July 11, 2024

Since 2014 Vestergaard Company A/S has reported on the company’s greenhouse gas emissions. We base our calculations on the methodology of ‘The Greenhouse Gas (GHG) Protocol – A Corporate Accounting and Reporting Standard,’ a widely recognized and used standard within GHG accounting and reporting. The GHG protocol categorizes a company’s greenhouse gas emissions into three scopes:

  • Scope 1 includes direct emissions from activities under our control, such as the consumption of natural gas, fuel oil and transport diesel.
  • Scope 2 covers indirect emissions from the production of purchased electricity or other energy, e.g., district heating.
  • Scope 3 includes all other indirect emissions in our value chain, upstream and downstream. Examples are extraction and production of purchased materials, transport of purchased and sold products and use of sold products.

Scope 1 and 2

With an ambitious goal of reducing our scope 1 emissions by 70% by 2025 compared to the base year 2019, we are already fully engaged in various initiatives, as outlined in the sustainability report. As of now, these have resulted in a reduction of our direct emissions by approximately 30% compared to the base year 2019/20. Our scope 1 emissions have increased slightly since last year. This is despite a reduction in our consumption of natural gas. The increase is due to higher production and, consequently, increased consumption of on-road diesel used to test the de-icers.

We are highly focused on our diesel consumption and have continuously optimized our testing phase to reduce consumption. We are currently implementing increased monitoring so we can map consumption and initiate further reduction measures.

Our scope 2 emissions have also increased due to higher electricity consumption as a result of the transition from natural gas to geothermal energy and heat pumps. The ambition is that an expansion of our solar panel system will ensure that in the future, 25-30% of the company’s electricity consumption will be covered by solar energy, compared to the 16% covered by the system in the last fiscal year. In the coming year, scope 2 is also expected to be included in the company’s CO2 reduction target.

Scope 3

For the first time this year, we can present our climate accounting for our entire value chain (scope 3), which accounts for more than 99% of our total CO2 emissions. This has required extensive work and involves a number of estimates and uncertainties. An essential part of the process is continuously improving the data used so that the calculations become more precise and accurate. Therefore, we are far from finished, but in the coming years, we will work on creating even better climate accounts.

The current results are, however, already very useful. They give us an understanding of where in our value chain we have the largest CO2 emissions and thus where there is the greatest potential for reductions. Combined with knowledge of where we have the greatest influence and ability to influence the development, this provides a solid basis for deciding where to focus our efforts.

As the figure above shows, the largest category is the use of our products by customers. This category includes all the diesel and electricity that our products use throughout their use phase. We do not have direct influence over how the products are used, but we do have influence over product design and on training and informing customers about optimal use of the products. Therefore, it is a good priority to work on reducing this amount. For many years, we have focused on making our products more efficient so that they now use significantly less diesel than before, and on electrifying our product portfolio. As the proportion of sales of electric products compared to diesel-powered products increases in the coming years, this category will be significantly reduced. Read more about our product development in the sustainability report.

The second largest category is the purchase of products and materials. Since a large part of our products consists of steel, our material purchase has a significant climate impact. We are therefore actively working to reduce this part, for example by reducing material waste in production. We have also completed a project where we have had dialogue with 20 of our largest suppliers to reduce negative impacts on climate and environment. We will continue this work in the coming years and increase the focus on purchasing more sustainable materials. Read more about our work with sustainable procurement in the sustainability report.

The remaining categories are grouped into one, as they are very small compared to the two aforementioned categories. However, this does not mean they are insignificant. There may be some low-hanging fruits in these categories where we can further reduce our climate impact. We have already initiated efforts in some of these areas, but in the coming years, we will try to set reduction targets and initiatives in all relevant areas.

Method and data

The climate accounting follows the methodology of ‘The Greenhouse Gas (GHG) Protocol – A Corporate Accounting and Reporting Standard,’ which is recognized as best practice within climate accounting. The consolidation approach is the operational control, however, the scope 3 accounting currently only includes our Danish productions site, as this is by far the largest, and the rest of our production sites will be included over the next years.

Scope 1

Data on use of natural gas and fuel oil is retrieved from online supplier portals and invoices. It is assumed that gas and oil is used in the same fiscal year as it is bought.

Data on the ICE company cars are incomplete. For the passenger vehicles, an estimate is used based on the distance from the user of the car’s house and the company address. For the service vans we only recently started tracking the milage, and for the fiscal year 2023/24 an estimate is used based on the kilometers driven for the last 6 months of the fiscal year.

The emission factors for burning of natural gas, fuel oil, diesel and gasoline are from Klimakompasset. The emission factors for the latest year are typically not yet available when we finish our climate accounting, and therefore the emission factors for the previous year is used, until the latest value is available.

Data on welding gas and truck gas is retrieved from invoices, and scope 1 emission factors are based on balancing of chemical equations. It is assumed that the gas is used in the same fiscal year as it is bought.

Scope 2

Data on electricity use is retrieved from online supplier portals and invoices.

Data on the electrical company cars are retrieved from the provider of the charging stations.

The emission factor for electricity is the locationbased from Klimakompasset. The emission factor for the latest year is typically not yet available when we finish our climate accounting, and therefore the emission factor for the previous year is used, until the latest value is available.

Scope 3

The scope 3 calculations involve many estimates and uncertainties. A crucial part of the process is continuously improving the data foundation to make the calculations more precise and accurate.

1 Purchased goods and services

The calculation of the CO2-emissions from purchased goods and services is mainly based on data from ERP. Where data on the weight of the materials is available, this has been used, and for the rest, the amount spend on purchased goods has been used (approximately a 60/40 split between weight and spend). As we have a large number of suppliers, we have used the method from the GHG protocol of prioritizing suppliers based on their contribution to the company’s total spend. We have selected the largest tier 1 suppliers that collectively account for at least 80% of our total spend or that are of special interest to us.

Additionally, some suppliers have delivered complete reports of the CO2-emissions associated with our purchase from them. This is however a minor part of the category.

The emission data consist of primary data from suppliers (EPDs, PCFs etc.) and secondary data from databases (both activity and spend-based emission factors). Additionally, some primary data from suppliers have been used on similar products from other suppliers. The primary database used is Klimakompasset.

Currently, the available data on purchased services such as accounting or consultancy is of a quality so low, that we have chosen not to include this category in the calculations. This category amounts to a minor part of the total purchase, but will however be included at a later stage, when we have gathered the necessary data.

3 Fuel- and energy-related activities

The data on fuel and energy use is the same as for the scope 1 and 2 emission calculations. The used emission factors are from Klimakompasset.

4 Upstream transportation and distribution

This category includes all transport from our tier 1 suppliers to our site. Our data on this transport is currently very limited. Most of the transportation is handled by our suppliers and only a few suppliers are able to deliver data on the transportation. For the large parts we purchase, the weight of the products and the distance to the suppliers combined with an emission factor from Klimakompasset have been used. This amounts to the majority of the upstream transport (>95%). For the rest (the small parts) the calculation is spend-based with an emission factor based on an average from the suppliers from which we have received data on transportation.

5 Waste generated in operations

97% of the waste generated in our operation is recycled or recovered as energy. This is not, however, included in the scope 3 emissions according to the GHG protocol. The waste included in this category is therefore our wastewater and the waste we send to landfill. The amount of wastewater is based on the amount of used water, which is retrieved from invoices. The amount of waste to landfill is retrieved from the waste management company’s online portal. The emission factor is from Klimakompasset.

6 Business travel

The majority of business travels are booked through a travel management company from which we receive data on emissions from the transportation and the hotel stays that our employees have used. A minor amount of business travels is conducted outside the management company, for which we do not have any data.

Category 7: Employee commuting

A survey was conducted in 2023 where information on our employees’ distance to work and preferred means of transport was collected. This data is combined with the average number of employees throughout the fiscal year and emission factors from Klimakompasset.

Category 9: Downstream transportation and distribution

The majority of this category is the transportation of our products such as deicers and water- and toilet-trucks, which is primarily transported on own wheels or by truck and ship. The data on this transportation is currently very limited, and based on an average distance to our customers, the number of sold products and emission factors from Klimakompasset.

A minor part is the transportation of spare parts, which is primarily transported by aircraft. Emission data on this transportation is received from the distribution firm on a quarterly basis and thus the data is offset by one month in relation to the fiscal year.

11. Use of sold products

The data on use of our sold products is currently limited. Our products use two types of energy: some use diesel oil, some use electricity, and some use both. The data on the energy use is retrieved from customers, but the datasets are in most cases small, and estimates and assumptions have been necessary.

The emission factors for diesel and electricity are based on an average of the estimated emission factors in Klimakompasset for the coming years equaling the lifetime of the products.

Categories not included

Some of the 15 scope 3 categories are not relevant to our company and some are temporarily excluded due to lack of data. Below is a table with the seven scope 3 categories that we have not yet included in our scope 3 calculations and the reason for this.

We are far from finished, but we will work over the coming years to develop even better climate accounts.