The right policies


Spend and save for the future


Many manufacturers are focused on pushing up production rather than the sustainability agenda. But, as Siemens’ Juergen Maier tells Tom Idle, investing in energy efficiency makes economic sense for the long term


I


t should have been the history-making meet- ing of world leaders that put a stop to global warming and created a platform for the low- carbon technology and services market to thrive. But the UN’s climate change summit in Copenhagen at the end of last year never quite lived up to the hype. But it did get people talking. Climate change is on the political and corporate radar across the world; emissions reduction targets might remain thin on the ground, but at least there is an acceptance that we cannot continue business as usual. And the Copenhagen Accord that emerged from the ashes of the get-together provides the starting blocks for real action.


“Important, but not critical” is how Juergen


Maier, managing director of the Industry Sector at Siemens UK, describes the meeting. For him, the fact that the world didn’t agree a strategy for how to tackle global warming doesn’t signal the end of the world. “We’ve actu- ally made a lot of progress,” he says. “We’ve now got the US taking it seriously. China has now made emissions reduction one of its top political priorities. That’s a big movement for- ward from where we were three or four years ago.


“What we haven’t agreed is targets. But Rome wasn’t built in a day.”


Of course, the UK has its own targets, informed by 2008’s Climate Change Act, which was the first piece of carbon reduction legislation


to be established anywhere in the world. It requires the UK to achieve an 80% cut in the UK’s carbon emissions by 2050 (compared with 1990 levels), with an intermediate target of 34% by 2020, which is likely to rise as soon as the rest of the world agrees similar targets. It’s a big ask and demands the appropriate regulation, policies and fiscal incentives to help drive businesses and consumers to do the right thing: use less energy in the first place and then invest in technologies that improve energy efficiency in the longer term.


The incentives are there. You can get tax breaks for putting in energy efficient investments, like high efficiency motors


One excuse for a lack of corporate attention to energy efficiency thus far is that it just isn’t sexy. For the person in the street, the term ‘sustainability’ conjures images of wind turbines and solar panels – the energy generation. But it is in using less energy that the UK has the best chance of meeting cli- mate change goals. According to the International Energy


Agency, 23% of the emissions reductions need- ed to meet our targets will come from renewable


energy use, while 57% of the CO2 reduction is possible by being more efficient with our energy consumption. “We’re not going to have a coun- try that produces carbon neutral power for a very long time, so energy efficiency needs to be given greater priority,” claims Maier. As the likes of Siemens will testify: the technology to deliver the UK’s ambitious targets already exists. The Siemens portfolio of solu- tions – from building control systems and ener-


02 | Sustainable Business | Green works | September 2010


gy efficient lighting, to variable speed drives and automation systems for manufacturing – can help to make the transition to a low-carbon economy as painless as possible. “A lot of people think that the technology needed to drive down energy costs is complicated and that companies like ours are still inventing it. But that’s not true at all. The technology is here today; tried, tested and proven.”


A recent survey commission by Siemens suggests that the companies that will flourish in the current economic climate are the ones that take their sustainability approach out of their CSR or marketing agenda and put it in their business agenda. “We asked whether, with all things being equal, somebody would base their buying decisions on whether the company had good sustainability credentials,” says Maier. The answer came back as a resounding ‘No’. That was 18 months ago, and Maier suspects that things will change in the future, but at the moment in the business to business world, hard cut commercial thinking still rules. The challenge, says Maier, is convincing com- panies that the business case stacks up. “The problem is that we have a short-term investment focus here in the UK,” he points out. The glob- al recession hasn’t helped; more companies are desperate to get their production rates back up to full capacity to take advantage of the markets coming out of economic downturn first. And despite more boardrooms talking about sustainability, few are making it a priority, with the middle management on the shop floor large- ly unaware and unconcerned with driving effi-


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