Defeating the hidden giant: KION’s decarbonization journey in procurement

Depending on the industry, emissions from purchased goods and services are often among the most relevant. KION is no exception up to 20% of the Group's total indirect emissions (known as Scope 3; data as of December 31, 2023) come from purchased goods and services. These so-called "3.1 emissions" include the emissions from purchased goods and services generated by the suppliers. "Scope 3.1 is the hidden giant when it comes to reducing GHG emissions," says Andrea Engel, Senior Director Global Contract Management & Sustainability at KION Group. "That's why it is crucial to look at procurement on the way to net-zero."

So how do we ensure that the goods and services we buy don't hinder our net-zero goals? To answer this question, KION, together with the consulting firm Capgemini, has launched a strategic project to decarbonize its own supply chain. In April 2025, Andrea spoke at HANNOVER MESSE together with Tanja Fischer, Manager for Decarbonization & Sustainable Procurement at Capgemini, about "Mastering decarbonization across the supply chain - best practices in manufacturing".

The full presentation is now available on demand.

The KION Group operates in more than 100 countries, with more than 1.9 million trucks and warehouse equipment in use by the end of 2024, and a supplier base of around 30-40 thousand. One of the challenges the project team faced was that indirect emissions calculations are often based on purchasing spend and standard values, rather than the actual emissions of suppliers. As Andrea explained, when it comes to sustainability, you have to go the extra mile: "How do we get to know the suppliers behind our suppliers? How do we close the data knowledge gap?"

So, the first big step was a feasibility study to assess the reduction potential, create data transparency and look at the cost versus risk factor because, as Andrea mentions, "while everyone agrees that sustainability is essential for the future, of course nobody in procurement is happy about potential cost increases". Based on these findings, two focus areas were identified with 2030 as the near-term target year: Supplier Engagement and Operationalization.

As a first step, the team identified 30 of KION's key suppliers from 10 emission-intensive categories and organized workshops with them to discuss their respective climate targets and ambitions, teach them about relevant concepts and share, expertise in reducing emissions. The aim was to identify which suppliers KION could leverage synergies with and which KION could support in their climate journey or even in setting targets. The dialog sessions showed that even within a specific industry or region there are major differences in sustainability status and ambitions.

The second focus was on making sustainability an integral part of KION's procurement processes. By operationalizing the issue of emissions throughout the procurement process, from sourcing to decision making, the foundation has been laid to integrate the issue into the day-to-day business of KION and its suppliers.

As Andrea mentioned at HANNOVER MESSE, much of this commitment is proactive: KION is taking this step with a long-term vision of achieving net-zero by 2050 at the latest. This is why now is a critical time for the overall success of the project, as it is crucial to lay the groundwork - both on the supplier side and within KION - so that every key member of our value chain is on board and understands why this "hidden giant" - as Andrea called the emissions from purchased goods and services - can only be defeated with a transparent, collaborative approach between KION and our suppliers.