Sustainability – because it concerns us all

2. December 2022

Humanity is facing immense challenges. Overcoming them requires us – governments, companies, and people – to all pull together. What was once considered “nice to have” is now a vital factor in determining a company’s long-term business success. Sustainability is now a “must have” – including at Rheinmetall.

Building photovoltaic plants is part of the Group’s climate strategy.
(image: istockphoto/ Joey Ingelhart / image top: FOJANA Unterlüß)

Sustainable clothing, sustainable food, sustainable travel – seldom has a term taken off so fast. And rightly so, because one look at the news will tell you that we’re not just facing one crisis; there are several, and they all require our attention at the same time. This means we have a phenomenal amount of work to do. Robert Swan, the famous polar explorer and environmental activist, made this point so succinctly when he said: ‘The greatest threat to our planet is the belief that someone else will save it.’ “We all have a collective duty here,” notes Ursula Pohen. She heads Rheinmetall’s Corporate Social Responsibility department, under whose remit all the threads of sustainability come together. “Sustainability is not folklore, it’s not for ‘do-gooders’; sustainability is an important part of our business.”

Passionate to be part of the solution

For some time now, customers, investors, employees and the public have not just been interested in the hard financials. They are seeking to form a complete picture of how companies operate, how they conduct their global business activities, and the impact these have on people and the environment. ESG – Environmental, Social, Governance: These are the three buzzwords by which companies will have to be measured in the future.

“Our stakeholders expect us to take responsibility as a company. We’ve been accepting this responsibility for over 130 years. For us, responsibility means doing our bit to help resolve the most pressing problems of our time, the most pressing of which is mitigating the effects of climate change,” declares Armin Papperger, CEO of Rheinmetall AG. “We’re not doing this just because we have to. We’re doing it because we want to! Passion for technology, passion for sustainability – we believe in both.”

Ambitious goals for sustainable development

Making a commitment to sustainability means having to formulate a sustainability strategy and setting goals. This applies equally to all three areas for action: environment, social, and governance. Three categories with one aim: obtaining a complete picture of sustainability in all its facets. Sustainability has been on everyone’s lips since 2015 at the latest. It was then that the global community adopted 17 sustainable development goals with its 2030 Agenda. World leaders also agreed under the Paris Climate Agreement to limit global warming to well below two degrees centigrade, prompting the corporate sector to make considerable efforts.

The way to carbon neutrality

The Group is making good headway on the environment front. Rheinmetall has set itself the goal of becoming carbon-neutral by 2035. To make sure the company is making tangible progress, it has drawn up a road map. “We are holding ourselves to clear, scientifically proven standards as we move to improve our energy and climate footprint,” explains Dr Alexander Vogt, who heads the Group’s Energy Management department.

The department is now preparing the Group to join the Science-Based Targets initiative, or SBTi for short. Over 3,000 companies belong to this international network. Its science-based targets will help to limit global warming to 1.5°C. “For Rheinmetall, this means cutting all the direct and indirect emissions from our business activities by 4.2 percent a year,” explains Dr Vogt. “It also means formulating clear reduction targets for greenhouse gas emissions throughout our entire value-added chain.”

At Unterlüss, Rheinmetall is building a heating plant that will run on woodchips. (istockphoto/ Claudiio Doenitz)

Several pilot projects are currently in progress, including an energy supply project at Rheinmetall’s Unterlüss site. Due to go into operation in 2023, a new heating plant there will be powered by material from the company’s own forestry operation, including wood pellets. This will save 5,200 tons of CO2 emissions a year. Further heating systems are planned in Unterlüss to reduce the plant’s greenhouse gas emissions and make production less dependent on fossil fuels and the current limited availability of these fuels.

Thinking about climate protection on a global scale

“We’re taking a three-pronged approach: we’re saving energy, we’re making ourselves more independent and we’re obtaining more power from renewable sources,” states Dr Vogt. One example of this can be seen in South Africa, home to Rheinmetall Denel Munition. The country gets most of its energy from coal. “We’re working with a local partner there to build a photovoltaic system so that we can supply ourselves with renewable energy.” The Group is currently exploring 20 larger-scale projects in all its divisions, with another 30 under development. Because Rheinmetall thinks globally when it comes to protecting the climate, the Group is also looking into procuring green energy for all its locations worldwide.

Sustainability is not an end in itself

Thus far, the strong focus on climate and environmental issues has somewhat overshadowed the social aspect of sustainability. “That’s now set to change – driven not least by the increasing regulatory requirements at national and international level. Due diligence requirements on human rights, in the company itself and the wider supply chain, are increasingly important,” notes Ursula Pohen. The third pillar of ESG comprises governance, compliance, risk management, and internal control systems. “If you like”, she adds, “the ‘G’ for governance includes all the work that ensures we comply with the rules and regulations.”

The green transformation of a globe-spanning Group like Rheinmetall involves far-reaching change and affects a whole host of administrative, operating and strategic processes. One thing’s for sure: sustainability is not an end in itself; it’s about an organization’s ability to continue creating value in the future – a task that’s never complete.

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