With foresight into the future

The recently published UBS study on Sustainability in the metal industry shows that the very diverse metal industry is faced with more difficult framework conditions than other sectors in Switzerland when it comes to managing the transition to a low-emission business. According to UBS economist Pascal Zumbühl, there are two main reasons for this: Firstly, the metal production and processing sub-sector in particular is extremely dependent on (fossil) fuels, which makes its emissions reduction pathway much longer. On the other hand, the second sub-sector, manufacture of metal products, is significantly less dependent. Secondly, the industry is hampered by high energy prices, a competition-distorting industrial policy and trade-restrictive measures, lessening the financial scope for sustainability measures. Does that mean we should be worried about the metal industry?

In a word: No. The Swiss metal industry has made enormous progress in the area of sustainability and in many areas is more energy-efficient than its foreign competitors. One example of this change is the FRAISA Group. The family-owned company is a leading manufacturer of high-performance tools and currently employs around 570 people worldwide. Its customers are companies in sectors such as toolmaking, mechanical processing, medical technology, watchmaking, precision engineering and aviation.

Thomas Nägelin: Our family company’s first mission statement from 1996 already stated that we want to take care of the environment on behalf of future generations. Of course, the mission statement was not formulated as clearly back then as it is today. As a family business in the fourth generation, we have the opportunity to put these convictions into practice. We will be 90 years old this year as a company. We have achieved this by emphasizing high equity ratios rather than rapid growth. Our goals are not expressed in terms of size, but in the level of exemplary behavior towards our staff and our partners. We have set ourselves the goal of ensuring that the FRAISA Group will remain a family business for future generations. However, the next generation will only get excited about our vision if FRAISA continues to strive to become even more sustainable in a threefold sense: socially, ecologically and economically. Within the Group, FRAISA pursues a holistic strategy with regard to environmental protection, social responsibility and sustainable business practices.

Our commitment to social, economic and ecological principles is the basis of our business activities and a constant incentive to develop sustainable solutions.

Thomas Nägelin, CEO of the FRAISA Group

In Switzerland, the regulatory density has increased in recent years, but the biggest incentive for us comes from the European Union (EU). We export around 80 percent of our products, some 80 percent of which to the EU. Because of this export focus, we keep a close eye on developments relating to environmental regulations such as the planned Carbon Border Adjustment Mechanism (EU CBAM) and expanded reporting obligations.

The increase in environmental regulations places new demands on us with respect to transparency. This relates not only to our own business activities, but also to upstream production steps in the value chain. To fulfil the new requirements, one thing we have done is to obtain a sustainability rating for our company. We’ve found that such ratings are increasingly being demanded by customers. And because we have already implemented a number of different sustainability measures, we perform better than our competitors. This can give us the competitive edge in sales.

Besides switching to renewable energy sources in production, we also utilize the heat generated by the machines to heat our buildings.

We were aware that this development was taking shape on the regulatory front, so we took various steps at an early stage to reduce our dependence on (fossil) energy sources. Because the consumption of electrical energy makes a significant contribution to our environmental impact, we specifically monitor electricity consumption at all production sites and have switched to certified electricity from green sources. Our commitment to sustainability and innovation go hand in hand: Besides switching to renewable energy sources in production, we also utilize the heat generated by the production machines to heat our buildings. We have now also begun to provide our employees with electric vehicles. In Switzerland, we have built a new factory building and now consume a third less energy. Additionally, we have installed photovoltaic systems on the roof of the building. We also ensure that we don’t use any fossil fuels, either in production or, as far as possible, in any other area.

Yes, by developing new products and technologies and providing precise application data, we help our customers to achieve their sustainable development goals. In the interests of ecological sustainability, we revised our life cycle assessment last year, taking into account the latest insights and regulatory requirements. Together with other tool manufacturers, we are committed to industry standards for the life cycle assessment of individual products and environmentally friendly concepts in the packaging sector, particularly within industry associations such as the German Engineering Federation (VDMA). At the same time, we are working continuously at all locations to further reduce our ecological footprint by adopting more efficient processes, lowering energy consumption and enhancing resource efficiency. In addition, our resource-saving FRAISA ReTool^®Services lengthen the service life of a tool many times over: By collecting, repairing and returning worn tools, we close the material cycle and cut our carbon footprint. So we are particularly pleased that industrial tool reconditioning with FRAISA ReTool^® is one of the good practice examples in the new ISO standard ISO/FDIS 59020 on the circular economy. If we produce more energy-efficiently and conserve resources, we lower our costs and protect the environment. That’s why I am utterly convinced that sustainability and profitability can go hand in hand.

By collecting, repairing and returning worn tools, we close the material cycle and cut our carbon footprint.

We see several obstacles in implementing our sustainability efforts:

1. Relevance and prioritization: It is a challenge for our company to identify and prioritize the relevant sustainability issues. The multitude of possible measures makes it difficult to set a clear focus and implement it immediately.
2. Resource allocation:  It must be clarified who is responsible for the sustainability measures and how much time and money a company can spend on them. There is often no clear person in charge and sustainability is seen as an extra responsibility.
3. Strategic alignment: One crucial question that companies need to ask themselves is whether they want to be "best in class" in terms of sustainability or simply conform to the industry average. This decision significantly influences the scope and intensity of the endeavors.
4. Employee acceptance: Employees’ openness to sustainability can vary. These differing attitudes necessitated targeted communication and training measures.
5. Technological aids: Today, there are good tools out there to help you achieve sustainability goals. The use of artificial intelligence (AI), for example, has considerably simplified the procurement of information. However, we first had to find the right tools and train our staff in using them.
6. Collaboration with external stakeholders: Collaboration with government agencies, other companies and industry associations was often complex, especially when implementing new legislative proposals. We had to understand what new regulations mean for us and how we can best implement them. Checklists that clearly define the requirements and steps would have helped enormously.

These challenges show that the path to more sustainable corporate management has many facets and requires both internal and external coordination. The climate challenge cannot be tackled by each of us alone, so we work with external consultants, other companies, industry associations, and educational institutions such as the ETH, to develop sustainable solutions and build up expertise.

Because sustainability also entails financial benefits, we have sufficient incentives to implement such measures – even without stricter laws. I would prefer the state to provide far-sighted and stable framework conditions that offer sufficient freedom for entrepreneurial activity. Long-term framework agreements with the EU would give us the planning security we need.

The metal industry has all the tools at its disposal to become more energy and carbon efficient. Emission-free production and distribution are the solution that we can only achieve together and as a whole society.