Sustainability approach

Sustainability strategy

We focus on using raw materials responsibly and turning them into valuable products. To promote sustainable development, we continuously invest in further developing our product portfolio, optimising our production methods, supporting employees, and strengthening long-term partnerships. We have been a member of the United Nations Global Compact since 2022 and are committed to its 10 principles. We support the Paris Agreement from the Paris Climate Conference as well as the European Green Deal, on the basis of which we pursue the strategic objective of actively contributing to minimising global warming. While we have striven for a CO₂ reduction target for our emissions from Scope 1 and Scope 2 since 2021, we have committed ourselves to short- and long-term emission reductions in line with the net zero standard of the Science Based Targets initiative (SBTi) in the reporting year. We are therefore developing corresponding targets and will submit them to the SBTi for validation in 2026 at the latest. Further information about our climate strategy can be found in the "Strategy" section of the TCFD report. As of the 2023 financial year, a quantitative climate target aimed at reducing the intensity of greenhouse gases has been integrated into the variable compensation for Group Management.

The Group-wide sustainability strategy applies to the entire corporate group and is supported by the Board of Directors. At the same time, the sustainability targets are centrally defined and coordinated. The companies are responsible for the decentralised implementation, plan specific measures, and implement them.

In the framework of the current EcoVadis evaluation along the areas of environment, labour and human rights, ethics, as well as sustainable procurement, Arbonia was awarded the bronze medal. This means that we are among the best 35% of the companies evaluated by EcoVadis. This recognition is a motivation for us to develop our sustainability strategy further and continuously improve our performance.

Sustainability governance

Arbonia is organised in a decentralised way and has a holding structure. Group Management consisted of the Executive Chairman of the Board of Directors (until 31 December 2024), the CFO, as well as the two CEOs of the Doors and Climate Divisions. As of 1 January 2025, the CEO of the Doors Division assumed the role of CEO of Arbonia while remaining CEO of the Wood Solutions Business Unit at the same time. With the departure of the CEO of the Climate Division and the closing of the sale of this business unit, Group Management now consists of the CEO, the CFO, as well as the CEO of the Glass Solutions Business Unit. Together with the Chairman of the Board of Directors, they define the targets and measures with which the strategy specified by the Board of Directors is implemented. The responsibility for the operational business lies with the companies and their respective management boards.

Sustainability is a central part of the Group strategy. The CFO is responsible for managing the topic within the Group. This person develops the sustainability strategy together with the sustainability management, which is part of the Corporate Communications & Investor Relations department and is responsible for the Group-wide coordination. The sustainability committee, which still existed in the last financial year, was therefore replaced by the sustainability management. The people responsible for ESG topics as well as the companies coordinate individual measures with the Group functions and implement them. Group Management evaluates important initiatives and projects on a monthly basis.

The Board of Directors and Group Management are pursuing a long-term strategy, while always keeping in mind the interests of the company, its employees, shareholders, and other important stakeholders. Once a year, they review the strategy and its reporting with regard to the material topics for Arbonia. The Board of Directors of Arbonia is continuously informed about new legal requirements for sustainable corporate governance. It takes on the decision-making and control function for all measures and evaluates the performance on the basis of defined targets.

This concerns Internal Audit and thus risk assessment, for example. In the reporting year, Internal Audit sent the Board of Directors 15 audit reports on risks and the implementation of planned measures. These reports are also available to external auditors. The Board of Directors is also continually involved in examining possible acquisitions in the form of due diligence processes. The Board of Directors can order investigations or call in external consultation via the Audit Committee committee in all areas of competence.

Materiality analysis

The materiality analysis carried out in 2023 was reviewed in 2024 and remains valid with the identified nine material topics. These topics are relevant on the one hand for long-term business success and on the other hand in respect to important effects on the environment and society. The analysis was based on frameworks such as the GRI standards, the Swiss Code of Obligations, and an initial comparison with the European Sustainability Reporting Standards (ESRS). Additional references included a benchmark analysis with sustainability reports from competitors as well as ESG rating analyses.

A core team consolidated the selection of topics, and an evaluation was then carried out by 23 internal stakeholders, including the CFO of Arbonia, the sustainability team, as well as representatives of the companies from various areas of responsibility and various corporate functions. The individual topics were rated according to the two dimensions "Effects on the environment and society" and "Business relevance". A threshold value was used to distinguish material topics from non-material topics. A workshop was then held where the stakeholders validated the results together with an external team of experts. On this basis, nine of the 13 topics were rated as "material" and are shown in the matrix below:

Article 964a ff. Code of Obligations

Comparison of material topics with the interests of the Code of Obligations

Risk management

Each year, Arbonia goes through its established risk management process. The risk catalogue reflects strategic, operative, and external risks on the basis of 26 risk scenarios and is continuously updated.

Internal Audit coordinates the risk management process. The assessment of the risk scenarios involves the relevant managers of the Group as well as the Wood Solutions and Glass Solutions Business Units. Both the probability of occurrence and extent of loss are estimated here. In this process, the two business units as well as the Group representatives evaluate the complete risk catalogue. As part of the evaluation, the risk exposures are represented on a matrix. The results are compared with the previous year to check their plausibility and consolidated for the Group for as well as for the two business units. The entire risk profile is presented to the audit committee as well as to the Board of Directors.

In the risk catalogue, there is a higher-level ESG risk scenario that describes in particular the financial impact of non-conformity in respect to sustainability topics. In the reporting year, the risk catalogue was supplemented, however, by integrating the ESG topics defined from the 2023 materiality analysis as well as the climate risks described according to TCFD in the scenarios.

The risks assessed in the reporting year differ from the previous year in individual points or in their order. The three highest risks from the perspective of Arbonia are in the areas of "price pressure" (external), the "subsidiaries / acquisitions / impairment" (strategic), and with topics related to the "development of the construction industry" (external).

Responsible people and mitigation measures have been defined for each risk. A status report indicates whether the respective measure is planned, proposed, being implemented, or completed, or whether it is an ongoing process. This status report is integrated in a risk management tool which carries out continuous internal monitoring of the risk exposure and the status of the measures.

Dealing with stakeholders

A continuous exchange with all those stakeholders who have a significant influence on the economic, environmental, and social goals of the Arbonia is of great importance. This group of internal and external stakeholders includes customers, employees, shareholders, as well as investors, analysts, public authorities, the neighbourhood, and communities at the company sites but also partners such as transport companies, suppliers, research institutes, and associations, as well as the general public. The exchange of ideas with these groups takes place in the context of personal discussions, meetings, conferences and trade fairs, as well as surveys. The table "Inclusion of stakeholders and their concerns" (see below) provides an overview of our interactions with the various stakeholders.

Memberships in the most important chambers and associations – including Swissmem (association of the Swiss mechanical, electrical, and metalworking industries), Swiss Holdings, or the German-Swiss Chamber of Commerce – allow us to have a continuous dialogue with sector-related companies and relevant interest groups. In Germany, we are a member of the Gütegemeinschaft Innentüren ("Quality Control Association for Interior Doors), the HOLZRING network, and the Verband der deutschen Holzwerkstoffindustrie (VHI – "Association of the German Wood-based Materials Industry") through individual companies. Arbonia has also been a member of the UN Global Compact since the end of 2021 and meets all of the obligations arising from our membership.

We are also locally active in the communities of our production sites. This is demonstrated by numerous donor programmes and support for non-profit organisations. Many companies sponsor sports activities for young people and adults. The Group also sponsors a non-profit association which organises educational projects to prepare children and young people for the challenges of the digital age. We also help to finance scholarships at universities of applied science.