Our impact and contribution towards mitigating climate change are two-fold – through the solutions we sell and through the way we run our business.
We have one of the world’s strongest portfolios of components crucial to decarbonizing the three most emission-heavy sectors in the world - industry, transport, and buildings.
Therefore, we have a responsibility and a unique opportunity to help enable the green transition.
Through strong partnerships and bold investments, we engineer solutions that help the world use energy in smarter, more efficient ways.
As a responsible business, we apply high standards and set stretch targets across climate, people, and environmental agendas and ensure proper internal policies and practices.
By delivering the solutions needed to decarbonize the industries we serve as the core of our business, we can have a sustained and systemic impact. This is why we have committed to our sustainability step-change initiatives to achieve our long-term success and to be the preferred partner for our customers.
Our step-change initiatives
Sustainability governance
Sustainability governance is an integrated part of Danfoss Group governance, which enables us to drive our sustainability transformation and ensure that we deliver on our ambitions.
Board of Directors/Audit Committee
The Board of Directors approves the sustainability strategy and Integrated Annual Report. Sustainability performance is part of the reporting to the Board.
Group Executive Team
The Group Executive Team is accountable for the sustainability strategy and targets. The Group Executive Team follows up regularly on progress, strategy, and targets throughout the year.
Sustainability Leadership Team
Responsible for the preparation of the Danfoss sustainability strategy and target setting. Progress on sustainability topics is addressed at monthly meetings.
Danfoss Segments
Responsible for strategy execution and reporting of sustainability performance within business areas.
Cross-functional working groups
Responsible for driving the implementation of identified sustainability projects, supporting the overall Danfoss strategy, and reporting to the Sustainability Leadership Team on a monthly basis.
Double Materiality Assessment
In 2021, we conducted a double materiality assessment, and as a result, ten key topics were identified as the most material issues for Danfoss. These served as a basis for establishing our sustainability three step-change initiatives, focusing on decarbonization, circularity, and our people. In 2024, we updated our double materiality assessment in accordance with the European Sustainability Reporting Standards (ESRS). This assessment enabled us to better understand where we may have the largest impact on people and the environment and where we may be exposed to financial risks or opportunities.
To prepare the DMA, we conducted desk research, engaged with both internal and external stakeholders, leveraged input and learnings from internal processes, and held workshops with key stakeholders within our business.
In accordance with the requirements of the ESRS, we first took an inside-out perspective. This means that we looked at both positive and negative impacts on people and the environment that may or have been caused by our business activities and operations across the value chain. Once we had assessed and identified our impacts, we took an outside-in perspective to assess where we may be exposed to financial risks and opportunities that impact our business resilience and financial stability.
In conducting the DMA, we engaged with internal stakeholders and leveraged knowledge and input from our internal business processes. We also engaged with key external stakeholders such as NGOs, customers, representatives from the financial sector, and industry and sustainability associations.
The outcome of our DMA, which has been approved by our Sustainability Leadership Team and the Group Executive Team and reviewed by our Audit Committee, showed that we have material topics to address and report on within the areas of environment, social, and governance. An overview of our material topics can be found here.
Stakeholder engagement
We are committed to stakeholder engagement that is meaningful and effective. Our engagement approach enables us to better understand the interests and views of our stakeholders, which in turn informs our business strategy, planning, and decision-making processes. These insights and learnings are also integrated into our due diligence and double materiality assessment processes.
As a global business, we engage with various stakeholder groups across our value chain. Our methods of engagement depend on the stakeholders involved and the objective of the engagement.
Our stakeholder engagement approach builds strong partnerships with suppliers, peers, and customers, all of whom support our joint sustainability ambitions.
Our stakeholder engagement is based on the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights. To promote knowledge exchange, we have been an active member of the UN Global Compact since 2002.
Our impact on the Sustainable Development Goals
With sustainability at the core of our business, we continue to support and contribute to the United Nations Sustainable Development Goals.
Our impact on the SDGs is two-fold. We are meeting many of the world's climate, urbanization, and food challenges with proven and reliable solutions. Driven by the power of an electrified society, and fueled by the opportunities of going digital, Danfoss is dedicated to engineering solutions that can unleash the potential of tomorrow.
We also see our contribution to the Sustainable Development Goals through our business activities and the effort of aligning our business practices with current environmental and societal challenges.
For Danfoss, as a leader in technology and innovation, the SDGs create good business opportunities and generate space to make a positive impact in the societies around us.
Annual Report 2024
Our integrated annual report provides a holistic view of Danfoss’ business, value drivers, strategy, governance, as well as sustainability and financial performance.
Engineering Tomorrow updates
Stay up to date with recent information from Danfoss, get inspiring content on our sustainable solutions and climate action. Read successful case stories from our customers and explore how we help lead the sustainable transformation to limit climate change.