Decarbonizing our own operations

Climate change is one of the defining challenges of this generation. It is also where we at Danfoss, as the core of our business, engineer the solutions needed to support the decarbonization of the industries we serve.

In decarbonizing our own operations globally, we apply the same approach that we bring to our customers. We have coined this three-step approach: Reduce, Reuse, Re-source.

In 2023, we continued to make progress on our validated science-based targets to limit global warming to 1.5°C. Since 2022, we have reduced our scope 1 and 2 emissions by 18% (excluding newly acquired Semikron and BOCK® Compressors). Since 2019, we have decreased our total scope 1 and 2 emissions, compared to the 2019 recalculated baseline, by 10.7%.

Our decarbonization targets:

Decarbonization based on science

We want to become the preferred partner in helping our customers decarbonize, and we’ve built a strong foundation for achieving our own targets.

In 2020, we took a significant step toward contributing to the goals of the Paris Agreement by committing to science-based targets. Our emission reduction targets were validated and approved by the Science Based Targets initiative in 2022. Our science-based target expands our greenhouse gas emissions reduction goals beyond our own business, across the entire value chain.

Danfoss’ SBT commitment

Danfoss commits to reduce 46.2 % of absolute scope 1 and 2 GHG emissions by 2030 from a 2019 base year. Danfoss also commits to reduce absolute scope 3 GHG emissions by 15% within the same timeframe.

We furthermore commit to reduce our scope 1 and 2 GHG emissions to zero by 2030 through energy efficiency measures, re-use of excess heat from processes and buildings, sourcing of renewable energy and only use offsetting as a last resort.

We commit to reduce scope 3 GHG emissions from purchased goods and services by 25% by 2030 from a 2019 base year.

In 2023, we continued to make progress on our validated science-based targets.

Decarbonizing our operations

We apply a three-step approach to decarbonize our global operations.

Step 1: Reduce involves saving energy by installing energy-efficient solutions such as heat pumps where possible.
Step 2: Re-use entails recycling the energy we already have by using excess heat from buildings, processes, and data centers.
Step 3: Re-source involves turning the remaining energy green by phasing out fossil fuels and procuring renewable energy.

As a last resort, we consider climate compensation for the residual emissions that cannot be removed in any other way. We continue to prioritize energy efficiency in buildings and processes to reach our goal. We are ambitious in the use of our solutions to achieve a large part of the energy savings and have proven that applying energy-efficiency measures is good business.

Securing renewable energy

With more than 80% of energy-related emissions coming from electricity, sourcing electricity from renewable and carbon-neutral sources is a key priority.

We are committed to purchasing 100% renewable electricity by 2030. We prioritize Power Purchase Agreements (PPAs) that contribute to the transition to more sustainable electricity grids and reinforce our long-term commitment to renewable energy. By purchasing green electricity where available, we can make the fastest and most significant contribution to climate action.

Since 2021, Danfoss uses renewable energy in our operations in Denmark and Germany through a Power Purchase Agreement (PPA). In 2023, we entered two long-term PPAs, in the US and China, which are expected to reduce our scope 2 emissions in the regions by 75% and 23%, respectively.

Carbon-neutral operations

Using our Reduce, Reuse, Re-source approach, we continue to decarbonize our operations around the world. In 2022, the Nordborg campus in Denmark, our largest production facility reached carbon neutrality. The 250,000 m2 campus achieved neutrality through reduction of energy consumption, reuse of excess heat from processes and data centers, and sourcing of green electricity. At the end of 2023, five of our factories have become carbon neutral, with additional factories to become carbon neutral in the coming years.

Electrification of our own fleet

The electrification of our company car fleet is an important part of our goal to become carbon-neutral by 2030. In 2020, Danfoss joined EV100, an initiative under The Climate Group to support the global transition to electric vehicles by transforming our car fleet to all-electric by 2030.

In 2023, we increased the share of electric vehicles in our car fleet to 12%. We also increased the capacity of on-site charging stations to offer employees and customers charging points for their electric vehicles.

Climate action initiatives and partnerships

In 2020, Danfoss joined, as the first global technology company, all three business initiatives by the Climate Group.

Through these initiatives, Danfoss commits to sourcing 100% renewable energy (RE100), improving energy productivity (EP100), and shifting to electric vehicles by 2030 (EV100).

In 2023, we announced our commitment to the First Movers Coalition (FMC). The goal of the Coalition is to accelerate emerging climate technologies to decarbonize the world’s heaviest emitting sectors. Danfoss made the commitment to purchase at least 10% (by volume) of low-carbon primary aluminum by 2030.

About the First Movers Coalition:

90+ leading global companies
A partnership by the US State Department and the World Economic Forum
Represents EUR 14 billion in annual demand, the world's largest demand signal
The seven hard-to-abate sectors covered by the FMC account for 30% of total global emissions

Read about the First Movers Coalition

Annual report 2023

Our integrated annual report gives our stakeholders a holistic view of Danfoss’ business, value drivers, strategy, governance, and performance. It combines key information on our financial, sustainability and ESG-related performance.

Read report