The Krones Group has just released its ESG performance reporting for the year 2024. “For us, sustainability and our associated targets are – regardless of external factors and developments –a cornerstone of our business strategy,” says Krones CEO Christoph Klenk.
“We firmly believe that our consistent approach to sustainability will help us tap into new opportunities for growth. We work continuously to improve the efficiency, longevity, and eco-friendliness of our products and services. And we are increasing the sustainability of our own operations and value creation processes in stages.”
The current non-financial report, which is once again integrated into the company’s annual report, includes twice as many metrics as last year’s. As a result, it has also doubled in length. The company cites its voluntary application of the European Sustainability Reporting Standards (ESRS) as the reason for the increase.
“Although the EU’s Corporate Sustainability Reporting Directive (CSRD) has not yet been implemented into German law, we decided to base our non-financial reporting on it now – in part because the additional metrics are an important tool enabling us to better assess the effectiveness of measures we have taken so far within our sustainability strategy and make any necessary improvements,” says Martina Birk, head of sustainability at Krones.
Lower emissions despite growth
The result is a document spanning more than 100 pages within the company’s annual report, which provides a transparent and nuanced picture of Krones’ sustainability performance. In particular, implementation of the company’s climate strategy has continued its positive trend from the previous years.
Measured against the base year 2019, the group’s operational greenhouse gas emissions (Scope 1 and 2) are down 51.7 percent. Emissions from products sold (Scope 3 downstream) decreased by 18.1 percent in the same period – despite a renewed increase in order intake.
As such, Krones has already achieved two-thirds of its medium-term target for both categories. These targets are, specifically, to reduce Scope 1 and 2 emissions by 80 percent by 2030 and Scope 3 downstream emissions by 30 percent in the same time frame. The company intends to achieve net zero emissions for its entire value chain by 2040. This emissions target and the associated strategy were validated and confirmed by the Science Based Targets initiative (SBTi) last year.
One of the new metrics that Krones reported for the first time in 2024 is the water consumption of its products sold. As part of the company’s effort in 2024 to tighten its own sustainability targets, the company set a new goal for water consumption: Using 2022 as a basis, the company intends to shrink the water footprint of the products it sells by 20 percent by 2030.
Krones is already halfway there, having reduced its downstream water footprint by ten percent. “The question of how beverages and other consumer goods can be produced using less water is gaining importance among our customers,” says Martina Birk. “And so, we’re investing a great deal of innovation into further developing our water- and media-efficient technologies.”
Social metrics met and exceeded targets
Krones achieved its best ESG performance in the social factors: Workplace accidents relative to hours worked have declined by 37.2 percent since 2022. That means Krones has already met and exceeded its 30 percent reduction target for 2030.
When it comes to diversity and compliance, Krones is also on the home straight: The percentage of women in management roles is up to 16.5 percent from 2020. The company aims to reach 20 percent representation of women in management by 2030. The share of group companies that have undergone compliance risk analyses is currently at 94.8 percent (2030 target: 100 %).
However, there are some areas where the Krones Group is not yet meeting its own expectations, as sustainability manager Peter Steger explains: “In light of our increasing production output, reducing our own water consumption and hazardous waste in our plants is proving increasingly challenging. For that reason, our analyses and efforts to derive optimised measures will focus on these two metrics.”
Emissions in the upstream supply chain remain a challenge
The same is true for greenhouse gas emissions from upstream processes (Scope 3 upstream), which have increased by 17.5 percent from 2019. “In order to achieve our medium and long-term goals in this regard, we are revising our strategy for sustainable procurement,” says Martina Birk.
“When it comes to our most important materials – stainless steel and steel – the market for low-emissions products still needs to develop more. So, we are scaling up our efforts to use less material and increase recycling.”
“This is especially important as we look at the level of business growth the group expects to achieve in the years ahead. One of our biggest tasks now is to permanently decouple our progress towards ESG goals – particularly those having to do with the environment – from our financial growth,” says Martina Birk.
“We’ve already managed that when it comes to centralised metrics like operational emissions or the energy and water consumption of our products. Now we have to expand these accomplishments to the other environmental metrics. We firmly believe that rising production and order volume can be reconciled with an increasingly low-emission, low-consumption supply chain as well.”
Link to the annual report:
https://www.krones.com/en/company/investor-relations/krones-group-annual-report-2024.php