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Carbon-neutral business

Siemens on target for 2030 climate pledge

Before the Paris Agreement was signed to put the world on a path to lower carbon emissions, Siemens made a reduction pledge of its own, based on its own carbon-neutral program. How far along is Siemens toward its goal of being climate neutral by 2030?

November 2016 was a big month in the fight to reduce carbon emissions and slow climate change. Early in the month, the Paris Agreement entered into force. The following week, the COP22 meeting focused on implementing the Paris Agreement was held in Marrakesh, Morocco. But what's happening outside the realm of policy? Companies played a big role in the Paris talks by showcasing their commitment to climate action. What are they actually doing on the ground to make good on those pledges? 

In 2015, Siemens was the first major industrial company to commit to cut its carbon footprint in half by 2020 and be carbon neutral by 2030. At that time, CEO Joe Kaeser noted that "taking action is not just prudent – it's profitable." The company is working toward its goal in four areas: energy-efficient buildings and production, distributed energy systems, green electricity purchasing, and intelligent e-mobility solutions. What has Siemens done in the meantime, and how have its carbon emissions developed?

Taking action is not just prudent – it’s profitable.
Joe Kaeser, Siemens CEO

Siemens cuts CO₂ emissions by over 20 percent

The company was able to cut its CO2 emissions from 2.2 million tonnes in fiscal 2014 to 1.5 million tonnes in fiscal 2018, a reduction of approximately 33 percent. It reduced its carbon footprint, for example, by deploying distributed energy systems, by investing in smart e-mobility solutions, and by increasing the use of renewables. About 80 percent of the German sites at Siemens are powered by 100 percent green energy. Siemens expects to save €20 million per year starting in 2020.

Siemens is investing a total of €100 million globally until 2020 to outfit its production facilities with energy-management features and building automation systems, as well as to implement energy-efficient drive systems for manufacturing. The investment will result in annual savings of €20 million in energy costs from 2020 onwards, and much of the technology used will come from the Siemens environmental portfolio.

Digital technologies play a major role in the energy sector. Siemens uses them to boost efficiency in the generation, transmission, and distribution of electricity for large utilities and for other projects. In a pilot project in New York City, Siemens is helping small producers of solar energy develop an energy platform based on blockchain technology  that enables both producers and consumers to trade electricity simply and efficiently.

By fiscal 2018, 13 projects were completed in Europe, North America and Asia. In addition, 19 energy efficiency projects were ongoing. 

     

Distributed energy systems constitute a second focus area where Siemens is also making headway. The company is expanding its use of distributed energy systems at its own sites through combined heat and power plants, solar panels, wind turbines, intelligent energy management systems, and energy storage solutions. The company says its long-term target is to satisfy 10 percent of its electricity demand through onsite power generation with a high renewable energy share. Four projects were initiated in fiscal 2018, and 14 more are in the concept development stage.

Third, Siemens is working to reduce the emissions of its company fleet of around 47,000 vehicles. The goal here is to reduce emissions and related fuel costs by 33 percent by 2025, which amounts to a reduction to approximately 200,000 metric tonnes of CO2. In fiscal 2018, emissions stood at approximately 300,000 metric tonnes of CO2. Electric vehicle options are gaining greater support. In some countries, economic individual behavior is coming into focus. Siemens will continue to include CO2 emissions as an integral factor in its local car fleet policies around the world.

Helping cities address climate change

In the fourth and final area of its efforts to reduce carbon pollution, Siemens has greatly expanded its purchase of green electricity. Board member Roland Busch explains the crucial importance of sustainable operations: "Decarbonization is absolutely essential in order to halt climate change and its dramatic consequences." Now that the Paris Agreement on climate change has gone into effect, the commitments must be realized through concrete action, he says: "The global economy must consistently drive this process and demonstrably reduce CO2 emissions in all sectors." 

According to Alden Meyer, director of strategy and policy at the Union of Concerned Scientists, cities, states, regions, and companies are increasingly committing themselves to transformational, long-term climate goals. Siemens, as one of the first global industrial companies to make the pledge, helped set the pace for this trend. Other large companies have made similar pledges, including Bank of America, Philips, and Apple. All of these companies want to be carbon-neutral by 2020 or 2030. 

Besides doing its part to reduce its own emissions, Siemens' innovative solutions are helping cities to meet the challenges of urbanization and climate change. "Seventy percent of all emissions will come from cities. If we want to win the battle against climate change, we need to win the battle in the cities first," says Busch. In 2018, Siemens technology helped reduce CO2 emissions significantly. The company helped customers mitigate their emissions by a further 39 million metric tonnes of CO2 in fiscal 2018 with Siemens environmental portfolio elements. All in all, the elements installed at customer locations since the beginning of fiscal 2002 that remain in use today have mitigated accumulated annual customer CO2 emissions by 609 million metric tonnes in fiscal 2018.

As Kaeser has said: Carbon reduction is not only good for the planet, it's also good for business.

        

Rhea Wessel is a freelance writer based in Frankfurt.
Picture credits: Siemens AG