Climate

The Swiss Code of Obligations obliges Lindt & Sprüngli to prepare a report on non-financial matters which shall cover environmental matters. For the reporting period, Lindt & Sprüngli prepared a report in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) with respect to climate matters as foreseen by the Swiss Ordinance on Climate Disclosures for the first time. The disclosures can be found in this chapter and are referenced in the TCFD index which is part of the Swiss Code of Obligations Art. 964b disclosure index (see Appendix).

Our related policies and documents

Our requirements and actions related to climate are guided by relevant Lindt & Sprüngli policies such as the Human Rights Policy and the Deforestation Policy.

In addition, we issued the following documents related to the identified material topic “Emissions”:

• Roadmap to net-zero: This outlines how Lindt & Sprüngli intends to reach its science-based climate targets Science Based Target initiative (SBTs) which were approved by the SBTi in 2023. It describes our corporate governance on this topic and which key areas we need to address to be able to achieve net-zero emissions by 2050.
• Corporate Carbon Footprint Methodology: In 2020, we calculated our first corporate carbon footprint in line with the GHG Protocol. We continuously improve the methodology and outline updates in this document.

Climate governance

Our approach to managing emissions reduction actions, risks, and opportunities is based on the integration of the emissions topic throughout the Group, from the highest governance body to specialized departments worldwide, and via designated decarbonization managers in our subsidiaries. To oversee the effectiveness of, and ultimately drive the Group towards, our global emissions reduction targets, we have established a designated governance structure. The Sustainability Committee, Compensation & Nomination Committee, and Audit Committee of the Board govern, guide, and approve different elements of our climate commitment and strategy (see Lindt & Sprüngli Committee Charters on our website and Sustainability governance structure in the Governance chapter).

Group Management, represented by the Greenhouse Gas Steering Committee with the CEO, CFO, and Group Management member responsible for Operations, lead and decide on our global climate strategy. The cumulative effect of specific emissions-reduction actions and targets are assessed on an annual basis by our Group Management. The local leadership teams and decarbonization managers own and design the local plans and collaborate with the global Centers of Excellence. Centers of Excellence comprise the experts at Group level who have competence in the topic areas in which we generate most emissions. Risks related to those topics are addressed directly by the responsible departments, under local management and Board supervision. For more information regarding our climate governance see our Roadmap to net-zero.

To support more efficient decision-making and effective prioritization of the agreed actions, we have also incorporated carbon considerations into the budget planning cycle.

Impact, risk, and opportunity management

We address our climate impacts, risks and opportunities through our Roadmap to net-zero and taking action to achieve our SBTs.

Our material impacts, risks, and opportunities

According to our Double Materiality Assessment (DMA), “Emissions” is a material topic. We have identified impacts, risks, and opportunities in our own operations, as well as in the upstream and downstream value chain, in relation to this topic.

Agriculture is responsible for large portions of two of the most significant sources of greenhouse gas (GHG) emissions: carbon dioxide (CO₂) and methane (CH₄). Emissions can have negative impacts on air quality, ecosystems, and human and animal health, and they are the main contributor to climate change. Lindt & Sprüngli indirectly causes GHG emissions (scope 3), predominantly through cocoa farming and the associated land-use change, other raw material sourcing (particularly dairy products), transport, and packaging. We cause scope 1 GHG emissions from direct energy consumption, including sources owned or controlled by the Group, and scope 2 indirect emissions from purchased electricity, steam, heating, and cooling.

As part of developing our decarbonization plans, we aim to identify and assess any further opportunities related to climate change. We are evaluating how to report on those opportunities in a consolidated way.

Climate Risk Assessment

In 2024, Lindt & Sprüngli worked with an external party to complete a Climate Risk Assessment (CRA) to understand the most material climate-related topics that may affect our strategy and business. The CRA took into account our own operations and the upstream value chain for cocoa, sugar, and dairy, considering potential impacts up to 2050. In line with best practices, the scenario analysis was conducted across three IPCC¹-based climate scenarios (1.5°C, 2°C, and 4°C) and up to a 2050 time horizon to identify both risks related to the transition to a low-carbon economy, and risks related to the physical impacts of climate change. The identified physical risks and transition drivers could potentially have a material financial effect in the short term (2025). These are expected to intensify in the medium term (2030) and long term (2050), as the climate continues to change and the global transition to a low-carbon economy accelerates. All the identified risks and opportunities were evaluated for exposure, probability, and financial effects to produce a final rating.

The CRA concluded that under higher temperature scenarios (current trajectory and 4°C), risks are concentrated in the upstream value chain, as agricultural commodities may suffer further negative impacts from such significant temperature increases. Under this scenario, physical risks will potentially also impact some production sites due to flood risks. Under low temperature scenarios (e.g. 1.5°C), transition risks, for example increased gas costs, are expected to dominate.

In the second half of 2023, we started to systematically identify and consolidate climate-related environmental opportunities for our business in the context of our SBT commitments. This exercise continued well into 2024 and will recur on an annual basis. This analysis includes emissions reductions and cost impacts in the areas of OPEX, CAPEX, and COGS.

Identifying, assessing, and managing climate-related risks and opportunities

The process for identifying and assessing climate-related physical and transition risks and opportunities in our own operations and along the upstream value chain was carried out in a three step process.

We first reviewed a longlist of physical and transition risks and opportunities. This list was refined based on internal data and stakeholder engagement. We then evaluated the qualitative upstream value chain and physical risks and opportunities against three dimensions: exposure, probability/likelihood, and impact/severity. These were assessed and rated on a scale from very low to very high, with the resultant scores reflecting the risk type. In a final step, we produced a qualitative and quantitative impact scoring and ranking of the most significant risks.

The CRA evaluated the climate risks that should be prioritized, and provided recommendations to mitigate and control these key risks. However, it did not define a standardized process for prioritizing and managing those risks on an ongoing basis.

For our Climate Risk Assessment, multiple metrics from ESRS E1 were considered as well as site data from own operations and raw material sourcing.

Outlook

Lindt & Sprüngli has committed to SBTs and has already implemented selected actions to mitigate risks confirmed throughout the risk assessment. The Group is considering strengthening these and complementing them with additional strategies. This includes, but is not limited to, deeper analysis of specific risks and further integration of the results into the Group Risk Assessment process.

We intend to further strengthen the processes implemented in 2024 in the coming year to measure and manage our carbon footprint. An important part of this journey is acquiring better data and being transparent about our progress towards our SBTs, which are in line with the Swiss climate targets. In 2025 we plan to commence work on our Climate Transition Plan, based on the foundations of our Roadmap to net-zero. As part of this process, Lindt & Sprüngli will also develop an approach for how climate-related issues are taken into account in major business decisions. In addition, the impact of climate-related issues on the business strategy and financial planning will be assessed including in view of a transition to a low-carbon economy.

Metrics and targets

Science-based targets

Lindt & Sprüngli has approved the following near- and long-term science-based emissions-reduction targets with the Science Based Targets initiative (SBTi):

• Scopes 1 and 2: Reduce absolute scope 1 and 2 GHG emissions by 42% by 2030 and by 90% by 2050 from a 2020 base year².
• Scope 3 non-FLAG³: Reduce absolute scope 3 GHG emissions by 25% by 2030 and by 90% by 2050 from a 2020 base year.
• Scope 3 FLAG: Reduce absolute scope 3 FLAG GHG emissions by 30.3% by 2030 and by 72% by 2050 from a 2020 base year, and no deforestation across its primary deforestation-linked commodities⁴, with a target date of December 31, 2025.
• Net-zero: Reach net-zero GHG emissions across the value chain by 2050.

Emission trends for all scopes since 2020

Our near- and long-term targets aim for absolute emissions reductions by 2030 and 2050 and are measured against our 2020 baseline. We will prioritize decarbonization efforts and neutralize any residual emissions to reach our goals. In 2023 we published our Roadmap to net-zero to provide insights into where we will focus our efforts.

In 2024, Lindt & Sprüngli subsidiaries submitted their local decarbonization plans to the Group for the first time. These plans were focused around emissions reduction actions that can be influenced at a country level, such as energy usage, packaging usage, and transportation. Furthermore, Center of Excellence leads were required to submit decarbonization plans for those areas that are governed at Group level, such as cocoa and other raw materials.

The plans were centrally consolidated by the Group Operations team and reviewed by both the Group Operations team and thereafter Group Management. The key focus areas remain cocoa, dairy, packaging, transportation, and energy.

The plans were later integrated into the financial budget planning for 2025. We subsequently set internal targets for 2025 and 2030, with details on actions per emissions scope. The actions vary, based on the local availability of lower-carbon options, and the emissions scope that is being tackled. Progress will be evaluated annually. We have also included a provisional budget for decarbonization actions into our medium-term financial planning processes up to 2030.

In scopes 1 and 2, key actions to reduce emissions relate to increasing the usage of renewable energy and improving energy efficiency.

In scope 3 FLAG, working towards no deforestation, particularly in cocoa, as well as improving traceability, is expected to have a significant impact (see Biodiversity and ecosystems). For other raw materials, reducing emissions from dairy by working with suppliers or finding alternatives to milk are anticipated to have the largest impact (see Responsible sourcing).

In scope 3 non-FLAG, actions to optimize the loading of trucks, and/or the use of alternative fuels, are expected to contribute to emissions reduction as well as reducing packaging materials or improving recyclability. We are working with our suppliers and have started to integrate lower-carbon solutions into our logistics in 2024. These include waste- and residue-based maritime fuel for ocean freight.

Across scope 3 emissions, we are striving to prioritize efforts to improve data availability and capabilities to have a more granular view of emission and reduction action impacts. For example, we identified and are working to implement a software tool to better understand emissions in our transport activities.

Decarbonization targets are also an element of Group Management compensation and considered in local CEO performance reviews.

Our carbon footprint

Our total GHG emissions (scopes 1, 2, and 3) in 2024 were 3.2 million metric tonnes CO₂ equivalent. This is an increase compared to our 2020 baseline of around +3.0%, mainly due to growth-related volume increases and an increase in purchased raw materials, some of which have a higher footprint. Emissions from our value chain (scope 3) represent around 95% of our carbon footprint, with cocoa, other raw materials including dairy and sugar, transport, and packaging being the largest contributors. Our business relies on agricultural commodities from around the globe, so agricultural activities and related land-use change (e.g., deforestation) and the processing and transport of these raw materials all contribute significantly to Lindt & Sprüngli’s global emissions. We did not purchase any carbon credits or offsets in 2024.

Our GHG emissions were calculated with primary and secondary data from our suppliers. A total of 54.0% of our GHG emissions were calculated using primary data and secondary emission factors. A further 4.0% were calculated using primary data and emission factors from suppliers. The remaining GHG emissions were calculated using secondary data.

The Lindt & Sprüngli corporate carbon footprint is aligned with the GHG Protocol standard to account for corporate GHG emissions. The operational control approach is used to set the organizational boundaries for the Lindt & Sprüngli corporate carbon footprint. For further information on the reporting boundaries considered, see our Corporate Carbon Footprint Methodology.

Division of our emissions footprint (2024) into emissions scopes and main impact categories

Scope 1 and 2 emissions – progress

Scope 1 and 2 emissions from energy consumption in production, warehousing, offices, and retail operations contribute just under 5% to our total emissions. They mainly stem from heating, cooling, and electricity usage in chocolate production. In line with the LPW (see Lindt Performance Way within this chapter), our Group Operations team sets and reviews targets and actions bi-annually. Furthermore, the cumulative effect of specific emissions reduction actions and targets is assessed on an annual basis by our Group Management.

Our emissions reduction initiatives at production sites included optimizing heating, ventilation, and air conditioning systems, replacing refrigeration units and fluids, improving the insulation of piping systems, and using low-carbon energy. Additionally, some of our sites use certified management systems (ISO 140001 in Italy and ISO 50001 in Germany) to improve their environmental management and energy efficiency. In 2024, we saw a decrease in emissions from direct energy use of around –4.7% compared to 2023. This was caused by a decline in refrigerants and stationary fuel use and was partially offset by fuels used for mobile combustion. Scope 2 emissions decreased by around –3.6% as a result of an overall slight decrease in energy purchased and an increased usage of energy from renewable sources. Within the energy types, we saw significant increases in both renewable energy purchased (around +60.9%) and renewable energy generated in our own facilities (around +47.3%). Compared to our 2020 baseline, we have decreased our scope 1 and 2 emissions by –9.3%. In 2024, we identified, and started to implement, a range of emissions-reduction activities within our local decarbonization plans that we currently believe will put us on track to our scope 1 and 2 emissions-reductions targets. We expect to report on their impact in the Sustainability Report 2025.

Scope 3 emissions – progress

Since 2023, we have reduced scope 3 emissions by –8.4%, driven mainly by reductions from cocoa. We saw a slight increase in volumes of cocoa purchased, but overall cocoa emissions decreased by –10%. We changed our cocoa powder purchasing and accounting methods, which reduced total emissions from cocoa by –5.6% compared to 2023 (see Corporate Carbon Footprint Methodology for more details).

Our scope 3 emissions increased by +3.8% compared to our 2020 baseline. There were some small shifts overall within our scope 3 footprint, mainly due to impacts of small methodology changes and increased or decreased spend on certain services and raw materials in areas where we do not have primary data. Within cocoa, overall cocoa emissions went down by –2.4% despite a small increase in volumes since 2020 which was due to changes in Land Use Change (LUC) monitoring and cocoa powder purchase and accounting.

We recognize that our scope 3 trend from 2020 to 2024 is not in line with the direction to meet our SBTs. However, we also recognize that this increase occurred in a period when we were focusing efforts on improving key processes and tools to accurately report our GHG footprint and developing decarbonization action plans. In 2024, we identified a range of scope 3 emissions reduction activities in our central decarbonization plans that might put us on the right track to meet our scope 3 FLAG reduction targets. Regarding scope 3 non-FLAG, we will further endeavor to identify additional emissions reduction actions and to increase data quality to improve the measurement of their impact.

Internal carbon pricing mechanism

In 2023, we developed and assessed the use and usefulness of an internal price on carbon in our investment decisions. We concluded further assessments in 2024 and are preparing to implement a mechanism related to investment decisions for significant projects.

¹IPCC: The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change.

²The target boundary includes biogenic emissions and removals from bioenergy feedstocks.

³FLAG and non-FLAG targets are defined based on the Forest, Land and Agriculture (FLAG) Science Based Target Setting Guidance.

⁴Targets include FLAG emissions and removals.

⁵Lindt & Sprüngli has identified cocoa to be its primary deforestation-linked commodity.

PwC CH