01 Introduction Environmental Strategy

Sustainability as Business

Xavier Houot,
SVP Global Safety, Environment, Real Estate, Schneider Electric

An engine for innovation

Decades ago, sustainability and environmental concerns emerged as scientific studies began to uncover the harm being done to the planet by development and industry. Some corporations reacted to this trend by trying to demonstrate how they were working to use fewer resources or to offset their carbon footprint. Sustainability and environmental responsibility were seen as risk mitigation — as a burden for corporations to bear lest their reputation be damaged in the public eye. Indeed, some organizations still operate in this manner, with sustainability and environmental responsibility viewed as “nice to haves” instead of the what they truly are: an engine for innovation.

The reality is, good environmental strategy is good business strategy. And good environmental performance makes for good business performance.

Environmental responsibility: an opportunity for business growth

The myth has now evaporated — business growth and environmental performance are not at odds. Quite the opposite — environmental excellence helps drive business growth. Leading companies have recognized that environmental performance is a boon to the bottom line. Renewable energy is now cheaper in many areas than traditional brown power.¹ The economy of the future is low carbon, and companies that prepare for that future will quickly gain a competitive advantage and be able to invent faster and address new customer needs earlier.

Increased profitability — Evidence shows that companies demonstrating leadership on climate action are more profitable. A 2014 CDP study of 500 S&P industry leaders found that organizations actively managing and planning for climate change secure an 18 percent higher return on equity or investment versus non-committed peers.
Improved efficiency — Making a clear and bold commitment to reducing carbon emissions and decoupling growth from resource intake often give rise to greater efficiency as companies find ways to improve processes, reduce raw material inputs, and lower energy consumption
More innovation — Environmental responsibility acts as a transformative lever for change, helping to spur innovation in low-carbon products, technologies, and services.
Greater access to capital — Investors and financial institutions continue to demand more disclosure on environmental performance and want to help their own customers reduce their carbon footprints. Science-based targets provide greater visibility and assurance of what a company is trying to achieve.

For businesses, seeking environmental excellence makes good business sense, helping to ensure long-term market viability, competitiveness, and resiliency.

2015 – 2017 Planet & Society barometer achievements

See the full results

Climate & Development (Sustainability offers)

80.1%

of product revenue with Green Premium ecoLabel™

Circular economy

130

Toward zero waste to landfill for 100 industrial sites

Our six pillars of environmental strategy

At Schneider Electric, our environmental strategy extends our vision for sustainability into six principles that guide our operations. There is a difference between an environmental strategy that focuses only on a company’s internal operations and one that reaches beyond to transform an entire supply chain from raw materials to customer delivery. We believe the latter, more difficult path is both the right way to operate and the only way to truly co-create a sustainable future.

Deploying low-CO₂ and resource-efficient strategies for planet-compatible growth path

We constantly strive to lower our CO₂ impact in every part of our organization and work to define and mitigate the CO₂ impact of all large projects.

Building an increasingly green supply chain

We work toward energy efficiency, water efficiency, and the reduction of any environmentally harmful side effects of transportation and manufacturing.

Considering waste as worth

We’re working toward zero waste at our 1,150 facilities worldwide. This year, we are proud to have had 130 plants receive the “Toward Zero Waste to Landfill” designation.

Promoting green attributes and value-adds

Through initiatives like our Green Premium ecoLabel, we promote awareness of the environmental benefits of our products and how those benefits bring increased value.

Implementing a circular economy

We work to keep our resources in use for as long as possible, extract the maximum value, and then recover and regenerate at the end of product lifetime. We offer services that prolong the lifetime of our products, helping our customers enjoy energy management and automation services while using fewer resources.

Strengthening our environmental governance

With more than 1,000 independent assessments, plus hundreds of field visits and audits, we review environmental risks in our supply chain and how we comply with changing regulations or report to a variety of external stakeholders and analysts.

Our environmental strategy is deployed throughout the company via a network of over 400 environmental leaders in charge of eco-designing new offers, greening our supply chain, inventing circular business models, and quantifying environmental benefits for customers. We always keep three things in mind: customer expectations, our Planet-Climate-Life preservation ambitions, and our business strategy.

The Science Based Targets initiative

Any truly responsible environmental strategy must be quantified, specific, and evidence-based. A collaborative effort between CDP, the U.N. Global Compact, World Resource Institute, and World Wildlife Fund, the Science Based Targets initiative helps corporations establish accurate and verified targets backed by climate science.

The time has come for all organizations to move beyond the question, “What can we do to incrementally improve our carbon footprint?” and to answer:

Exactly how much greenhouse gas emission does our organization need to reduce in order to meet the targets of the Paris Climate Agreement?
How quickly does our organization need to accomplish that reduction?

Schneider Electric is among the more than 400 companies working with the Science Based Target initiative (SBTi). We’re currently at the second step of their four-step process — Commit, Develop, Submit, Announce — and look forward to sharing our targets publicly and doing our part to achieve the goals of the Paris Climate Agreement.

#MoveTheDate

When it comes to environmental responsibility, incremental gains are no longer enough. We already consume 1.7 planets' worth of resources per year.² And we know that if we do nothing, we are bound to a 4 °C increase in global temperature by 2100.

In 2017, August 2 was Earth Overshoot Day. This means that in 2017, all of us who call Earth home used more from nature than our planet can renew in the whole year — and we did so in less than eight months. Overshoot happens through overfishing, overharvesting forests, and emitting more carbon dioxide into the atmosphere than forests can recycle into oxygen. We must #MoveTheDate. And we must not stop moving it until what we consume is in a responsible balance with what the planet can produce.

With this in mind, businesses must look at environmental strategy and performance in three ways:

Climate

Is your business model and global supply chain +2 °C compatible?

At Schneider, we actively quantify how "More Schneider means a better climate" by assessing our own CO₂ footprint and calculating the amount of CO₂ avoided through our customers’ use of our technologies.

Planet

Is your raw material consumption and circular take-back strategy One Planet compatible?

At Schneider, we’ve partnered with Global Footprint Network to continually assess whether we are helping to #MoveTheDate each year, and where, and when, and how we can accelerate toward that goal.

Life

Are your supply chain practices and value propositions life-preservation compatible?

At Schneider, we track the use of hazardous chemicals and substances yearly and seek to reduce or discontinue them entirely — in our plants, in our products, and in our packaging. Our hazardous waste and emissions have to be strictly handled.

References

¹ http://www.independent.co.uk/environment/solar-and-wind-power-cheaper-than-fossil-fuels-for-the-first-time-a7509251.html
² According to the Global Footprint Network