Sustainability – one of the key concepts of Siemens AG’s corporate identity today. Yet Siemens initiated its corporate policy of responsibility toward the population and environment 50 years ago by establishing an environmental protection department. Some 25 years later, the company presented its very first Environmental Report – the forerunner of today’s Sustainability Reports.
Support from the very top – Ernst von Siemens calls for environmental protection
In December 1970, Munich’s Süddeutsche Zeitung newspaper asked Ernst von Siemens, Chairman of the Supervisory Board of Siemens AG, about the most important event of the year in the field of science and technology. His response anticipated a development that became increasingly important at the company over the coming years: environmental protection. “I believe the most important event [...] was neither a new invention nor a discovery, but rather the fact that the general public has become so much more aware of the need to protect our environment. It might sound strange that a businessman associated with the natural sciences, of all people, should say this, since ‘engineers’ and the industry they have built up have a reputation for being the most zealous destroyers and polluters of the environment.”
We also want to preserve a free and intact natural world, which we all need to live a meaningful life.Ernst von Siemens, March 25, 1971
Important milestone – Establishing the environmental protection department
Environmental protection is by no means a new topic at Siemens: A “Water management and air pollution control” taskforce has existed since 1959 to help plan new production facilities and make recommendations for water treatment, air pollution control and waste disposal. Ten years later, these activities were consolidated into one unit: On September 8, 1971, a corporate circular announced the establishment of an environmental protection department.
It is [...] expedient and necessary that a summary of all the tasks and ongoing work for the protection and improvement of the environment at our company can be provided at any time, and that proactive consultation and coordination of the issues and topics is provided [...].Circular no. 12/1971, September 8, 1971
By that time, the company had defined three areas of responsibility in which the new department would provide consultations and coordination. At the level of the businesses (such as components, power engineering and communications), this involved environmentally compatible product design and the development, manufacturing and marketing of devices and systems for monitoring, measuring, evaluating, and improving environmental conditions. Siemens’ factories were advised on issues regarding environmentally friendly manufacturing and compliance with legal regulations.
In 1972, three specialized committees, or taskforces, were established in the department: “Water resources, clean air, and waste disposal,” “Radiation protection,” and “Noise abatement” – the latter concerning products and manufacturing processes. Taskforce responsibilities included recommending measures to reduce or avoid manufacturing emissions, accelerating the development of ecofriendly processes, and ensuring the sharing of information within the company.
But there was more done than simply establishing these units: Siemens and its subsidiaries also made a variety of investments in environmental protection. Just to cite one example: In the late 1980s, Siemens Property Management (Siemens Real Estate today) participated in the “Low-temperature supply from the Bewag district heating return flow” project initiated by the Berlin power utility Bewag. In this project, hot water in Bewag’s district heating system, cooled from 110°C down to about 50°C after circulating in the inner city, was further used to heat industrial buildings in Siemensstadt before returning to the Reuter-West power plant. Siemens Property Management received the Berlin Environmental Award for this project in 1989.
Systematically expanded – Environmental protection management at Siemens
After 1990, the organization of environmental protection at Siemens was based on three levels and well developed. The first level was responsibility for environmental protection on the Managing Board. On the second level, each of the Groups appointed one member of its Executive Management to be responsible for environmental protection. The third level included factory managers and local environmental protection officers.
At Siemens in Germany, for example, there were 250 environmental protection officers at the time, even though only one-quarter of that number was mandatory. To support the Managing Board level, five “Corporate Offices for Environmental Protection” were established in 1993: “Operational Environmental Protection,” “Chemical Safety,” “Radiation Protection,” “Fire Protection and Disaster Prevention,” and “Product Recycling.” On the second level, 17 departments were set up with specific responsibility for operational environmental protection in 1993.
The growing importance of environmental protection at Siemens was also reflected by its inclusion in the company’s mission statement from 1990 onward. In this statement, Siemens AG committed to protecting the environment and conserving resources. This applied to both the company’s manufacturing processes and products and considered possible environmental impacts as early as the product development stage. At the 1996 Hannover Messe, for example, the Power Transmission and Distribution Group presented a new, low-emission corrosion protection solution for power transformers that replaced the environmentally harmful zinc spraying previously used.
We strive to avoid or minimize environmental impact – even beyond current regulations.Company mission statement, 1990
This topic became even more important in subsequent years, and the measures taken by Siemens were often groundbreaking: In 1993, Siemens was the first major European company to issue comprehensive product design guidelines binding for all product developers. The aim was to conserve resources, avoid the use of hazardous substances, and ensure – beginning with the development stage – that as many components as possible could be suitably recycled at the end of their service life. More stringent demands were now also made on product design, including easy dismantling of devices and components, the use of detachable connections (snap-on connections, screws) and recyclable parts, long lifecycles, ease of repair, and environmentally friendly packaging.
1993 is a year worth mentioning for another reason as well: The Management’s Discussion and Analysis in the 1993 Annual Report included environmental protection as a separate topic for the first time. It referred to the investments made in environmental protection measures – a total of 290 million Deutsche Mark in fiscal 1993 – and also stated that environmental protection activities were based on three pillars: the conservation of resources and the avoidance of waste through continuous improvements in manufacturing; the design of products that are environmentally friendly because they consume less energy and water and are recyclable; and the “systemic knowledge from nearly all Siemens activities” that “[...] flows directly into products and systems that can be used for environmental technology.”
Internal and external transparency – First Environmental Report of Siemens AG
In 1996, 25 years after the creation of the Environmental Protection department, Siemens – which by then had modernized its operations in the new German states -- presented its first Environmental Report 1995. In some 40 pages, the company provided information on its current organization, measures and results of environmental protection in Germany. The results were impressive: Compared to 1995, energy consumption fell by 11.8 percent, carbon dioxide emissions by 8.9 percent, the volume of non-recyclable waste by 5.8 percent and the volume of wastewater by 10 percent.
In addition, the company voluntarily introduced environmental management systems such as the EC Eco-Audit and ISO 14401. At the time of the report’s publication, external environmental auditors had – in accordance with the EC Eco-Audit – successfully registered or certified ten Siemens locations in Germany, making Siemens the front-runner in Europe. Six locations were also certified according to ISO 14401 during the reporting period.
These positive results were the result of investments in environmental protection measures and the commitment of the company’s 240 environmental protection officers. Their commitment is reflected in impressive figures: A fiscal 1995 survey shows that all the environmental protection officers in the company’s factories put in over 110,000 hours for the benefit of ecology. In addition, employees working full-time for environmental protection under the Managing Board and in the Groups dedicated nearly 120,000 hours to environmental protection.
Efficiently distributing our efforts to avoid or even eliminate weak points and implement ideas that make particular ecological sense will continue to play a decisive role in effective environmental protection at Siemens AG in the future.Siemens Environmental Report, 1995
Firmly anchored in the corporate structure – New power to issue environmental protection guidelines
As part of the company’s realignment, power to issue guidelines for environmental protection, health management and health and safety was pooled in the Environmental Protection, Health Management and Safety (EHS) unit in August 2009. In addition, there was a change of responsibility on the Managing Board: While environmental protection was initially assigned to the management of Corporate Technology in 1971, EHS was now part of Human Resources.
And Siemens remains a forerunner; in 2015, the company was the first major industrial group worldwide to introduce a program to become carbon neutral. By 2020, the company had reached its interim goal of halving internal CO₂ emissions after reducing them by 1.2 million metric tons. This was achieved by initiating a number of measures, including an energy efficiency program for all locations, the use of decentralized energy systems, the reduction of vehicle fleet emissions, the purchase of “green” energy, and the introduction of an internal CO₂ price at three German companies. The company is aiming to be fully carbon neutral in operations by 2030.
Commitment to sustainability – New DEGREE framework
At its Capital Market Day (CMD) in June 2021, Siemens underscored its commitment to sustainability with its new DEGREE framework program, which applies across the company’s worldwide business activities. DEGREE stands for decarbonization, ethics, governance, resource efficiency, equity and employability. Siemens is currently intensifying its physical decarbonization activities across its entire value chain and is ensuring that the company’s climate-protection efforts are in harmony with the highest aspiration levels of the Paris Agreement adopted in 2015.
This includes committing to a 20-percent reduction of emissions in its supply chain by 2030, and aiming at achieving a carbon neutral supply chain by 2050. The company also intends to make greater progress toward achieving circularity by the end of this decade, and, for example, clearly increase its purchasing of secondary materials for metals and plastics.
Sustainability is part of our DNA. It’s not an option. It’s a business imperative. Based on our successful track record, we’re now setting even more ambitious targets. We’ll accelerate our efforts and raise the bar.Judith Wiese, Chief People and Sustainability Officer, Member of the Managing Board of Siemens AG, 2021
Dr. Claudia Salchow