Sustainability Strategy

 We embrace our responsibility for the environment, safety and our community. This commitment must be reflected in all our actions and decisions. By enforcing high safety standards, we ensure a safe working environment that protects our employees. In terms of integrity, we are a transparent, authentic and modern company.  

We demonstrate accountability and commitment to our decisions and actions, and are dedicated to a culture of dealing openly with failures. With the initiatives that make up our “Klöckner & Co 2025: Leveraging Strengths” strategy, we continue to merge the digital and physical sides of our business and aim to take them to the next level. By 2025, Klöckner & Co aims to become the leading one-stop shop for steel, other materials, equipment and processing services in Europe and the Americas.

 Sustainability is at the heart of our “Klöckner & Co 2025: Leveraging Strengths” strategy. We approach our dedicated sustainability strategy from an overarching environmental, social and governance (ESG) perspective and integrate it into our strategic planning.

We believe that in particular innovation, technology and new business models will enable the steel industry’s successful transformation to sustainability. As part of our Group strategy, we are consequently working as a pioneer of a sustainable steel industry to establish innovative business models by creating a comprehensive portfolio of sustainable customer solutions. Through expanding our product and service portfolio, we are seizing the strategic opportunity to integrate the attractive new business area of sustainable solutions into our business model. We see this transformation as a unique growth opportunity – not just in the future, but already today.

Under our Nexigen^® umbrella brand, we have focused our sustainable product and service portfolio across the Group, providing transparent, carbon-reduced solutions in the categories of materials, processing, logistics, circularity (closed-loop) solutions and comprehensive Sustainability Advisory Services for sustainable customer solutions. In this way, we are already helping customers to reliably source carbon-reduced steel and metal products, while our smart software solutions give them full visibility into the carbon footprint of the products they buy. To provide our customers with optimum support in establishing sustainable value chains, we have introduced rating scales for our carbon-reduced steel, stainless steel and aluminum products. These scales are rooted in international, science-based standards and categorize the carbon-reduced materials according to their certified emissions along the entire value chain from resource extraction to production and processing (cradle to Klöckner exit gate). They serve as a guide and a comparison tool for customers when determining the carbon footprint of end products. Through numerous partnerships, we already offer our customers carbon-reduced steel and metal products today. Klöckner & Co aims for the two lowest carbon footprint categories (“Prime” and “Pro”) - to account for over 30% of its total product range by 2025 and 50% by 2030.

In addition, as of the beginning of 2023, we now provide customers with an individual product carbon footprint (PCF) for almost every item in our product portfolio. This allows customers to reliably, transparently and easily see the carbon footprint of a product purchased from Klöckner & Co. With the Nexigen® PCF Algorithm, we have developed an innovative tool whose automated PCF calculation methodology is certified by TÜV SÜD. The Nexigen® PCF Algorithm’s methodology for calculating the PCF follows the internationally recognized Greenhouse Gas Protocol and ISO 14067, ref. 14040 and 14044, and, in accordance with those standards, calculates the product’s cradle-to-customer entry gate emissions. As a result, our customers receive information on the extent to which Klöckner materials can contribute to reducing the carbon footprint of their business activities and their own end products, and can reliably include the cumulative carbon emissions of their products in emissions calculations across the entire value chain, from resource extraction to production and delivery at the customer’s factory (hence “cradle to customer entry gate”).

In addition to the strategic opportunities we see in the sustainable transformation of the steel industry, we are meeting our responsibility to reduce our own emissions and those of our upstream and downstream supply chains. As part of this, we have designated the reduction of carbon emissions as a non-financial target for the variable remuneration of the Management Board, the entire first management level below the Management Board and additional executives at levels two and three.

We are the first company in the world to have our net zero carbon targets recognized by the Science Based Targets initiative (SBTi) as science-based targets in the regular process in accordance with the latest standards. Klöckner & Co has thus committed to reducing Scope 1 and 2 emissions to net zero by 2040 and emissions in the entire value chain by 2050. Our path to net zero is based on the following science-based medium- and long-term carbon reduction targets:

Our corporate goal is the verifiable reduction of emissions from our business activities. As this is a continuous, long-term process, in addition to our reduction measures, we offset all of our Scope 1 and 2 emissions, without taking them into account against our reduction targets..

For us, the dimensions of sustainability also include social responsibility and reliable governance in addition to environmental factors. This is because, for Klöckner & Co, responsible conduct based on ethical convictions paves the way for long-term business success and hence also for sustainability. We shape the social dimension in partnership with our employees, suppliers and customers, as well as with the involvement of the surrounding communities. Occupational safety is a priority in our Company. In particular, we are committed to protecting the health of our employees. To that end, we have created the Safety 1^st and Kloeckner Cares initiatives. As part of our social commitment, we provide targeted support for educational programs in the community.

We pledge ourselves to reliable governance, for example by creating transparency and demonstrating commitment. Our responsible business management and control geared toward sustained value creation aim to build trust with business partners, employees, investors at home and abroad as well as the general public.