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- DJSI – #2 in its Industry in 2019
- CDP Climate Change A List
- FTSE4Good Index
- MSCI World ESG Index
- EcoVadis – Silver recognition level
- Sustainalytics Index
CHIEF SUSTAINABILITY OFFICER
Jenny Bofinger-Schuster (Siemens AG)
Awarded in Fortune magazine in the U.S. to be “the most admired company” in industry for the fourth year in a row.
Siemens is a leading supplier of systems for power generation and transmission as well as medical diagnosis. It is one of the world’s largest producers of energy-efficient, resource-saving technologies. They are setting the course for long-term value creation through accelerated growth and stronger profitability with a simplified and leaner company structure. The Siemens of the next generation will be inspired by its purpose and will be connected by its Ownership Culture. The main aim of the Vision 2020+ company strategy is to give Siemens’ individual businesses significantly more entrepreneurial freedom under the strong Siemens brand in order to sharpen their focus on their respective markets. Below the Group level, there will be three Operating Companies and three Strategic Companies. The realignment will enable Siemens to sharpen its customer focus and orient its activities on the requirements of the industries in which it operates.
Smart Infrastructure: Smart Infrastructure intelligently connects energy systems, buildings and industries to adapt and evolve the way they live and work. Siemens work together with customers and partners to create an ecosystem that intuitively responds to the needs of people and helps customers to better use resources. It helps customers to thrive, communities to progress and supports sustainable development. Creating environments that care.
Digital Industries: Siemen’s Digital Industries is a leading innovator in automation and digitalization. Their mission is to consult and support customers from the discrete and process industries in their digital transformation. They continually expand their Digital Enterprise portfolio to include cutting-edge technologies and offer industry-specific end-to-end solutions for companies of all sizes.
Siemens Mobility: The separately managed business Siemens Mobility is a leader in transport solutions. Siemens is shaping connected mobility for rail and road, enabling mobility operators worldwide to make infrastructure intelligent, increase value sustainably over the entire lifecycle, enhance passenger experience and guarantee availability.
Siemens Gamesa Renewable Energy: Siemens Gamesa is a leading supplier of wind power solutions to customers all over the globe. A key player and innovative pioneer in the renewable energy sector, Siemens have installed products and technology in more than 90 countries, with a total capacity base of over 89 GW and 23,000 employees.
Siemens Healthineers: The separately managed business Siemens Healthineers AG is a leading medical technology company providing innovative technologies and services in diagnostic and therapeutic imaging, laboratory diagnostics and molecular medicine, as well as digital health and enterprise services.
Financial Services: The Siemens Financial Services Company (SFS) provides business-to-business financial solutions. Around the globe, they support customer investments with project and structured financing as well as leasing and equipment finance.
Gas and Power: Gas and Power is the only company in the world that can offer the combined strengths of Oil & Gas, Power Generation and Transmission along the energy conversion chain – creating lasting value for its customers. As a technology leader, the breadth and strength of their portfolio remains critical to supporting the current electricity demands of society. Equally important are proven project capabilities – not just for products, but also for solutions and services (including digital) and project financing.
Global Business Services: Global Business Services innovates, designs, transforms and efficiently operates business services for Siemens units and external customers. They create valuable impact specific to customers’ needs with unique expertise in business services. Siemens competitive service offering includes digital end-to-end process solutions as well as expertise-driven services.
Real Estate Services: Siemens Real Estate is responsible for the management of Siemens’ global real estate holdings and supports the Company with forward-looking strategies for tapping markets worldwide.
Company Sustainable Activity
According to the company :
“Rankings & certifications: For the 20th consecutive time, RobecoSAM/Dow Jones listed Siemens in the DJSI World Index, confirming its standing as one of the most sustainable companies in its industry with a repeating score of 79 points. In addition, the Carbon Disclosure Project recognized Siemens’ performance in mitigating climate change by putting Siemens on its annual “A List” of the best companies driving decarbonization worldwide. The Financial Times Stock Exchange (FTSE) included Siemens again in its FTSE4Good Index series for ethical investment, while the MSCI World ESG Index included Siemens for the third year in a row, too. Siemens was ranked first in the Corporate Knight’s “2019 Global 100 Most Sustainable Corporations in the World” ranking within its Industry. For EcoVadis, which provides supplier sustainability ratings for global supply chains, Siemens received a rating of 61 points and reached the Silver recognition level. With a score of 78 points, Siemens are also rated as a Leader in the Sustainalytics index, leading the industry and landing a position in the Top 3 on a global scale.
All locations have environmental management systems in place. At least 253 are certified to ISO 14001, with at least 251 of them audited by external auditors. The decision to pursue ISO 14001 certification is made by environmental protection executives of the business units and countries, in close consultation with environmental protection officers at group level.
59 Siemens locations have implemented energy management systems according to ISO 50001, and others are ready to follow. The above reported numbers for Environmental and Energy Management Systems do not include SGRE. However, SGRE has also implemented Environmental Management Systems (EMS), which cover 100% of relevance.
Decarbonization: Since 2014, the company has eliminated almost all GHG emissions at Siemens facilities in five focus countries by switching to green sources when purchasing electricity. These five countries – the United States, the United Kingdom (UK), the Czech Republic, Austria and Germany – account for more than 60 percent of Siemens’ total electricity consumption.
- 60 % of the global electricity consumption of Siemens’ sites is covered by renewables
- 41 % of CO2 emissions reduced since the launch of Siemens’ CO2 neutral program
- 20 mil. Euros expected annual savings in operating costs starting 2020 due to investments in energy-efficiency projects
Siemens also considers carbon pricing a must-have for effective decarbonization and putting a price on carbon should capture the true cost associated with carbon emissions. It should be sufficiently relevant to trigger a shift towards low-carbon technologies in line with the commitments of the COP21 Paris Agreement. Accordingly, Siemens joined the Carbon Pricing Leadership Coalition of the World Bank (CPLC) in 2016 to advocate the introduction of carbon pricing globally and has launched two internal carbon pricing pilot projects.
Siemens UK has launched a carbon reduction Investment Fund of £240k which was created by charging UK businesses an internal carbon price of £13 per ton of carbon emissions from gas and electricity. This specific price was set in order to raise enough seed funding for 5-10 projects as part of the pilot project phase. These range from innovation solutions, such as using a digital twin for gas turbines, to energy efficiency measures like funding new air curtains for factories.
Following a similar approach as the UK, Siemens Brazil has launched a carbon reduction Investment Fund as part of a pilot project launched in October 2019. To determine the internal carbon price for future investments, Siemens Brazil adopted the recommended level of the High-Level Commission on Carbon Pricing and set the price at US$40 per ton of carbon emissions.
Leverage distributed energy systems: Siemens is expanding their use of distributed energy systems at sites through combined heat and power plants, solar panels, wind turbines, small gas turbines, intelligent energy management systems, and energy storage solutions. Their long-term target is to satisfy 10% of electricity demand through onsite power generation with a high renewable energy share. The Siemens Campus Erlangen will be one of the first showcases and will be carbon-neutral from day one. Another nine projects were completed in fiscal 2019 and a further seven are in concept development.
Reduce fleet emissions: Siemens is working to reduce the emissions of their 50,000 vehicles. The goal is to reduce emissions and related fuel costs by 33% by 2025, i.e. a reduction to approximately 200,000 metric tons CO2. In fiscal 2019, emissions stood at approximately 300,000 metric tons CO2. On the basis of a survey of mobility requirements, e-car options are being given greater support. Siemens will continue to include CO2 emission factors as an integral part of the local car fleet policies around the world.
Purchase “green” energy: Siemens is increasing the share of electricity that they purchase from renewable sources such as wind farms. In fiscal 2019, a significant share of sites in Germany, the United States, the United Kingdom, Austria, Spain, Portugal, the Czech Republic, the Netherlands and Denmark were already supplied with “green” electricity. The overall coverage of “green” electricity was 58% in fiscal year 2019. From this results that CO2 emissions could be reduced by more than 550,000 metric tons through purchasing electricity from renewable sources.
Environmental Portfolio: Siemens has an Environmental Portfolio as part of its response to global challenges such as climate change, scarcity of natural resources and environmental pollution. The Environmental Portfolio consists of products, systems, solutions, and services that meet one of its selection criteria, namely energy efficiency and renewable energy.
With the Environmental Portfolio, Siemens intent, among other factors, hope to help customers mitigate their carbon dioxide footprint, cut energy costs and improve profitability through an increase in productivity. In addition to its environmental benefits, Environmental Portfolio enables them to compete successfully in attractive markets and generate profitable growth, underlining Siemens’ strategic focus on technologies for energy efficiency and climate and environmental protection. For fiscal 2019, about 70% of the revenue from their Environmental Portfolio was generated by products and solutions for energy efficiency.
Greenhouse gas emissions: In 2018, the company reduced its emissions by more than 10 percent. Since fiscal 2014, emissions have dropped by around 41 percent – from 2.2 million tons to 1.3 million tons in fiscal 2019 – so Siemens are on track to reach its intermediate goal to reduce emissions by half by 2020.
Reports of greenhouse gas emissions are on the basis of the Corporate Standard of the Greenhouse Gas Protocol of the World Resource Institute (WRI) and of the World Business Council for Sustainable Development (WBCSD). Direct greenhouse gas emissions (Scope 1) arise from sources in the company’s ownership or under its control. Indirect greenhouse gas emissions (Scope 2) refer to the consumption of purchased electrical energy and district heating. Since fiscal 2016, Siemens have also been reporting on upstream Scope 3 emissions from their supply chain, such as business travel, capital goods, fuel and energy-related activities and transportation. Scope 3 emissions from the supply chain have been calculated by means of a multi-regional macroeconomic input-output model on the basis on their volume of purchased goods and services.
For Scope 1 and 2 combined, Siemens achieved a reduction in emissions by 177 kt CO2 e. Compared with fiscal year 2018, this signifies a reduction of 12%. Direct greenhouse gas emissions (Scope 1) have been reduced by 6%. For the other Kyoto gases, including sulfur hexafluoride (SF6), they have also seen a reduction. For SF6 alone, the recorded emissions of 95 kt CO2e (without SGRE) is a reduction close to 6%.This reduction results from an improved handling and emission control approach.
The significant reduction of Scope 2 emissions by 20% is mainly a result of the continued power purchasing policy. In fiscal 2019, Siemens purchased green electricity from hydro and wind power mainly in Denmark, the Czech Republic, the UK, Spain, France, Germany and Austria, and increased the share of green electricity in the US.
Atmospheric pollutant emissions: Volatile organic compounds (VOCs) contribute to the formation of ozone close to the Earth’s surface and are responsible for what is known as summer smog. Such organic compounds are used as solvents in paints and adhesives, in impregnation processes, and for surface cleaning. Siemens monitor ozone-depleting substances (ODSs) and comply with the Montreal Protocol, the international convention on the protection of the ozone layer in addition to various national laws.
Nitrogen oxides with the assumed typical combustion conditions in the relevant thermal processes resulted in a figure of 198 metric tons for environmentally relevant locations in the year under review, compared with 199 metric tons the year before. The figure includes nitrogen oxides released during the incineration of fuels reported in the section on primary energy.
Water: The Siemens Water Strategy aims to reduce the local negative impact of their water use. It takes into account factors such as water stress, water pollution, and flooding. They have analyzed 297 environmentally relevant sites using the Global Water Tool of the World Business Council for Sustainable Development (WBCSD) business association. The results show that Siemens faces relevant risks. From the start of fiscal 2015 through end of fiscal 2019, 97% of their sites have implemented the water strategy, excluding strategic companies.
Siemens total water volumes have increased significantly due to the intensified use of chemically unchanged cooling water as cooling demands of buildings increased. Apart from this, water consumption without chemically unchanged cooling water has remained more or less stable over the last two years.
Wastewater from manufacturing processes amounts to around 0.9 million cubic meters. Their main water use is for cooling processes; most of this water is returned to the receiving water body with the same chemical quality as when it was drawn from the environment.
Waste: The environmental relevance of waste depends on the type of waste and the method used to dispose of it. Waste performance indicator addresses both waste efficiency and absolute disposal waste reduction Siemens differentiate between hazardous, non-hazardous, and construction waste. The groups of hazardous and non-hazardous waste are each further divided into recyclable waste and waste for disposal. Reports on waste from construction or demolition work separately because this kind of waste material arises independently from production.”
- LEED certificates i.e. LEED Gold label in the Hague in Netherlands
- ISO 14001
- ISO 50001
Sustainable Development Goals
How they cover SDGs:
Find out more
By 2030, Siemens aims to achieve a worldwide net-zero carbon footprint, investing some 100 million Euros in energy-efficient projects at production facilities and buildings. They expect this to result in approximately €20 million worth of energy cost savings per year once the program is completed. By fiscal 2019, 28 projects were completed in Europe, North America and Asia. In addition five energy efficiency projects are ongoing.
Siemens is committed to making an important contribution to the decarbonization and here are several main ways to reach this goal:
- Use energy as efficiently as possible
- Increase the share of renewable energy and accelerate the switch from the remaining conventional electricity generation to low-carbon fuels
- Redesign electricity markets to ensure sufficient investment into a sustainable, secure and energy-efficient system
- Accelerate the uptake of highly flexible technologies to integrate renewable energies and ensure system stability
- Accelerate the decarbonization of other sectors with sector integration, including Power-to-X technologies.
CO2-neutral Siemens: Siemens launched the global CO2-Neutral Program in September 2015. On the basis of a positive business case, the plan is to halve the footprint of operations by 2020 as compared with 2014 and become carbon neutral by 2030.
By fiscal 2019, Siemens managed to reduce CO2 emissions by around 900,000 metric tons versus 2014, putting them well on track to meet their 2020 interim goal. Their CO2-Neutral Program not only enables them to protect the environment and reduce costs, but also to gain experience and strengthen their expertise in environmentally friendly technologies that may well be useful for suppliers and customers.
Pollutants: The volume of emissions of volatile organic compounds increased by 2% to 884 t mainly due to increased production. The volume of ODS emissions increased by 0.23 t of R11 equivalents (R11 is one of the many substances that produce ODS). Overall, they are aware of the need for phase-out plans and substitution, especially for R22, which they use the most often.
Waste: Year-on-year, non-hazardous waste decreased by 1%. Hazardous waste increased by 16%. Including all waste types, waste volumes decreased by 7% compared with fiscal 2018.The recycling and recovery rate decreased slightly by 3 percentage points to 89%
Siemens has put many measures in place to make the business more sustainable – reducing GHG emissions, switching to renewable energy, recycling, and checking products for environmental impact. As a result of Siemens’ sustainability policies, Siemens appears in multiple other sustainability indices. Siemens has also set the ambitious target to become carbon neutral by 2030, which they are currently on track to achieve. They achieved the B rating.