EU taxonomy reporting

Net sales

The economic activities within Alfa Laval covered by the taxonomy have primarily been identified based on the end markets (industries) each division sells to. However, for the economic activity 3.6 “Manufacture of other low-carbon technologies” within “Climate change mitigation,” a more product-oriented approach has also been applied. This includes mainly the sales of brazed, gasketed, and welded heat exchangers, provided they are not sold to nuclear power or fossil fuels or are already covered by the identified end markets (industries).

Specific products have also been used to identify sales within 8.2 “Data-driven solutions for greenhouse gas emission reductions” and 8.4 “Software enabling physical climate risk management and climate adaptation.” For 5.1 “Repair, refurbishment, and remanufacturing,” a selection of aftermarket offerings has been used to identify sales qualifying under “Circular economy.”

The net sales figures refer to contracts with customers. The majority of the economic activities covered by the taxonomy primarily relate to the Energy division, followed by the Food & Water division.

The above table on net sales can be summarized as follows:

Operational expenditure

Operating expenses refer to direct costs for:

• training and other HR adaptation needs (conversion and change),
• research and development,
• building renovations,
• short-term lease agreements,
• maintenance and repairs, and
• other direct expenses for the daily upkeep of tangible fixed assets by Alfa Laval or third parties.

The largest portion of operating expenses relates to research and development, which is a high-priority area to support the company’s future growth in sustainability. It is also within this area that operating expenses have increased compared to the previous year.

The above table on operational expenditure can be summarized as follows:

Investments

Investments are defined as the sum of purchased and leased capital investments. Taxonomy eligible investments and operational expenditure relate to:

• assets or processes associated with taxonomy eligible economic activities and
• purchase of output from taxonomy eligible economic activities and individual measures to become low-carbon or reduce greenhouse gas provided that the measures are implemented and operational within 18 months.

The investments are mainly focusing on increasing production capacity for existing and new products that reduce energy consumption and carbon emissions for our customers and to reduce Alfa Laval’s own energy consumption and carbon emissions.

The above table on investments can be summarized as follows: