Approaching nature-related impact
According to the World Economic Forum's Global Risks Report 2023, the loss of biodiversity and ecosystems is one of the four greatest risks of the coming decade. The consequences of this loss are serious and can range from disruptions in supply chains to the collapse of food and healthcare supplies. Because intact ecosystems are essential for sustainable economic activities, GEA is now advancing its environmental commitment to include the protection of biodiversity.*
LEAP forward: From impact assessment to strategic environmental planning
GEA is advancing its commitment to environmental responsibility. As a global player, GEA recognizes its significant impact on both people and the planet and is dedicated to minimizing the negative environmental effects of its operations. Biodiversity loss, climate change, pollution, and water and resource use are closely linked to each other and require a holistic approach to develop successful strategies.
To tackle nature-related challenges across its entire value chain, GEA began analyzing its impacts and dependencies on nature in 2024, adopting the LEAP framework (locate, evaluate, assess, prepare). This framework, recommended by the Taskforce on Nature-related Financial Disclosures (TNFD) and the Corporate Sustainability Reporting Directive (CSRD), assesses the company's nature-related risks and opportunities across its entire value chain.
What is the LEAP approach?
The LEAP process is a voluntary, comprehensive approach to environmental responsibility. It provides companies like GEA with practical guidance on how to identify and assess their nature-related dependencies, impacts, risks and opportunities. Here’s what it entails:
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Locate: Identifying how the company’s operations and supply chain interact with the environment
This includes all points where GEA’s activities intersect with natural ecosystems and biodiversity – whether through resource extraction, emissions, or other forms of environmental impact.
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Evaluate:Assessing the dependencies on and impacts to these natural systems.
This phase involves an in-depth analysis of how GEA’s activities rely on and affect nature and biodiversity. Employing Life Cycle Assessment (LCA) databases, GEA evaluates the environmental impacts across its entire value chain, focusing on the key areas land use, water use, pollution, and climate change. The results enable GEA to understand geographic hotspots and priority product groups in terms of nature-related impacts.
Evaluate
Assessing the dependencies on and impacts to these natural systems.
GEA evaluates its impact on biodiversity across the entire value chain using ReCiPe* factors. This approach clusters negative impacts into four environmental metrics: pollution, climate change, land use, and water use, are translated into ‘species loss per year’.
- Product-related activities: GEA evaluates the energy demands and environmental impacts of its products during their use phase and expresses them as ‘species loss per year’.
- Own operations: GEA assesses the nature impact of its facilities by analyzing land use, water use and withdrawal, along with data on waste, fuel, and electricity consumption. These factors are shown as ‘species loss per year’.
- Upstream activities in supply chain and further downstream activities: GEA determines the life cycle inventory data per commodity group per country for its purchased goods and services (spend-based data from the fiscal year 2023) quantifying the impact on nature through key parameters to quantify such as greenhouse gas emissions and expresses them in terms of ‘species loss per year’. (For more information please see our Raw Material Commitment.
*'ReCiPe' serves to calculate life cycle impact category indicators. The acronym represents the initials of the institutes that were the main contributors to this project and the major collaborators in its design: RIVM and Radboud University, CML, and PRé Consultants.
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Assess: Identifying the risks and opportunities associated with these environmental impacts
This step includes analyzing how dependencies on biodiversity might pose risks to business operations and identifying opportunities to mitigate these risks while enhancing sustainability. Translating nature-related impacts into financial impacts will allow GEA to take these into consideration when making business decisions in the future. -
Prepare: Developing strategies to address these impacts and reporting the findings.
This final phase is about preparing actionable strategies to manage identified risks and leverage opportunities, including setting up nature-related KPIs (Key Performance Indicators) to monitor risks. It concludes with transparent reporting as part of GEA’s commitment to corporate accountability.
Detailed environmental insights
GEA’s adoption of the LEAP framework involves several specific actions:
GEA conducts an initial assessment of its product-related activities, its direct operations including adjacent areas to own operations, and its supply chain to map out the environmental impacts. This involves evaluating several aspects from the raw materials used to the end-of-life impact of its products. To better understand its dependencies on ecosystem services, GEA employs different calculation methods, which help pinpoint critical ecosystem services that support the company’s operations.
The adoption of the TNFD framework implies the integration of nature-related findings from the LEAP approach into GEA’s company-wide risk management processes. At this point no material biodiversity-related risks have been identified and reported on. However, the assessment will be repeated annually to ensure that environmental considerations are constantly evaluated under the double materiality approach and embedded in its core strategic planning.
GEA adopts the mitigation hierarchy, a tool that guides GEA towards limiting the negative impacts on biodiversity as far as possible. Currently, the ambition extends to “No Net Loss”. GEA assumes responsibility as a manufacturing company and contributes to the protection of nature and biodiversity wherever possible. This also includes a possible extension of its ambition to "Net Positive Impact". GEA will therefore continuously reassess whether and how an additional positive contribution to the protection of nature and biodiversity is possible and feasible.
From 'No Net Loss' to 'Net Positive Impact'
When addressing biodiversity-related risks, goals are increasingly framed as 'No Net Loss' (NNL) or 'Net Positive Impact' (NPI). These goals aim to balance (NNL) or outweigh (NPI) the negative impacts on biodiversity.
In practice, this means any environmental harm should be offset by creating equal or greater benefits for biodiversity. These gains are assessed against a baseline, such as the state of biodiversity before the project began or what it would have been without the project.
The 'net' in NNL and NPI acknowledges some biodiversity losses are inevitable and that gains may not match the losses in terms of time, space, or type.
A look ahead to strategic environmental planning
As GEA moves forward, it will continue to review and update its assessment as needed, seeking continuous improvement in its transparency and sustainability related to nature-related challenges in operations. The implementation process will be a journey of learning and growth, with GEA striving to develop appropriate measures to reach today’s targets, set targets for biodiversity, and foster collaboration with its stakeholders.
GEA prepares to publish its first TNFD report as part of the Sustainability Report 2024. This action will highlight GEA's commitment to transparency and its dedication to continuous environmental improvement.
*Source: Global Risks Report 2023 | World Economic Forum | World Economic Forum (weforum.org)
