Climate, energy and emissions
Energy consumption and greenhouse gas (GHG) emissions are critical topics for GF due to its business in the machining and manufacturing sectors. As a global industrial company, GF believes it is essential to continually measure, manage and reduce the GHG emissions associated with its operations and value chain.
GF’s GHG emissions per scope (2021)
In % of total emissions
GF has assessed the environmental impacts of its operations, and it found that its indirect GHG emissions (scope 3) are among the largest areas of its ecological footprint.14 Both GF and its stakeholders recognize that solid environmental and GHG emission management is integral for the company to create new business opportunities. To reduce GHG emissions, GF is taking steps to improve energy efficiency, promote the use of renewable energy and evaluate measures to generate its own renewable energy on-site. In 2021, for the first time, GF calculated its scope 3 GHG emissions according to the Greenhouse Gas Protocol Corporate Standard. These emissions result from activities not directly controlled by GF but which GF indirectly impacts through its value chain. The assessment concluded that scope 3 emissions represent the majority (86%) of GF’s total GHG emissions.15
GF’s Sustainability Framework 2025 outlines its plan to reduce the climate impacts of its operations and value chain. This ambition is highlighted by GF’s specific goal to reduce its CO2e emissions in absolute terms by 21% (scope 1 and 2 emissions) compared to 2019. GF has aligned this goal with the Paris Agreement’s aim to limit global warming to 1.5°C above preindustrial levels (science-based target) and thereby has increased its previous commitment from 12.5% to 21%.
In 2021, GF also developed a scope 3 target in line with the protocols of the Science Based Targets initiative (SBTi), that will be officially approved at the beginning of 2022. The company will submit both of its targets (one for scope 1 and 2, and the other for scope 3) to the SBTi in March 2022.
To achieve the scope 3 emissions target, GF will mainly focus on the following measures:
- encourage and support suppliers to commit to CO2e reduction targets
- transition raw materials to low-carbon alternatives such as bio-based (non-food) materials and low-carbon aluminum and magnesium produced with renewable energy
- increase the usage of recycled materials in GF’s products
- improve the energy efficiency of GF Machining Solutions’ equipment and machines
For GF to achieve these ambitious targets, it must enact advanced energy efficiency measures combined with a renewable energy strategy. Therefore, GF’s Corporate Sustainability Team, working closely with the divisions and facilities, has developed a detailed roadmap to achieve the science-based target (SBT) for scope 1, 2 and 3 emissions. The roadmap will be approved by the Corporate Sustainability Council and later by the Sustainability Committee at the Board level in February 2022.
In 2021, GF also assessed the potential climate-related impacts between now and 2050 as part of its risk management strategy. The strategy is aligned with the Task Force on Climate-related Financial Disclosures (TCFD). As a result, GF defined material physical and transition risks and opportunities as a foundation for future risk management, in addition to various adaptation and mitigation activities.
Environmental management systems (EMSs) promote the efficient use of resources and enable facilities to take immediate action if consumption data show significant deviations. EMSs also help facility operators to develop a systematic approach to increasing energy efficiency and reducing energy consumption. At the end of 2021, 91% of GF’s production facilities had EMSs in place and were certified to ISO 14001, an internationally recognized standard for environmental management systems. Eight facilities from GF Piping Systems and GF Casting Solutions were certified to the energy management standard ISO 50001.16 These eight sites account for 45% of GF’s total energy consumption.
In addition, 85% of GF production facilities had an occupational health and safety management system in place and certified to ISO 45001.
Moreover, 95% of GF’s production facilities and a majority of sales companies have quality management systems certified to ISO 9001 and IATF (ISO TS) 16949.
Climate change score from CDP
In the 2021 CDP reporting cycle, GF retained its climate change score of A– (Leadership level).
In the year under review, with an increase of the order intake by 28% relative to 2020, GF’s net energy consumption also increased by 20% to 3.6 million gigajoules (GJ), an increase of 2% compared to 2019 (before COVID-19). In 2020, GF’s production volume decreased due to COVID-19, and therefore its electricity consumption was also lower compared to 2021. In the current reporting period, GF’s overall increase in energy consumption was mainly due to an 12% rise in electricity use and two additional production sites being included in the reporting scope in 2021. Compared to 2019 (thus, before COVID-19), GF’s electricity consumption in 2021 actually decreased by 3.5% due to various factors, including its divestment of an iron plant at the end of 2019.
To reduce its overall energy consumption, GF initiated several measures at its sites in 2021. These efforts also included energy-saving measures, such as LED lighting installations, as part of GF’s green electricity fund created in Switzerland in 2020. The fund aims to insource the amount spent on renewable electricity certificates and incentivize energy-saving measures. GF’s facilities pay an internal charge and can submit grant proposals to the fund to subsidize energy-efficiency initiatives and the self-generation of renewable energy. For example, a GF Piping Systems site in Schaffhausen (Switzerland) replaced the old lighting in its production area with highly efficient LED spotlights and a control system in 2021. The new, highly efficient LED spotlights increase illuminance by about 50% while using two-thirds less energy than the previous system. Moreover, the control system ensures that the lighting is dimmed or switched off depending on the amount of daylight. During the project, about 2’000 fluorescent tubes were replaced with new LED spotlights.
A GF Piping Systems site in Sichuan (China) achieved energy savings by replacing inefficient water pumps in its production hall with new energy-saving water pumps, which reduced the site’s energy consumption by 3% in 2021 compared to the previous year. GF Piping Systems initiated several energy-efficiency programs at its sites, notably in Germany and the US. Those programs include investing in more efficient cooling systems, replacing old injection molding machines with more efficient units and using cooling water treatment technology to reduce waste heat. These programs are a continuation of efforts in the previous year, such as the one in Malaysia that has since led to measurable progress in terms of improving energy efficiency and reducing CO2 emissions.
Additionally, GF Casting Solutions site in Suzhou (China), relocated a large furnace to reduce the energy consumption of its entire melting process. By optimizing the shop floor layout, energy consumption for the entire melting process was reduced.
Composition of energy sources
In addition to the amount of energy GF consumes, the composition of its energy sources is equally relevant to its environmental footprint.
Energy sources 2021
Renewable energy (incl. certified green electricity)
Renewable energy sources
Renewables represented 24% of GF’s total energy consumption in 2021 (up from 17% in 2020). The vast majority (96%) was due to the purchase of 835’095 GJ of renewable electricity, primarily from hydro power and wind turbines. The remainder of the renewable energy was self-generated hydro and solar power as well as purchased renewable district heat.17
To increase the share of renewables in GF’s energy mix, GF Casting Solutions purchased green electricity for its facilities in Austria and for one site in China. Currently, eight GF facilities generate their own solar or hydro power. In total, they generated 14’700 GJ of renewable electricity in 2021. A GF Piping Systems facility in Irvine (USA) installed a rooftop solar system that generated more than 500 megawatt hours (MWh) in its first year and covered 35% of the site’s total electricity consumption in 2021.
Over the next five years, GF will increasingly replace fossil-fuel energy with energy from renewable sources. GF’s roadmap to meet the science-based target (SBT) within this strategy period also includes plans to increase the company’s purchase and to generate its own renewable electricity, as well as launch new energy-saving measures and substitute internal combustion engine vehicles with electric models. In 2021, GF conducted a feasibility study on the profitability of PV installations for Switzerland, with the aim of a global roll-out in the years to come.
Total CO2e emissions (scope 1, 2 and 3)
In 1’000 tonnes
Scope 3 emission sources 2021
In 1’000 tonnes CO2e
Total CO2e emissions (scope 1, 2 and 3) increased by 5% in 2021 compared to 2019. GF distinguishes between its GHG emission sources to align with the international community’s efforts to meet the goals of the Paris Agreement.
The majority (86%) of GF’s total GHG emissions occur in GF’s value chain and are classified as scope 3 emissions. Previously, GF’s scope 3 emissions calculations only included business travel. In the year under review, for the first time, GF calculated its scope 3 emissions in all 15 categories in accordance with the GHG Protocol. Four of these categories were deemed irrelevant, while two of the remaining 11 categories were identified as material in the 2021 emission inventory as they contribute to 90% of GF’s scope 3 emissions.21 As a result, GF focuses in the future on purchased goods and services (category 119) and use of sold products (category 11).
- Purchased good and services (Category 1)
This category includes all upstream emissions from the production of products either purchased or acquired by GF. Products include both goods (tangible products) and services (intangible products, considered immaterial). In order to manufacture and assemble their products, GF’s three divisions purchase a variety of materials (including plastics, aluminum and magnesium) that are associated with elevated amounts of GHG emissions during their manufacturing processes. This category accounts for 69% of total scope 3 emissions in 2021.
- Use of sold products (Category 11)
This category includes emissions from the use of goods and services sold by GF Machining Solutions. These machines consume energy during their operation, creating emissions during their use phase. Therefore, GF aims to provide energy-efficient machines to support its customers in achieving their science-based targets. This category accounts for 21% of total scope 3 emissions in 2021. Due to the business of GF Piping Systems and GF Casting Solutions category 11 is of less importance and therefore excluded.
The remaining 14% consists of scope 1 emissions resulting from the consumption of fossil fuels at GF’s operations (4%) and scope 2 emissions resulting from operations electricity consumption (10%).22, 23
Target achievement: CO2e emissions
As previously described in this chapter, GF’s Sustainability Framework 2025 contains the target to reduce its scope 1 and 2 CO2e emissions in absolute terms by 21% from 2021 to 2025.
CO2e emissions (scope 1 and 2)
In 1’000 tonnes
GF is on track with its reduction target – based on the 1.5°C global warming target of the SBTi – for scope 1 and 2 emissions in 2021. Total scope 1 and 2 emissions decreased by 17% compared to the 2019 baseline. In the year under review, scope 1 and 2 emissions decreased by 4% compared to 2020.
Scope 1 emissions increased by 9% compared to the 2019 baseline. The increase in scope 1 emissions is mainly due to the expansion of reporting on fuel consumption for company cars. In 2021, all GF sales companies reported their fuel consumption for company cars for the first time.
In addition to saving energy in its production sites, GF is also focused on reducing its scope 1 emissions by transforming its vehicle fleet to non-fossil fuel power trains. Therefore, the GF Corporate Policy on E-mobility came into effect in 2021. The policy is GF’s framework for transitioning its global vehicle fleet from traditional fossil fuel combustion engines to electric and hybrid fuel cell power trains and any sustainable technologies that emerge in the future. For example, in December 2021, a GF Piping Systems site in Dautphetal (Germany) began converting its company cars by replacing diesel vehicles with hybrid models. Overall, GF had 25 e-cars (including full electric vehicles and hybrid cars) across 13 sites in 2021. In the coming years, each site will switch to e-cars based on the replacement cycle of their fleet contracts.
Scope 2 emissions decreased by 28% compared to the 2019 baseline. In 2021, the company purchased renewable electricity for GF Casting Solutions sites in Austria and one in China, GF Piping Systems and GF Machining Solutions sites in Switzerland, and for one GF Piping Systems site in Turkey. These purchases made a positive contribution to reducing GF’s overall scope 2 emissions. In addition, GF benefitted from an update of the emission factors, reflecting the trend towards renewable energy in the majority of countries where it operates.