Dusseldorf When Lars Petersson, CEO of the Danish paint and coatings manufacturer Hempel, talks about sustainability, he means a lot of things at once. Because the term, according to Petersson, is more complex than it is often used. “Sustainability has four dimensions for us,” says the manager in an interview with the Handelsblatt. “It’s about sustainable products, but also sustainable performance, partnerships and relationships with our employees.”
Petersson has therefore set an ambitious goal for his company. According to the medium-term strategy of the group, Hempel wants to double its sales by 2025 – and at the same time become climate-neutral in its own production. In the past year, the group, which produces varnishes and paints for the marine industry and infrastructure construction, but also for home use, generated sales of 1.5 billion euros.
With his reduction target, Hempel is two decades earlier than the European Union (EU) target of decarbonising the economy by 2045. However, the way to get there doesn’t seem far. Because the company already emits only around 0.02 tons of CO2 per 1000 liters of paint produced in its own production (Scope 1). If the emissions from the energy supply are included, the value rises to around 0.1 tonnes per 1000 liters (Scope 2).
That is little compared to the steel industry, where the production of one ton of steel currently still causes emissions of around 1.5 to two tons of CO2. But for Hempel boss Petersson, reducing emissions is just the beginning. “Because our own CO2 emissions are very low anyway because of our business model, we will have to work more closely with our suppliers and customers in the future in order to reduce the CO2 footprint there,” says the manager.
Top jobs of the day
Find the best jobs now and
be notified by email.
Interface function in the supply chain
In the value chain, Hempel stands at the interface between large CO2 consumers: On the one hand, there are the large chemical manufacturers who supply the company with primary materials that are energy-intensive and therefore pollute. This is where a large part of the so-called Scope 3 emissions arise: i.e. the CO2 that is not generated at Hempel itself, but in upstream and downstream parts of the value chain.
Here the group works together with its suppliers to reduce the impact on the climate. “There is currently no technological solution with which our suppliers can produce, for example, solvents in a climate-neutral way,” explains Petersson. Wherever possible, the company therefore relies on alternative preliminary products. One example of this is the wall paint manufacturer JW Ostendorf, which was acquired in 2018 and has increased its sales of solvent-free paints by around 85 percent in recent years.
On the other hand, Hempel also supplies customers such as the shipping industry, which emits a lot of CO2 due to its business model. Here the group tries to reduce global CO2 emissions through its products. For example, a particularly dirt-repellent coating for ship hulls should help to reduce water resistance during travel. According to the company, around 23.5 million tons of CO2 have been saved in shipping since the product was launched in 2013 – this corresponds to the emissions of around 1.2 million cars in one year.
“We try to understand where our customers’ challenges are when it comes to sustainability, and then work with them to develop appropriate solutions,” says Petersson. The Group has also defined a target for this. Hempel wants to save a total of 30 million tons of CO2 for its customers by 2025 – and in principle become climate-positive. In the coming year, the company also wants to formulate a plan for the switch to circular economy in order to reduce the amount of waste along the supply chain.
Awarded by customers
From the point of view of experts, Hempel is thus pursuing a common climate strategy. “Many companies try to offset the climate protection effect of their products on the user side with the emissions resulting from production,” says Manfred Fischedick, scientific director of the Wuppertal Institute for Climate, Environment and Energy. However, it should always be taken into account that this does not say anything about how good or bad the production itself is, “and whether there is not a lot of unused potential for savings”.
Hempel boss Larsson wants to proceed as consistently as possible with the CO2 reduction in his group – and in doing so, as far as possible, dispense with compensation measures such as reforestation projects or the like. “However, there are also very small parts in our value chain where this will not be possible in the short term,” says the manager. The company will first have to offset these emissions – even if that is only the second-best solution.
The cooperation between the paint manufacturer and Vestas, the world’s largest wind turbine manufacturer, shows how working with customers can actually help to save CO2. Thanks to process optimization by Hempel, Vestas will be able to save around 60 percent of its CO2 emissions in the future when it comes to surface treatment at the US plant in Colorado. Overall, the reduction is up to 1,100 tons of CO2 per year – while digital monitoring is intended to reduce costs at the same time.
Last year, Vestas therefore awarded its supplier an internal sustainability award. “We are impressed by Hempel’s dedication to developing ever more sustainable solutions and by the long-term goal of driving change in our own industry,” praised Lisa Ekstrand, Head of Sustainability at Vestas. It is important to Vestas to support suppliers in becoming more and more sustainable.
Sustainability is also becoming more important in M&A
In addition to such relatively new business areas, which are only just emerging for Hempel as a result of decarbonization, acquisitions should also contribute half of the planned doubling of sales by 2025. Here, too, CEO Petersson pursues a clear strategy: “When we make acquisitions, we look closely at the sustainability indicators in order to meet our medium-term goals.” If any differences in sustainability have to be compensated for, this will be included in the calculation. “If the effort is too great, we’ll let it go.”
Organic growth at Hempel also has to be subordinate to the sustainability principle. The group is striving for a uniform level of sustainability in its 24 plants around the world – and in some cases also accepts the risk of losing market share in less developed countries, where the price war is particularly fierce. “In the long term, however, we expect that regulation will be aligned around the world,” predicts Larsson. “When the time comes, we will have a head start over the competition there.”
Series – Climate Pioneers in Business: There is hardly a day on which a new company in the world does not declare its freshly set climate goals and ambitions for the energy transition. There are some who have long been ahead of the “green economy” trend and have been proving for many years that ecology and economy do not have to be a contradiction in terms. In our series we introduce a few of these “climate pioneers”.