Winners act sustainably

Acting sustainably keeps companies profitable by giving them a decisive competitive edge and ensuring their long-term growth. The more sustainable the company, the more attractive it is – for investors, customers, job-seekers and employees. Companies that are rigorously geared for sustainability are demonstrably more successful.

Humans are currently consuming the earth’s resources 1.5 times faster than nature can replenish them. At this rate, we’ll need two earths by 2030. Moreover, the inhabitants of the rapidly growing countries and cities of Asia, Latin America and the Indian subcontinent have an understandable desire to achieve a standard of living comparable to that of their counterparts in the industrialised world. Now more than ever, it’s vital to strike a balance between growth and responsible resource use. As a pioneer in green infrastructure, Siemens has aimed, ever since its foundation in 1847, at achieving success with trailblazing technological innovations that are not only of high value to customers and society but have also been produced by highly motivated employees protected by a strong social safety net.

I’m convinced that our unique corporate culture of innovation, excellence and responsibility is also a key reason why we weathered the global economic crisis as well as we did. Siemens not only maintained its workforce intact; it actually increased the number of employees substantially.

Sustainable companies have a clear advantage when it comes to recruiting the best and the brightest. Why? Because companies that are focused on sustainability are clearly perceived to be more attractive employers. Due to the shortage of skilled labor and the competition for talent in many countries, this is now a crucial factor for market success. Today, every third Siemens employee is working in the booming field of environmental technology. For example, Siemens Wind Power, which started with just a single worker six years ago, now employees 7,000 people.

Sustainability is also playing an increasingly important role in investment decisions. A number of green investors are now engaged at Siemens. And it’s not just sustainability funds that are asking for environmental data and other indicators of sustainable company management. More and more pension funds and institutional investors want to see them, too. In the prestigious Dow Jones Sustainability Index, Siemens is ranked the most sustainable company in its category. The Carbon Disclosure Project also puts us at No. 1.

Customers have long focused on sustainability. Of course, green products only have widespread market appeal if their procurement pays off economically. And it does. Take power generation, for example: over the course of their lifetime, six of our high-efficiency gas turbines will cut costs at a Florida utility by roughly $1 billion. Or take electric motors: Siemens’ latest models consume up to 45 per cent less power than their conventional counterparts – generating huge potential savings, since energy consumption can make up nearly 97 per cent of a motor’s total cost. Or take building technologies: maintenance – not construction – accounts for some 80 per cent of a building's lifecycle costs. Building upkeep alone uses 40 per cent of the energy consumed in the EU. Advanced building technologies can cut this consumption by up to 40 per cent. We at Siemens also combine our technology with innovative contract models.

With our Energy-Saving Performance Contracting program, customers no longer have to open their wallets to pay for renovations. They simply reimburse us from the ongoing guaranteed energy savings that our renovations produce. When we show how we can cut their energy costs by 40 per cent at essentially no charge, customers don’t hesitate. That’s why we’ve renovated 6,500 public buildings worldwide to date – enabling our customers to reduce energy costs by considerably more than €2 billion.

Now that environmental technology has become the lead industry of the century, sustainability is transforming the entire economy. At Siemens, we expect our green technologies – which already account for more than a third of our total revenue – to be generating more than €40 billion in revenue by 2014.

So sustainability is far from being just a passing fad. In many countries around the world, it’s now the cornerstone of business and society – influencing the decisions of investors, customers and employees. And sustainability drives success: according to analyses by SAM, there’s a medium-term correlation between sustainability and a company’s market valuation. And not only that: a company’s longevity is also a significant indicator: studies show that companies in Japan and Europe have an average lifespan of 12.5 years. Siemens has been around for 164 – yet another sign of successful sustainability.