Our decarbonization activities span the full value chain. As a leading provider of energy-efficiency solutions, Danfoss is an essential partner in the green transition and decrease of value chain emissions. Value chain emissions, also known as scope 3 emissions, are the most significant part of Danfoss’ total carbon footprint, comprising of more than 99%. These emissions occur outside of our operations – upstream with suppliers and downstream with the use of our products by our customers.
The decarbonization levers for scope 3 are complex and often require innovation and partnerships along the value chain. We embrace this as an opportunity to collaborate with our business partners, suppliers, peers, and customers to achieve our shared goals of industry decarbonization.
Decarbonizing the value chain
Our decarbonization activities span the full value chain. We enable the reduction of scope 3 emissions through our product portfolio of more efficient and lower-emitting solutions. Our scope 3 emissions account for more than 99% of our value chain emissions.
Upstream emissions
Our upstream focus is on minimizing the carbon footprint embodied in the materials and production of our products. And by doing so, we also contribute to reducing our customers’ product carbon footprint. To achieve this, we engage with our suppliers to source low-carbon materials while integrating sustainability in our procurement processes and product design.
- Driving impact with our suppliers: Through the Green Ask, our supplier engagement program, we are working with our suppliers to improve greenhouse gas emission data and implement emissions reduction initiatives. We are also strengthening collaboration with suppliers to increase the share of recycled materials in both products and packaging.
- Regionalizing our supply chains: We are regionalizing our footprint to become more resilient, competitive, and sustainable. By regionalizing our supply chains, we source, produce, and sell within the same region, while also reducing our carbon footprint.
- Sourcing of low-carbon materials: We support the development of low-carbon aluminum and commit to purchasing at least 10% (by volume) low carbon primary aluminum by 2030, while ensuring that at least half of all aluminum used is composed of secondary aluminum by 2030. Driven by these commitments, we have begun transitioning to green aluminum, testing both low-carbon virgin aluminum and aluminum with higher recycled content in our product design.
Downstream emissions
Our downstream emissions are primarily driven by the emissions from the use of our products and account for approximately 97% of our total emissions. Across our three business segments, we work with decarbonization levers that include investments in optimization and energy-efficiency, transitioning to next-generation technologies, and automation.
- Innovation spend: We invest to continuously develop more efficient and lower-emitting solutions for our customers. These investments enable us to strengthen our leading positions in our core businesses, electrification, and digitalization.
- Improving product efficiency: We are improving the performance of our products through better design and component choices. This includes reducing energy losses by increasing efficiency, adopting new technologies, and applying improved working principles to further enhance product efficiency and productivity.
- Optimizing energy use: By integrating intelligent features into our products and developing energy-optimizing services, software, and control solutions, we help customers run their systems more efficiently. Our performance optimization tools ensure that our products consume less energy during their lifetime in customers’ applications.
- Accelerating lower-emitting solutions: By providing optimal technology and solutions for specific applications, we contribute to our customers’ emissions reductions. Across our business segments, we are exploring lower-emitting technologies and collaborating with customers to implement innovative solutions together.
Decarbonizing Danfoss
Energy efficiency is instrumental in helping us reach our goal to achieve net-zero emissions across the value chain by 2050.
Learn more about our decarbonization targets