Local player opens the window to sustainability

Local player opens the window to sustainability

David Briggs, CEO, VELUX Group, outlines the window company’s drive to lower carbon emissions through new technologies and larger initiatives around the globe and promote the Danish model of cooperation and goodwill.


Why has Denmark been so successful in promoting economic growth and sustainability?

In the grand scale of the world, Denmark is a small country. However, this is one of our strengths. Denmark is an example of a socioeconomic model that decouples growth and increased carbon dioxide emissions. The country demonstrates a level of ambition that is beyond that imagined by other countries. Danish Companies such as VELUX, Ørsted and other high performers set examples for worldwide businesses. There is a spirit of partnership in Denmark between the government, corporate sector and general public. There is no background of conflict, rather there is an expectation that we have similar goals only achieved by working together. In France and the U.K.—both of which I am familiar with—there is an assumption of conflict and a climate of suspicion to some degree, which does not exist in Denmark. This enables us to go much further and much faster.

Nations should look at the cooperative model Danish society promotes between business, government and citizens and what can be achieved if these three elements address challenges together. Over a period of many years Danish society has managed to find an equilibrium in this respect. It is much easier for businesses to operate. One can go further than in a climate where these segments are fighting or where players think there is a winner and a loser in a zero-sum game. If you are a union person, government minister or business leader, you should focus on working out ways to cooperate. This will be required to manage the challenges the planet has. Fighting each other will make progress nowhere near as fast and go nowhere near as far.


Can you give us an overview of VELUX Group’s operations?

We are an eighty-year-old business founded chiefly on the spirit of innovation. Our founder essentially invented the roof window as we know it today. His success freed up millions and millions of square meters across the world for use as coveted living areas in modern homes. One of the keys to our success is that we have always resisted the temptation to move into adjacent areas; we consider ourselves a daylight and fresh air vendor. This niche has enabled us to build an enviable position. Our turnover is now around €2.4 billion, and we operate in 37 countries. We are the market leader by some distance in our segments, with a market share of above 70 percent, which is rather unique. We are family and foundation owned, which gives us a different perspective to running the business compared to being a listed company. We are afforded a more long-term vision for the business, and we can aspire to not only be successful but contribute to society. It is quite the success story. We feel that we have played a positive role in commercial segments through reasonable acquisitions. We believe we are a good owner of companies in this area.


What new innovations is VELUX Group working on and how will they contribute to decarbonization and the quality of your client’s lives?

Our windows have evolved continuously in terms of energy performance, which contributes to the decarbonization of buildings. These innovations were not available to us years ago, but through digitalization and the internet of things, we are now able to integrate these facets into our products. We are working on digitalization, automation and sensor-driven activation of things triggered to cool the house without having to revert to air conditioning or heat the home and ventilate it properly without having to constantly have mechanical ventilation running. Windows can cool buildings by up to one and a half degrees without the need for air conditioning. We are also working a great deal with our suppliers on material technology. The biggest carbon emissions contributor to VELUX windows comes from aluminum and glass. We are working with our aluminum suppliers and looking for potential substitutes for our products that are less carbon heavy. We are also working on new glass technologies such as vacuum-insulated glazing. Normally you put gas in between the glass to keep heat in or out. Our experts are working on ways to have a vacuum between those two elements that performs significantly better. Additionally, we are working on how to use less glass by essentially making the glass thinner so less energy is used during production.

We are also working on smart home technologies. For example, if you have a VELUX window, it takes about 15 minutes to fit a wireless solar driven motor and a small chip into your router through which you can control the window remotely from your cell phone. Through very affordable sensors installed throughout the house you can regulate the internal temperature and quality of air you breathe. This is super important for the health and wellbeing of children, for example. Increased levels of carbon dioxide affect our cognitive abilities and can be regulated without one having to think about it. Promoting a circular economy is another huge focus for us; we want to be able to take back things and reuse them as much as possible. Currently, 80 percent of our innovation is targeted at sustainability issues.

Sustainability is not linked to decarbonization alone. The essential purpose of a building is to keep one safe, comfortable, healthy and warm with plenty of daylight and fresh air. That said, decarbonizing buildings is crucial for the planet. Around 40 percent of annual carbon dioxide emissions comes from the building sector. Renovating buildings and constructing new buildings—which we are going to have to do at an unprecedented rate—produces environments that are conducive to the health and wellbeing of all who inhabit them. If we wanted to simply reduce carbon dioxide emissions, we could all live underground with no windows; this is the most efficient way from a carbon-cutting perspective. However, we would be ill and unhappy. VELUX makes the most of what is naturally available such as daylight and fresh air in a way that decreases carbon dioxide released into the atmosphere.


What major initiatives are involved in VELUX Group’s Sustainability Strategy 2030?

We were the second company in the world after Microsoft to announce that we will repay our full historical carbon debt; in our 100th year in 2041 we will have essentially pulled out the amount of scope one and scope two carbon dioxide emissions we put into the atmosphere over the entire course of our operations. This amounts to around 5.6 million tons of carbon dioxide. We are doing this in partnership with the Worldwide Fund for Nature (WWF). Historical carbon debt is often coined scope four; we will see more attention in this area going forward. We also want to focus on biodiversity challenges facing the planet. We have chosen the old-fashioned practice of reforestation and are working in big projects across the world, generally around the equator. Our first project kicked off in Uganda through WWF. We work with them because we do not know how to do those things properly with local communities. This is a large endeavor on our part; it is an expensive long-term commitment.

We also signed up to the Science Based Targets initiative for a 1.5-degree Celsius decrease in temperature, which means eliminating our scope one and two carbon emissions by 2030 and halving our scope three emissions from our supply chain by 2030. This is a harder path than the WWF initiative. Reducing our scope three emissions by 50 percent while growing means decoupling these two aspects and involves a lot of work. This commitment has fundamentally altered the way that we go about product development and supplier relations. We are working hard with suppliers in redesigning our products.
To achieve the goals we set ourselves, we must work in partnership with other entities. This means signing up for partnerships that are far longer than a corporation would normally be comfortable doing. Our partnership with WWF runs through to 2040. There are a lot of unknowns between now and then, but we have made a firm commitment that local communities can depend on. A one- or two-year initiative is not good enough and will not solve the world’s problems. These must be long term, and our ownership allows us to do that. We want to go above and beyond what most companies are prepared to commit to. Our motives are not just about being good to the planet; an investment of €2.5 billion is not large in the context of the world. Rather, we want to demonstrate to others how to go about building sustainably. We want to be vocal and visible and serve as an example.


In what areas do you see the most opportunity for the company moving forward?

VELUX’s success is built on daylight and fresh air through roofs of houses; we are essentially a residential business. There is a certain skill and knowledge involved in cutting holes in a roof and replacing it with a product that lets light and air through. Those skills are essentially the same whether it is a roof of an office building, warehouse, factory or home. We believe we can leverage our knowhow significantly as nobody else is specialized in this area. We can bring a lot of innovation because we have 450 engineers who do only this very thing. Up until now there has not been much attention given to energy performance of products in commercial segments, such as roofs of sports stadiums, factories, hospitals or offices. The products we offer and develop contribute significantly to reducing the carbon footprint of commercial buildings. Up until recently, if one built a store or a warehouse in the U.S., the solution would be to have no windows, which in turn means turning on lights. This is an extremely unsustainable model. One should always get as much as you can out of what is free and naturally available. There is opportunity to move into this segment and contribute to improving commercial buildings. We are tremendously excited about this.

Our biggest markets are in Europe, especially Northern Europe. Our operations in Central and Eastern Europe are growing at a good rate, up from a previously lower base. We are ambitious in the U.S., where we have been doing well for the last four years. The only places where we have no intention to develop a significant market presence are warmer countries on either side of the equator. We need to work at developing products that are better at keeping heat out. We have not cracked this sufficiently to be a perfect match for the Indian subcontinent due to high temperatures, for example. We want to hear people say that VELUX has transformed their understanding of what one can do with a roof. Roofs can do more than keep out the rain. They can transform the building to make people’s lives better by bringing in more daylight and fresh air than possibly imagined.