From energy consumption to human rights, ESG rules shape our actions. Yusuf Avci, Sustainability Manager at KLINGER Holding, explains how KLINGER is dealing with the new sustainability requirements.
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Yusuf Avci, Sustainability Manager at KLINGER Holding
Mr. Avci, we are constantly hearing about ESG, CSRD, EU taxonomy, etc. What do these regulations entail for the KLINGER Group?
Yusuf Avci: The new requirements demand detailed, comparable sustainability data. Starting in 2026, we have to report on each previous financial year. In addition to key financial figures, these reports must include our energy consumption, waste volumes, personnel figures and CO2 emissions. The bottom line is that customers, investors and supervisory authorities demand transparency.
How does KLINGER deal with all these different guidelines and regulations?
Yusuf: We have several regulations, such as the Corporate Sustainability Reporting Directive, the EU Taxonomy and the Corporate Sustainability Due Diligence Directive. Each of these requires us to submit different documents and data. As a manufacturing company, it is important that we include all of our locations. The lack of a standardized ERP system presents us with a challenge here. We are currently gathering data using SIC codes and gaining initial experience in a GHG pilot project in which KLINGER Finland, KLINGER Fluid Control, KLINGER Dichtungstechnik and KLINGER Gebetsroither are participating. Our aim here is to establish standards that will allow us to comply with all of the rules and regulations.
What will we be able to deduce from the final ESG report?
Yusuf: It will cover, among other things, energy consumption and intensity, waste management and reduction, recycling and circular economy, water consumption and water management, reductions in raw material consumption and material efficiency, resource scarcity and risk management. Where can we potentially reduce waste and where are new strategies for greater sustainability emerging? Furthermore, employee development and training, employee retention and turnover, age diversity in the workforce, gender pay gap transparency, availability and accessibility of complaint channels, anonymity and data protection, and much more are also important key figures for the KLINGER Group. The aim is to derive specific measures. Whether we’re talking about more energy-efficient systems or switching to materials from sustainable sources, the ESG report provides us with a solid corpus of data. This allows us to demonstrate our compliance with legal requirements and helps us actively shape our future.
Thank you for your insights.
Fact box
ESG and Sustainability Reporting Glossary
- Carbon Border Adjustment Mechanism (CBAM): Collects CO2 certificates for imports of carbon-intensive products, such as steel and cement. Takes effect in 2026. This affects KLINGER.
- Climate-neutral: State in which a company or product is no longer a net emitter of greenhouse gases; usually achieved through avoidance and offsetting.
- Conflict Mineral Regulation (EUCDR/CMR): Regulates the use of conflict minerals such as tungsten. This affects KLINGER.
- Corporate Carbon Footprint (CCF): Measures a company’s total CO2 emissions. Serves as a basis for climate strategies.
- Corporate Sustainability Due Diligence Directive (CSDDD): Enforces compliance with human rights and environmental standards in global supply chains. Companies are responsible for their suppliers’ compliance.
- Corporate Sustainability Reporting Directive (CSRD): Specifies extended sustainability reporting requirements within the EU. KLINGER must submit data for 2025 as of 2026.
- Deforestation Regulation (EUDR): Aims to protect forests by regulating products such as coffee, cocoa and timber. This affects KLINGER.
- Ecodesign for Sustainable Products Regulation (ESPR): Sets minimum standards for sustainable product design. Relevant for producers to cut waste and energy consumption.
- European Green Deal: EU strategy to achieve climate-neutrality by 2050, including through the use of renewables and sustainable economic policy.
- European Sustainability Reporting Standards (ESRS): Define detailed specifications for reports in accordance with the CSRD and ensure comparability.
- EU taxonomy: Defines what is considered “green”. Affects financing and investor decisions, as it makes sustainable activities more clearly identifiable.
- Greenhouse gases (GHG): Include CO2, methane (CH4) and other climate-damaging gases. Emissions are classified into three scopes:
- GHG Protocol: Globally recognized standard for emissions accounting. Classifies emissions into scopes 1, 2 and 3 and defines methodology guidelines:
- Scope 1: Direct emissions from own or controlled sources, for example production processes or heating systems.
- Scope 2: Indirect emissions from purchased energy, such as electricity or district heating.
- Scope 3: Other indirect emissions along the entire value chain. These include emissions from purchased materials and services, transportation, business travel and the use and disposal of manufactured goods.
- Product Carbon Footprint (PCF): Records the CO2 emissions associated with a specific product over its entire life cycle.
- SIC codes: These Standard Industrial Classification Codes are used to assign companies to specific sectors of industry. In the context of ESG, this aids consistent data acquisition from various sectors.
- Supply Chain Act (LksG): German: Lieferkettensorgfaltspflichtengesetz; requires companies to review human rights and environmental risks in their supply chains. KLINGER must report figures from 2029, but – itself being part of supply chains – will already be affected earlier.
