Fresenius Medical Care takes next important step towards goal to reduce CO2 emissions in its operations
Fresenius Medical Care (FME), a leading global provider of kidney disease products and services, has entered into five virtual power purchase agreements (vPPAs) for renewable energy with wind and solar farms in Germany and the U.S. These agreements are projected to supply approximately 580 gigawatt hours of renewable energy annually, which is about 46% of the company’s global energy consumption.
The initiative is a significant stride towards Fresenius Medical Care's strategic sustainability goal to reduce its carbon emissions by 50% by 2030, ultimately aiming for climate neutrality by 2040. The energy farms are expected to become operational in 2024 and 2025, with contracts spanning 10 to 15 years.
CEO Helen Giza emphasized the importance of this milestone in driving the company's commitment to sustainability. Fresenius Medical Care has also aligned its climate targets with the Science Based Target initiative (SBTi) and integrated greenhouse gas emission reduction as a performance target for the Management Board's long-term variable remuneration.
- Fresenius Medical Care (FME) has signed five virtual power purchase agreements for renewable energy.
- The vPPAs will supply around 580 gigawatt hours of renewable energy per year.
- The agreements cover 46% of FME's global energy consumption.
- The energy projects are scheduled to commence in 2024 and 2025.
- FME aims to reduce its carbon emissions by 50% by 2030.
- The company targets climate neutrality by 2040.
- FME has committed to the Science Based Target initiative (SBTi).
- Greenhouse gas reduction is now part of the Management Board's performance targets.
- The vPPAs have a long-term timeframe, with operational start dates in 2024 and 2025, delaying immediate impact.
- The contracts are long-term commitments of 10 to 15 years, potentially reducing flexibility in future energy sourcing decisions.
- Achieving the 50% reduction in carbon emissions by 2030 is ambitious and may face unforeseen challenges.
Insights
Fresenius Medical Care's (FME) strategic move to sign five virtual power purchase agreements (vPPAs) is a significant step towards its sustainability goals. These agreements, involving wind and solar energy projects in Germany and the U.S., will contribute approximately 580 gigawatt hours of renewable energy annually starting in 2024 and 2025. This accounts for up to 46% of FME's global energy consumption, which is a substantial reduction in its carbon footprint.
The company plans to cut CO2 emissions in its operations (Scope 1 and 2) by 50% by 2030 and achieve climate neutrality by 2040. This aligns with broader industry trends, reflecting a growing commitment to sustainability and renewable energy usage. For retail investors, this reinforces FME's reputation as a forward-thinking company with a strong environmental strategy, potentially making it more attractive to socially responsible investors.
The impact of these agreements will also extend beyond FME's immediate operations. By supporting renewable energy projects, FME contributes to broader societal benefits, including reduced dependence on fossil fuels and lower greenhouse gas emissions. However, one should consider the timelines: the commencement of these projects in 2024-2025 means that the immediate impact on FME’s carbon footprint and operating costs will not be realized right away.
From a financial perspective, FME's decision to enter these vPPAs demonstrates a strategic long-term investment in sustainability, which could bolster its financial health over time. The agreements have terms of 10 to 15 years, indicating a long-term commitment that could lead to stable and predictable energy costs, shielding the company from future energy price volatility.
Moreover, aligning the reduction of greenhouse gas emissions with management's long-term variable remuneration could drive performance, ensuring that the leadership is motivated to achieve these sustainability targets. For investors, this alignment can be seen as a positive governance practice that ensures management's interests are in line with those of shareholders.
However, it's important to consider the potential initial costs and financial outlays associated with these agreements. While the long-term benefits are clear, the short-term financial impact, including any upfront costs or investments needed to integrate these renewable energy sources, should not be overlooked. Retail investors should watch for any updates on the financial specifics and expected returns from these agreements.
- Fresenius Medical Care enters virtual power purchase agreements for renewable energy to clearly step forward in reducing CO2 emissions footprint
- Company enacts five virtual power purchase agreements for around 580 gigawatt hours per year with wind and solar farms in
Germany and theU.S. - Energy farms scheduled to go into operation in 2024 and 2025
- Important milestone for strategic sustainability goal to achieve climate-neutrality by 2040
BAD HOMBURG,
"The commitment to sustainability is firmly anchored in our corporate mission with the objective to become carbon neutral in our operations by 2040," says Helen Giza, CEO of Fresenius Medical Care AG. "The successful execution of the agreements is an important milestone and brings us closer to this goal."
Wind and solar power are generated from five energy projects as part of the vPPAs. The wind and solar parks are scheduled to go into operation in 2024 and 2025, and the contracts with FME have terms of 10 to 15 years.
Fresenius Medical Care has continuously expanded its global sustainability activities in recent years. The focus is on three strategic focus areas:
- enhancing quality of care and access to healthcare,
- building the best team to serve patients and
- reducing the company's environmental footprint.
In January 2024, FME also submitted the commitment letter for the Science Based Target initiative (SBTi), further aligning its climate targets with the SBTi standards. At this year's Annual General Meeting, the reduction of greenhouse gas emissions was also anchored as a performance target for the long-term variable remuneration of the Management Board in the new 2024+ remuneration system.
About Fresenius Medical Care:
Fresenius Medical Care is the world's leading provider of products and services for individuals with renal diseases of which around 4.1 million patients worldwide regularly undergo dialysis treatment. Through its network of 3,862 dialysis clinics, Fresenius Medical Care provides dialysis treatments for approx. 325,000 patients around the globe. Fresenius Medical Care is also the leading provider of dialysis products such as dialysis machines or dialyzers. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and on the New York Stock Exchange (FMS).
For more information visit the Company's website at www.freseniusmedicalcare.com.
Disclaimer:
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, changes in business, economic and competitive conditions, legal changes, regulatory approvals, impacts related to the COVID-19 pandemic results of clinical studies, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care's reports filed with the
Media Contact
Christine Peters
T +49 160 60 66 770
christine.peters@freseniusmedicalcare.com
Sabine Blessing
T +49 171 74 81 259
sabine.blessing@freseniusmedicalcare.com
Contact for Analysts and Investors
Dr. Dominik Heger
T +49 6172 609 2601
dominik.heger@freseniusmedicalcare.com
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SOURCE Fresenius Medical Care Holdings, Inc.
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