Sustainability at the heart of GF’s business
Sustainability is a long-standing part of GF’s culture and business. 58% of GF’s products or solutions enable a social or environmental benefit, thus helping customers all over the world to move towards a more sustainable future.
GF Piping Systems ensures that less water is lost as it travels from source to household taps. GF Casting Solutions develops new lightweight components making mobility more CO2 efficient. GF Machining Solutions and its smart technologies offer customers a more efficient use of resources by reducing the consumption of materials and energy.
A recent example of sustainability in GF’s business is the multi-year partnership agreement with SwissShrimp AG. The startup is a pioneer in local and sustainable shrimp breeding in Switzerland, and GF supports it with its expertise and technical know-how on water treatment.
In this sustainability chapter, GF provides a high-level overview of environmental, social, and governance (ESG) topics. GF’s Sustainability Report 2020 will be published in June 2021.
GF keeps an ongoing dialogue with its internal and external stakeholders, enabling key issues to be proactively recognized and resolved. This exchange is fostered by a range of activities and measures.
More than 14’000 employees in 34 countries contribute to GF’s sustainability efforts in a number of ways, such as designing products and solutions with more sustainable features, reducing the consumption of natural resources, and operating in a safe and healthy way in their daily activities.
GF is in regular contact with its investors via roadshows, events, meetings (including its Annual Shareholders’ Meeting), and through active ESG-focused dialog sessions with sustainability analysts and stewardship teams.
GF conducts targeted workshops on sustainability with customers from key market segments to jointly develop forward-looking products, solutions, and services.
GF’s product and solutions specialists build lasting customer loyalty by maintaining continuous contact with customers, including at trade fairs or in-house events, as well as by offering customized training sessions.
Long-term successful partnerships with GF’s procurement and logistics partners are essential for business continuity. Ensuring that they comply with the standards that GF applies to itself is of the highest importance to GF.
GF regards suppliers as crucial partners to ensure increased environmental efficiency of GF’s own operations (for example with production equipment), as well as to reduce social and environmental risks throughout GF’s value chain.
Universities and research institutes
GF maintains close contact with universities and research institutes. Cooperation takes place on a number of levels, with GF offering internships and junior work opportunities to students at technical colleges and universities, in addition to other specific projects.
One such example is when GF entered into an agreement with Oxford Flow, based in Oxford (UK), to develop innovative products and solutions, such as a novel control valve to prevent pressure and water loss.
As an international company, GF strictly follows the relevant rules and regulations of each country in which it operates. To facilitate this, GF is a member of a number of chambers of commerce.
GF supports and promotes cultural and social programs at its various locations. It also aims to have an overall positive impact on the local communities where it operates.
Industry associations and NGOs
As an international company with Swiss roots, GF cultivates an ongoing exchange with international and national associations and organizations. GF is involved in Swiss trade organizations and since 2015, has been committed to the UN Global Compact’s ten principles in the areas of human rights, labor, environment, and anti-corruption.
Sustainability at GF
In an increasingly complex and uncertain world, it is becoming even more critical for companies to focus on broad stakeholder value to achieve business success. GF ensures that its business contributes positively to society’s progress toward the UN Sustainable Development Goals.
In 2020, the COVID-19 pandemic posed challenges for businesses and society. GF responded with numerous initiatives to ensure that employees remain safe and healthy. At the same time, GF was confronted with volatile demand for its products, which led to short-time work models. In parallel, GF managers volunteered to temporarily reduce their monthly compensation. These savings were collected in a solidarity fund and distributed during the year to selected cases of hardship among GF employees.
Several other initiatives to ensure employees’ health included extending the existing home-office policy, providing hygiene training and personal protective equipment, enforcing physical distancing, and frequent communication during the crisis.
GF regards ethical business conduct, resource-efficient and environmentally friendly production, eco-design in products and solutions, as well as respect for our employees and all other GF stakeholders as part of the Corporation’s responsibility in society.
Consequently, GF is committed to sustainable development. The Corporation takes economic, environmental, and social responsibility for its activities at all levels. To focus its efforts, GF conducts a periodic materiality assessment of topics within the sphere of its influence to identify those that carry the highest relevance for GF and its key stakeholders.
Sustainability program management
The ultimate responsibility for sustainability at GF resides with the Board of Directors. To facilitate the strategic direction provided by the members of the Board, a Sustainability Committee was established in 2020. The Chairman of the Board of Directors is the chair of the Sustainability Committee. The roles and responsibilities of the Committee are defined in the Charter of the Nomination and Sustainability Committee and published on the GF website.
The Executive Committee has operational responsibility for the topic of sustainability and for ensuring that GF meets the defined targets, with progress discussed every six months. The annual performance objectives of the Executive Committee members include at least one MBO related to sustainability. The specific objectives match and support the strategic efforts of each division and are being cascaded into the organization.
Responsibility for the integration of sustainability aspects into the daily operations of GF lies with each department and division. The Corporate Sustainability unit1, in close contact with the dedicated sustainability teams within the three divisions, ensures tracking of progress for individual locations, business units, and divisions towards achieving the set targets. Corporate Sustainability also actively works with senior and executive managers to ensure a robust and aligned sustainability program.
GF developed Sustainability Targets 2020 along its entire value chain. These targets are closely linked with GF’s Strategy 2020 and the respective activities contribute to the key strategic thrusts of the Corporation. At the end of the current five-year strategy period, GF achieved progress on all of its sustainability goals. The company publishes a detailed Sustainability Report in the first half of each year.
GF’s own operations
In GF’s core business, sustainability efforts are directly linked to the Corporation’s understanding of its purpose – to add value to and improve the quality of lives through all of GF’s business endeavors. Thus, GF ensures that the components or complete-system solutions that it designs and produces address the megatrends faced by today’s society, contribute to the UN Sustainable Development Goals, and provide best value-added from a quality, safety, and sustainability perspective for the customers.
For GF Piping Systems, this means leak-free and safe transport of water, gas, and chemicals, energy-efficient process water solutions for industrial applications, as well as hygienic water for private homes and commercial buildings. An example that provides significant energy savings is the COOL-FIT system, which reduces energy consumption by up to 30%, reversing the trend of rising energy demands. GF Piping Systems constantly innovates solutions to reduce so-called non-revenue water (NRW) – this is water that has been produced and is lost due to leakages before it reaches the customer.
For GF Casting Solutions, sustainability in its product portfolio means developing solutions for the future of mobility, both in the automotive and aerospace segments, which in turn help customers on their sustainability journey. The division’s core expertise lies in applying innovative design solutions and production technologies to create components with a weight reduction of more than 50%2 – thus helping its customers to reduce fuel consumption and CO2 emissions during the vehicle’s usage. Lightweight castings manufactured by GF Casting Solutions, such as shock towers, realize weight reductions ranging from 17 to 45%. This is essential in electric or hybrid cars to reduce weight. Today, approximately one-third of orders relate to e-mobility.
For GF Machining Solutions, sustainability translates into more innovative, integrated and connected high-precision machines and solutions that significantly improve the energy efficiency of product manufacturing. The division also offers new technologies, such as laser texturing, to replace the harmful etching process. Offering re-use possibilities is equally important when it comes to sustainable manufacturing. In this regard, GF Machining Solutions successfully piloted the re-use of copper and brass wires – so-called EDM wires from EDM machines3. Every year, roughly the same amount of scrap wire is taken back from the customer as was originally sold. Both GF and its customers benefit from this system, as the scrap wire retains its value and the customer does not have to be concerned about disposal. This pilot proved how GF could close the loop and realize the benefits of a circular economy.
Cross Car Beam
Today, the cast cross car beam in magnesium can replace many single steel or aluminum sheet metal parts or aluminum profiles. The complex cast solution is developed, produced and tested by GF Casting Solutions. For manufacturers of light vehicles and commercial vehicles, the cross car beam offers maximum functional integration and a significant weight reduction while meeting all required properties.
Communication about sustainability
To embed sustainability into its daily activities, GF renewed its internal policy on sustainability management. GF communicates with employees about sustainability through a variety of channels, including a global quarterly sustainability newsletter and an online collaboration group. In the second half of the year, continuing an annual tradition, GF conducted a sustainability conference (this time virtually), bringing together around 60 environmental and health and safety specialists from GF’s locations in the Americas to present site-specific projects in energy efficient and safer work environments.
Planning for the next strategy cycle
In 2019, GF launched an initiative to define its sustainability framework for 2021–2025 and a longer-term sustainability ambition for 2030. Dialog with GF’s key stakeholder groups formed part of this process: input from customers and suppliers of the three divisions, as well as GF’s investors and employees was collected in a series of interviews.
Based on this input, three cross-divisional work streams in the areas of products and solutions, climate and resources, and people and well-being were formed, with the aim to develop ambitious yet realistic sustainability targets. These targets were proposed to the Executive Committee and the Board of Directors in the second half of 2020 as part of the overall business strategy discussion, and all nine targets were approved. These targets were integrated into the business strategy as sustainability at GF is not considered a separate strategy, but vital to GF’s overall strategic direction. Further details regarding the Sustainability Framework 2025 will be communicated soon.
Anchored in the social environment
GF supports and promotes cultural and social programs at its various locations as well as activities that contribute to the common good. In 2020, around CHF 2 million were spent at the Corporation level on social involvement activities. The biggest contributions in 2020 went to the Corporation-owned foundations Clean Water, Klostergut Paradies, and Iron Library. In addition, several GF companies supported local activities by making substantial contributions.
GF is a member of various Swiss and international business associations with annual membership fees amounting to less than CHF 0.1 million. In the year under review, no contributions were made to any political parties or to individual politicians.
Improved access to clean drinking water
Through its Clean Water Foundation, GF has supported a total of 155 drinking water projects worldwide since 2002. To date, GF has invested more than CHF 11 million and improved the lives of more than 300’000 people through better access to safe drinking water. In 2020, the Clean Water Foundation granted funds to projects in Indonesia, Malawi, Uganda, Tanzania, Honduras, and Peru. Most of the projects focus on the improvement of infrastructure for water filtration and water distribution in rural communities and for hospitals. The non-profit organization Water Mission in Charleston (USA), a trusted partner of GF’s Foundation for the past ten years, executed most of these projects.
Annually, GF supports the Foundation with a substantial lump sum contribution. The Board of Trustees includes the CEO, who also chairs the Foundation, and two members of the Executive Committee.
Klostergut Paradies and Iron Library Foundation
The Klostergut Paradies in Schlatt (Switzerland) has been owned by GF since 1918. Today, this historical building serves as the main seminar and training center for the Corporation. In addition, since its foundation in 1948, the Iron Library Foundation has been located at the Klostergut Paradies. Today, GF proudly owns one of the world’s largest private collections of books on the subjects of material science and the history of technology.
The Iron Library and GF Corporate Archives, managed by one team, jointly preserve the historical and cultural heritage of the GF Corporation, whose roots go back to the 18th century. In 2020, the digital offering included over 1’000 digitized volumes with a total of more than 60’000 pages.
Expertise for sustainable shrimp breeding in Switzerland
GF and SwissShrimp AG have signed a multi-year partnership agreement. The startup from Rheinfelden (Switzerland) is a pioneer in local and sustainable shrimp breeding in Switzerland. Besides avoiding the use of medication in breeding, SwissShrimp also does away with long transit routes to regional distributors or end customers. The company uses the waste heat from the neighboring Schweizer Salinen saltworks to heat their infrastructure. GF will support SwissShrimp with its expertise and its technical know-how with regard to water treatment, among other activities.
Next generation of lightweight components
To take advantage of emerging new technologies such as artificial intelligence (AI), the GF Casting Solutions Research & Development team based in Switzerland has partnered with AI pioneer Microsoft. The objective of the joint efforts was to establish a solid, data-driven understanding of GF Casting Solutions’ complex multi-step casting processes. Environmental impact as well as manufacturing costs increase with every process step. Hence, it is desirable to determine as early as possible whether a produced part will make it all the way to the customer or whether it will need to be sorted out in a later process step due to defects.
Herbicide-free weed removal
In order to make agriculture more sustainable, ETH Zurich promotes projects that contribute to achieving the UN environmental goals. One of these is the Rowesys project (Robotic Weeding System), which addresses the challenge of herbicide-free weed removal. The result is an agricultural robot that removes weeds mechanically, automatically, and without herbicides. For its complex chassis components, a cooperation between the Rowesys team and GF’s R&D department in Schaffhausen was established. The wheel suspension with integrated components from GF makes it possible to overcome all obstacles through the spring-damper system and to not get stuck between stones or holes.
Sustainability awards for GF
In 2020, The Wall Street Journal examined 5’500 publicly traded companies with regard to their sustainability program. GF ranked among the top-10 in a list of the 100 most sustainably managed companies in the world. The ranking is based on sustainable aspects such as environment, social and human capital, or business model and innovation. The successful rating reflects GF’s years of efforts in the area of sustainability and the quality of ESG-related information that the company provides to its stakeholders.
In December 2020, the London-based CDP awarded GF an A– rating (Leadership level) for its worldwide measures to reduce energy consumption, as well as for its transparent disclosure of greenhouse gas emissions. GF also scored higher than the European and the Powered Machinery sector averages. The CDP 2020 reporting cycle covers activities from 2019. Environmental management is a core pillar of GF’s sustainability program. During 2019, the company implemented about 30 measures worldwide to reduce greenhouse gas emissions, which contributed to total savings of 3’000 CO2e metric tons.
Sales with social and environmental benefits
% of total sales