Case Study CCY Architects

CCY Architects

Case Study | February 28, 2025

Danfoss is working to decarbonize the supply chain for some of the world’s most emission-heavy sectors with the help of McKinsey.

nside every machine are countless essential components, and the makers of those components contribute to carbon emissions for the life of those technologies. In fact, given Scope 3 emissions in their supply chains, manufacturing, transport, and construction are the most emission-heavy sectors in the world.

Danfoss is one organization working to change that. One of the largest producers of component parts for heating and cooling, drives, and power solutions, the Nordic company’s net-zero transformation is helping manufacturers around the world green their supply chains.

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The opportunity

With more than 42,000 employees across the world, Danfoss produces thousands of components each year. Used across manufacturing industries, these components find their way into countless technologies essential to keeping everyday life moving for people the world over.

The company, says CEO Kim Fausing, has an opportunity to make a powerful environmental impact. “We’re at a critical juncture in addressing climate change. Everything Danfoss does is focused on increasing machine productivity, reducing emissions, lowering energy consumption, and enabling electrification,” says Kim. “We want to be the best-in-class preferred partner for customers looking to decarbonize and are taking our own medicine—continuously making the way we run our business more energy efficient.” 

"We’re at a critical juncture in addressing climate change. Everything Danfoss does is focused on increasing machine productivity, reducing emissions, lowering energy consumption, and enabling electrification."

Danfoss CEO, Kim Fausing

Kim and Jürgen Fischer, president of Danfoss Climate Solutions began having high-level discussions with McKinsey in the summer of 2021 about how best to engage customers -- makers of equipment across these emission-heavy sectors who use Danfoss’s component parts – to become their preferred partner in decarbonization.



The question at the center of those conversations: What should Danfoss’s decarbonization target be and how could the company make a realistic plan to meet it?

Setting a course for net zero

With more than 42,000 employees across the world, Danfoss produces thousands of components each year. Used across manufacturing industries, these components find their way into countless technologies essential to keeping everyday life moving for people the world over.

Danfoss’s Climate Solutions business is responsible for producing heating and cooling machinery components. Teaming up with McKinsey sustainability experts, Danfoss looked for ways to decarbonize various aspects of it.


They learned that while the highest carbon emissions come from the use of products across their entire lifecycle, the second largest source of emissions lies in the materials and construction processes. Product redesign and an alternative supply chain offered two possible ways forward.


“Material decarbonization is the next frontier for advanced industries,” says McKinsey partner Jacob Staun. “We helped Danfoss map out the complexity of their supply chains to identify sources of emission and design solutions with a positive impact on cost and carbon.”

Innovating with technology

With more than 42,000 employees across the world, Danfoss produces thousands of components each year. Used across manufacturing industries, these components find their way into countless technologies essential to keeping everyday life moving for people the world over.

The company, says CEO Kim Fausing, has an opportunity to make a powerful environmental impact. “We’re at a critical juncture in addressing climate change. Everything Danfoss does is focused on increasing machine productivity, reducing emissions, lowering energy consumption, and enabling electrification,” says Kim. “We want to be the best-in-class preferred partner for customers looking to decarbonize and are taking our own medicine—continuously making the way we run our business more energy efficient.” 

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Kim and Jürgen Fischer, president of Danfoss Climate Solutions began having high-level discussions with McKinsey in the summer of 2021 about how best to engage customers -- makers of equipment across these emission-heavy sectors who use Danfoss’s component parts – to become their preferred partner in decarbonization.



The question at the center of those conversations: What should Danfoss’s decarbonization target be and how could the company make a realistic plan to meet it?

Innovating with technology

With more than 42,000 employees across the world, Danfoss produces thousands of components each year. Used across manufacturing industries, these components find their way into countless technologies essential to keeping everyday life moving for people the world over.

The company, says CEO Kim Fausing, has an opportunity to make a powerful environmental impact. “We’re at a critical juncture in addressing climate change. Everything Danfoss does is focused on increasing machine productivity, reducing emissions, lowering energy consumption, and enabling electrification,” says Kim. “We want to be the best-in-class preferred partner for customers looking to decarbonize and are taking our own medicine—continuously making the way we run our business more energy efficient.” 

“Building lower carbon products requires ... new skill sets and embedding carbon reduction into every business process including procurement, product design, and go-to-market.”

—McKinsey associate partner Jessica Fan

Kim and Jürgen Fischer, president of Danfoss Climate Solutions began having high-level discussions with McKinsey in the summer of 2021 about how best to engage customers -- makers of equipment across these emission-heavy sectors who use Danfoss’s component parts – to become their preferred partner in decarbonization.



The question at the center of those conversations: What should Danfoss’s decarbonization target be and how could the company make a realistic plan to meet it?

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