Climate Strategy and Targets within our Sustainability Framework

Emissions of carbon dioxide and other greenhouse gases ‏(GHG) caused by humans are responsible for increased climate change and global warming. These emissions are also increasing due to our lifestyle and our economic systems. And yet the global “climate budget” is limited.

The UN’s global Paris agreement on climate change represents a commitment by the community of nations to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. To achieve this, carbon dioxide emissions must be reduced by 2050.

Henkel is committed to the 1.5 degrees Celsius target and sees it as an essential prerequisite if more than nine billion people are to be able to live well within the resource limits of our planet in 2050.

Three main levers are available to stop global emissions from increasing further, and to make sure emissions are reduced by the required amount:

1. Increase our carbon-efficiency: save energy and raw materials
2. Fast and deep decarbonization: replace CO₂ in energy and raw materials manufacturing
3. Neutralisation of CO₂ impact: permanently remove CO₂ or convert CO₂ into raw materials

In accordance with the Science Based Targets initiative ‏(SBTi) Henkel derived its own science-based emission reduction targets based on its long-term targets. The Science Based Targets initiative  by the UN Global Compact, World Resources Institute, World Wildlife Fund for Nature (WWF) and Carbon Disclosure Project (CDP) aims at encouraging companies to set such targets.

In 2020, Henkel’s science-based targets were approved by the initiative as consistent with levels required to meet the goals of the Paris Climate Agreement. The targets as approved by the initiative are:

• Henkel commits to reduce scope 1 and 2 GHG emissions 67 percent per ton of product by 2030 from a 2017 base year. 
• Henkel also commits to increase annual sourcing of renewable electricity from 6 percent in 2017 to 100% by 2030. 
• Furthermore, Henkel commits to reduce scope 3 GHG emissions from purchased goods and services 30 percent per ton of product by 2030 from a 2017 base year.

The targets covering greenhouse gas emissions from Henkel’s operations ‏(scopes 1 and 2) are consistent with reductions required to keep warming to 1.5 degrees Celsius, the most ambitious goal of the Paris Agreement. 

Henkel’s target for the emissions from its value chain ‏(scope 3) meet the SBTi’s criteria for ambitious value chain goals, meaning they are in line with current best practice. 

The carbon footprint of our production is around 475.000 metric tons of CO₂ and is attributable to the fuels we use ourselves (Scope 1) and the energy purchased (Scope 2), in particular electricity. 

We are aiming to reduce the carbon footprint of our production by 65 percent by 2025 compared to the base year 2010. To do so, we continually improve our energy efficiency and use more energy, particularly electricity, from renewable sources. To date, we have been able to achieve a reduction of 50 percent CO₂ emissions per tonne of product (2021 vs. 2010). 

Conversion to renewable energy:

In addition to our efficiency targets, we are striving to source 100 percent of the electricity we purchase for production from renewable sources by 2030. 

To implement the target of sourcing 100 percent renewable electricity, it is important to consider differences in legislation and infrastructure, as well as levels of regulation and variations in climate conditions in each of the countries we operate in. For this reason, we are following country-specific approaches that are flexible and leverage a portfolio of options. With this in mind, we are basing our conversion to renewable energy on a combination of three models: 

1. On-site production: This model involves generating green power at our sites through wind turbines, solar cells or other technologies. The infrastructure is either funded by Henkel itself or paid for by collaboration with external partners.
2.  Direct purchase: For this model, we purchase green power straight from the grid of a local energy utility company, or as part of a long-term Power Purchase Agreement (PPA).
3. Virtual coverage: If the two options above cannot be implemented at one of our sites – meaning we cannot generate or purchase renewable electricity directly – green power requirements can be covered virtually. For example, by entering into long-term PPAs that feed green power from specific sites into the supply grid in an amount that is equal to the amount consumed.

By successively converting our production sites using a combination of the models described above, we consider the individual conditions at each site, as well as their respective energy requirements.

On the way to becoming a climate-positive company, in 2020, we signed a large-scale Virtual Power Purchase Agreement ‏(VPPA) in the US, where it is not possible for us to cover our electricity requirements with on-site production or direct purchase. We are committed to purchase 50 percent of the energy generated at a new wind farm in Bee County, Texas. This capacity is equal to 100 percent of the electricity that we use in our operations in the US, and covers more than 30 production sites.

Since August 2021, the Henkel Fragrance Center in Krefeld in the Laundry & Home Care business unit in Germany has been operating on a CO₂-neutral basis, making it the first Henkel site to switch its production completely to CO₂-neutral energy. We have been operating a 17,000 square meter solar plant at our largest Beauty Care site in Wassertrüdingen, Germany, since the beginning of 2021, generating 1,675 megawatt hours (MWh) of green electricity per year. Combined with the conversion to biogas, the ­production facilities have been operated with 100 percent renewable energy since August 2021.

Our production facility for detergents and cleaning products in Düsseldorf, Germany, is aiming to meet the important milestone of becoming carbon neutral by the beginning of 2022. To achieve this goal, the site is accelerating its shift to renewable energy sources, including the use of biogas for various processes. While we have already been using 100 percent renewable electricity for our laundry detergent production in Düsseldorf-Holthausen since 2020, we have now also been sourcing the thermal energy required for liquid laundry detergent and dishwasher tab production from renewable sources since July 2021

Szenario for 2030+

By 2030, we aim to replace the last remaining fossil fuels used in our production that we use to generate process energy directly with carbon-neutral alternatives, such as biogas or biomass. We also aim to supply surplus carbon-neutral energy that Henkel does not need for its own purposes to third parties – thus becoming a climate-positive company in our production. In doing so, we will avoid emissions from our own activities, and also enable third parties to use carbon-neutral energy.

Overall, production only accounts for about one percent of our carbon footprint along the entire value chain. The use of our products accounts for around two thirds, and the raw materials for around one quarter. This is where we see big potential to reduce emissions and contribute to climate protection.

CO₂ emissions during product use

Our products are used millions of times every day in households and industrial processes. As our analysis shows, the product use phase has the greatest impact on our carbon footprint.  For this reason, our goal is to leverage the potential of our brands and technologies and to offer our expertise to help our customers and consumers save 100 million metric tons of CO₂ over the ten-year period from 2016 to 2025. To achieve this, we have developed a CO₂savings portfolio that can be used as a basis for quantifying the exact contributions made by products to reducing emissions (Scope 4).

Our goal includes two approaches. With our engagement, we want to help reduce CO₂ emissions that are generated by customers when they use our products (called Scope 3 emissions). In addition, we want to help customers avoid CO₂ emissions by using our products and technologies (called Scope 4 emissions). Through our brands and technologies, we make products that are used and applied in ways that directly linked to the use of energy, such as detergents, shower gels, or hotmelt adhesives. We want to enable the efficient use of energy with innovations that cut energy consumption and the related CO₂ footprint. On top of this, we strive to encourage responsible-minded behavior while using our products through targeted communication.

CO₂ emissions from raw materials

By building on our existing SBTi targets for 2030 and following our ambition to be climate positive by 2030 for our own operations we want to explore the global SBTI net-zero standard on how to set a pathway for our scope three emissions. Emissions from raw materials play a significant part here.

Contribution by our suppliers:

The raw materials we purchase have a decisive impact on our carbon footprint along the value chain. Thus, we are sharing our commitment to becoming climate-positive with our partners and suppliers. We also expect them to make a contribution to the reduction of CO₂ along the entire value chain. Therefore, we have the ambitious target to reduce the carbon footprint of our raw materials and packaging that we use by 30 percent per ton of product by 2030 compared to the base year 2017.

Replacing CO₂ in raw materials:

In order to reduce emissions further, we have studied our portfolio to see where we can replace carbon-intensive raw materials with low carbon alternatives.

Palm ‏(kernel) oil is a key raw material for Henkel. Its cultivation can lead to deforestation of primary or secondary rainforests of significant environmental value, including peat lands and forests that absorb high levels of carbon. Drainage of these areas, for example, causes considerable carbon emissions. Our target is therefore to purchase all palm and palm kernel oil used in our products from sustainably-cultivated sources in line with the RSPO’s Mass Balance ‏(RSPO = Roundtable on Sustainable Palm Oil) model by 2025. In doing so, we want to avoid the abovementioned activities that drive carbon emissions during the production of palm ‏(kernel) oil. RSPO-certified palm oil performs better than non-certified with around 35 percent lower greenhouse gas impact.

Neutralisation of CO₂: permanently remove CO₂ or convert CO₂ into raw materials

To maximize our efforts to reduce carbon dioxide emissions along the value chain, Henkel is also focusing on technologies that are still at the development stage – and which offer huge potential for making even better use of temporary or local energy peaks in the future. This also includes exploring technologies to remove carbon from the atmosphere and permanently store it. Therefore counterbalancing the impact of emissions that cannot be completely avoided or abated.

One of these is “power-to-X”, which enables the CO₂ to be used for positive outcomes and is expected to be ready for large-scale technical application within the next 15 years. The technology is the subject of a government research project that is supported by several companies: Henkel is also planning to participate.

Using power from renewable energy sources, this technology makes it possible to blend CO₂ with other chemical elements and convert the energy it contains.

The “power” in power-to-X is green power that is generated through water electrolysis and stored as hydrogen. “X” represents the numerous valuable raw materials into which this hydrogen can be converted in conjunction with carbon dioxide – e.g., gas fuels, synthetic fuels or chemical raw materials, such as surfactants or plastics. These raw materials are climate-neutral if made from CO₂ taken from industrial processes. They are climate-positive if CO₂ from the atmosphere is used as the resource.

This opens up new possibilities for Henkel: Firstly, we can use gas from power-to-X to fuel our production ‏(spray towers, power plant). Secondly, we can replace carbon-intensive raw materials with raw materials from the power-to-X process.

If used on a wide scale, the technology can help to significantly cut CO₂ emissions in the atmosphere, reducing the carbon footprint of our value chain in the future. Over the long term, it could even make it possible to extract more CO₂ from the atmosphere than is emitted into it, making a positive overall impact on the climate. 

The deployment of conventional combustion engines that run on Compressed Natural Gas (CNG), which is mainly composed of methane, is one of the technologies that we are implementing into our business operations as part of our journey toward more sustainable mobility. CNG produces the least amount of CO₂ of all types of fossil fuel combustion. As a test, we have continuously operated CNG-powered trucks for delivery runs on the route between Serbia and Austria since 2021. The use of a CNG powered truck saves about 14 percent of CO₂ emissions on this route compared to a conventional diesel truck. 

Trucks powered by liquefied natural gas (LNG) are another alternative mobility solution for Henkel. Since 2020, two LNG-powered trucks have been traveling on our supply routes from Düsseldorf to Bönen, Germany, and Barcelona, Spain. The technology saves 20 percent of CO₂ compared to conventional diesel trucks. In 2021, the Düsseldorf site logistics operations commissioned another LNG truck, which will also be used on the Düsseldorf-Bönen supply route.

We identify and assess climate-related risks based on the recommendations of the Task Force on Climate-related Financial Disclosures ‏(TCFD).

When assessing the potential impact of climate change on our business activities, we consider the entire value chain – from the raw materials we purchase through to the marketing of our products. We draw on the findings of our comprehensive risk and opportunity assessment process. 

Further information can be found in this document:

Summarizing information according to the recommendations of the TCFD_Feb 2022

Together with our customers, consumers and suppliers, we aim to achieve reductions in CO2 emissions. This includes emissions from the raw materials we use. We also want to help customers and consumers reduce CO2 emissions that are generated when they use our products ‏(called Scope 3 emissions). In addition, we want our products and technologies to help to avoid CO2 emissions from being generated ‏(in this context called Scope 4 emissions).

The two documents below describe

• the boundaries and the GHG Scope 3 reporting categories relevant for the Henkel scope 3 reporting
• the boundaries and the GHG Scope 4 reporting categories relevant for the Henkel scope 4 reporting

Each document further outlines the methodology behind the relevant reporting categories.