IFRS Sustainability Disclosures
Since 2024, Belimo has reported in accordance with the IFRS® Sustainability Disclosure Standards as issued by the International Sustainability Standards Board (ISSB). While IFRS S1 outlines general requirements for sustainability-related financial information and offers general clarifications, IFRS S2 focuses specifically on climate-related disclosures. By applying IFRS S2, Belimo is aligning its sustainability disclosures with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD).
To provide annual climate-related financial information, Belimo has integrated climate-related financial risks and opportunities into its enterprise risk management process. Belimo has assessed climate-related physical and transition risks as well as the opportunities available to the Company.
Governance
The Board of Directors of BELIMO Holding AG is the highest governing body of the Group. It determines the strategic objectives and oversees the climate-related risks and opportunities impacting the Group. These climate-related risks and opportunities are an integral part to the annual, company-wide risk assessment and are treated like other operational and financial risks and opportunities.
The members of the Board of Directors possess extensive experience in sustainability and climate-related topics. Notably, two Board members, Sandra Emme and Ines Pöschel, earned the ESG Designation Certificate for Board Members in 2023. This program, designed by and for board members, aims to achieve the highest standards in ESG and climate education. Additionally, Group Sustainability provides the Board of Directors with information to enhance expertise on climate-related risks and opportunities.
The Board of Directors has delegated the responsibility for reporting and compliance regarding environmental, social, and governance (ESG) topics, including disclosures on climate-related risks and opportunities, to the Audit Committee.
Furthermore, while the Board of Directors oversees and approves climate targets, including setting, monitoring, performing, and reporting against public goals, operational management has been delegated to the CEO. The CEO can then further delegate responsibilities to specific members of the Executive Committee.
The entire Executive Committee is advised and guided by the Head of Group Sustainability. Sustainability initiatives are operationalized by the Sustainability Program Team, comprising representatives from all main Belimo departments. Group Sustainability reports to the CEO on ESG aspects, including climate change, on a quarterly basis. It coordinates the integration of these aspects into core business activities. The assessment of climate-related risks and opportunities follows the same procedures and controls as other operational and financial risks in the risk management process. The process is coordinated by Group Sustainability and Group Finance. The Executive Committee directly oversees the progress against strategic targets, including those related to climate change. Regular reviews enable the Executive Committee to take the necessary operational and strategic actions to keep targets on track.
The Board of Directors is regularly informed by the Executive Committee and Group Sustainability about the progress towards climate targets.
Strategy
Belimo has assessed twelve climate-related risks and opportunities that could reasonably affect the Company's prospects. The assessment covers both the Company's own operations (OO) and the entire value chain (VC). The climate- related risks are classified as either physical or transition risks. The potential effects of these risk are expected to occur over short-, medium-, or long-term time horizons. The definition of time horizons is aligned with the Belimo Double Materiality Assessment:
- Short-term: below 2 years
- Medium-term: 2-5 years
- Long-term: >5 years
Physical / Transition | Category | Name | Opportunity vs. Risk | Own Operation vs. Value Chain | Time horizon | Description | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Physical | Chronical patterns | Long-term climate patterns | Opportunity | VC | Long-term | Increased global warming leading to heat waves and maximum temperature requires climate adaptation with more intelligent and efficient building automation and HVAC systems (cooling). | ||||||
Transition | Resource efficiency | Resource efficiency through circularity | Opportunity | VC | Medium-term | Introduction of circular business practices and further developments in reuse / refurbishment and recycling of products reduces the environmental and climate impact and reduces the need to rely on virgin raw materials, which reduces material costs (sourcing). | ||||||
Resource efficiency through building optimization | Opportunity | VC | Long-term | Opportunity to contribute to more energy-efficient buildings and enable carbon savings by installing Belimo products: meeting the customer need for energy efficiency which leads to increased revenues and better competitive position. | ||||||||
Policy and Legal | GHG emissions pricing | Risk | OO / VC | Medium-term Long-term | Increased GHG emission pricing, e.g., CBAM in Europe leading to increased operating / compliance costs. | |||||||
GHG emissions reporting | Opportunity | OO / VC | Medium-term | Opportunity to create transparency on GHG emissions (company and product level) and to gain competitive advantage when reporting progress against targets and disclosing products carbon footprint transparently. | ||||||||
Regulations on products | Risk | VC | Medium-term Long-term | Increased regulatory requirements on products / certifications / declaration leading to write-offs, asset impairment, and early retirement of existing assets. |
Physical / Transition | Category | Name | Opportunity vs. Risk | Own Operation vs. Value Chain | Time horizon | Description | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Transition | Products & Services | Products substitution | Opportunity | VC | Medium-term Long-term | Development of new low-carbon products through R&D and innovation leading to increased revenue through demand for lower emissions products. | ||||||
Technology | Cost of product technology | Risk | OO / VC | Medium-term Long-term | Costs for transition to lower emission technology, e.g., costs to adopt new practices and processes, capital investment in technology development, higher R&D expenditures, higher prices of souring material / products. | |||||||
Opportunity | VC | Medium-term Long-term | Costs savings in use-phase for customers due to lower energy demand. | |||||||||
Reputation | Consumer preferences | Risk | VC | Medium-term Long-term | Shift in customer preferences and perceptions of company with regard to climate change leading to reduction of revenue from decreased demand for products. | |||||||
Opportunity | VC | Medium-term Long-term | Shift of consumer preferences and perceptions of company / products with regard to climate change leading to increased demand for products by meeting their requirements. | |||||||||
Stakeholder concern | Risk | VC | Medium-term Long-term | Increased stakeholder concern or negative stakeholder feedback on climate mitigation actions of company leading to reduction in capital availability and overall worse reputation of company. |
Belimo has identified five significant climate-related opportunities:
- Resource efficiency through building optimization
- Long-term climate patterns
- Consumer preferences
- Product technology costs
- Product substitution.
Additionally, stakeholder concern has been recognized as significant climate-related risk.
The impact of climate-related risks and opportunities on Belimo's business model and value chain is mainly concentrated in the downstream value chain, particularly during the use phase of our products. While consumer preferences are changing globally, there is currently a greater focus on this issue in the EMEA market region due to regional regulatory developments.
More broadly speaking, Belimo's product portfolio offers numerous solutions to help customers reduce their climate impact and building energy costs while adapting to long-term climate patterns. Changing consumer preferences and increasing investor focus on energy efficiency and sustainability are supporting the trend towards energy-efficient and sustainable buildings. Each of the three business lines has significant opportunities in this area.
Thus, Belimo is in the process of further developing product compliance and sustainability requirements to meet customer preferences and regulatory requirements related to climate change. This includes sustainable material sourcing, changes in transportation modes, and reducing energy consumption during the product's use-phase. Belimo actively engages with suppliers on their climate change mitigation actions. Close interaction with customers allows Belimo to identify climate-related requirements that help customers meet their own targets.
Currently, the Company focuses on innovation and research and development (R&D). In 2024, Belimo invested CHF 72.9 million in R&D. These investments are directed toward developing innovative new products and solutions that provide ecological, climatic, and social benefits during the product use-phase. Consequently, Belimo has a strong impact on climate change adaptation. The Company is working with its customers and suppliers to strengthen these adaptation efforts. To set near- and long-term climate targets, Belimo has defined a climate transition plan and decarbonization model focused on reducing energy consumption during the product use-phase (standby energy), actively engaging suppliers to reduce GHG emissions, sourcing lower carbon materials, and optimizing the transport network to further reduce shipping emissions while maintaining short lead times.
The effects of climate-related risks and opportunities on financial performance for the reporting period under review were assessed as part of the risk assessment process but will not be quantitatively disclosed. The anticipated effects of climate-related risks and opportunities on financial performance over short-, medium- and long-term were assessed as part of the risk assessment process but will not be quantitatively disclosed. In general, Belimo expects its financial performance to increase due to higher revenues from products aligned with lower-carbon economy.
Risk Management
Belimo uses a standardized Enterprise Risk Management (ERM) process to assess and prioritize climate-related risks and opportunities. This annual process is carried out by the Executive Committee and Group Taxes & Compliance. Climate-related risks and opportunities were collected and defined by Group Sustainability and Group Finance and approved by the CFO.
Risk scenarios were discussed and evaluated by the Executive Committee in a dedicated ERM workshop. The results are analyzed, and the risk exposure is discussed in plenary. The Board of Directors is informed of the results and provides input on strategic risks. Belimo assesses risks and opportunities based on their nature (classification of risks and opportunities), likelihood (probability of occurrence) and magnitude (financial impact), taking into account any mitigating measures implemented. The financial impact of risks is quantified and classified according the following scales:
Financial impact | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quantified impact on EBIT for the Company over 12 months in case the risk occurs | < MCHF 1.25 | MCHF 2.5 | MCHF 5.0 | MCHF 10.0 | MCHF 20.0 | > MCHF 40 | ||||||
Probability of occurrence | ||||||||||||
Quantified probability of the risk occurring over 12 months | < 3% | 6% | 12% | 25% | 50% | 100% | ||||||
In identifying and defining risks, Belimo refers to the recommendations by the TCFD on transitional risks such as technological, political, reputational and market developments. The Company has identified opportunities in the areas of products and services, resource efficiency, technology and stakeholder requirements.
Although the Company does not disclose climate-related scenario analysis in the current disclosures, Belimo is implementing new processes and measures to meet this reporting requirement in the future.
Metrics and Targets
Belimo measures and reports absolute GHG emission (in tons CO2 equivalent) classified as Scope 1, Scope 2 and Scope 3 emissions on an annual basis. GHG emissions are measured in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) and the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) for all relevant Scope 3 categories. Furthermore, Belimo discloses market-based and location-based Scope 2 emissions.
In tCO2e | 2024 | 2023 | 2022 | |||
|---|---|---|---|---|---|---|
Scope 1 | 610 | 525 | 606 | |||
Scope 2 market-based | 1 720 | 1 735 | 1 721 | |||
Scope 2 location-based | 2 244 | 2 268 | 2 278 | |||
Purchased goods and services | 100 721 | 69 227 | 100 898 | |||
Upstream transportation and distribution | 10 629 | 6 173 | 9 883 | |||
Waste generated in operations | 196 | 186 | 173 | |||
Business travel | 3 513 | 3 634 | 2 595 | |||
Employee commuting | 1 468 | 1 369 | 1 369 | |||
Downstream transportation and distribution | 1 668 | 1 293 | 1 941 | |||
Use of sold products | 501 899 | 485 716 | 572 972 | |||
End-of-life treatment of sold products | 4 565 | 4 550 | 4 373 | |||
Total Scope 3 | 624 660 | 572 148 | 694 204 |
Belimo is not applying an internal carbon price in decision-making. However, as part of its Climate Strategy, Belimo supports the Belimo Climate Foundation and applies a carbon price of CHF 200 per ton CO2e to finance GHG emissions reduction through building optimization projects. Climate-related considerations are currently not factored into executive remuneration.
Belimo has set near-term and net-zero reduction targets for Scope 1, 2, and 3 emissions. These climate targets align with the Paris Agreement to limit global warming to 1.5°C and the SBTi Net Zero Standard.
The Company is currently preparing for target validation by SBTi. The targets apply to the entire Group, not just specific business units or geographical regions. With GHG accounting processes in place, progress against the targets is frequently monitored internally and disclosed publicly on an annual basis.
Belimo is on track to meet its near-term GHG emission targets. All Scope 1, Scope 2 and Scope 3 GHG emissions relevant to Belimo's business activities are covered by gross GHG emission targets (science-based). The targets are based on the total emissions produced without the use of any carbon credits, offsets or removals. The targets are not derived using a sectoral decarbonization approach.
Related GRI Disclosures
Further related information can be found in the following sections of the GRI report:
IFRS S2 Topic | GRI Disclosure | |
|---|---|---|
Governance | 2-12 Role of the highest governance body in overseeing the management of impacts | |
Strategy | ||
Metrics and targets | ||