Unlocking leverage for the world’s climate with the help of SBTs
Customer: Siemens Energy AG
Category: Energy
Date: April 2021
Siemens Energy AG is one of the world’s leading energy technology companies. Through its market position, the company is an important player in reducing global CO2e emissions. With its products and its climate-neutral program and the discontinuation of coal-fired power plants in 2020, Siemens Energy AG drives the transition to more sustainable, reliable, and affordable energy systems.
Together with the DFGE – Institute for Energy, Ecology and Economy, the company has embarked on a journey to set ambitious SBTi climate protection targets in line with the Paris Climate agreement to underline its climate protection ambitions. The following case study explains the challenges that must be faced and overcome, on the way to meaningful climate protection – both for individual products in the portfolio and, ultimately, the entire company.
“By signing up to the Science-based targets, Siemens Energy AG proves that we are serious about leading the energy transformation. With the consulting by DFGE, we wanted to ensure SBTi process compliance through validation of existing calculation approaches and comprehensive coverage of all elements in the value chain. In addition, thanks to DFGE the target development process was accelerated”
Challenge
Corporate GHG balance as a prerequisite for setting science-based targets
With its innovative technologies, extensive energy experience and ambitious strategy to decarbonize global energy systems Siemens Energy AG is a driver of the energy transition. Even though the company only came into being in 2020 as a spin-off from Siemens, sustainability is a fixed point in the company due to its previous affiliation with Siemens and its longstanding CSR tradition. When looking for support in the scientifically based implementation of the global sustainability strategy, Siemens Energy AG chose DFGE as a partner.
The complex challenges of the collaboration included:
- review of the existing approaches for the preparation of a CO2e balance (CCF).
- completion of the items of a CO2e balance, including a sector-specific consultation of possible emission sources.
- preparation and documentation of the approaches to ensure the reproducibility of the calculations in future years.
- preparation of the final SBTi strategy by elaborating and preparing accepted and appropriate methods and approaches and filling the Target Submission Form.
Solution
DFGE Support enabled smooth submission of science-based targets
Fundamental for the submission of science-based targets was the compilation of a well-founded CO2e balance. In an iterative process, the company’s carbon footprint was refined again and again. To this end, Siemens Energy AG’s existing CO2e calculation approaches were validated and refined by DFGE. Furthermore, questionable items were analyzed and missing items were supplemented by suitable calculation systems in consultation with Siemens Energy AG.
Based on the CO2e balance, DFGE selected suitable parameters and approaches and compared them in the form of target paths for the final decision-making by Siemens Energy AG. For the underlying calculations, DFGE used the documents of SBTi as well as tools developed in-house.
In a next step, the Target Submission Form and related documents were prepared and/or reviewed by DFGE. Here, it was crucial to prepare the individual emission drivers of the Siemens Energy AG portfolio transparently and clearly in order to enable a smooth review process by the SBTi. These documents are the basis for the decision on an ambitious target for emission reduction, in line with the target to limit global warming to 1.5° C. The documents were submitted in February 2021 and by mid of April 2021 the target was already approved by the SBTi.
Furthermore, DFGE managed the release process through SBTi and assisted in documenting the calculations so that the update can continue annually.
Result
SBTs put Siemens Energy AG on the path to become sustainability leader in the industry
As part of its SBTs, Siemens Energy AG has committed to supplying 100 percent of its energy from green energy by 2023. This will, for example, reduce primary energy emissions and emissions from the company vehicle fleet (Scope 1 & 2).
Moreover, by 2030, greenhouse gas emissions of products (scope 3) in the Gas and Power segment are to be cut by just under a third (27.5%) over lifetime compared to 2019. To achieve this, the company will continue to promote, among others, increased efficiency of its products. To make a significant contribution in the decarbonization of power grids, it will successively switch to SF6-free products.
By addressing climate targets, Siemens Energy AG has gained a much better understanding of its emissions and reduction potential internally and can now consistently drive its operational reduction activities. Externally, by setting targets, Siemens Energy AG has been able to emphasize its pioneering role in the competitive arena in terms of decarbonization and can differentiate itself even more from its direct competitors. Furthermore, this makes the company even more attractive for investors and, due to its position in the market – as a manufacturer of power plants and power plant components – it can exert a strong leverage function for the reduction of global emissions.
In 2021, the DFGE will also support Siemens Energy AG for their first CDP Climate Change participation and their MSCI rating.
About Siemens Energy AG
The Siemens Energy Group was created on 1 April 2020 through a restructuring of the Siemens Group. The company is a provider of electric equipment and technologies for the energy sector as well as for industrial customers, and is located in Munich. The portfolio includes electrical equipment for power generation, power transmission and industrial applications, in the field of conventional as well as renewable energies.
Siemens Energy AG‘s mission is to empower its customers to meet the growing global demand for energy while transitioning to a more sustainable world. Its innovative technologies, extensive energy experience and the ambitious strategy to decarbonize global energy systems are all central to the efforts to be the partner and driver of the energy transition. “Siemens Energy energizes society.“
