Today didn’t get off to a good start. As I sat eating my cornflakes, I had a quick look through the papers and saw this headline: “Global carbon emissions rebound to pre-lockdown levels”. According to the article, the pandemic caused obvious drops across industry and manufacturing, however recoveries in the second half of 2020 resulted in a 2% rise year-on-year for December. What was more disheartening was that this rise was against the backdrop of reduced air and road travel.
In a previous blog, I talked about a ‘dirty restart’ looming towards the end of 2020. And if I’m honest, the economy was always going to fire into life with the same voracity at which it was turned off all those months ago. In a sense, a lot has changed, but nothing has changed. While the sources of energy are changing, our behaviours and physical infrastructure are moving far slower.
Leading from the front
I’m often asked when talking about the climate emergency, who jumps first? Should business wait for the conditions to be right and capitalise, or should they act with the power and influence they have, to take bigger decisions prioritising people, planet, and profit alike?
For me it’s the latter and this is our collective opportunity in the private sector to be on the right side of history with our actions, today… but the first step is getting our own house in order. It’s no good us lobbying government and our customers to be greener when we can’t honestly say we’re doing it to ourselves. This is why we have joined the Science Based Targets Initiative and set ourselves new standards.
Science Based Targets provide companies with a clearly defined path to reduce emissions in line with the most ambitious Paris Agreement goals, keeping the global temperature rise to 1.5 degrees, rather than 2 as stated before. More than 1,000 businesses around the world have already joined.
And this isn’t just ‘big corporate rhetoric’. A new progress report from the SBTi shows that the typical company with science-based targets has reduced its direct (scope 1 and 2) emissions at a rate of 6.4% per year, exceeding the 4.2% rate needed to limit warming to 1.5°C.
This is one of the proudest moments of my time as CEO (the other being my appointment as CEO!). This is now about using our technology to transform the everyday for billions of people right across the UK and the world. We’re voluntarily opening ourselves up for verification against these targets in a transparent manner that means if we’re behind in one area it’ll be reported and managed.
But of course, as the Chancellor’s recent budget showed, doing what’s right is not always doing what’s cheap…or easy. The coming years will require investment and expenditure in the short term to change the direction of travel. But my answer to this is always easy: have you ever stopped to add-up the cost of doing nothing? Or simply continuing with business as usual?
When the BlackRock CEO Larry Fink wrote an open letter to fellow CEOs, he showed that from January through to November 2020, investors in mutual and exchange traded funds invested $288 billion globally in sustainable assets, a 96% increase over the whole of 2019. His words were, “I believe that this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type.”
As national governments aim to increase the level of their ambition, regulation and legislation will be passed to enforce compliance. It’s futureproofing us not only for a change in regulation and taxation but also perception. Our brand sustainability credentials will not only allow us to attract the best future talent to continue the journey to 2050, but also allow us to work with fellow like-minded organisations, also committed to the SBTi.
Speaking-up on topics that matter
As part of the UK100, Siemens is in a unique position to lobby government and continue to push for a fair and balanced way of tackling carbon. We have a responsibility to not only change what’s created in our factories, but also what’s created in the corridors of Westminster.
A carbon-based taxation system cannot penalise the lowest earners; a group that may be in fuel poverty already, have a poorly insulated home and a 15-year-old diesel car. If we are to function as a mature society, the system needs to protect its poorest members and redistribute the wealth from its most well-off.
It’s not often you’re reminded of your hometown at times like this, however that’s just what I found myself doing. I was born and raised in Rochdale, home of the Rochdale Society of Equitable Pioneers in 1844 (a forerunner for the Cooperative organisation). Cooperative movements harnessed the idea that through a shared responsibility and a level of social cohesion, things can change for the better. One of the Rochdale Principles set 177 years ago was the idea that the co-op worked altruistically to improve the communities of the people it served.
In 2021, it’s no different. Responsible businesses have a duty to act, working with communities, cities, towns, and governments. We have the potential to achieve localised energy independence, clean power, preserve nature, create new jobs and industries, have cleaner air, rivers, and oceans.
Business is always about gambles, risk and the unknown, but for me this is a safe bet. It’s like placing your chips on a roulette board that only has one number, but the board isn’t black and red…it’s only green.