2.1. ESRS E1. Climate change
- 2.1.1 Interaction with other ESRS
- 2.1.2 Governance
- 2.1.3 Strategy
- 2.1.4 Impact, risk and opportunity management
- 2.1.5 Metrics and targets
Viscofan is committed to energy efficiency and global climate protection. We seek to reduce the intensity of our atmospheric emissions by investing in and developing more efficient production technology, increasing the use of renewable energy and leading the change in the industry. We also wish to positively influence the value chain, through sustainable casings that help our customers to reduce their emissions.
Current and potential impacts, risks and opportunities
Negative impacts
- Impact on climate change. Greenhouse gas emissions.
Opportunities
- Products with a lower carbon footprint.
- Efficiency of production processes.
- Promotion of renewable and sustainable energies.
Risks
- Shortage of collagen skins. Physical risk – Temperature-related.
- Water scarcity. Physical risk – Water-related.
- Regulatory changes. Transition risk – Policy and Legislation.
- Cost of transition to low-emission technologies. Transition risk – Policy and Legislation.
Policies and commitments
- Sustainability Policy.
- Climate Change Policy.
- Environmental management system based on ISO 14001.
- ISO 50001 energy efficiency certificates.
Sustainability objectives
- Net Zero target for Scope 1 and 2 emissions.
- Reducing the intensity of water collection per meter produced.
Governance
- Board of Directors. Appointments, Remuneration and Sustainability Committee, Audit Committee.
- Executive Sustainability Committee.
- CEO.
- Department of Investor Relations, Communication and Sustainability.
- Operational Sustainability Department.
- Executive Sustainability Subcommittee.
2.1.1 Interaction with other ESRS
Although other material aspects of sustainability included in the standard have been excluded on the basis of the double materiality analysis, climate change also has an impact on the ESRS E2 – Pollution with respect to ozone-depleting substances, ESRS E3 – Water resources, ESRS E4 – Biodiversity, as well as ESRS E1 – Own workforce, ESRS E2 – Workers in the value chain, ESRS S3 – Affected communities, and ESRS S4 – Consumers and end-users.
2.1.2 Governance
ESRS 2 GOV-1 and ESRS 2 GOV-3
Climate change is a significant aspect identified in the materiality analysis and, as such, is included in the Group's operating management processes. It is an essential part of our risk mitigation in our Sustainability Action Plan. See ESRS 2 section General Disclosures – 1.1.2. Governance.
In this context, the remuneration systems for members of the Board of Directors and employees are aligned with the Beyond25 strategy and include non-financial objectives related to sustainability, given its importance as one of the four strategic pillars. Climate change indicators as a material aspect are integrated into our short- and long-term incentives. See in the ESRS 2 section General Disclosures – 1.1.2. Governance.
2.1.3 Strategy
Transition plan for climate change mitigation
ESRS E1-1
Having met the 2030 target of a 30% reduction in the intensity of scope 1 and 2 emissions on metres of extruded casings by 2023, the Executive Sustainability Committee has drawn up a climate transition plan within its Sustainability Action Plan. The transition plan has been approved by the Board of Directors at its December 2024 meeting.
Viscofan has set climate objectives in line with the provisions of the Paris Agreement with the aim of making our business model compatible with the transition to a sustainable economy, and with the limitation of global warming to 1.5°C that seeks a significant reduction in direct and indirect emissions.
This plan is part of Viscofan Group's Sustainability Action Plan, 2022-2025, in accordance with the Beyond25 strategy. Since climate change is a material element for Viscofan, we are seeking to combine the decarbonisation of operations with energy diversification by reducing dependence on fossil fuels such as natural gas.
Our ambition is to reach net zero greenhouse gas emissions by 2050 with a roadmap based on an intermediate target of 45%-50% absolute reduction of direct emissions (scope 1) and emissions derived from electricity consumption (scope 2 – market-based) by 2030 (absolute terms) compared to the 2018 baseline. In terms of scope 3 emissions, this metric is being reported for the first time this year, and therefore no specific initiatives or plans for improvement have been established. This line of work will be addressed by the different bodies in the 2025 financial year.
The target for scope 1 and 2 emissions uses the 2018 emissions figure as a reference (the base year for all other sustainability targets).
Viscofan's Net Zero Plan is based on five strategic axes
- Promotion and investment in equipment for the use of green hydrogen and biofuels, biomass.
- Electrification of operations.
- Promotion of electricity sourcing from renewable sources.
- Implementation of energy efficiency measures.
- Remuneration incentives linked to decarbonisation.
The Net Zero plan does not allow for changes in Viscofan's product portfolio, or the adoption of new technologies in operations or in the value chain, with the exception of those necessary for the production, distribution and use of renewable energy and energy efficiency measures.
The investments associated with this plan until 2030 have been estimated at €14.5 million, including electric boilers and biomass and energy efficiency measures in production facilities. The investments already made until 2024 (59%) and the remaining estimated investments will be financed with Viscofan's own resources. These investments do not represent a relevant part of Viscofan's total asset base and have not been identified as a CapEx plan in accordance with the requirements of Commission Delegated Regulation (EU) 2021/2139. Note 25 reports the investments and expenses associated with the environment and climate change for the year, including those under the Net Zero plan.
As for the decarbonisation levers, we expect to achieve a 45% to 50% reduction in scope 1 and 2 GHG emissions by 2030 compared to 2018, based on projects already carried out and underway; in the case of green hydrogen and other biofuels, this will depend on their availability at a competitive cost. From 2030, concrete measures will be defined according to the available technologies and the expected progress. Reduction initiatives and targets in absolute terms are considered possible as long as there is technological availability of hydrogen (fundamentally), biogas or other synthetic fuels that do not involve the emission of greenhouse gases. The plan does not provide for locked-in GHG emissions.
In addition, within Viscofan's activities, and with the cogeneration plant installed in Cáseda (Spain), we sell to third parties the electricity that the Group does not use in the casing production process. This electricity sales activity is included in Annexes 1 and 2 of the Regulation as an eligible activity in the climate change mitigation and adaptation objectives. It represents 4% of Viscofan Group's net turnover, lower than the criterion established in Article 12(1)(d) to (g) and Article 12(2) of Commission Delegated Regulation (EU) 2020/1818 (Regulation on climate transition benchmarks), so that Viscofan is not excluded from the EU benchmarks aligned with the Paris Agreement.
This plant has three cogeneration engines with the capacity to use green hydrogen as fuel. This renewable energy source is expected to be used in 2030. No relevant investments have been made in cogeneration activity during the 2024 financial year (see point 2.4. of the EU Taxonomy) nor are they foreseen in the Net Zero Plan.
At the end of 2024, the Group's scope 1 and 2 GHG emissions (market-based) amounted to 403,064 tonnes, -25.7% compared to 2018, mainly due to the purchase of electricity from renewable sources and, to a lesser extent, to the installation of solar panels and energy efficiency measures. Likewise, in 2024, scope 1 GHG emissions in Spain went down due to lower electricity production in the cogeneration plant.
Viscofan's exposure to gas-related activities covered by Delegated Regulations on climate change adaptation or climate change mitigation under the Taxonomy Regulation
See point 2.4. European taxonomy for environmentally sustainable economic activities
Material impacts, risks and opportunities, their interaction with the strategy and business model and current and anticipated financial effects
ESRS 2 SBM-3, ESRS E1-9 (phased in)
Below are the main IROs, their classification by category and their description, as well as their interaction with Viscofan's business, strategy and financial planning in accordance with disclosure requirement SBM-3 of ESRS 2.
Risks identified
1. Shortage of collagen skins. Physical risk – Temperature-related
Description:
The physical consequences of global warming or climate change regulation itself may lead to higher prices for raw materials, affecting the company's procurement, transport and distribution worldwide. Increases in the price of raw materials may be caused by their reduced access or availability, or by their carbon footprint.
In the particular case of Viscofan, the main risk is caused by a lower availability of collagen skins of cow origin. Viscofan has a diversified supply of this raw material on different continents and although it is a global risk, it may have a greater impact on certain geographical areas based on scenario analysis.
Specifically, according to IPCC reports and other academic studies, the increase in global temperature can put greater stress on livestock. The cumulative effects of productivity shocks are expected to translate globally into 7-10% decreases in livestock numbers by 2050 if ~2°C warming materialises (Boone et al., 2018), leading to lower raw material availability in different geographical areas where Viscofan purchases collagen skins. At temperatures above 30°C, animals eat 3-5% less per additional degree of temperature, which reduces their productivity and fertility. These climate change consequences may lead to a lower availability of collagen leather and so to increases in its price.
Interaction with the strategy and response plan:
Para compensar el encarecimiento de las materias primas Viscofan tiene herramientas de mitigación:
- Viscofan has mitigation tools to compensate for the increase in raw material prices:
- Passing on cost inflation through higher selling prices to customers.
- Specific R&D projects and production trials encouraging diversification of sources of supply and suppliers.
- Investment and development of more efficient and less wasteful production processes
Potential impact
To calculate the potential impact of this risk, we have used the IPCC CR scenarios and academic studies, estimating in 2050 -10% lower availability of collagen skins in a Neutrality Scenario (≤2º) and -20% in an accelerated warming scenario (≥4º). Thus, the potential impact for Viscofan in that year has been studied through the equivalent in terms of reduced sales in collagen casings associated with the lower availability of this raw material.
During 2024, there have been no situations of lack of availability of collagen skins that result in increased prices of raw material.
2. Drought. Physical risk – Water-related
Description:
The increase in the planet's average temperatures can increase the risk of water stress, causing a lack of supply at production plants. Water is essential for the viability of Viscofan's production plants, requiring water collection for different phases of the process, mainly for casing cleaning, cooling, steam production and moistening of casings.
According to the World Resources Institute (WRI), Viscofan is present in some countries where water stress is expected to increase compared to current levels. Drought and water scarcity events could lead to restrictions on water use in these areas, directly affecting the company's production chain and resulting in less capacity to meet demand several days a year. The identified sites subject to this analysis are plants located in the United States and Mexico.
Interaction with the strategy and response plan:
Within the Sustainability Action Plan, Viscofan is analysing possible scenarios and measures to be implemented faced with this possible long-term risk.
Likewise, the 2030 commitments include reducing the intensity of water collection. To comply with this, Viscofan is developing and investing in technologies that require less water, promoting and studying the viability of reusing water in the production process and investing in the best available water treatment and discharge technologies.
Potential impact:
To study the potential impact, the IPCC's SSP scenarios and the World Resources Institute's analysis have been used as a basis. With this, we have analysed the variation in the level of water stress between 2030 and 2040, used as an indicator of possible water rationing problems, under the assumption that the administrations have adequate infrastructures to carry it out in relation to the historical availability of water, but not necessarily with the new availability associated with global warming.
Supply shortages at plants could cause production stoppages and the loss of sales which is difficult to quantify based on the climate scenarios analyzed. Viscofan has contingency plans in place to address this.
In 2024, the Viscofan Group plants have had no water supply problems.
3. Regulatory changes. Transition Risk – Policy and Legislation
Description:
Viscofan's production process is energy intensive, so legislative proposals related to this resource and aimed at mitigating climate change may have a particular impact on the business. In this regard, Viscofan has identified as a material risk the rise in the prices of GHG emission allowances under the EU Emissions Trading System, and the establishment of this mechanism at a global level.
Interaction with the strategy and response plan:
Viscofan has a Net Zero Plan for 2050 with an intermediate target of reducing scope 1 and 2 GHG emissions by between 45% and 50% by 2030 (versus 2018), with defined decarbonisation levers. See details of the plan in section 2.1.3 of this ESRS and the most relevant actions in the year in section 2.1.4. of this ESRS.
Potential impact
The increased price of greenhouse gas emissions and the extension of its mechanism worldwide has an impact on the Group's operating costs.
On the TCFD basis, Viscofan has used the IEA Sustainable Scenario and the IEA Current Policies to estimate the potential impacts, with Neutrality (≤2º) and Accelerated Warming (≥4º) scenarios, which establish an increase in the price of CO2 emission allowances between 40% and 210% in 2050 compared to current levels, depending on the scenario.
Viscofan, with Cáseda in Spain and Weinheim in Germany, is subject to the European Union's GHG emission allowance regime called EU-ETS. In the current financial year, expenditure on GHG emission allowances is €17.1 million. This cost has been detailed in note 8 of the Viscofan Group's consolidated financial statements.
4. Cost of transitioning to lower-emission technology: Transition risk – Policy and Legislation
Description:
Governments have high ambitions to achieve carbon neutrality, and this can lead to the deterioration of existing energy assets and investment in equipment that uses renewable energy sources or generates lower carbon emissions.
If the speed of this transition is faster than the amortisation period of the equipment or requires non-mature energy technologies to be adopted, it can lead to significant associated costs and investments, as well as loss of overall product competitiveness. This is a risk that has been considered globally in all operations where Viscofan is present.
Interaction with the strategy and response plan:
Viscofan, as part of its Net Zero Plan, is seeking to invest in energy equipment that uses renewable energies to the extent that the existing ones have reached the end of their useful life, as well as the diversification of energy sources, in order to achieve greater self-consumption. See details of the Net Zero plan in section 2.1.3 and the most relevant actions in the year in section 2.1.4. of this ESRS.
Potential impact:
Based on Krishnan et al 2021 estimates, the Net Zero 2050 scenario would require spending on physical assets equivalent to around 7.5% of GDP during the period 2021 to 2050.
For now, in 2024, based on the analysis carried out following the IAE's Net Zero Emissions (NZE) scenario, the transition commitments to low-emission technology of the national governments of the countries in which Viscofan is present have a time horizon longer than the useful life of the energy equipment. Likewise, based on Viscofan's Net Zero Plan approved by the Board of Directors, we foresee no significant investments to achieve the intermediate targets by 2030 or the replacement of existing energy equipment.
Impacts
1. Greenhouse gas emission
Casing production is a continuous and energy-intensive process, mainly due to its drying phase. However, according to the European Union's environmental taxonomy criteria, 96% of Viscofan's turnover has no significant impact on climate change. The only eligible activity is the cogeneration of heat/cold and electricity based on natural gas from the Cáseda plant in Spain, which consists of the sale to third parties of the electricity that the plant does not use in its production process and which represents 4% of the net turnover of Viscofan Group. See details of the net turnover of the Viscofan Group in note 19.1 of the consolidated financial statement.
This cogeneration activity is not aligned and therefore does not make a substantial contribution to climate change mitigation based on the technical requirements established by the Taxonomy Regulation. These requirements set a minimum level of greenhouse gas emissions for a cogeneration activity to be aligned that is technically impossible to achieve with the use of 100% fossil fuel, requiring the blending of non-fossil fuels and the development of new technologies that would allow such consumption.
Opportunities identified
Viscofan's integral risk management system assesses and monitors the risks and their tendency, taking the necessary management measures which, aside from mitigating the risk, may generate opportunities. The main opportunities identified are described below:
1. Products with a lower carbon footprint
For Viscofan, the reduction of GHG emissions represents an opportunity not only to reduce the environmental impact of our operations, but also to offer our customers products with a lower carbon footprint that help them in their challenges in the fight against climate change, which can provide an additional competitive advantage.
2. Efficiency of production processes
The reduction in the intensity of use of resources such as energy or water, as well as a reduction in the generation of waste, could lead to savings for Viscofan and represent a competitive improvement compared to other market players that do not adopt this type of strategy. To this end, it is necessary to optimise and improve manufacturing processes, establishing circularity and efficiency measures in terms of water, waste and energy.
3. Promotion of renewable and sustainable energies
Viscofan is working to promote the decarbonisation of its processes using green hydrogen as an energy vector. If this technology were available competitively and continuously, it would save CO2 emissions and the cost associated with their emission allowances.
Resilience analysis
Based on the analysis of climate change risks detailed above, no impairments of current assets have been identified and no significant investments are envisaged to comply with the commitments established in our 2022-2025 Sustainability Action Plan or the interim 2030 commitment of the Net Zero Plan.
With a longer time horizon, Viscofan has not carried out a detailed resilience analysis as established in the ESRS E1 beyond the Net Zero 2050 Plan, which assumes the development of renewable energy production and supply technologies that are currently not available at a competitive cost and which would mitigate the risk of increased cost of GHG emissions, and which may also represent an opportunity to reduce the current cost of GHGs in Europe.
In the case of physical risks (scarcity of collagen skins and water supply) Viscofan has a response plan for anticipation and mitigation, as detailed above. In addition, where necessary, we take appropriate countermeasures or, to the extent possible and economically acceptable, transfer them to third parties (such as insurers). Opportunities and risks are continuously monitored using indicators, so that, for example, changes in the economic or legal environment can be identified at an early stage and, if necessary, appropriate response measures implemented.
2.1.4 Impact, risk and opportunity management
Description of processes for identifying and assessing climate-related impacts, risks and opportunities
ESRS 2 IRO-1
Viscofan Group's process for determining impacts, risks and opportunities (hereinafter referred to as IROs) has been described in ESRS 2 – General Disclosures, section 1.1.4.
In the particular case of climate change, Viscofan's risk and opportunity management model is based on the COSO ERM and Task force on climate-related disclosures (TCFD) recommendations and on the company's Risk Control and Management Policy, which also takes into account impacts and dependencies.
Viscofan has identified physical and transition risks and transition opportunities, based on the recommendations of TCFD, reference institutions (IEA and IPCC) and the analysis of comparable companies that are in line with the types detailed in points AR 11. and AR 12 of ESRS E1. This identification has been carried out in the operations themselves, and in the value chain.
To determine which risks and opportunities could have a material financial impact on the organisation, the Executive Sustainability Committee has assessed their potential impact, probability and mitigating actions put in place.
Three global warming scenarios have been analysed, one with high emissions that envisages greater climate-related hazards (4.0ºC), one in line with the limitation of global warming (1.5ºC) and another intermediate (2.4ºC) and with different time horizons for materialisation:
- Current or already materialised: materialisation in the 2024 financial year, the reporting year in the financial statements.
- Near or medium-term future: materialisation in the next five years, applicable for all scenarios that offer projections to 2030.
- Long-term future: materialisation in a period of more than 5 years, applicable for all scenarios that offer projections to 2040 or later.
For material physical risks, a scenario analysis has been carried out based on specific hypotheses about the external conditions that have led to the materialisation of a specific situation and that may lead to a climate-related hazard, especially in a higher temperature (4.0ºC), supported by third-party scientific studies based on relevant climate data, and historical trends. This analysis considers the sites in which Viscofan is present and the dependence on raw materials that could be affected by a climate-related event. See description of these in section 2.1.3. of this ESRS.
In transition risks and opportunities, the main focus of the assessment is on possible events in a scenario in line with the limitation of global warming to 1.5ºC based on third-party studies on policies, costs and investments and consumption habits in a world adapted to this situation.
In order to identify, quantify and assess the impact of its activity on climate change, Viscofan has worked from the European Union's environmental taxonomy criteria. Considering them, the natural gas-based cogeneration of heat/cold and electricity at the Cáseda plant in Spain has a negative impact on climate change. This activity is included in Viscofan's Net Zero Plan described above.
Policies related to climate change mitigation and adaptation
ESRS E1-2, ESRS 2 MDR-P
Key content and principles
Within the framework of the General Sustainability Policy and in line with the Sustainable Development Goals (SDGs), Viscofan has a climate change policy approved by the Board of Directors in December 2020 in order to establish its commitment to the control of atmospheric emissions, energy efficiency, as well as a business strategy related to the development of alternative energy sources. This policy addresses climate change mitigation and adaptation.
This policy is available on Viscofan's website in the section on Corporate Governance – Regulations and Policies.
This policy establishes the following basic principles and commitments:
- To gradually reduce the intensity of greenhouse gas emissions by setting quantifiable and measurable targets.
- To incorporate the climate change variable into internal decision-making and investment processes, as well as into long-term risk analysis and management processes.
- To seek innovative advances in product design that contribute to providing sustainable solutions, in particular in the use of alternative renewable energy sources.
- To implement certified environmental management systems.
- To introduce circular economy criteria in the company's activities.
- To foment and adopt energy saving and efficiency measures.
- To promote initiatives to raise awareness among employees and external stakeholders of the fight against climate change aimed at consolidating a culture of efficient and responsible use of energy and resources within the group.
- To promote agreements and programmes with other stakeholders in order to capitalise on the group's expertise and resources to solve climate-related problems and generate social value.
- To report in a transparent way on significant results and actions in the fight against climate change.
Scope of the policy
This policy applies to all companies in the Viscofan Group and binds all its staff, regardless of the position and function they perform.
Additionally, the policy sets forth that Viscofan will foster the application of the Policy's principles and provisions with any natural and/or legal person linked to Viscofan by a relationship other than an employment relationship where it is possible and appropriate for them to follow principles and guidelines consistent with those set out in this Policy and other sustainable development policies.
Monitoring and supervision:
Monitoring of the Policy is the responsibility of the Board of Directors, which will exercise it through the oversight of the Appointments, Remuneration and Sustainability Committee regarding the development and implementation of sustainability policies and strategies, and of the Audit Committee in terms of the integrity of the non-financial information included in the management report, as well as in the supervision of non-financial risks arising from the Group's actions in relation to the Policy. Likewise, the Group has an Executive Sustainability Committee whose tasks include promoting sustainability plans and programmes in the implementation of policies, and an Ethics and Compliance Committee reporting to the Audit Committee which, in addition to ensuring compliance with the Code of Conduct, manages the channel for reporting any offences by employees and other people related to the company.
Actions and resources in relation to climate change policies
ESRS E1-3, ESRS 2 MDR-A
Viscofan's commitment to environmental improvement and the fight against climate change is also revealed in its human, operating and financial dimension.
Management systems
We are working to attain this environmental management ISO 1400 certification at all our production plants. In addition, the plants in Cáseda and Urdiain (Spain), Weinheim (Germany) and Ceske Budejovice (Czech Republic) are certified according to the ISO 50001 standard.
Therefore, they are able to improve their efficiency, energy costs and green greenhouse emissions. As part of its commitment to improve energy management, the Group plans to obtain this certificate for other plants.
The breakdown of the Group's plants with these certificates as at 31 December 2024 is as follows:
| Country | Plant | ISO 14.001 | ISO 50.001 |
|---|---|---|---|
| Spain | Cáseda | Yes | Yes |
| Urdiain | Yes | Yes | |
| Germany | Weinheim | Yes | Yes |
| Alfhausen | No | No | |
| Serbia | Novi Sad | Yes | No |
| Czech Republic | Ceske Budejovice | Yes | Yes |
| Belgium | Hasselt | Yes | No |
| US | Danville | No | No |
| Montgomery | Yes | No | |
| New Jersey | Yes | No | |
| Mexico | Zacapu | Yes | No |
| San Luis PotoYes | Yes | No | |
| Brazil | Itu | Yes | No |
| Matarazzo | Yes | No | |
| Uruguay | Pando | Yes | No |
| China | Suzhou (2 plantas) | Yes | No |
| Australia | Sidney | Yes | No |
Resources for energy efficiency and the fight against climate change
The reduction in energy consumption with new technologies and the availability of renewable energy sources are essential aspects of Viscofan's commitment to contributing to protection against climate change and entail the implementation of projects and investments.
Based on this, the CapEx allocated to projects aimed at the fight against climate change and energy efficiency in the 2024 financial year amounts to €7.4 million. The investments have been identified in the list of additions to property, plant and equipment and intangible assets of the Viscofan Group (see notes 5 and 6 to the consolidated financial statements).
Of these, the following should be highlighted:
The investment in Cáseda for the installation and commissioning in 2025 of a biomass boiler that will allow us to reduce CO2 emissions and harness cellulose casing waste. We estimate emission savings of 9,000 tonnes equivalent per year.
The installation of electric boilers in Cáseda with the aim of replacing part of the plant's energy needs (currently met with natural gas) with electricity from renewable sources thanks to an agreement to supply photovoltaic electricity through the construction by a third party of a solar park adjacent to the factory. We estimate emission savings of 30,000 tonnes equivalent per year.
The investment to start up a GEA heat recovery plant in Brazil in an evaporation plant, a new technology for the reduction of energy consumption compared to the previous technology.
Energy measurement and control systems have been implemented in various Group sites to achieve greater control, use and efficiency in the energy sources of the production process.
These investments have been financed with the cash generation from the business, although Viscofan has financing with sustainable criteria that, not being particularly attached to the aforementioned projects, contribute to Viscofan's sustainable performance. See note 15 of the consolidated financial statements.
And see section 2.4. European taxonomy of environmentally sustainable economic activities in which Viscofan reports the key performance indicators under Commission Delegated Regulation (EU) 2021/2178.
In addition, within the framework of the climate strategy, Viscofan does not plan to sell key assets or products during their useful life, which result in locked-in GHG emissions.
Environmental training
Being more sustainable and reducing our impact on the environment is a commitment for all of us. In addition to allocating financial resources, measures are also promoted to further the Group's values and commitments with regard to environmental management among employees, with training courses standing as an essential element of the management approach.
It is worth noting the internal training carried out for people involved in reporting information and in EU Delegated Regulation 2023/2772 on sustainability reporting.
2.1.5 Metrics and targets
Targets related to climate change mitigation and adaptation
ESRS E1-4, ESRS 2 MDR-T
Viscofan's Net Zero emissions target
In 2024, Viscofan has set a Net Zero emissions reduction target. The Executive Sustainability Committee has made this target compatible with the Paris Agreement and therefore with the limitation of global warming to 1.5°C. This Net Zero target has been approved by Viscofan's Board of Directors at its December 2024 meeting.
A path with intermediate milestones has been established, namely an aggregate reduction by 2030 of more than 50% of scope 1 and 2 GHG emissions compared to 2018. For scope 1 emissions, a reduction of 29% is expected by 2030 vs. 2018 and for scope 2 emissions a reduction of 99% in the same period.
Likewise, the Net Zero target has been set for 2050. This target does not take into account carbon credits or avoided emissions.
The target was set on the basis of 2018, as it was the reference year used for the sustainability objectives and from which Viscofan's first Sustainability Action Plan was established. At the moment, a future update plan for the base year has not been established.
In the case of scope 1 and 2 emissions, the target is for all the Viscofan Group's production plants. The market-based approach has been chosen in setting targets for the calculation of scope 2 emissions.
In terms of scope 3 emissions, 2024 is the first year when this metric is calculated, and therefore no specific initiatives or improvement plans have been drawn up. This line of work will be addressed by the different bodies in the 2025 financial year.
To set the targets, we have used the same climate scenarios as for the risk analysis with a constant scope of companies, greater use of renewable electricity in the world, and greater availability in the supply of renewables at a competitive price. The decarbonisation levers to achieve this target, which include the use of renewable energy and energy efficiency measures, have been described in the subsection Transition Plan for climate change mitigation included in point 2.1.3 of this ESRS.
Based on these, Viscofan's Net Zero goal is broken down as follows:
| In tonnes of CO2eq | Base year 2018 | Reached 2024 | Target for 2030 | Target until 2050 |
|---|---|---|---|---|
| GHG emissions | 542,266 | 403,064 | 271,134 | 54,266 |
| Use of renewable energy | 0 | -61,199 | -128,630 | -216,868 |
| Energy efficiency and reduced consumption | 0 | -2,500 | -2,600 | 0 |
| Fuel substitution | 0 | 0 | -700 | 0 |
| Electrification | 0 | 0 | 0 | 0 |
| Material efficiency and reduced consumption | 0 | 0 | 0 | 0 |
| Product phase-out, replacement or modification | 0 | 0 | 0 | 0 |
| Process phase-out, replacement or modification | 0 | 0 | 0 | 0 |
| Other | 0 | -75,503 | 0 | 0 |
No specific objectives have been established in relation to renewable energy, energy efficiency, which are included in Viscofan's Net Zero Plan, nor specific objectives for adaptation to climate change.
Cogeneration activity
Cogeneration activity consists of the sale to third parties of the electricity that the Group does not use in the production process of its main activity. It is included in Annexes 1 and 2 of the Regulation as an eligible activity with respect to the objectives of climate change mitigation and adaptation to climate change. The CapEx of this activity in the year is not material, at less than 3% of the Group's total investments. See section 2.4 European taxonomy of environmentally sustainable economic activities of this sustainability report.
Sales of cogeneration energy account for 4% of the Group's net turnover, which means that Viscofan is not excluded from the EU benchmarks aligned with the Paris Agreement, in accordance with the exclusion criteria set out in Article 12(1)(d) to (g) and Article 12(2) of Commission Delegated Regulation (EU) 2020/1818 (Regulation on climate transition benchmarks).
Target for the reduction of water withdrawal intensity
The United Nations Global Compact, of which Viscofan is a signatory member, is committed to SDG 6. Clean water and sanitation. Viscofan has made a voluntary commitment based on the Environmental Policy and within the framework of the Sustainability Action Plan, establishing a target for reducing intensity.
This target is based on a 10% reduction in the intensity of water withdrawal over metres of extruded casings by 2030.
With this target, Viscofan seeks to reduce the risk of climate change in water and improve efficiency in the use of this resource.
The levers to achieve the target are:
- Development and investment in production technologies with a lower need for water, mainly in process phases that involve washing the casings.
- Efficiency measures in the use of this resource.
- Reuse as far as possible of the water from the production process.
To establish the target, we have forecast an increase in production for the denominator, the extruded meters, based on the greater demand for casings foreseen in the Beyond25 strategic plan and the historical growth of the market from 2% to 4% in volumes.
This target has no intermediate milestones, and no ecological thresholds, entity-specific allocations and conclusive scientific evidence have been considered when setting it.
The target was set on the basis of 2018, as it was the reference year used for the sustainability objectives and from which Viscofan's first Sustainability Action Plan was established. The target's scope is all the production plants of the Viscofan Group.
The Executive Sustainability Committee monitors performance against this target on a quarterly basis, identifying catalysts for variances. This Committee also reports regularly to the Board of Directors' Appointments, Remuneration and Sustainability Committee.
The variations in the ratio on a baseline of 100 for 2018 are as follows:
| Base 100 year 2018 | 2030 Commitment | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|---|
| Water withdrawal in m3 / Extruded metres | 90 | 87 | 86 | 89 | 95 | 100 | 101 | 100 |
Energy consumption and mix
ESRS E1-5
The internal energy consumption expressed in MWh is the following:
| In MWh | 2024 | 2023 |
|---|---|---|
| 1) Fuel consumption from coal and its derivatives | 0 | 0 |
| 2) Fuel consumption from crude oil and petroleum products | 10,541 | 10,470 |
| 3) Fuel consumption from natural gas | 1,756,590 | 2,001,205 |
| 4) Fuel consumption from other fossil sources | 0 | 0 |
| 5) Consumption of electricity, heat, steam and refrigeration bought or purchased, from fossil sources | 116,686 | 161,786 |
| 6) Total fossil energy consumption (calculated as the sum of lines 1 to 5) | 1,883,817 | 2,173,461 |
| Share of fossil sources in total energy consumption (%) | 86,0% | 90,8% |
| 7) Consumption of electricity, heat, steam and refrigeration bought or purchased, from nuclear sources | 24,374 | N/A. |
| 8) Energy consumption from nuclear sources | 24,374 | N/A. |
| Share of nuclear sources in total energy consumption (%) | 1,1% | N/A. |
| 9) Fuel consumption by renewable source, such as biomass (which also includes industrial and municipal waste of biological origin, biogas, renewable hydrogen, etc.) | 43 | 0 |
| 10) Consumption of electricity, heat, steam and refrigeration bought or purchased, from renewable sources | 279,973 | 218,950 |
| 11) Consumption of self-generated renewable energy that is not used as fuel (MWh) | 1,261 | 707 |
| 12) Total renewable energy consumption (MWh) (calculated as the sum of lines 9 to 11) | 281,278 | 219,657 |
| Share of renewable sources in total energy consumption (%) | 12,8% | 9,2% |
| Total energy consumption (calculated as the sum of lines 6, 8 and 12) | 2,189,469 | 2,393,118 |
Energy production
The Viscofan Group has cogeneration facilities at the Cáseda (Spain) and Weinheim (Germany) plants. This operation allows greater environmental efficiency in casing production as well as cost efficiency since the combustion of natural gas allows thermal and electrical energy to be generated both for self-consumption (Germany and Spain) and for sale to the grid (Spain).
In addition, at the plants in Hasselt (Belgium), Urdiain (Spain) and Suzhou (China), Viscofan has solar panels whose electricity is used to cover part of the energy needs of these plants.
As a result, the breakdown of energy production divided between renewable and non-renewable is as follows:
| In MWh | 2024 | 2023 |
|---|---|---|
| Non-renewable energy production (Cogeneration) | 352,399 | 433,004 |
| Renewable energy production (Solar panels) | 1,261 | 707 |
| Total energy produced | 353,661 | 433,711 |
Activities in sectors with a high climate impact
Based on Sections A, H and L of NACE (as defined in Commission Delegated Regulation (EU) 2022/1288), the Group's activities do not fall within sectors with a high climate impact.
However, due to greater transparency in the information and as an indicator that is used both internally and as sustainability benchmark, Viscofan reports this energy intensity indicator for the entire Group, calculated as total energy consumption over net income (see note 19.1 of the consolidated financial statements):
| Energy intensity MWh/€000 | 2024 | 2023 |
|---|---|---|
| Energy consumption, traditional business (TB) and new business (NB) / TB + NB revenues | 1.2 | 1.3 |
| Energy consumption Cogeneration Spain / Electricity sales revenue Spain | 15.3 | 11.8 |
| Group energy consumption in MWh / Net income in thousands of euros | 1.8 | 2.0 |
Gross Scope 1, 2 and 3 GHG emissions and total GHG emissions
ESRS E1-6
Calculation standard
Scope 1 and 2 emissions are calculated following the criteria defined in the Greenhouse Gas Protocol (GHG Protocol), under the financial control scheme, consolidating as CO₂e the emissions corresponding to all GHGs relevant to the company: CO2, CH4, N2O, HFC and SF6.
The conversion factors used are:
- Scope 1: the GHG Protocol tool "GHG emissions from stationary combustion"
- Scope 2: for location-based emissions established by the Intergovernmental Panel on Climate Change (IPCC) or by the applicable administration. In the case of market-based emissions, a conversion factor requested from the supply company.
In the case of scope 3 emissions, the criteria established in the Corporate Value Chain (Scope 3) Accounting and Reporting Standard of the GHG Protocol have been used.
Scope 1 and CO2 emissions
These include emissions under the operational control approach and encompass the companies of the consolidated accounting group defined in section 1.1.1 of this report. Viscofan Group does not have minority shareholdings in companies whose net turnover is material, so they have not been taken into account for the calculation.
Viscofan's main activity, casing production, is an on-going process all year round that requires a lot of heat, especially in casing drying processes. The main energy input used in the process is natural gas, electricity and steam. Likewise, in 2024 Viscofan has not had biogenic CO2 emissions from the combustion or biodegradation of biomass, nor reduced its CO2e with carbon credits.
Viscofan avoids CO2 emissions at its cogeneration plant in Cáseda compared to another equivalent alternative of heating water, producing steam and generating electricity. However, the overall activity of the cogeneration plant, including the production of electricity sold to the grid, entails for the particular case of Viscofan more Scope 1 emissions compared to those theoretically emitted to obtain the cogeneration steam by means of conventional boilers.
It should be noted that the facilities in Cáseda (Spain) and Weinheim (Germany) are subject to the EU Emissions Trading System.
Scope 3 emissions
For the calculation, Viscofan has examined the total emissions based on the 15 scope categories set forth in the Corporate Value Chain (Scope 3) Accounting and Reporting Standard of the GHG Protocol. The principles of integrity, accuracy, consistency and transparency have been used to determine the significant categories.
Based on this, the following categories of emissions have been excluded:
- Category 6. Business travel: 2.5% of total scope 3 emissions are not included because it is an irrelevant category based on the preliminary analysis carried out with the collaboration of a third party, and for the reduction of which Viscofan may have little influence on third parties; not exceeding 5% of the limit allowed as an exclusion criterion.
- Category 10. Processing of sold products: the casings are used by customers to stuff meat products without generating emissions in their processing. They also represent a small part of the total weight of the final product.
- Category 11. Use of sold products. The use of the products sold by Viscofan does not generate direct emissions.
- Category 13. Upstream leased assets: Viscofan does not own any assets leased to third parties.
- Category 14. Franchises: Viscofan does not have franchises.
- Category 15. Investments: Viscofan does not have any stakes in companies whose net turnover is relevant to the calculation of the Group's scope 3 emissions.
The analysis of scope 3 emissions has not identified biogenic CO2 emissions from the combustion or biodegradation of biomass upstream or downstream of the value chain that are relevant, nor are carbon credits considered.
The following methodology has been used to calculate scope 3 emissions for the significant categories:
- Category 1. Purchased goods and services: it includes the emissions associated with the life cycle of all products and services acquired by Viscofan in the reporting year; in the case of raw materials, the primary data is expressed in kg, water in cubic metres (m3) and services in euros.
- For the purchase data of products by weight in kilogrammes (kg), we have mapped the groups of items in EcoInvent v3.10 looking for the emission factor (kgCO2/kg) that best fits the name of each item. Where there was no specific attributable emission factor, the most general and restrictive factor has been used.
- For goods and services for which there is no weight data, purchase cost data expressed in euros have been used. We have mapped the groups of items with the emission factor from the Comprehensive Environmental Data Archive (CEDA 6.0.) (kgCO2 /euro) that best fits the name of that item. These emission factors have then been applied to obtain emissions by item group.
- Category 2. Capital goods: it includes the emissions associated with the life cycle of the capital goods purchased. Capital goods are final products that have a long useful life and are treated as fixed goods or as property, plant and equipment. The emission factors were taken from the CEDA 6 database that provides emissions per monetary unit of production for different countries.
- Category 3. Fuel- and energy-related activities: it includes emissions associated with the production and distribution of fuels and energy purchased and consumed by Viscofan that have not been considered in Scope 1 and 2. The following activities are included: emissions associated with the extraction, production and transport of fuels consumed by Viscofan; and emissions associated with the extraction, production and transport of fuels consumed in the generation of electricity, steam, heat or cooling consumed by Viscofan, in addition to the losses suffered in such transport.
- Category 4. Upstream transportation and distribution: as primary data, we have used distances travelled in kilometres, load and type of transport. The emission factors were taken from the DEFRA 2024 database that provides emissions per unit for the country. The calculation method has been based on distance, i.e. determining the mass, distance and mode of each shipment, then applying the appropriate mass-distance emission factor for the vehicle used.
- Category 5. Waste generated in operations: it includes emissions associated with the treatment of waste generated by Viscofan's operations, including wastewater. The databases used for the emission factors have been Ecoinvent v.3.10., CEDA 6 Global and the Catalan Office for Climate Change.
- Category 7. Employee commuting. Based on the Group's average workforce broken down by geographical location, we used the emission factors from DEFRA 2024, which provides emissions per unit for the country.
- Category 8. Upstream leased assets. This category includes emissions associated with the operation of assets that are leased (real estate) by Viscofan and that are not included in the scope 1 and 2 emissions inventory. In these cases, Viscofan acts as a lessee.
- Category 9. Downstream transportation and distribution. The primary data is distances travelled in kilometres and the load transported in kg to customer locations.
- Category 12. End-of-life treatment of sold goods. It includes the following:
- Casings: of the different product families from both Traditional Business and New Business, those that involve disposal and treatment at the end of their useful life are cellulose casings, inedible collagen, fibrous and plastic products. Of these, the group has a large number of references with different sizes, whose detailed information is available in metres. Average reference values for the most relevant product categories have been used for conversion to kilogrammes.
- Packaging of the products sold which mainly include cardboard caddies, cardboard boxes, films and plastic bags and pallets.
We mapped the groups of items with the CEDA emission factor 6.0 (kgCO2/euro) that best fits the name of that item. The most significant investment in the period is the construction of a new Viscofan plant in Thailand. The corresponding CEDA emission factor has been used for all scopes 1+2+3 to take into account the emissions incorporated in the building's raw materials.
The primary data has been the consumption in MWh of the different energy sources used in Viscofan's operations. Emission factors for fixed and mobile combustion were taken from the United Kingdom's 2024 Department of Environment, Food & Rural Affairs (DEFRA), which provides emissions per unit for the country, specifically, DEFRA "Well-to-Tank" (WTT) of the reporting year for each type of fuel; and for electricity, the emission factors from the International Energy Agency (IEA), which establishes two types of emission factors based on the "Well-to-Tank" (WTT) emissions associated with power generation and WTT emissions associated with energy distribution (Transmission & Distribution – T&D) and energy losses in Transmission & Distribution (T&D Loss).
The calculation has used mobility patterns from an internal tool developed by a third party (Ecoact – a company of the Schneider Electric group), based on country-level patterns for each of the geographies in which Viscofan is present. The calculation used the factors and patterns from 2023, the most up-to-date at the time the GHG inventory was carried out.
The primary data relates to the surface area of the assets based on the lease contracts, from which the consumption of natural gas and electricity is estimated based on average ratios. To calculate emissions from electricity consumption in leased spaces, IEA country-specific emission factors are used. To calculate the emissions from natural gas consumption in the leased spaces, a unique DEFRA emission factor is used. In both cases, only scope 1 and 2 emissions from leased assets under the GHG Protocol requirements are included. Therefore WTT and T&D-related emissions are not calculated.
The calculation method has been based on distance, i.e. determining the mass, distance and mode of each shipment, then applying the appropriate mass-distance emission factor for the vehicle used. The emission factors used have been taken from the DEFRA database for the corresponding reference year.
The weights of waste have been distributed by geographical region according to the amount of products sold in each region. Based on this information, UNEP regional municipal solid waste destinations by continent have been considered to calculate the APAC, EMEA, NAM and SAM regions (respectively, Asia-Pacific, Europe, Middle East and Africa, North and South America). For emission factors, the DEFRA 2024 database was used due to its geographical relevance. In addition, emission factors from the OCCC database have been used to a lesser extent when a relevant emission factor for a specific type of waste has not been found in the DEFRA database.
This is the first year of calculation of scope 3 emissions, and we have sought to use the most up-to-date emission factors possible. For subsequent years, Viscofan plans to monitor the calculation of the categories identified as relevant and the advisability of updating the emission factors. For category 1, work will be done to incorporate emission factors directly from the suppliers of the main raw materials.
Breakdown of GHG emissions
| Past values | Milestones and target years | |||||||
|---|---|---|---|---|---|---|---|---|
| In tonnes equivalent | Base year | 2023 | 2024 | % var 2024 vs. 2023 | 2025 | 2030 | 2050 | Target % annual / Base Year |
| Scope 1 GHG emissions | ||||||||
| Gross Scope 1 GHG emissions (tCO2eq) | 378,128 | 393,255 | 349,124 | -11.2% | 346,124 | 268,908 | 54,266 | 92.3% |
| Percentage of scope 1 GHG Emissions from regulated emissions trading schemes (%) | n.a. | 72.4% | 68.4% | -4,0 | n.a. | n.a. | n.a. | n.a. |
| Scope 2 GHG emissions | ||||||||
| Location-based scope 2 gross GHG emissions (tCO2eq) | N/A. | N/A. | 67,210 | N/A. | n.a. | n.a. | n.a. | n.a. |
| Market-based gross scope 2 GHG emissions (tCO2eq) | 164,138 | 79,932 | 53,940 | -32.5% | 46,940 | 2,225 | 0 | 32.9% |
| Significant Scope 3 GHG emissions | ||||||||
| Total gross indirect GHG emissions (scope 3) (tCO2eq) | N/A. | N/A. | 576,505 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 1. Purchased goods and services | N/A. | N/A. | 353,633 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 2. Capital goods | N/A. | N/A. | 22,065 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 3. Fuel- and energy-related activities (not included in scopes 1 or 2) | N/A. | N/A. | 97,630 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 4. Downstream transportation and distribution | N/A. | N/A. | 19,645 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 5. Waste generated in operations | N/A. | N/A. | 14,840 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 7. Employee commuting | N/A. | N/A. | 4,741 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 8. Upstream leased assets | N/A. | N/A. | 798 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 9. Transportation and distribution | N/A. | N/A. | 32,349 | n.a. | n.a. | n.a. | n.a. | n.a. |
| 12. End-of-life treatment of sold products | N/A. | N/A. | 30,805 | n.a. | n.a. | n.a. | n.a. | n.a. |
| Total GHG emissions | ||||||||
| Total GHG emissions (based on location) (tCO2eq) | N/A. | N/A. | 992,839 | n.a. | n.a. | n.a. | n.a. | n.a. |
| Total GHG emissions (based on market) (tCO2eq) | N/A. | N/A. | 979,569 | n.a. | n.a. | n.a. | n.a. | n.a. |
GHG intensity based on net income
In 2024, the intensity of total GHG emissions (Scopes 1, 2 market-based and 3) on the total consolidated revenue of the Viscofan Group is as follows
| Ratio | 2024 |
|---|---|
| Total GHG emissions in tonnes (market-based scope 2) | 979,569 |
| Consolidated revenue in thousands of euros | 1,203,994 |
| Intensity ratio | 0.8 |
In 2024, the intensity of total GHG emissions (Scopes 1, 2 location-based and 3) on the total consolidated revenue of the Viscofan Group is as follows:
| Ratio | 2.024 |
|---|---|
| Total GHG emissions in tonnes (scope 2 based on location) | 992,839 |
| Consolidated revenue in thousands of euros | 1,203,994 |
| Intensity ratio | 0.8 |
The consolidated revenue figure refers to the Viscofan Group, expressed on the basis of international financial reporting standards. See note 19.1 of the consolidated financial statements.
GHG removals and GHG mitigation projects financed by carbon credits
ESRS E1-7
In 2024, Viscofan has not eliminated or stored GHGs resulting from projects in its own operations, nor has it contributed in the upstream and downstream phases of its value chain. Nor has it reduced or eliminated GHGs through climate change mitigation projects outside its value chain financed through the purchase of carbon credits.
Internal carbon pricing system
ESRS E1-8
The Viscofan Group does not apply internal carbon pricing systems.