Client Case MEKRA Lang North America

The upstream supply chain is responsible for up to 90 percent of a vehicle's GHG emissions. The supplier industry is therefore largely responsible for reducing emissions, while the OEMs themselves have little room to maneuver. MEKRA Lang North America (MLNA), the US subsidiary of the German MEKRA Lang Group, develops and produces mirror and camera systems for commercial vehicles at its plants in the USA and Mexico. OEMs such as Volvo or Daimler Truck are already asking suppliers such as MLNA to meet certain sustainability criteria (e.g. product carbon footprint of purchased parts, roadmap for reduction, climate plans, proportions of green electricity). To proactively meet future customer requirements and regulatory requirements, MLNA commissioned external support. With Horváth's support, the supplier defined a climate transition path. The aim of the joint project was to make emission sources transparent, define reduction targets and prioritize and plan measures. In addition, awareness of the issue of decarbonization should be created throughout the company. 

1. Calculation of the GHG balance at company and product level - Creation of transparency regarding emission hotspots 
   The first step was a standardized calculation of the Company Carbon Footprint (CCF) according to the GHG Protocol across both plants. In addition, a qualitative assessment of relevant departments (e.g. Purchasing, Maintenance, Sales, Planning) was carried out to define additional starting points for optimization levers in the organization. An infrastructure assessment of the plants (including buildings, cooling, heating, recycling management) enabled measures to be derived at an early stage, particularly about energy efficiency.  
    
2. Derivation of GHG reduction targets based on internal and external influences to ensure the level of ambition 
   The starting point for defining an ambition level and the climate targets was, among other things, benchmarking the emissions intensity (CO2e/turnover) for Scope 1-2 in the industry. Great importance was attached to the customer perspective when deriving the reduction targets. Equally important was the comparison with growth ambitions in order to define realistic reduction targets. 
    
3. Definition of overarching reduction measures along Scope 1-3 and enabler measures 
   Based on the GHG balance, qualitative and other quantitative analyses, extensive measures were developed jointly for each scope, category, and location. Additional expert workshops and interviews resulted in a long list of measures, which was roughly evaluated along various decision-making dimensions (e.g. strategic relevance, investment requirements, benefits, feasibility, dependencies, time dimension). The portfolio of measures was expanded based on the best practices and the experience gained from previous Horváth consulting projects. 
    
4. Consolidation and prioritization in a holistic decarbonization roadmap, including cost-benefit analysis and budget implications 
   Based on the defined decarbonization targets, the measures were then evaluated in detail in terms of their costs and benefits. The prioritization of measures along Scope 1 to 3 was carried out with the inclusion of prioritization aids, e.g. investment-to-reduction ratio (CO2e/USD). In addition to the pure reduction measures, additional basic requirements and enabler measures were defined based on the target operating model. Measures were planned with activities, responsibilities were defined and handed over for implementation, including measure tracking in a degree of severity logic to track the measures. 

By creating a strong understanding of decarbonization issues, MLNA can act as a pioneer in a market where sustainability continues to be less relevant than in Europe. This means that the company is ready for demanding customers and the demand for more transparency regarding greenhouse gases in the supply chain. They can also show what their own climate transition path looks like. Finally, cost savings can also be expected, especially through the reduction of energy consumption for electricity and gas. The transformation in procurement is also strategically important, as CO2e is another factor that is driving the re-localization of suppliers and therefore resilience in the supply chain. 

The result is a plan for the future on how to deal with emissions reduction. This will enable MEKRA Lang North America to further advance its own decarbonization efforts and contribute to the decarbonization of the automotive industry.