Jan Rabe, Siemens' sustainability director: There is a profitable business case for total decarbonization

9 October 2015

Jan Rabe, Siemens’ Sustainability Director

NEW YORK: “We are not doing it for altruistic reasons only. There is a positive business case,” says Jan Rabe, Siemens’ Sustainability Director, on why the major industrial company has set out to become climate neutral by 2030, in our latest exclusive Climate TV interview.

With the means to drive the global decarbonization process, Siemens has taken on its own moral obligation to set higher standards for what it deems necessary climate action.

At Climate Week NYC, the company announced its science-based target to cut its operations’ emissions - totalling 2.2 million metric tons a year - in half by 2020. The commitment is a step towards its all-embracing goal of achieving a net-zero carbon footprint by 2030.

In the video, Simens' Sustainability Director states: “At the end, we need to be climate neutral. It is the only true and right target.”

With over 300 manufacturing sites around the world, the company is investing €100 million over the next three years in its energy efficiency program. The investment has an expected payback time of less than five years,says Jan Rabe, “which roughly translates to 20% in return, something [board members, stakeholders, and employees] cannot say no to.”

He explains: “It is not only good for the environment, for people - the customers - but it is also good in the end for the bottom line.”

The company expects cost savings of up to €20 million a year with its investments in energy management systems, automation systems for buildings and production processes, as well as energy-efficient drive systems for manufacturing.

PUBLIC-PRIVATE LEADERSHIP

More wide-scale adoption by businesses of development pathways based on green growth and low carbon manufacturing is inseparable from delivering emissions cuts that countries are pledging in the international climate change negotiations, which will come to a head at the UN climate summit (COP21) in Paris this December.

Rabe argues that while the initiative to act on the value opportunity at hand should come from businesses themselves, national governments can greatly accelerate the transition.

“What we need from the governments are very predictable corridors in regards to decarbonization; things like global harmonized carbon prices that then can be relied upon in business cases. This will make the transition go faster.”

THE ‘TIPPING POINT’

At Climate Week NYC, a string of major announcements were made from companies, investors and governments that build momentum toward a low carbon economy.

The week showcased how businesses around the globe are turning innovation into valuable opportunity within major industry sectors. Siemens saw sales generate up to €33 billion, or 46% of total revenue, from its ‘Environmental Portfolio’ focused on energy efficiency and CO2 reduction. Its customers reduced their cumulative emissions by 428 million metric tons, which is as much as half of Germany’s total carbon emissions.

Fortune 500 listed companies made their own climate action pledges at Climate Week NYC to use 100% renewable energy to meet electricity needs, as part of The Climate Group’s RE100 initiative. Companies include Nike, Goldman Sachs and Procter & Gamble, among others who amplified a message heard throughout the year from major global businesses: that transitioning to 100% renewables is good business.

Moreover, a coalition of organizations representing over 6 million companies called for an ambitious deal at COP21 in Paris this December. “Every week there is a big announcement and I am certain this will continue on the road to Paris and beyond,” says Jan Rabe.

“We have reached a point of no return. So there will be decarbonization. It’s now more a matter of doing it right and making it a profitable business case for everyone.”

Text by Andrew Pickens, video by Ilario D'Amato

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