A strong business case to go carbon neutral: Roland Busch, Siemens

Author:
Ilario D'Amato
7 October 2016

Roland Busch, Managing Board of Siemens AG & CSO

NEW YORK: Global engineering giant Siemens highlighted the business case for slashing its carbon emissions and becoming carbon neutral during Climate Week NYC in September. The German company, which is at the forefront of the transition towards a net-zero emissions global economy shaped by the climate Paris Agreement, plans to halve the carbon it emits – currently 2.2 million metric tons annually – as early as 2020. The company is also looking to reduce its emissions to zero by 2030.

“We’ve said that we want to be carbon neutral by 2030,” confirms Roland Busch, Member of the Managing Board of Siemens AG & Chief Sustainability Officer, “and this comes with a couple of measures. We’re investing in energy efficiency projects for our buildings, for industries; we’re investing in decentralized energy systems; we go for co-generation, combined power and heat kind of projects; and of course, we are working on our Siemens’ fleet to reduce our emissions.”

RENEWABLES PROFITS

Siemens is also taking advantage of the economic and environmental benefits offered by renewable energy: “We’re buying green electricity,” continues Roland Busch, “preferably, of course, coming from Siemens wind turbines; it would be buying an equity from solar or wind power plants, and be using that power to refuel our operations.”

The clear message offered by Siemens is that such measures align with their internal operations, such as investing €100 million (US$111 million) in improving energy efficiency: “It’s a business case: we believe if Siemens can do that, others can do that as well. The investment we are putting into place gives us a payback of 20 million per annum; so we’re talking about in terms of three, four, maybe five years of paying back.”

Current low interest rates make these measures even more attractive, and profitable. “The clear message is that it’s a good business case,” reiterates Roland Busch. “Of course, you have to choose the right technologies, but then you can really do something good for the economy and ecology.”

A GLOBAL NET-ZERO LANDSCAPE

Siemens is already putting in place a series of measures to help implement the goals set out in the Paris Agreement in December at COP21. What is the single, most important thing business leaders and investors can do to help raise the level of ambition towards greater global collective climate action?

“I don't know whether there’s a single measure, there’s not really a silver bullet” to generate the necessary drive to realize such goals, says Roland Busch. One of the main points is “getting the regulations and policies straight: you have to have certainty in order to really have certainty for investments. Money is there, good projects are there.” Businesses just need clarity and long-term policies around them.

“Another one would be a clear policy on carbon, to price it,” underlines Roland Busch. “We do believe that there’s a price link to carbon emissions, and if we get that straight – not only on a municipal or federal, but maybe at an international level – then I guess we have a very strong impact. Then, many technologies would go into the money: and that would by itself, trigger a lot of new projects.”

AN HOLISTIC APPROACH

To accelerate the realization of a net-zero emissions world, we must focus on a multi-sectoral approach, suggests Roland Busch. “It’s not only about our power generation, electricity: it’s really about the combination that is addressing all fields. We know that emissions are coming from transport, from industry, as well as from the energy sector.”

Technology can – and must – play a central role in this transition: we must “deploy these technologies in a broad scale, without silos,” says Roland Bush. “For example, electric mobility is tearing down the silos between mobility and power generation.”

Subnational governments will also be crucial in shaping the right policies that will help to spur the investments necessary for bending the curve of emissions as soon as possible: “We have to look very much into the urban environments,” concludes Roland Busch, “because cities are the biggest emitters of carbon: more than 70% is coming from cities.

“We really have to see how to make urbanization liveable, and at the same time getting technology in place to reduce your carbon emissions. And as I said, last but not least, getting governments in place in order to really give a stable environment where it’s worthwhile to invest.”

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