What Company is This?
SKF is a Swedish company founded in 1907. It is present in approximately 130 countries, employs more than 38,000 people, and has 17,000 distributors worldwide. SKF develops and provides products and solutions to reduce friction, such as bearings, seals, and lubrication systems, as well as services such as engineering, maintenance, condition monitoring, and remanufacturing of the above-mentioned products. SKF operates across more than 20 industries, with a focus on sectors where reliability and efficiency are critical. Key industries include aerospace, railway, automotive, high-speed machinery and electrical drives, heavy industries, agriculture, and food and beverage.
What Are the Results?
SKF reaches a total score of 49%, the highest in this year’s edition of the Sustainable Steel Scoreboard, lands in second place in General Supply Chain Sustainability with a 33% score, and takes a clear lead in Steel Supply Chain Sustainability with a 65% score. In the Target-Setting and Progress subcategory of General Supply Chain Sustainability, SKF scores second-best at 43%, and in the Supply Chain Levers subcategory at 17%, like the majority of the analysed companies. It disaggregates its greenhouse gas emissions from steel and scores 100% for Disclosure in the Steel Supply Chain Disclosure subcategory. However, for Target-Setting and Progress, as well as Supply Chain Levers, in this category, SKF scores highest by a considerable margin, at 58% and 54%, respectively.
What Are the Highlights?
In the General Supply Chain Sustainability category, SKF scores full points for its SBTi-verified emissions reduction targets, which are exceptionally divided into interim targets for 2030, 2035, and 2040, with a 2050 net-zero target. The targets include a disaggregated target for purchased goods and services, also divided into interim targets for 2030, 2040, and 2045. The company scores at least 50% on the following indicators: it has a process in place to monitor suppliers for compliance with greenhouse gas emissions targets and other environmental impacts, and it specifies that sustainability is a factor in selecting a preferred supplier.
In the Steel Supply Chain category, SKF scores 60% for setting targets to use lower-emission and fossil-free steel. The company has committed to sourcing 100% net-zero steel by 2050 and has set targets for selected bearing steel suppliers to meet specific milestones by 2030, such as achieving ResponsibleSteel certification, setting SBTi-approved climate targets, or delivering lower-emission steel in line with the SteelZero definition. SKF is the only company in our analysis that is a member of ResponsibleSteel and one of three that are members of SteelZero, earning partial points on indicators related to these initiatives. In addition, SKF scores at least 50% for the share of recycled steel used in its annual production cycle and for its partnerships with steelmakers such as Voestalpine and Ovako, the first-mentioned regarding hydrogen-reduced iron and the latter scrap-based electric arc furnace-produced steel.
Where can the Company Improve?
SKF scores poorly or nothing for General Supply Chain Sustainability indicators regarding requiring science-based targets from suppliers and disclosing the share of suppliers having those targets, for requiring water reduction targets from suppliers, for committing to halting deforestation and conversion of natural ecosystems, and for having specific requirements on both water management and conservation, as well as deforestation and land conversion prevention towards suppliers. Furthermore, for Steel Supply Chain Sustainability indicators, SKF scores zero for not disaggregating its greenhouse gas emissions for steel and for not disclosing the current share of lower-emission and/or fossil-free steel in its production cycle. SKF acknowledges that most products and materials leaving its operations are not in a closed recycling loop. Nevertheless, 25% has been awarded for designing for disassembly, modularity, repairability, and recycling, as the company’s products are clearly mainly steel-based, even if steel recyclability is not explicitly mentioned.
