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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 decarbonization program. One year on, Siemens has made significant progress toward this goal.

November 2016 was a big month in the fight to reduce carbon emissions and slow climate change. Early in the month, one year after its signing, 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.” One year later, it’s time to take stock of how Siemens is working to meet its own targets related to company-produced emissions, using four levers: energy-efficient buildings and production, distributed energy systems, green electricity purchasing, and intelligent e-mobility solutions. 

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 own CO2 footprint by over 20 percent from 2.2 million tonnes in fiscal 2014 to 1.7 million tonnes in fiscal 2016. What’s more, by implementing products, solutions, and services from the Siemens Environmental Portfolio, customers worldwide succeeded in reducing their CO2 emissions by 521 million tonnes. This amount is equivalent to more than 60 percent of Germany’s annual carbon dioxide emissions.

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. Speaking at New York Climate Week in September 2016, Roland Busch, a member of the Managing Board, said Siemens is on track to meet its goal of 50 percent less CO2 emissions by 2020. He referred to several project examples in the four focus areas. 

     

Three Siemens locations – Mohelnice, Rastatt, and Frankfurt-Fechenheim – have already concluded their energy-efficiency measures. They will reduce carbon emissions by 6,000 tonnes annually and lower operating costs by about €1 million a year. The locations are part of the energy efficiency program led by Siemens Real Estate, which included the start of 17 projects in fiscal 2016 and a total investment volume of more than €35 million. 

In addition, Siemens made progress in projects in Sweden and at two US locations. At Charlotte, North Carolina, at a worldwide hub for 60-Hertz power generating equipment, nine measures were undertaken for facility improvement to boost energy efficiency, including cooling towers, air compressor replacement, and lighting replacement, for projected energy savings of €900,000 and 3,000 tonnes of CO2 reductions of per year. About 150 kilometers north, in Rural Hall, North Carolina, a one-stop shop for gas turbine inspections and repairs was given an energy efficiency makeover resulting in 11 facility improvement measures, including demand flow systems, replacement of LED lighting, and airflow reduction of fan houses. These upgrades are projected to save 5,000 tonnes of carbon dioxide per year.

Decentralized energy systems constitute a second focal area where Siemens is also making headway. A decision was made in June 2016 to use photovoltaic as part of the CO2 program when the technology makes economic sense. One central idea of this focus area is to combine power generation with storage solutions and intelligent energy management technologies. Third, Siemens has reduced fleet emissions – the company expanded programs to promote hybrid and electric vehicles and reduce emissions in general. Siemens has surveyed 2,400 employees on their mobility needs, and plans to work with them to develop emission-saving mobility concepts. Siemens has 45,000 vehicles that account for roughly 300,000 tonnes of CO2 emissions annually.

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. Since the beginning of the calendar year, some 33 Siemens locations responsible for 50 percent of total electricity usage have been using 100 percent green power. 

Siemens Managing 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 2016, Siemens technology helped reduce CO2 emissions significantly. The Environmental Portfolio represents 46 percent of Siemens’ revenues – giving proof to what 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