For NETZSCH, a medium-sized industrial enterprise, sustainability is about far more than meeting statutory requirements and preparing mandatory reports. Instead, NETZSCH has placed environmental, social and governance (ESG) at the heart of its corporate strategy and defined long-term targets that apply to management and employees across all its locations. Lufthansa Industry Solutions (LHIND) advised the company on its journey to authoritative and audit-proof sustainability management.
In this interview, Johann Vetter, Head of Sustainability Management at the NETZSCH Group, and Ulrike Stroh, an ESG expert at LHIND, discuss their collaboration and describe how good intentions evolved into a bona fide sustainability strategy.
Mr. Vetter, ESG is now strategically embedded at NETZSCH. What exactly does this mean in practice?
Johann Vetter: For us, having a green logo, spreading the right slogans and producing flawless reports isn’t enough. We’re a family-owned company with a long tradition and want to play our part in ensuring that the world remains livable for future generations. That’s why all our international locations are playing their part, along with our headquarters in Germany. We define certain guidelines – for which our sustainability report (in line with the ESRS) is vital – but also launch and implement some initiatives at the local level.
How do you secure employee buy-in?
Johann Vetter: It’s crucial to make the first steps and practical implementation as straightforward as possible. Our employees across all continents need to understand where our journey is headed and what is expected of them – but also how they stand to benefit. We hold information events, training sessions and action programs to ensure this approach is standardized, and so that we can all identify with it, across the entire NETZSCH Group. In the future, company management will reward participation in the action programs to reduce our CO2 emissions and energy consumption, including through grants for voluntary local sustainability projects.
Digitalization is the key to making ESG manageable.
Johann Vetter Head of Sustainability Management at the NETZSCH Group
What has the impact been on the company as a whole?
Johann Vetter: As we work together to improve our carbon footprint, champion social causes and promote equality and diversity, we’re shaping our company culture and strengthening a sense of community. But it’s still about the facts, figures and data. The figures are there; we just have to use them. We’ve defined our targets. From there, we derive corresponding measures, always working in five-year stages. One of our targets is to become climate-neutral as a Group by 2045. Our efforts to achieve this include investing in efficient buildings and machinery. And we have to generate the funds for these measures, or make savings in other areas. So, it’s not just about reporting, it’s about corporate management.
What role do data and technology play in making sustainability manageable in practice?
Johann Vetter: Digitalization is the key to making ESG manageable. Complex statutory requirements, such as the EU Corporate Sustainability Reporting Directive (CSRD), present us with challenges – especially in combination with our decentralized company structure, which comprises 53 sites in 36 countries. We have to collect and collate the necessary data from our Procurement, HR, Controlling, Production and other departments before preparing it for CSRD-compliant reporting. We rely on various tools and collaborated with the experts at Lufthansa Industry Solutions to map this process efficiently while simultaneously developing a holistic ESG strategy. The fact that the LHIND team not only has theoretical expertise but can also provide practical examples proved particularly helpful.
What exactly did the support from LHIND involve?
Ulrike Stroh: In the first step, we worked with the NETZSCH Group’s Sustainability Team to conduct a double materiality analysis, which laid the foundations for all subsequent ESG activities. This was followed by a CSRD fit/gap analysis, an EU taxonomy assessment and recording all relevant data for the sustainability report. Shortly after, NETZSCH published its first CSRD-compliant report and received the auditors’ seal of approval right away.
But, as Johann Vetter has already outlined, this reporting was just a milestone. The NETZSCH Group had set its sights higher: future-ready positioning and genuine, impactful sustainability. That’s why, focusing on material fields of action, we developed an individual ESG strategy with tangible, measurable targets and pathways. We then derived specific measures to achieve them. Beyond that, we supported carbon footprint calculations for various products and worked with NETZSCH to record indirect emissions in line with Scope 3 of the Greenhouse Gas Protocol. The latter aspect is a vital step towards producing a complete corporate carbon footprint.
Ultimately, we enabled the team to continue these calculations independently in future.
It’s only by placing sustainability at the heart of a company’s strategy and recognizing it as an element of corporate success that sustainability can have an impact.
Ulrike Stroh ESG expert at LHIND
How was this received at NETZSCH?
Johann Vetter: Rather than an off-the-shelf solution, the LHIND team offered us tailored guidance through the process. They explained what we had to do and how it all worked. After that, we had to choose our own course.
NETZSCH sets an excellent example. Where do other projects fall down?
Ulrike Stroh: In the course of our collaboration, it became clear that the NETZSCH Group’s management has a genuine interest in sustainability, extending far beyond meeting its obligations. This made it a cross-cutting topic that linked specialist departments, IT and management. It’s only by placing sustainability at the heart of a company’s strategy and recognizing it as an element of corporate success that sustainability can have an impact.
Projects often fail because responsibilities aren’t clearly defined or because sustainability is too heavily concentrated in just a few roles – or because companies regard the topic as a “nice add-on” to their core business, a way to enhance their reputation or a bureaucratic obligation.
