Climate

Climate change is one of the most pressing issues of our time. Urgent and decisive action is required to both mitigate its impact and adapt to the inevitable volatility the planet is experiencing now and will continue to experience in the future.

We acknowledge these challenges and will meet them head-on, shouldering our responsibility to accelerate climate action throughout our business, our value chain, and beyond. We have been, and will continue to be, an industry leader in both our commitment to ambitious climate targets and in our drive to deliver against these targets.

Climate change mitigation and adaptation are material topics for our business, as is the addressing of energy sources through our value chain. As such, a critical part of our approach to accelerating climate action is to work together with our suppliers, customers, and stakeholders to achieve our newly validated Science Based Targets (SBTs), which are a first for our company. Delivery of these targets is guided by the newly developed CTAP, which focuses on our climate approach, climate targets, performance, decarbonization levers across Scope 1, 2 & 3, and climate-related risks.

Our climate approach

Our climate approach, as detailed in the graphic below, focuses on climate change mitigation and climate change adaptation in our own operations and value chain.

While we remain fully responsible for reducing our own emissions, the products and services we offer to our customers provide a unique opportunity to extend our impact beyond our own operations and supply chains, enabling large-scale global decarbonization through avoided emissions.

We have outstanding products such as Bovaer®, our methane-reducing feed additive for cattle, and our suite of animal nutrition solutions, which enable our customers to significantly decarbonize their own value chains.

Our climate mitigation activities, aligned to the latest 1.5°C global warming science, include:

• The reduction of direct emissions in our own operations (Scope 1 & 2) through operational efficiency improvements and our renewable energy transition strategy
• The reduction of indirect emissions in our value chain by driving Scope 3 improvements through engaging and collaborating with our suppliers, driving additional value chain improvements and new designs and technology to reduce emissions
• Collaborating with our customers to avoid emissions in their own operations through the products and services we offer
• Ultimately, in alignment with SBTi standards, using carbon removal technologies to deliver our net-zero target, but with no reliance on carbon credits to achieve our near-term targets, in alignment with the latest guidance

With respect to climate change adaptation, a risk-based approach helps us identify and assess risks and opportunities and thus where we need to build further resilience into our own operations and value chain.

Our climate approach

Our commitments

With our long legacy of setting ambitious climate targets, we submitted our SBTs to the SBTi for validation, including an ambitious target of achieving net zero across our full value chain by 2045. In addition to our net-zero target, we have committed to interim near-term targets without the use of carbon offsets. These are:

• Reduce Scope 1 & 2 GHG emissions by 42% by 2030 from a 2021 base year
• Increase active annual sourcing of renewable electricity from 76% in 2021 to 100% by 2025 and continue active annual sourcing of 100% renewable electricity through 2030
• Reduce absolute Scope 3 GHG emissions by 25% by 2030 from a 2021 base year (from purchased goods and services, fuel-and-energy-related activities, upstream transportation and distribution, and waste generated in operations)

As a key requirement of committing to being a net-zero company by 2045 across our full value chain, we aim for a minimum decarbonization reduction of 90% across all scopes versus a 2021 baseline. In setting a baseline for SBTs it was necessary to balance the requirements set by the SBTi and selecting a year which best represented our business reality. 2021 was selected as it was a year for which we had complete data available for our legacy companies, as well as being post-Covid and prior to the disruption in the vitamin market.

Our decarbonization efforts focus on avoiding and mitigating GHG emissions. However, we will also look to neutralize any unavoidable residual emissions by means of carbon removals, using nature-based or other industrial-based solutions.

Progress

2024 was a big year for our company. In October, we achieved validation of our net-zero and near-term targets by the SBTi, aligned with the ambition of keeping global warming below 1.5°C. Submission of our climate targets for external validation underscores our unwavering focus on sustainability and our commitment to accelerate climate action alongside our customers and suppliers, whose partnership is essential to our collective success.

The year also saw the development of our first dsm-firmenich Climate Transition Action Plan (CTAP), which built on the already strong foundation of climate leadership laid down by our dual-legacy business.

This plan will help align our organization with the most ambitious climate recommendations by establishing specific strategies, setting ambitious targets, and defining clear accountability to ensure and track progress. Guided by the roadmaps consolidated into the CTAP, we continued to successfully execute against our plans, taking our global environmental responsibilities very seriously both within our own operations and in our broader value chains, as a significant part of our emissions are either upstream or downstream of our operations. Our 2024 progress is presented in the diagram below.

Our net-zero Roadmap

ESRS E1 IRO-1

At dsm-firmenich we have led the way in decarbonizing our operations. With our newly validated SBTs, we are committed to building on that solid base and accelerate our Scope 3 action to reach net-zero by 2045.

Reducing our operational emissions

In 2024, our Scope 1 & 2 market-based GHG emissions amounted to 778.1 kt CO₂e, of which 594.4 kt CO₂e related to Scope 1 emissions and 183.7 kt CO₂e related to Scope 2 emissions. These emission levels (excluding assets that were divested in 2024) represent a 27.45% reduction versus our 2021 baseline. This was achieved mostly through three main levers:

• The continued effort to improve our energy efficiency throughout the organization
• A further step-up toward our 100% purchased renewable electricity target with significant increases in China, for example
• The reorganization of our industrial assets

To achieve our current results and progress toward our targets, we developed a roadmap as part of the CTAP. This consists of three primary improvement pillars to Scope 1 & 2 emissions:

• Reduce our energy consumption through energy efficiency measures
• Transition toward renewable electricity
• Transition toward renewable heat, using renewable fuel sources, and the electrification of our heat demand

Toward more energy-efficient sites

A key pillar of our Scope 1 & 2 GHG reduction roadmap involves reducing our operational energy consumption by being more efficient. Various levers and technologies are being implemented to support this transition, such as:

• Operational optimization with the use of digital solutions
• The implementation of energy basics such as insulation and condensate recovery
• The selection of state-of-the-art utilities
• Various process optimizations involving, for example, liquid separation or using smart electrification technologies like heat pumps

Further details can be found in the Climate change actions and resources section.

A team of experts works with our production sites to identify opportunities to implement these technologies. This collaboration and the development of site roadmaps, combined with the transition to renewable energy, forms the basis of our Scope 1 & 2 GHG roadmap. The implementation of this multi-year project portfolio is projected to deliver average annual reductions of 20 to 25 kt CO₂e.

In our 2024 results, the GHG reduction contribution from this program is mainly linked to the roughly 50 projects implemented in 2023. We can highlight significant savings from our steam distribution network in Yimante (Hubei province, China); the generation of steam out of reaction heat losses in Lalden (Switzerland); the continuing roll-out of digital solutions like steam trap monitoring in Kingstree (South Carolina, USA) or energy dashboards in locations such as León (Spain).

In 2024, we continued to invest in the energy efficiency of our operations, implementing a comparable number of projects, costing around 10 million euros. We completed the implementation of a new state-of-the art boiler in Kingstree (South Carolina, USA), made steam distribution improvements in Port Newark (New Jersey, USA), introduced heat pumps in Minhang (Shanghai, China), and improved boiler efficiency in Belvidere (New Jersey, USA) and Brotas (Brazil).

Toward renewable energy

We are a member of RE100, the Climate Group’s initiative comprising leading companies that have committed to obtaining 100% electricity from renewable sources as early as possible and via credible claims. Our new commitment is to purchase 100% of our electricity from renewable sources by the end of 2025. In accordance with strict RE100 technical criteria, we strive to switch to renewable electricity via long-term power purchase agreements, local retail contracts and, where not possible, local unbundled Energy Attribute Certificates (EACs). This is a fundamental part of our journey to reduce emissions in line with our SBTs and ultimately our long-term net-zero ambitions. We are progressing well toward this target; in 2024, 95% of our purchased electricity was from renewable sources.¹ Key steps toward this realization (with more detail in the Sustainability Statements) include:

• As well as maintaining 100% purchased renewable electricity in our North American and European operations, for the first time all our ANH premix sites globally and HNC premix sites in APAC and LATAM are at 100%
• All purchased renewable electricity in North America corresponds to long-term virtual power purchase agreements (VPPAs)
• All our sites in Europe are powered with 100% renewable electricity
• In 2024, we purchased 65% of electricity in China from national renewable sources as we concluded several long-term contracts

In addition to renewable electricity, we continue to use renewable sources for steam and heat, including biomass co-generation plants in Switzerland, France, China, and Brazil. We are optimizing the use of waste streams and are collaborating with external providers to assess possibilities for the energy transition. The focus on low-carbon heat solutions is key to our GHG reduction program and will continue to be the greatest challenge in our transition journey.

Reducing our value chain emissions

Our commitment to sustainability extends across the entire Scope 3 value chain, and we are pleased to report progress in reducing emissions beyond our own operations. Our absolute Scope 3 GHG emissions in 2024 amounted to 11,156t CO₂e. We reduced our Scope 3 GHG emissions for the in-scope SBTi categories vs. the 2021 baseline by 19.6%.

The significant part of the reduction since 2021 was driven by our reduced production and purchased volume guided by our business portfolio review. In 2024, we continued to increase our share of primary carbon footprint data, as over the years we have been able to track footprint improvements and capture the reduction efforts of our suppliers. Driven by product and volume mix, achieved reductions in emissions from purchased goods and services are the result of our engagement and collaboration with suppliers and the optimization of our supplier mix.

Scope 3 emissions by category

Reducing our upstream emissions

Our upstream emissions represent most of our greenhouse gas footprint. They arise mostly from our upstream supply chain, including purchased goods and services, fuel-and energy-related activities, upstream transportation and distribution, and waste generated in operations. Within the supply chain, the Purchased goods and services category is the single largest source of Scope 3 emissions. Our plan for achieving our newly validated Scope 3 target – 25% reduction in absolute Scope 3 emissions by 2030 from a 2021 baseline, plus a 90% reduction by 2045 – is included in our newly developed CTAP. The broad levers to decarbonize in Scope 3 can be found in the Sustainability Statements, but some of the specific CTAP initiatives include:

• Actively engaging with our suppliers through our responsible sourcing framework and the ‘Joining Forces for NetZero’ program to drive collaborative decarbonization efforts. As part of this, we initiated a pilot program with 11 suppliers to develop material-level supplier emission factors. These will be scaled up to cover 60% of Scope 3.1 direct raw materials emissions by 2025
• Focusing on increasing renewable electricity in our value chain and transitioning to renewable energy when and where feasible. Collaboration is key in energy transition
• Process optimization can be applied within the company and upstream in the value chain. It includes increasing yields and making processes more efficient, which results in less raw material for the same volume of product, shifting processes to reduce carbon impacts, as well as big shifts such as incorporating biotechnology
• Reductions in fuel- and energy-related emissions follow roadmaps developed and steered by our operations teams with a view to increasing energy efficiency
• We manage logistics through our third-party providers (3PL/4PL) and do not operate our own transportation or warehousing. This is implemented via a robust supplier selection process which focuses on sustainability and on identifying logistics providers based on their environmental performance and certifications.

Our logistics sustainability strategy focuses on:

• Measuring and reporting CO₂ emissions
• Managing and reducing emissions via actionable and effective strategies

To better measure our carbon footprint, we have implemented an online dashboard, capturing all our emissions real time, utilizing the data from our forwarders, with historic data going back to 2021. We also undertook multiple projects focused on CO₂ reduction, such as load optimization, and electric vehicles in Cotia, Brazil to deliver samples to our customers. For transportation and warehousing, we select logistics providers (3PL/4PL) with a strong sustainability agenda through a rigorous procurement process.

Decarbonizing Scope 3 emissions continues to be a challenge, as it does for our industry as a whole, with clean and harmonized data being crucial for success. In 2024, we made significant progress in improving our Scope 3.1 reporting capability by sourcing activity data directly from Sievo, our procurement function’s single source of truth for purchased data. This has enabled us to gain deeper insights into our largest source of emissions and to drive reductions through better production and consumption data.

In 2023, the Partnership for Carbon Transparency (PACT) published the PACT Methodology and Technical Specifications for Product Carbon Footprint Data Exchange, establishing the foundation for value chain carbon transparency. We were one of the 25 committed companies to be part of the annual implementation programs, which followed in 2024. These programs were geared to help companies and their suppliers achieve this transparency in primary data exchange. We will continue to build on this transparency and quality in our collected primary data which will enable targeted decarbonization in our value chain. Primary data have already enabled us to capture the decarbonization efforts and achievements of key suppliers for products like niacinamide and niacin.

Reducing our downstream emissions

We further support downstream efforts by sharing our carbon footprint through Environmental Product Declarations (EPDs), Imp’ACT Card™, and Ecotools for our businesses. We explore new innovations, such as the low-carbon sweetener, EverSweet®, our low-carbon vitamin C, Quali®-C, and even the recycling of toluene at our site in La Plaine (Switzerland). Our dedication to sustainability extends into our product range, where we actively engage in the eco-design of fragrances and flavor solutions with low carbon emissions, utilizing our digitally integrated tools EcoScent Compass® and EcoFood Compass®.

Avoided emissions

For our climate actions, we are committed to reducing our own GHG emissions in Scope 1, 2 & 3 according to the SBTi. Through this, our customers and actors further down the value chain are also enabled to lower their Scope 3 emissions and ultimately move closer to net-zero targets themselves. As a leading provider in nutrition, health, and beauty, we can play a key role in transforming the value chains in the direction of climate- and environment-friendly solutions. By partnering with customers and joining forces in emissions reductions, we can efficiently address the most urgent, sector-specific climate challenges.

Bovaer® continues to play a transformative role in reducing methane emissions across the agricultural value chain with cumulative avoided emissions of 220k tons of CO₂e by the end of 2024. By significantly reducing emissions, it provides a scalable, science-based solution to one of agriculture’s most critical environmental challenges: climate change mitigation and advancing sustainable farming practices. In 2024, Bovaer® made substantial progress in its global rollout, gaining regulatory approvals in key markets and reaching more farmers worldwide. Now present in 68 countries, it is bringing the vision of more sustainable dairy and beef farming closer to reality. In recognition of its impact, Bovaer® was named one of TIME’s Best Inventions of 2024, underlining its role in advancing sustainable agriculture and its potential to drive global change.

Our performance solutions, including feed enzymes, eubiotics and mycotoxin deactivators, improve animal performance and feed efficiency and reduce waste, thereby reducing emissions related to producing animal protein.

With the help of our intelligent, sustainability service, Sustell™, farmers can accurately and credibly quantify the environmental footprint reductions associated with these solutions based on their own primary farm and feed data. Life Cycle Assessment (LCA) studies carried out with Sustell™ show that applying our feed enzyme solution ProAct 360™ in representative European poultry diets improved the digestibility of the feed, leading to more efficient feed utilization and a reduced carbon footprint of broiler production of up to 7%. If ProAct 360™ were to be applied to all European broiler production, approximately 3,700 kt CO₂e emissions could be avoided.

Our innovative waterless formulations for scalp and hair care provide the same performance consumers expect from liquid formats. They also significantly reduce the environmental impact of these products by transporting less water and minimizing packaging. Compared with a liquid shampoo, a powder shampoo with dsm-firmenich ingredients requires the transportation of 91% less water, thereby saving 42% of GHG emissions along the supply chain.

Brewers Clarex® is an enzymatic solution that prevents the formation of chill haze in beer while maintaining its quality. The efficiency of the brewery process as well as its eco-footprint can be improved by using enzymes to replace traditional treatments in the production process. Brewers Clarex® helped our customers to reduce their GHG emissions by approximately 143 kt of CO₂e in 2024. This happens without any impact on the desired properties of the end-product.

¹ This is a 1% deviation with RE100 report. A small amount of unbundled EACs is used in regions with limited local availability, which will be covered locally when options become feasible.