Published on January 2nd, 2019 | by Jacek Fior0
Companies Will Save The World (Fringe Stories From COP24)
January 2nd, 2019 by Jacek Fior
COP24 is behind us and I am still deep in materials, interviews, and reflections after the event. And trust me, reflections are not easy when you are Polish. I bet you all remember the famous phrase: “Life is Stranger than Fiction.” That is basically what I felt listening and watching to our government in action. Having said that, I will say almost no more about the Polish contribution to climate change and will focus on what I learnt and didn’t learn during the 2018 Sustainable Innovation Forum held in Katowice, Poland, alongside COP24 itself.
CleanTechnica readers need no reminder that we are quite off track with our climate actions, and following COP24 gave me little hope that would change much, at least not within the political domain. I have recently started believing, however, that it will be companies that will save the world. I’ll ignore Tesla here, since its role is obvious, but looking around and picking up the right pieces of news, we can see the corporate world turning to green energy and companies noticing great opportunities renewable energy and clean transport may offer.
From Apple globally to Rawicom locally in Poland, companies are pushing the change. Attending SIF18 as a CleanTechnica writer I enjoyed all the benefits – smiles and handshakes from our readers (feels great) plus access to top executives who were happy to talk to me (I hope, and so it seemed). Let me tell you briefly what I learnt.
I must admit, all of the interviews were done at ease without any push for time. It allowed for an open conversation rather than a short question and answer session. The one question I asked my interviewees to start with was about COP24 — what they would consider a success and whether any success is possible at all.
My first interview was with Andreas Klugescheid, Head of Steering Government, External Affairs and Sustainability Communications at BMW Group. Andreas pointed out two things in response to my core question. First, that we should not expect each COP to be as spectacular as Paris, for example. That is not the point, obviously, and it somehow anticipated what COP24 would deliver, meaning quite little.
Secondly, we discussed the great potential of the event for raising awareness among people. Extensive media coverage may do more good than the best declaration agreed upon during a COP. That worked quite well even in Poland, where public media, heavily controlled by the government, seemed a little detached from reality and forced the coal future and climate denial narrative. This government communication provoked debate and helped many see the manipulations behind it. Thank you, COP24! 🙂
Right after that, I could make my obvious claim — it will be companies that will drive the change. Andreas nodded in agreement and gave examples of what BMW is doing in that respect, from the obvious switch to electrified transport (however slow it may appear), through DriveNow carsharing solutions, and on to Charge Forward, a smart charging program.
Apparently, the energy transformation is the key to a sustainable future and source of ample opportunities, and that is what we are seeing across many industries and car manufacturers. Charge Forward is just one example of BMW efforts to be a player in that sector.
When I asked about the future of BMW’s core business — cars — Andreas was very confident that it looked bright – BMW’s PHEV models are selling well, existing and soon-to-come EV models are or are expected to be leaders in Europe, and BMW feels it can compete with anybody. Yes, I had to ask about Tesla and its sales in the US to see if a similar scenario could be expected in Europe. Once again, Andreas was at peace with that and reiterated that BMW believed competition was good and they were ready for that.
“I do not fear for the future of BMW when it comes to electric vehicles. (…) I honestly trust that people who spend 40, 50, 60 thousand euro plus for an EV, they will probably go for the manufacturer whom they know, whom they trust — in our case, 102 years already.”
Since I revealed what car the chief editor of CleanTechnica is driving these days*, I did not question his belief in the historical advantage of large companies over younger competitors. I felt the Nokia example was out of place. 🙂 I did, however, ask where BMW and the car industry would be today if Elon Musk and Tesla had never appeared. Judging by a longer silence before Andreas offered his answer, the question had merit and we both agreed the industry would have been where it was 7–8 years ago, at least when it comes to EVs.
Later that day, I had a chance to speak to Louis Shaffer, Distributed Energy Management Segment Manager at Eaton, who shared with me his views on COP24, politics, and the future of our planet. As before, we started with our expectations with regard to COP24. Louis was very frank here and pointed out little had been done since the big Paris agreement. As he put it, politicians are waking up today to see how declarations never became actions, how plans never left the planning phase, and how climate is changing TODAY.
“All the recent reports are saying the same — climate change is here and it’s affecting us now, it’s not the future. (…) What would be significant for me is that people walk away [after COP24] knowing we don’t have as much time as we thought and it’s the people who are going to vote for this.”
Without necessarily naming the politicians here, we agreed a lot of those in power today are simply wrong. That means new leaders, smart politicians, will come and earn points for simply being right, as people are ahead of politicians with their concerns about the future and climate change.
Knowing that politicians are good at following people, it must be someone else showing the way to act, and that is companies, of course. Louis says it all clearly — electricity is a business, whether it’s Poland, France, or the US. Since solar and wind are getting cheaper and cheaper, beating other sources, why would anyone want to pay more for the same? Of course, the giants of Apple, Google, etc. declare they are going green and making great PR news out of it, but at the end of the day, they are making smart financial decisions.
The example from Eaton is the microgrid system installed in its manufacturing plant in Johannesburg, Africa. Results? Yes, 40% reduction in energy costs. Sounds about right, doesn’t it? It all means the future is green, and it’s not because politicians say so — it’s because we are making it economically possible.
The beauty of it is that it goes down into the supply chain as well. Smart companies know the price on CO2 emissions will go up, and so will make sure their suppliers land on the green, cheaper side to help them stay competitive.
The challenge Louis sees is electrification of heat. What is reassuring is the number of innovations appearing somehow behind the scenes. As Louis put it, heat innovation is not as sexy as transportation, so it attracts less media attention and is less globally known. However, it’s happening and a new Elon Musk of the heat industry is making his or her way forward somewhere out there in the recesses of startup laboratories.
With my passion for EVs, I had to ask Louis about it and I learnt he was going to make his next car electric, and then hesitated to ask himself: “Why do I need a car at all? Why bother if you have carsharing and Uber?” The only thing Louis suggests is “Uber EV” as an option in the app, saying he would be happy to pay more and would choose this option. Actually, it is interesting Uber hasn’t thought about it yet, or has it? We definitely did at Tesla Shuttle. All we need, then, is clients like Louis who are happy to pay more. 🙂
The other thing Louis referred to is how gasoline cars will become more and more expensive to own. He is not into taxing the car or gas, but he sees the economy being regulated with a carbon emission cost. That applies to all and everything, so your car cost will somehow reflect all the carbon emission from the supply chain and fuel. That leaves me as quite a radical, as I would tax diesels and would tax them high.
My next interview took place at the end of day two, meaning both the interviewer and the interviewee were a bit tired. So, more credit to Dr. Dieter Vollkommer, Corporate Vice President of Sustainability at Siemens, for engaging in a lively discussion. We jumped quickly to talking about the company’s program of CO2-neutral operations. The task is huge and ambitious, but the company seems determined to make it happen, and to do it for real — not just offsetting its carbon footprint, but actually aiming to be carbon neutral by 2030. As Dieter put it: “Green energy runs in Siemens DNA so the course of action is clear.” In that way, my question about companies driving the change got answered before it was asked. It is yet another great example of a large corporation believing in companies’ pioneering role in the fight against climate change (quoting almost literally the Siemens website).
Two things led me to ask Dieter a tough question. First, I know a bit about the entire Siemens product portfolio. :-). Second, I learnt, with growing concern, that the Polish government is determined to build new coal units in Ostrołęka despite obvious economic and environmental disadvantages. I asked Dieter, then, what would Siemens do if a client approached the company to request a turbine for a new coal plant. The question came with no illicit intentions and only to see where things were going. After a little hesitation, Dieter confirmed they would probably go for such a project. At the end of the day, it’s business and it’s better to have a high-efficiency Siemens turbine than a product of lower efficiency from another source, as it’s simply better for the environment. I was not convinced by the argument, I must admit.
I referred to Michael Liebreich’s piece “Two Business Cycles to Prepare for A Low-Carbon World,” which was released one day before the SIF18 conference and made a strong point to divest from carbon-heavy initiatives. Siemens appears to be under similar pressure from investors, as Dieter pointed out, who are closely watching what projects the company gets involved in. Will that finally convince companies to say no to political crusades like the one in Ostrołęka, Poland? I truly hope so. Moving away from coal can’t happen overnight, but phasing it out should mean no more new coal-fired units.
Finishing the interview, I asked Dieter about Siemens’ contribution to the development of e-mobility. It was good to hear we shared a passion for EVs and realized the difficulties ahead. Siemens is focusing on solving the challenge of charging, or helping to, but not in the hardware world — in smart infrastructure. A simple example is a Siemens parking lot, where Dieter works, of about 3000 cars. It shows the possible strain on the grid if you imagine all of them being electric and plugging in at 7:30–8:30 in the morning. Don’t worry, though — all solutions for managing the demand and supply are already being developed — from V2G to BMW’s Charge Forward and more. Good to have Siemens on board to help the transition.
It was a busy two days and a lot to write about. SIF18 and all other COP24 fringe events made December pretty hot in Poland. Blame me not for my only mild interest in the outcomes of the climate negotiations. Significant as they are for communicating climate change challenges, I held little hope they would make a difference. Talking to doers is always more inspiring.
*Side story from BMW’s executive: BMW held a dinner party for the first 100 buyers of the i3, many of which were the range extender (REx) models. During the party, they were asked how many times they had used the extender, and the answer from all the users was … never. So much for the famous range anxiety, at least among early adopters.