Sustainability Report 2022
Our contribution to the C eduction and energy effi ciency Technical education Environment, resource and material effi ciency People at Festo Ethics and governance 4 Company portrait 6 Preface 1 8 Blue World 12 Assist people at work 14 Improve health 16 Lifelong learning 20 Industrial transformation 24 Ecological innovations 28 Resilience in value chains 2 32 Strategy and management 34 Sustainability management 36 Sustainability strategy 38 Networks and committee work 3 40 CO2 reduction and energy efficiency 42 Corporate carbon footprint (CCF) 46 Our locations 50 Purchased goods and services (Scope 3.1) 51 Transport and distribution (Scope 3.4) 52 Use of products sold (Scope 3.11) 4 56 Technical education 58 Digital Learning 60 Learning through competitions 64 Training for sustainable occupations 66 Bionics and STEM offerings for secondary education 5 68 Environment, resource and material efficiency 70 Our locations 75 Packaging 76 Use of materials in our products 6 82 People at Festo 84 Employee development 88 Diversity 94 Vocational training 96 Further training 100 Safety at work 102 Holistic health promotion 7 104 Ethics and governance 106 Compliance 109 Taxes 110 Human rights in the supply chain 118 Business continuity managament (BCM) 8 120 GRI index 9 130 Report profile Contents 1 3 6 5 4 7 2
TOTAL SALES 2022 RESEARCH AND DEVELOPMENT SERVICES EMPLOYEES WORLDWIDE EUR 3.81 billion 48.307 t 20.817 + 13,4 % + 60 Employees -3.599 t CO2equivalents GRI 2-1, GRI 2-2, GRI 201-1 CO2 COMPANIES in around 60 countries PRODUCTION SITES 12 Global Production Centres DISTRIBUTION CENTRES 4 Regional Service Centres BRANCHES over 250 worldwide SERVICE WORLDWIDE in 176 countries CO2 EMISSIONS: (SCOPE 1/2) EUR 264 million + EUR 25 million Company portrait Festo at a glance As a family-owned company that operates around the world, we know how important roots are in this process. That is why we are not just globally represented, but have local companies with their own local identity. The result is a global network of around 20,800 employees in around 60 countries with over 250 branches. Our products and services are available in 176 countries on this earth. In the 2022 financial year, the Festo Group generated sales of approximately EUR 3.81 billion, of which around 7% is invested annually in research and development. The share of training and development measures amounts to 1.5% of sales. GRI 2-1 The Festo Group is divided into the Automation and Didactic business divisions. Important industry segments are automotive, food and packaging, electronics and assembly, biotech, pharma and cosmetics, chemicals and water, as well as – with growing importance – medical technology and laboratory automation (life tech), which have been in focus since the beginning of the pandemic. Festo also supports all automated process steps in the field of electromobility, from battery production to the production of electric vehicles. GRI 2-1 The Automation business division The Automation division offers a wide range of solutions for factory and process automation: the business purpose comprises the development, manufacture and sale of pneumatic and electrical components, technical systems and services as well as the transfer of knowledge for automation tasks such as control, regulation, positioning and handling of machines, apparatus and technical processes. In terms of customer solutions, the increasing demand for energy and resource efficiency and humanisation of work is becoming a competitive factor in all industry segments. GRI 2-6 The Didactic business division The group’s activities in the Didactic division stand for technical basic and further training and, for more than five decades, have included the continuous development of professional, industry-oriented learning products and services relating to automation technology. The educational offerings focus on pneumatics, hydraulics, electronics and mechatronics as well as sensor technology, robotics, CNC and fieldbus technology. Festo Didactic is a system partner of companies as well as private and public educational institutions to make and keep people fit for work through education and training and to allow them to participate in economic development. GRI 2-6 At Festo, we pursue the goal of making tomorrow’s working world more productive, simpler and more sustainable on a daily basis. That is why we are developing solutions for automation and technical education that prepare people, companies and organisations for the demands of the future. GRI 2-1: Total sales by region Total sales by region 2020 2021 2022 Europe/Middle East 62% 60% 57% Asia 22% 24% 25% The Americas 16% 16% 18% 4 5 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022
Dear Readers, The world is changing. Business and society alike face existential challenges. The United Nations expects that there will be around 9.7 billion people on the planet by 2050. All these people need food, medical care and training. At the same time, we are already seeing the effects of ongoing climate change and growing resource conflicts. At Festo, we see sustainability as an integral part of our corporate strategy. We are convinced that economic and environmental aspects have to be in harmony in order to secure the long-term prosperity of each and every one of us and to meet the challenges. As a responsible family-run company, the social dimension of sustainability is of great importance to us. As a matter of course, we also meet our corporate due diligence to safeguard human rights in our value chain. As we further develop our products and services, we constantly ask ourselves where automation technology can be an enabler for more sustainability. The focus is on simplifying work, providing medical care and lifelong learning. As a cross-technology automation company and a leading global provider in the field of technical education, we want to make an essential contribution here. Our products and services can be used in a way that is open to new technology – for example, in battery GRI 2-1, GRI 2-11, GRI 2-23 production, in hydrogen production and in the manufacture of alternative fuels. In doing so, we are supporting structural change as part of the industrial transformation towards a circular economy. Sustainability begins with our product development. For many years now, we have been working on topics such as lightweight construction in order to further reduce the use of materials in our products. The design of our value chains also aims to reduce CO2 emissions. By increasing the localisation of production activities and the further expansion of renewable energies at our plants, we want to continuously reduce our CO2 consumption. As of this year, all of our buildings in Germany as well as our production and logistics sites around the world have been CO2 neutral in terms of Scope 1 and 2. All other locations around the world will follow by 2026 at the latest. I hope you enjoy reading the Sustainability Report 2022. Dr Oliver D. Jung Chairman of the Management Board at Festo SE & Co. KG Dr Oliver D. Jung Chairman of the Management Board at Festo SE & Co. KG 6 7 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Blue World How to treat our blue planet presents humanity with unprecedented challenges. The ability to securely supply and support the world’s population in the face of demographic change seems to be in insoluble conflict with the protection of our natural resources. Festo deals with these conflicting priorities with its expertise in automation technology and technical education and anchors them in the ‘Blue World’. Automation and technical education with Festo: enabler for sustainable solutions to tackle humanity’s greatest challenges. 8 9 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Pneumatics Electrics Process automation Digitalisation Artificial intelligence Biological transformation Automation and technical education Assist people at work Human-machine collaboration Improve health Technologies for life sciences Lifelong learning Technical education Industrial transformation Driving structural change Ecological innovations Save resources, protect nature Resilience in value chains De-globalisation, safeguard supplychains Safe supply for the population, support for demographic change CO2 neutral production, minimised use of resources Festo has anchored its solution-finding skills in its Blue World approach: With the technology fields of pneumatics, electrical automation, process automation, digitisation and artificial intelligence, Festo enables the transformation of industrial production into an efficient and more climate-friendly way of manufacturing, such as in the field of biotechnology. With our human-centred approaches, we make life easier for people in the workplace, support healthcare with our LifeTech technologies and enable people to learn and use new technologies efficiently with our learning systems. With our resource-conserving approaches, we use automation technology to support structural change in certain sectors, such as the automotive industry and show how automation technology can better protect our most important resources such as water, earth and air. This also includes increasing localisation in order to shorten transport routes and value chains and thus minimise emissions. Our blue planet presents us at Festo with major challenges. How can we help to solve these challenges with automation technology and technical education? 10 11 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Assist people at work On the one hand, the focus is on intelligent and collaborative robots that can work hand in hand with humans and provide relief, particularly in a work environment with difficult and tiring tasks. On the other hand, digitisation offers great potential for complementing people’s skills and increasing productivity. Artificial intelligence software tools and methods can carry out complex analyses of large amounts of data and generate information that helps people make decisions. Great attention is paid to the ease of use and the intuitive design of the technical assistants. The Festo Cobot With the world’s first pneumatic cobot, Festo is ushering in a new era of human-robot collaboration. The pneumatic helper is the innovative solution for tasks in production – wherever a third hand is helpful or processes need to be automated, whether for feeding parts or performing routine movements. There is no other technology where human-robot collaboration is as sensitive as it is with flexible pneumatics. The Festo Cobot is particularly economical for small and medium-sized companies: firstly, because only little investment is necessary, and secondly because of its flexible application scenarios: even small batch sizes and work steps can now be processed automatically. Thanks to its intuitive and simple commissioning and programming, the training time is also fast and efficient. What systems and solutions does Festo offer that make the workplace more ergonomic and relieve people of difficult and strenuous tasks, both physically and mentally? The pneumatic cobot enables safe collaboration without a safety fence. 12 13 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Festo LifeTech Festo supplies components for the automation of analytical applications for laboratory facilities. The offer includes electric and pneumatic drives as well as controllers, dosing systems and grippers, equipped with sensors for measuring and checking. Automated handling speeds up the work with samples and fluids and also offers safe handling of the test material. This reduces the causes of errors, for example by preventing mix-ups. In addition, it guarantees sterile and consistent analysis conditions even with higher test volumes and delivers fast and accurate results. The automatic detection, opening and closing of sample containers, including the addition, dosing and pipetting of fluids, guarantees efficiency, productivity and time savings for laboratories. Festo also offers expertise and components for miniaturised laboratory systems designed for mobile use. Fast and precise diagnostics are required. Under the term ‘LifeTech’, Festo offers systems and components for medical technology and laboratory automation. Thanks to decades of experience and innovative strength in the automation of industrial manufacturing processes, a high level of efficiency and productivity as well as maximum reliability are achieved in these areas. Population growth, demographic change and pandemics are placing ever greater demands on healthcare and preventive health measures. How can technological innovations in automation technology speed up medical technology and laboratory diagnostics while ensuring high quality and safety standards? From standard market products to customised subsystems: Festo LifeTech offers everything from a single source for medical technology and laboratory diagnostics. Improve health 14 15 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Lifelong learning How do we enable people to master the new technologies? After all, productivity and competitiveness cannot be maintained and increased by modern, high-quality automation solutions alone. Rapid technological change means that companies need to continuously train their employees and develop their skills in order to maintain their productivity over the long term. Employees themselves ensure their employability by continuously acquiring the most sought-after skills through on- and off-the-job training. Driven by innovations and changing societal needs, completely new job profiles are constantly being created and existing jobs are being transformed. As the world’s leading provider in the field of technical education, Festo is a global partner for educational institutions, governments, public institutions and companies. 16 17 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Festo Learning Experience (Festo LX) The Festo LX digital learning portal offers a holistic approach to technical basic and further training. We pursue a blended learning approach that combines theoretical knowledge with practical exercises. Festo LX provides the right learning content for the learning systems from Festo Didactic. Knowledge can be learnt independently and tested on the physical equipment so that it can be used in a targeted manner in later day-to-day work. Thanks to the large number of learning formats, learning is motivating and varied. Festo LX enables digital learning that is as individual as people themselves. Digitisation not only changes the required skills taught in technical basic and further training, but also how these are learned. 18 19 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Festo also consistently relies on industrial intelligence and AI at its own plants. The findings from these applications are incorporated into customer projects in a targeted manner. Entire branches of industry and sectors are undergoing profound change. With Industry 4.0, production is increasingly interlinked with state-ofthe-art information and communication technology. How will we manage to bring about this change in our machine and plant control systems? Industrial transformation 20 21 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
- This structural change is particularly evident in the automotive industry. Combustion drives are transforming into regenerative drive systems with massive effects on production environments, processes and supply chains. Intelligent machines independently coordinate increasingly complex manufacturing processes and generate data that is converted into information using artificial intelligence in order to identify specific areas where there is potential for optimisation. This improves quality and reduces the use of resources. When it comes to battery cell production for electromobility, Festo provides the technology to manufacture high-quality batteries reliably and cost-consciously. This includes the automation of processes from the preparation of raw materials and the fully automated production of battery cells to transport and assembly systems for precisely assembling battery parts. Festo Automation Experience (Festo AX) With Festo AX Solutions, Festo uses artificial intelligence to offer algorithms that make it possible to record status data of components in order to predict their potential failure – including during recycling. A wide variety of components are moved here. Adaptive gripping with corresponding algorithms and robot solutions enables the efficient and fast recycling of individual materials. 22 23 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
During their natural photosynthesis outdoors, algae bind ten times more CO2 than terrestrial plants. With the right technology, their efficiency can be increased a hundredfold. Ecological innovations Climate and resource protec- tion are becoming the most urgent task. How do we achieve energy savings and the reduction of CO2 emissions? How can we reduce our material consumption, recycle more and find alternative materials? It’s all about opening up new solution areas for automation and the transformation towards a circular economy. Economists have been predicting the end of linear growth for some time now. Moving towards a closed circular economy is the next major goal with new growth potential. Here, too, nature is the great role model for us, because in nature there is no waste and no wastage. The inclusion of biology as a field of action for automation is particularly promising for Festo. In this way, the smallest factory of the future will be located in a biological cell. Experiments with algae, seen as little climate saviours, are already producing extremely promising results today. 24 25 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
1 2 3 4 5 Festo BionicCellFactory The BionicCellFactory is a universal model factory. It depicts the automation of the biological transformation towards the circular economy. The combination of expertise in the biosciences, sensor technology and innovative automation technology offers new growth opportunities for pioneering biotechnology, which at the same time relieves the strain on our natural environment. With automation technology from Festo, biomass can be produced on a large scale, depending on the application requirements for the chemical, food and pharmaceutical industries. This process consists of five modules, from the optimised cultivation of the algae cells with continuous monitoring and analysis through to harvesting and the further processing and refinement of the various components. We are further expanding our portfolio in the field of biotechnology: we ensure stable and precise process control with maximum productivity. This includes optimised fumigation and feeding strategies, control algorithms, soft sensors for real-time biomass determination, and system concepts for bio-based production processes. We will also support plant operators with remote diagnostics, maintenance and control as part of cloud solutions. Holistic process: 1. CO2 collection: binding of CO2 from the ambient air, 2. Analysis: monitoring cells using quantum sensors and artificial intelligence, 3. Cultivation: automated photosynthesis of biomass, 4. Harvest: harvesting of cells using a centrifuge, 5. Enzymatic transformation: gentle splitting of cell components 26 27 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Resilience in value chains Long supply chains and a dependence on singular raw material sources bring risks in times of pandemics, warfare or high energy prices. How can we better safeguard globalised supply chains and find a more environmentally friendly way to deal with our environment? In addition to the manufacture of the products, logistics are an important competitive factor, as goods need to reach our customers quickly and safely, while causing as little environmental impact as possible. Festo relies on a local-for-local strategy. Thanks to a decentralised production network, local markets – with their local market needs – can be supplied more quickly and reliably thanks to short transport routes. At Festo, a CO2 reduced supply chain begins with the development of new products and the question: What risks can already be taken into account during the design phase of the products in order to support product development and market entry? The level of material stocks, risks of individual suppliers defaulting and selected delivery routes follow this consideration. Our selected means of transport are as CO2 reduced as possible, while the digitisation of the supply chain ensures early detection of disruptions and their elimination. Festo supply chain 28 29 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
A secure supply for the population, demographic change CO2 neutral production, circular economy Our goal: the transformation to a circular economy Today’s challenges call for innovation-friendly and broad-based partnerships. We see the next development boost for industrial production in the shift towards a circular economy. Together with our customers and partners, we want to drive this transformation forward. Innovations are the key to greater sustainability. 30 31 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Corporate Responsibility 32 Christian Österle is Head of Corporate Communication and Sustainability and is thus globally responsible for communication, design, the brand name, history and sustainability at Festo. He is responsible for the ongoing development and monitoring of the implementation of the sustainability strategy at Festo. Sustainable decisions require a holistic view of ecological, economic and social aspects. Sustainability is therefore an integral part of Festo’s corporate strategy. Christian Österle, Head of Corporate Communication and Sustainability at Festo 33 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Sustainability management The United Nations (UN) has formulated 17 Sustainable Development Goals (SDGs) at the economic, social and environmental levels. For Festo, a strategy in line with these sustainability goals, systematic sustainability management and transparency are key elements on the way to achieving this. GRI 3-3 Sustainability is firmly anchored in our corporate strategy. The Management Board of Festo SE & Co. KG is committed to this. From left to right: Dr Jaroslav Patka, Frank Notz, Gerhard Borho, Dr Oliver D. Jung, Dr Ansgar Kriwet. Frame of reference for our sustainability management There were no significant changes to the organisation of Festo and the supply chain in the reporting period. No acquisitions were made in 2022. GRI 2-6 As part of our ‘Local for Local’ approach, we will expand our international production capacities in India, Mexico and Turkey. We will also include these locations in our sustainability management. GRI 203-1 Basic information about Festo for 2022 can be found in the company portrait on pages 4 and 5. More detailed information about our business areas is available on our website www.festo.com. Sustainability management Thinking in terms of generations and responsible, long-term business practices are deeply rooted in the family-run company Festo. Essential elements of our sustainability strategy are therefore firmly anchored in our corporate strategy. This covers the following five directions: – Competitiveness – Growth – Innovation – Culture – Sustainability GRI 2-6, GRI 2-9 In the future, the following three sustainability topics from the corporate strategy will be managed and promoted at management board level: – Reduction of the carbon footprint – Digital education – Capability shift GRI 2-6, GRI 2-9 These measures are subject to a quarterly assessment by the Management Board, are supported by senior executives and follow a project organisation. The other topics of the sustainability strategy are evaluated every six months and further developed with the responsible areas. This is carried out under the responsibility of the Corporate Responsibility (CR) department, whose responsibilities also include sustainability reporting. GRI 2-6, GRI 2-9 Identification of key issues The interests of both internal and external stakeholders were taken into account in the identification of topics. There are two groups within the external and internal stakeholders. ‘Formative stakeholders’ have concrete expectations of Festo as a company and also have a direct influence on its business activities. In addition, there are ‘other stakeholders’ whose interests are taken into account but whose influence is considered to be rather limited. Specifically, these two categories are as follows: Formative stakeholders – Shareholders – Management Board – Customers and their customers – Employees Other stakeholders – Suppliers – Local population – Science – Public – Non-governmental organisations (NGOs) – State – Supervisory institutions GRI 2-26, GRI 2-27, GRI 2-29 The diagram on the next page shows the key topics and areas of action for Festo in the field of sustainability. GRI 3-2 When deriving and updating the key topics and areas of activity, we will in future be guided by the requirements of the European Corporate Sustainability Reporting Directive (CSRD). GRI 3-1, GRI 3-2 34 35 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
In March 2020, the Management Board of Festo SE & Co. KG adopted the sustainability strategy, which has since been regularly updated. In 2023, the sustainability strategy and the corporate strategy will be even more closely integrated. An important decision in 2022 was to bring together the topics of energy efficiency and climate protection across the entire supply chain into a field of action that is now managed holistically. This has led to a consolidation of the sustainability strategy from six to five action areas. CO2 reduction and energy efficiency Chapter 3 This large, restructured area of activity is the focus of our sustainability efforts. On the basis of the corporate carbon footprint (CCF) calculated for the first time in 2021 in accordance with the GHG Protocol, we intend to evaluate the options for a successful participation in the Science Based Target initiative (SBTi) in 2023. The high calculated emissions from the use of our products at the customer’s site represent a major challenge for us. Scopes 1 and 2 and 3.8: We will continue to invest in new photovoltaic systems and energy efficiency measures at our locations in 2023. As a result of these measures, we expect an additional 2,500 MWh per year of our own renewable power generation and annual energy savings of around 2,500 MWh. In addition to our production network, these measures will also apply to Festo’s sales companies. These companies will be included in primary data collection on energy consumption and CO2 emissions for the first time in 2023. This creates the conditions for CO2 neutrality for the entire Festo Group by 2026 at the latest. Scope 3.1 and 3.4: In terms of the materials we use in 2023, we will continue to focus on improving the quality of data on our CO2 emissions and exploring the use of lower-CO2 materials through selected projects. The same applies to distribution logistics. On the one hand, we increase the transparency and resilience of the balance sheet. On the other hand, we are continuing to systematically switch individual products from air freight to sea freight. Scope 3.11: With regard to our products and services, we will continue to develop the existing offerings to increase energy efficiency for our customers in 2023. For the first time, we will be able to calculate the product carbon footprint (PCF) of selected components ourselves and make it available to our customers (see Chapter 5 for details). Technical education Chapter 4 The technical training and further training of our customers at Festo Didactic is another important pillar of our sustainability efforts. Examples of our activities are: – Making high-quality learning content accessible to as many people as possible with the Festo LX digital learning portal – Learning solutions as the key to environmentally friendly innovations – Getting young people excited about technical topics with Bionics4Education – Promote learning through competitions with numerous activities The introduction of an environmental management system according to ISO 14001 is planned for Festo Didactic SE and the Canadian plants of Festo Didactic. Environment, resource and material efficiency Chapter 5 In 2022, we restructured the topics in this field of activity. At our own locations, we will work on the efficient use of materials, operating materials and waste reduction and the economical use of water as part of our ISO 14001-certified international environmental management. With regard to the entire value creation process, the focus is on our products and their packaging. The focus here is on saving materials and using materials that do not contain any critical ingredients or have a comparatively lower carbon footprint. In 2023, we will assess our potential contribution to the circular economy and identify measures. People at Festo Chapter 6 Within this area of action, we will continue to work on the long-term issues relating to the qualification and further development of our employees, the expansion of occupational health promotion and safety, and equality and diversity in the company. Ethics and governance Chapter 7 The focus of the Ethics and Governance area is on our global compliance management system and the fulfilment of corporate due diligence obligations for human rights. In 2023, after the conditions have been created in 2022, we will implement the requirements of the Act on Corporate Due Diligence in Supply Chains (LkSG) at our suppliers and in our own business units. The following chapters also explain our activities in the areas of activity in the reporting period 2022 using corresponding GRI indicators. Our contribution to the CO2 reduction and energy efficiency Technical education Environment, resource and material efficiency People at Festo Ethics and governance The five areas of action of our sustainability strategy GRI 2-6, GRI 2-22, GRI 3-2 Sustainability strategy 36 37 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Networks and committee work Partnerships and networks mean significant added value for mutual exchange and working across corporate boundaries. Our Automation and Didactic business divisions work both nationally and internationally as part of various committees and associations concretely on the issue of sustainability. GRI 2-28 5 G Alliance for Connected Industries and Automation (5 G-ACIA) I Working group for Business and Human Rights of the German Engineering Federation (VDMA) I Stuttgart CSR network I Various employer associations I European industry umbrella organisation ORGALIM (indirectly via VDMA and ZVEI) I EuropElectro (representing the interests of European industry in China) I Fraunhofer Institute for Production Systems and Design Technology ISO and IEC standardisation committees for automation technology I Industry 4.0 platform I Stiftung KlimaWirtschaft – German CEO alliance for climate and economy I SustaiNet – business network I VDMA Blue Competence sustainability initiative I German Electrical and Electronic Manufacturers’ Association (ZVEI) ADEA – Association for the Development of Education in Africa I German-African Business Association I International Academy for Production Engineering I Didacta Association I Digital Industries I Don Bosco Tech Africa I European Institute of Innovation & Technology (EIT) I EuroSkills I iMove I German Asia-Pacific Business Association I OEastern Europe Business Association of Germany I Industry 4.0 platform I UN organisations such as UNESCO, UNIDO, UNICEF, UNHCR I VDMA I WEF – Advanced Manufacturing and Production I Worlddidac I WorldSkills Africa I WorldSkills International I ZVEI Automation Didactic 38 39 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
A major challenge for our planet is climate change, which is caused by the constant enrichment of the earth’s atmosphere with man-made greenhouse gases, especially carbon dioxide (CO2). Climate protection and the economical use of energy are therefore two of the most important tasks of our time, which are firmly anchored in our corporate and sustainability strategies. Our focus is on reducing CO2 emissions – both for our customers and for ourselves. From 2023, all our buildings in Germany as well as our global production and logistics sites will be CO2 neutral with regard to Scope 1 and 2. From 2026, the entire Festo Group will be CO2 neutral. After that, we will continue to work on energy-saving measures and the retrofitting of our heating technology in order to continuously reduce the need for compensation. GRI 3-3 CO2 reduction and energy efficiency
3.7 Employee commute Acquired electricity, steam, heating and cooling Vehicle fleet 3.14 Franchise Greenhouse gas emissions (Scope 1, Scope 2 and Scope 3) based on the GHG Protocol emissions (in tCO2-eq). Festo SE & Co. KG Nachhaltigkeitsbericht 2022 52 3.7 Employee commute and cooling 3.13 Property, plant and equipment issued as a rental or lease 3.1 Purchased goods and services 3.2 Capital goods 3.3 Fuel- and energy-related emissions 3.4 Transport and distribution 3.5 Waste 3.6 Business trips 3.8 Property, plant and equipment received as a rental or lease Company facilities 3.15 Investments 3.12 Handling of sold products at the end of their life cycle 3.11 Use of the products sold 3.10 Processing of the products sold 3.9 Transport and distribution (downstream activities) (upstream activities) Festo Scope 3 Scope 3 Scope 2 Scope 1 14,917,871 14,382 * 450 4,434 150,356 20,499 19,421 359,717 17,500 7,000 24,847 38,875 * Category 3.9 is included in category 3.4 In 2022, Festo first estimated the corporate carbon footprint (CCF) across all three Scopes in accordance with the Greenhouse Gas Protocol (GHG Protocol) for 2021. This initial calculation was carried out with the assistance of an external management consultancy. The four categories 3.10 ‘Processing of the products sold’, 3.13 ‘Property, plant and equipment issued as a rental or lease’, 3.14 ‘Franchise’ and 3.15 ‘Investments’ were identified as not relevant to Festo’s carbon footprint. These categories have therefore not been calculated and are greyed out accordingly in the graphic. The calculation is based on the different possible approaches and meets the requirements of the GHG Protocol. The results can be found in the graphic. With the exception of category 3.3 ‘Fuel- and energy-related emissions’, which only cover our headquarters and the production and logistics sites worldwide, the diagram shows the emissions of the entire Festo Group, including all international local sales companies. 3.1 Corporate carbon footprint (CCF) We are aware that it will be necessary to continuously develop the calculation methods and assumptions made. Nevertheless, this first corporate carbon footprint shows a clear result: more than 95 per cent of all emissions are generated in category 3.11 ‘Use of the products sold’. As a partner to many industries for the automation of their processes, Festo brings high-quality, long-lasting, energy-consuming products to the market. Consequently, our efforts to reduce CO2 will focus on this category (see Chapter 3.5). Other categories relevant in terms of their size are our purchased materials with about 360,000 tonnes (see Chapter 5.2) and the delivery and distribution processes with 150,000 tonnes (see Chapter 3.4). Festo will also look for ways of reducing CO2 emissions in the latter two categories. GRI 302-1, GRI 302-2, GRI 302-4, GRI 302-5, GRI 305-1, GRI 305-2, GRI 305-3, GRI 305-5 42 43 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability R port 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
With the corporate carbon footprint across all relevant categories, we now offer transparency. And the focus of our efforts on certain areas, such as the use of our products by the customer, becomes clear. Rainer Seifert is head of the Corporate Responsibility department, which is responsible for preparing the GHG-compliant corporate carbon footprint. The insights gained across all three Scopes are a valuable building block for the future derivation of CO2 reduction targets. Rainer Seifert, Head of Corporate Responsibility at Festo 44 45 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
GRI 305-1: Direct greenhouse gas emissions (Scope 1, t CO2-eq)* GRI 302-1c: final energy (electricity, district heating, MWh) Energy consumption in relation to sales (MWh/EUR millions) GRI 305-2: Indirect energy-related greenhouse gas emissions (Scope 2, t CO2-eq) GRI 305-4: Greenhouse gas emissions (Scope 1 and Scope 2) in relation to turnover (t CO2-eq/EUR millions) 120 90 60 30 0 129,927 141,851 140,623 GRI 302-1a: primary energy (fuel oil, diesel, gas, MWh)* 2020 2021 2022 30 20 10 0 35,506 33,400 31,744 2020 2021 2022 17,744 18,507 16,563 15 10 5 0 2020 2021 2022 80 60 40 20 0 81,782 86,690 79,683 2020 2021 2022 60 40 20 0 74.5 68.0 57.8 2020 2021 2022 15 5 0 18.7 15.4 12.7 10 2020 2021 2022 3.2 Our locations Primary energy consumption and Scope 1 greenhouse gas emissions Among the primary energy consumptions, we document the fuel oil and natural gas consumption caused by the operation of our buildings and, to a much lesser extent, some of our production processes. It also includes the fuel consumption of the vehicle fleet, which is predominantly leased. We report on the CO2 emissions caused by this in Scope 1. GRI 302-1a Our production processes do not cause direct emissions of other greenhouse gases (e.g. process emissions). The emissions of cooling agents from cooling and refrigeration plants are negligible compared to CO2 emissions. They are therefore not reported on. In 2022, the primary energy demand amounted to 79,683 megawatt hours, down 8.1 per cent compared to the previous year. This is due to opposing effects. Shortterm energy-saving measures in connection with the gas shortage led to significantly lower consumption at the German locations. In addition, a milder winter not only resulted in lower consumption in Germany, but also at all European locations. In China, the primary energy demand rose sharply as production volumes grew again towards the end of the pandemic, partly offsetting the positive trend. Scope 1 emissions are essentially derived from primary energy consumption. Only a shift between the various energy sources such as fuel oil, natural gas, diesel and petrol can lead to slight deviations. The influencing factors are correspondingly identical with those of primary energy consumption. Scope 1 emissions are shown in the second diagram on the right and amounted to 16,563 tonnes of CO2 equivalents in 2022. GRI 305-1 Final energy consumption and Scope 2 emissions Festo obtains its final energy almost exclusively in the form of electricity. Two locations are heated with district heating in an environmentally friendly manner. The associated emissions are reported in Scope 2. GRI 302-1c Final energy demand amounted to 140,623 megawatt hours in 2022 and was roughly on a par with the previous year. Due to the catch-up effects of the second year of the pandemic, it was not possible to achieve any significant absolute savings. By contrast, Scope 2 emissions caused by final energy demand fell by a further five per cent year-on-year to 31,744 tonnes of CO2 equivalents. This is due both to internal measures, in particular the expansion of in-house power generation with photovoltaic systems, as well as to external factors such as the general expansion of renewable energy systems by our energy suppliers. GRI 305-2 Total Scope 1 and Scope 2 greenhouse gas emissions amounted to 48,307 tonnes of CO2 equivalents in 2022. The total energy demand in relation to turnover (primary and final energy) fell by 15 per cent compared to the previous year to its lowest level ever of 57.8 megawatt hours/million euros. Turnover-related emissions of Scope 1 and 2 fell by 18 per cent compared to the previous year, also reaching the lowest level ever of 12.7 tonnes of CO2 equivalents/million euros. As a result, energy requirements and greenhouse gas emissions are now decoupled from turnover. The much faster development in emissions is due to the purchase of green electricity. GRI 302-4, GRI 305-4, GRI 305-5 * The figures for 2021 had to be corrected due to late reports from the plants. 46 47 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Guarantees of origin for electricity For our locations in Germany, we have been reporting on the procurement of green electricity since 2021 and have set the corresponding Scope 2 emissions to zero. For the amount of electricity consumed by Festo, the electricity supplier acquires guarantees of origin issued for electricity from wind and hydropower plants in the European electricity network. This method makes it possible to take advantage of the ecological characteristics of electricity generation (zero emissions) without the electricity coming physically from the same power plant as the cancelled guarantees of origin. The procedure is thus accepted by the Greenhouse Gas Protocol. From 2023, we will be purchasing green electricity in accordance with the system described for all international production and logistics sites. The guarantees of origin will then also meet the requirements of the European green electricity label EKOenergy and the US green electricity label green-E. The availability of green electricity labels is still under review for the locations in China, India and Singapore. Once the current electricity supply contract expires, only EKOenergy-labelled guarantees of origin will be used for the German locations. In the medium term, we intend to further improve the ecological quality of green electricity and examine whether electricity and guarantees of origin can be procured together from 2027 onwards, i.e. acquired from the same plants, or whether ecological electricity supply contracts, so-called Power Purchase Agreements, can be concluded. Both options would provide a greater incentive to expand electricity generation from renewable energies. Expansion of in-house renewable power generation In the reporting year, all areas suitable for installing photovoltaic (PV) systems at the production and logistics sites were identified, evaluated and prioritised in accordance with their yield forecasts and profitability. At the locations in Bangalore (India), Jinan and Shanghai (both China), Lupfig (Switzerland) and Warsaw (Poland), PV systems with an installed capacity of 3,549 kilowatt peak (kWp) were constructed and commissioned. The total PV capacity installed at Festo has thus been increased by 70 per cent and now amounts to 8,398 kilowatt peak (kWp). In the reporting year, 5,498 megawatt hours of PV electricity were generated. Energy controlling and saving With the exception of three smaller plants, our locations are equipped with energy monitoring systems. These make it possible to monitor energy consumption, identify abnormally excessive consumption and its causes, and take corrective measures at short notice. Routines to monitor consumption during non-production periods have been implemented and intervention thresholds have been defined. Festo Energy Saving Services: Festo Energy Saving Services (FESS) analysed the compressed air systems of all production plants, from compressed air generation and preparation to distribution and the use of compressed air. In addition, leakage detection was carried out in representative areas. Furthermore, the local maintenance departments were trained and enabled to independently conduct leakage detection in order to ensure this is carried out in the future. The optimisation potentials identified by FESS are being implemented. Energy-efficient lighting In addition, a further 18,100 square metres of production space were converted to energy-saving LED lighting. Energy teams Energy teams were set up at all production sites in 2022. Their task is to further develop energy controlling and to identify and implement both investment and behavioural measures in production and building operations. The energy teams drew up a list of measures with an investment volume of over 11 million euros. Of this total, 4.4 million euros will be invested in the current year, spread over 37 measures. In 2022, the total output of our photovoltaic systems worldwide increased by 70 per cent. Measures 48 49 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
Scope 3.1 Scope 3.4 3.4 Transport and distribution Pilot project for shifting from air to sea freight In 2021, three regionally significant delivery locations were analysed to see how increasing inventories of high-volume products would enable the shift from air to sea freight (‘Air2Sea’) in order to reduce transport emissions. The results were only partially implemented in 2022 due to supply chain disruptions. In a pilot project on the route between the delivery centres in Rohrbach and Mason (Ohio, USA), 47.1 tonnes were transported by plane rather than by ship, thus avoiding around 400 tonnes of CO2 equivalents. Sea freight forwarding by rail at the Rohrbach location In the case of imports by sea freight, the downstream transport of around 280 40-foot containers from the seaports to the CSC Rohrbach was shifted from road to rail. The associated emission reduction amounts to around 70 tonnes of CO2 equivalents. At the same time, heavy-duty traffic, harmful nitrogen oxide and particulate matter emissions and noise were avoided. GR 305-3 3.3. Purchased goods and services In addition to the use of the products sold (Scope 3.11), the CO2 emissions along our supply chain are primarily influenced by the goods and services purchased – in particular the materials we use to manufacture our products. Reduction measures, transparency and the collection of primary data within our supply chain play a key role here. Initial activities for primary data collection were launched in 2022, with the aim of gradually expanding data transparency together with our suppliers. In addition, our focus is on material efficiency along the entire value chain. As described in more detail in Chapter 5.3, this begins with product development by selecting the right material and using a material-saving product design. When selecting materials, we see materials with low specific emissions that come from optimised production routes or are based on sustainable raw materials as levers to reduce emissions. This is already being tested in individual projects such as a sustainable pneumatic cylinder concept. In addition, recycling concepts in the production of materials such as aluminium and optimised supply chains have already prevented CO2 emissions. 50 51 Festo SE & Co. KG Sustainability Report 2022 Festo SE & Co. KG Sustainability Report 2022 1. BLUE WORLD 2. STRATEGY AND MANAGEMENT 3. CO2 REDUCTION AND ENERGY EFFICIENCY 4. TECHNICAL EDUCATION 5. ENVIRONMENT, RESOURCE AND MATERIAL EFFICIENCY 6. PEOPLE AT FESTO 7. ETHICS AND GOVERNANCE 8. GRI-INDEX 9. REPORT PROFILE
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