever to CO2 reduction is to use recycled materials. We are already making an important contribution to resource conservation by constantly increasing the proportion of recycled materials in our products. For example, most of the aluminum housings we use are currently made of recycled aluminum. Its carbon footprint is only about a fifth of that of primary aluminum.

Extending the use phase by recycling is also an important lever for saving primary materials. In our more than 20 remanufacturing plants worldwide, we reprocess used parts on an industrial scale for a "second life" in the aftermarket – something we have actually been doing since 1963. Compared to a new part, remanufactured products save up to 90 percent in materials and energy.

ZF channels a high percentage of waste from production processes back into the external recycling processes. This mainly applies to scrap metal and metal chips, waste oil, paper and cardboard as well as wood and demolition waste. As a result of their material composition and design aspects, ZF products have a higher recycling rate.

To support the circular economy and close material loops, ZF set itself a waste reduction target: Locations ZF locations shall reduce waste for disposal relative to sales by 1% on an annual basis. Base year is 2019.

Sustainability in the Choice of Materials

One of the most important factors for the successful reduction of indirect emissions is the purchase of sustainably produced materials. Particularly important for ZF is steel. That is why we have concluded a long-term supply agreement with Swedish start-up H2 Green. Between 2026 and 2033, the Scandinavian company will supply ZF with 250,000 tons of environmentally friendly steel per year from its production facility in northern Sweden. This corresponds to about ten percent of ZF's current steel requirements. With this deal, ZF will save around 475,000 tons of CO2 per year.

The steel is produced in a fully integrated production process using end-to-end digitalization, electricity from renewable energy sources and green hydrogen instead of coal. In conventional steel production, iron ore is reduced by heating it together with coal. In the process, a chemical reaction takes place separating the oxygen from the iron, creating and releasing CO2. In the production process of H2 Green Steel, on the other hand, green hydrogen reacts with iron ore in a similar way to that with carbon. Instead of CO2, however, only water is produced as the main by-product.

Sustainable Products

Our products contribute to sustainability in several ways. We have a holistic understanding of sustainable mobility and the energy generation required for it. For instance, we offer products that reduce road traffic emissions - such as our solutions for electric mobility - while our wind power gearboxes contribute to the sustainable generation of energy.

Electric Mobility

Why we need electric mobility and which role plug-in hybrid drives play at the mobility of today and tomorrow. This and more information around electric cars and electrification is answered here.

Wind Power

ZF Wind Power stands for the highest quality at competitive cost of energy and customer proximity around the globe.
Sustainable, Successful Partnerships

One highly interesting project is the development partnership with Swedish OEM Polestar to produce the world's first completely climate-neutral vehicle. This car is expected to be ready for series production in 2030 and to have a zero-carbon footprint from raw materials manufacturing through production to the end of its useful life. This project is therefore about avoiding emissions over the entire vehicle life cycle and doing so without resorting to compensation measures. ZF is the first leading supplier group in the automotive industry to participate in the "Polestar 0 Project".

Sustainable Cooperation With Suppliers

ZF maintains a global network of approximately 60,000 suppliers for the procurement of necessary materials – from small family businesses to large corporations. ZF is committed to strengthening its sustainability-related activities within its supplier base.
For example, a supply chain sustainability team is continuously developing and implementing the decarbonization roadmap, which is in line with the Group's 2040 goal.

To achieve this goal, general expectations for CO2 reduction with a focus on sustainability issues were communicated at the digital Global Supplier Summit in November 2021. Individual information letters were also sent to each supplier by the end of 2021. ZF also continued the ZF Decarbonization Dialogues. The aim of this format is to share information and knowledge on the application of strategies, methods, and technological potential. The decarbonization dialogs are the starting point for various campaigns and concrete projects.

As a further measure to foster decarbonization, minimum sustainability requirements have been defined in new procurements, addressing issues such as secondary raw material content and use of green electricity. From August 2022, these will be part of every new sourcing in the production materials environment through the tender conditions.

Acting for climate and nature

Annual Report 2023: Sustainability

In the annual report, you will find important data and facts about sustainability. The ZF Sustainability Report is part of the annual report.

The sustainability report has been prepared in accordance with the GRI standards (Core option) and the TCFD standards.