2. Strategy
Arbonia’s climate strategy aims to reduce the company’s ecological footprint. We want to play an active role in reducing environmental impact and promote a more sustainable use of resources. We are committed to continuously optimising our production and supply chain in order to reduce greenhouse gases and minimise energy consumption. In this context, we are focusing on the use of energy-efficient technologies and renewable energies. Furthermore, we are striving to use more sustainable materials and promote the use of alternatives with a lower environmental impact. By promoting environmentally responsible conduct and providing training, we are making our employees more aware of the topic of climate protection and encouraging them to play an active role in implementing our climate strategy.
We will keep reviewing and improving our climate strategy on the basis of international standards and best practices. With transparent reporting and regular progress reviews, we will ensure that we achieve our targets and make a positive contribution to the fight against climate change.
The Arbonia Group’s efforts to decarbonise its business activities are based on the 1.5 degree target from the Paris Climate Agreement. The crucial factor in this regard is the CO2 reduction targets for our emissions from Scope 1 and Scope 2 in line with the Science Based Targets initiative (SBTi). In the reporting year, we made particular progress with regard to the recording of emissions from Scope 3 and also developed approaches for reducing these emissions.
When it comes to evaluating climate-related opportunities and risks, Arbonia distinguishes between a short-term (< 1 year), medium-term (2–5 years) and long-term (> 5 years) perspective. In the reporting year, possible opportunities and risks were identified within these timescales and analysed in two scenarios. The basic principles of this initial internal analysis are presented here. In line with the TCFD recommendations, the climate-related consequences for Arbonia fall into the following three categories:
Physical risks
Physical climate risks encompass direct consequences for companies as a result of climatic changes; for example, potential damage to buildings. These risks result from climate change effects such as drought, water shortage, heat, heavy rainfall and sea level rise. Some of these problems were previously referred to as natural hazards, but climate change is causing an increase in both extent and probability of occurrence. Potential physical risks were prioritised internally in the first analysis in 2023. These risks are to be looked at in more detail for the individual sites in the next few years.
Transitory risks
Transitory climate risks describe indirect effects for companies as a result of the successive decarbonisation of the national economy and arise from ambitious climate protection policies. Linked to this are factors such as tightening of emissions trading rules, stricter efficiency regulations, or changing market conditions, as well as technological progress.
Climate-related opportunities
The decarbonisation of the economy brings with it opportunities for company-specific growth. The same applies to the climatic changes that are expected in the coming decades. Competitive advantages may be achieved by changing the product portfolio, adopting a forward-looking approach to market positioning and optimising operational processes.
Within this context, Arbonia is pursuing the goal of generating 60 % of the net revenue of the Climate Division via low-emission, energy-efficient growth products by the 2026 financial year. In addition, the company is focusing on the topic of energy efficiency during the use phase as a further strategic growth area.
The characteristics of the three categories of climate-induced consequences described here are linked to scenario analyses. Our initial approach at Arbonia was to investigate two scenarios for global warming by the year 2100 (see graphic).
| | Scenario considered | |
| Category | 1.5° C – 1.8° C | > 3° C |
| | Selected potential risks and opportunities identified in the initial analysis: | |
Acute physical risks | Production interruptions and damage due to flooding | Production interruptions and damage due to flooding |
Chronic physical risks | – | Increased electricity costs for cooling and air conditioning due to increasing heat heat and more frequent heatwaves |
Opportunities due to long-term physical changes | Higher demand for air conditioning products due to increasing heat
and more frequent heatwaves | Higher demand for air conditioning products due to increasing heat
and more frequent heatwaves |
Transitory market risks | Impact of emission targets and target achievement on financial valuations and creditworthiness | – |
| Transitory political / legal risks | Increased costs for emissions accounting and fulfilment of other legal requirements and their tracking in the supply chain | – |
| Transitory market opportunities | Increased demand for Arbonia products due to the attractiveness of construction projects in which energy-efficient and low-emission products are used | – |
3. Risk management
The Arbonia Group has a centralised risk management system which is implemented in accordance with an institutionalised process. All potential and material risks are evaluated as part of this system. Key parameters for the evaluation include probability of occurrence, reputational damage and extent of loss. The Arbonia Group’s risk management process is repeated on an annual basis and the results are reported to the CFO and the Board of Directors.
The Arbonia Group’s risk catalogue (see also “Risk management”) encompasses a higher-level ESG scenario which takes climatic changes into consideration. In the current evaluation, this scenario is not assigned a high expectancy value at either Group or division level. As the Arbonia Group, we will differentiate this risk in the subsequent evaluations in order to establish a more direct link to individual business units for the evaluation participants.
In the reporting year, Arbonia launched an initiative in order to prepare for increased integration of climate-related risks into the group-wide risk management activities. A longlist with relevant physical and transitory aspects was produced in a pilot project, based on the recognised scenarios of the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA). As a first step, this list was qualitatively assessed by Risk Management and the Corporate Communications & Investor Relations department, with the project team developing concrete risk scenarios with defined timescales for individual aspects. For an extract of the opportunities and risks under consideration, see “2. Strategy”.
As an initial step, these analyses relate to the Arbonia Group’s largest sites. Potential consequences for the entire Group are derived from trend descriptions, forecast ranges and financial calculations – on this basis, proposals can be developed for managing the risks under consideration. The aim is to establish a standardised process that uses the longlist as a basis to identify and evaluate risks at regular intervals and transfer them to the central risk management system.
The next step will involve defining suitable measures for mitigation. In the future, this will incorporate the upstream and downstream parts of the value-added chain in addition to Arbonia’s own production facilities.
4. Key figures and targets
On the basis of the SBTi guidelines, we have determined a path for reducing our own CO2 emissions (Scope 1 and 2) and defined corresponding targets and measures. We are aiming for an average annual absolute reduction of 4.2 % by the year 2035 (reference year 2020). A certified energy and environmental management system reviews the target achievement and the effectiveness of the implemented measures.
The optimisation of energy consumption – and thus the improvement of the CO2 balance sheet – has long since become a task of all companies, departments and areas of the Arbonia Group. All targets in the area of energy efficiency are defined annually and advanced with corresponding measures.
In the reporting year, Arbonia slightly increased the share of electricity that it produces itself from 12.9 % in the previous year to 14.6 % by installing further PV systems on the roofs of the production plants. A further success was the reduction in heating oil consumption for heat production by 32.0 %. Greenhouse gas emissions from Scope 1 and 2 dropped by 7.6 % overall; however, the greenhouse gas intensity (greenhouse gas emissions in kgCO2e / CHF net revenue) increased
by 2.7 % due to a drop in revenue.
Complete monitoring of the key figures in energy management is the most important instrument for Arbonia to continue to pursue the strategic targets relating to energy efficiency and CO2 emissions. This also makes it possible to measure the share of renewable energy.
