Our path to a sustainable supply chain

Across all our global production sites, we pursue a unified approach – "Regional for local". This means that we manufacture our goods in the markets, or the regions, in which they're sold. "Regional for local" also affects our supplier structure too. It guides us to source the materials and components we require, as far as possible, from the same region as the factory that needs them. This helps us reduce kilometres travelled and emissions.

Our production locations in Germany, Italy, Romania, the USA, Mexico, Brazil and China, for years, have been using upstream products increasingly from their region. In 2021, our German factories will buy around 70% of their components from Europe. Our factory in Mexico is a particularly glowing example of development. Three years ago, we were only at 15% regional procurement, and now we're at 86%. Our factory in China procures 98% of its materials and components in the region.

Since 2017, we have increasingly been delivering our products directly from our production locations without any detours via a central warehouse, to several Kärcher sales companies in Europe. And the difference that direct supply makes in the battle for eco-friendly logistics can be seen in the figures.

An analysis at our German logistics centre showed that, thanks to direct transport from production locations in Italy and Romania to 13 European sales companies, we were able to save over 70 tonnes of CO₂ per year. This corresponds to 30,900 transport kilometres saved. Step by step, more Kärcher companies are being incorporated into the direct supply structures.

We're also cutting transport distances in Australia. Instead of sending products from various distributions centres to a main warehouse in Melbourne in the south-east, we are increasingly sending them directly to our storage facility in Perth, in the west. This cuts out the 3400 kilometres of inland-transport route between the sites, enabling Kärcher to save 299 tonnes of CO₂ per year in Australia.

In 2020, we significantly reduced our CO₂ emissions for specific transport routes in Europe by using a method called combi-transport. Instead of only using lorries on roads, as was usual in the past, we now transport our goods via rail or water for part of the routes. In 2019, we completed 245 transport runs via combi-transport, saving 173 tonnes of CO₂. In 2020, the number of combi-transport runs grew to 605, saving 427 tonnes CO₂.

Our transport route from Romania to Germany is a good example of how just one route can make a big difference in reducing your carbon footprint. Our logistics partners have been completing deliveries via a new train route from Oradea to Stuttgart since mid-2020. Every full load transported via the route cuts out 1000 kilometres of road transport, which, when calculated for the volumes moved over the year, results in a savings potential of 710 tonnes of CO₂.

Kärcher achieves around 35% vertical manufacture. We're focussing on key technologies, such as the core of our high-pressure cleaner – the pump – or the tanks for fresh and dirty water in scrubber dryers, which are finished via plastic-rotation process. Larger plastic components like this would take up a large volume of transport. By producing them ourselves at our sites, and tailored to our needs, we are reducing both transport kilometres and emissions. We also take great care to use energy efficient systems and buildings at our production sites.

Emissions are classified as Scope 1, 2 or 3 (according to the Greenhouse Gas (GHG) Protocol reporting method). This helps companies recognise where their emissions arise and how they can be reduced. Scope 1 and Scope 2 cover the direct energy use at our facilities, which have been carbon-neutral since 2021. We are reducing our emissions as much as possible at production locations using far-reaching measures, efficient buildings and resource-conserving systems. For example, we use green energy at all our factories, and some are equipped with LED lighting and photovoltaic systems. We compensate for unavoidable emissions via our partner First Climate and, since 2021, we have been supporting a rainforest conservation project in Brazil.

Scope 3 emissions will be our increasing focus going forward. These include all other emissions, for example, those along the supply chain. But how high are our emissions? The further from our own business processes these processes are, the harder it is to analyse and have influence over them. We first carry out a careful analysis to create a solid database. Using this database, we develop ideas about how we can reduce or compensate for the emissions in the supply chain. We carried out a pilot project to determine the Scope 3 emissions of our in-house production of cleaning agents. The result shows that a large portion of the total emissions from this production unit are generated from logistics and manufacturing, the supply of raw materials for production and the delivery of the finished detergent itself. We will take concrete measures to combat these in the future.

With the aim of promoting a healthy closed-loop economy, Kärcher does not use any harmful substances which are banned by law. Since 2003, we have been using the Kärcher standard 050.032 for ingredients to ensure that this is the case. This document obliges our suppliers not to use certain materials in the components which they deliver to us. We are continuously adjusting and updating which materials are included on the list and all suppliers have to sign and adhere to this standard.

When selecting which raw materials are used in our products, we are stricter than the law requires. By 2009, we had already banned harmful plasticisers, which were only legally banned in 2019. We also specify binding limits for PAH (polycyclic aromatic hydrocarbons) for Kärcher products, although these are only partly covered by legal regulations.

Beyond this, we are also always searching for the most environmentally responsible solutions. We design our components to use as little material as possible, both metal and plastic. We also produce almost exclusively sustainable detergents and cleaning agents, manufactured from natural substances.

We're continuously working to optimise our packaging and reduce the associated waste, both during the supply stages for components for production and during delivery to our customers.

As part of our 2025 sustainability goal, our factory site in Winnenden, Germany, is testing ways to significantly reduce packaging waste both on site and in the supply chain, with the aim of achieving a plastic-waste-free production process. We'll use the knowledge we gain from this test to apply to other factories. For example, this year we're installing a powder-mill to create our own plastic powder. Until now, we've received the powder in giant plastic sacks known as Big Bags, and now we're going to eliminate this waste. The granulate, which we use to make the powder ourselves, arrives in tankers with no packaging.

Our reusable boxes are another example of waste reduction within the factory. We're already using these for transport inside the factory, for example moving components from injection moulding to other parts of the production facility. Doing this means we've eliminated the plastic film that used to be used to package these parts. We're also holding discussions with our suppliers to work out how they could also make similar switches in the upstream supply chain.

We're making progress on product packaging, too. We've succeeded in eliminating polystyrene for packaging our Mobile Outdoor Cleaner OC 3 – opting for cardboard instead. This also helps us reduce the overall size of the package.

Our sustainability strategy includes optimising all our product packaging by 2025. We're improving the stability of our products and their surfaces in order to enable fully plastic-free packaging.

Recycling is a key part of our supply chain at multiple stages, for example, when we're choosing materials. We're working on constantly increasing the proportion of recycled plastics we use. The big challenge is finding suppliers who can provide the recycled materials at the consistent high quality we require. Essentially, this recycled plastic can come from household plastic waste or from industrial production waste.

Currently, we're using four times more recycled material in our products than we were ten years ago. We have switched to recycled plastic for manufacturing the spray lances for our high-pressure cleaners, using Nylon 66 (or PA 66), which is made from the fibres of old airbags and production waste. We want to achieve a recycled plastic content of up to 50% in selected Home & Garden products.

Recycling also has a big part to play at the end of a product lifecycle. That's why we work in the design stages to ensure we're using materials that are easily recyclable. For example, parts that are screwed together rather than glued can be more easily separated later, improving recycling efficiency and resulting in a high-quality recycled material.

If you dismantle Kärcher products manually, you can recycle over 90% of the materials. We work with specialist partners for this.

Our customers expect their Kärcher products to have a long lifetime. How long a specific machine lasts, depends greatly on its field of use, how it is maintained and how intensively it is used. We tackle various points to ensure this lifetime is as long as possible. In the end, a product which has a long lifecycle gets much more from its raw materials than one which wears or breaks quickly.

Our scrubber dryer is a good example of the amount of leverage we have. First, the entire machine and all its individual components undergo serious stress tests, to sniff out and eliminate potential weak points. We are also gradually switching the batteries for our scrubber dryers to lithium-ion batteries. These last three to four times as long as the batteries we used previously. The machines run for longer without needing a battery change – which pleases the customers too, of course.

Since how our customers handle their machines also has an impact on the lifetime of the product, we also make it as easy as possible to use and care for, or maintain, the product. We provide care instructions and design the machines to be as user-friendly and low-maintenance as possible. For example, on our scrubber dryers, all the control elements are yellow and the maintenance components are grey. This makes it easy for the user to see, at a glance, which parts are maintenance parts. Last but not least, we also construct the machines so that the wear components are easy to access and change. This makes users more likely to have their machine repaired rather than buying a new one.

To become a Kärcher supplier, you have to fulfil strict criteria. We check that every new supplier adheres to our regulations and regularly audit our existing suppliers. We include questions on quality, as well as welfare and environmental standards, and health and safety.

We also use software that – with help from AI – searches all available online sources for indications of discrepancies or anomalies. For example, it combs social networks for posts about our partner companies and raises the alarm if, for example, an employee complains several times about their employer. If we receive this kind of notification, we proactively contact the supplier and investigate.

As part of our 2025 sustainability strategy, we – with the help of AI software, among other things – are establishing a proactive supplier risk management scheme for sustainability. This helps us promote sustainable behaviour in other firms as part of our day-to-day collaboration.

Our Code of Conduct describes in detail our requirements for both our own behaviour and that of our suppliers. The heart of the document focuses on treatment of employees. For example, the Code of Conduct prescribes ethical behaviour and prohibits discrimination, child labour and other forced labour.

The Code of Conduct was developed from our Integrity Guidelines, which is itself based on the image of a respectable salesperson. The requirements, which were first aimed solely at our company, have applied to our partners for some time.

As well as self-assessment, independent institutions are a good way to gain a better overview of the sustainability of certain companies. For this, Kärcher primarily relies on EcoVadis and Sedex. For transparency, Kärcher is also listed on both platforms as a supplier.

The ratings give a quick overview of a company, but also contain more detailed information, for example on areas such as sustainable procurement, environmentally friendly behaviour and information on working conditions.

We will reduce our material suppliers by 40% by 2025, thereby driving our regional partner strategy for a reliable and sustainable supply chain. This reduction in supplier numbers also simplifies our collaboration with the remaining suppliers. Ultimately, it is much easier for all parties to conclude good contracts with fewer suppliers than with a larger number of suppliers.