From a practitioner to an enabler, Schneider Electric has brought new ideas to the sustainable practice of Chinese enterprises - sustainability is an investment, an income, and an emerging business model for long-term growth.
Text | Yan Jing, Yi Nan
At the National People's Congress and the National People's Congress in March 2024, "dual carbon" was written into the government work report for the fourth time, and "green and low-carbon" once again became a hot topic, and the "EU Battery and Waste Battery Regulation" also made stricter and clearer requirements for the carbon footprint statement of batteries......
The policy direction and the green direction of the market environment are becoming more and more urgent, and "sustainable development", which is a necessary topic for survival and development, no enterprise can stay out of it. However, when companies begin to reduce carbon emissions, the reality of the problem is limiting their "green" pace.
Zhang Bing, the head of a resource-based enterprise that is a major carbon emitter, has put carbon reduction at the top of his work list. "I've been to a lot of places to learn from experience, and the question I'm most concerned about is 'can low-carbon transition make money?' and the feedback I've gotten is different," he said, "but everyone mentioned that the cost pressure brought by the transformation process to enterprises does exist and cannot be ignored." Zhang Bing's desk is stacked with carbon reduction plans from different departments, all of which present a worrying reality in the budget and benefits section - the uncertainty of the inputs and outputs of green and sustainable change has deepened his worries.
This is not an isolated case. According to a survey by the Schneider Electric Institute for Business Value, while more than half of the companies surveyed have set a clear carbon neutrality timetable, 43% of the companies surveyed are worried that the return on investment in carbon reduction is less than expected. Some respondents admit that business pressure will indeed have an impact on the promotion of corporate carbon reduction. Faced with sustainability issues, many companies are in a dilemma: if they don't do it, they can only face an increasingly tight business space, but they invest rashly and worry that the investment and return will not be balanced.
However, companies that moved earlier have already explored sustainable pathways and are accelerating in new business growth points. Schneider Electric's results are particularly impressive, with 74% of Schneider Electric's sustainable impact revenue already accounting for in 2023 and is expected to increase to 80% by 2025. "Sustainable impact revenue" refers to the revenue generated by products or solutions that have a positive impact on the climate, and this figure means that the impact of a company on industry and society in terms of sustainability is increasing.
So, what is this company doing right to achieve benefits from sustainability?
Culture-oriented, rooted in the "green concept"
Peter Drucker, the father of modern management, said, "The true face of an enterprise is reflected in the details of its operations." "Walking into the Schneider Electric China headquarters building, the eyes are full of green. The green logo, leisure area, green wall, and "IMPACT" corporate culture and values publicity and layout are deeply integrated with Schneider Electric's unique "Life Green".
As a sustainable influence company with a history of nearly two centuries, which has transformed from a traditional steel manufacturing industry to being on the list of Corporate Jazz's "Global 100 Most Sustainable Companies" for 13 consecutive years, what drives Schneider Electric's sustainable journey?
Strategy and goals are the compass for sustainable development. As early as 2002, Schneider Electric realized that the future was now and took a forward-looking view of sustainability as a strategic cornerstone and integrated it into every aspect of its business. In 2005, Schneider Electric launched the "Sustainability Impact Index (SSI) Program", a quantitative indicator system to measure its sustainability performance, and changes every three or five years to continuously improve and surpass itself by setting higher goals.
"2021-2025 Schneider Electric Sustainability Impact Index (SSI) Program" 2023 Annual Results and Highlights
Culture and philosophy are the driving force behind sustainable development. "Change needs to be driven by culture", Wang Jie, vice president of Schneider Electric, believes that as a long-term system project, corporate culture is the internal driving force for sustainable development - only when all employees reach a consensus, can they act consistently. SSI links the SDGs to employee performance appraisals and provides clear guidance and guidelines for action.
Influenced by the concept of sustainability, the staff of the logistics center in China has taken the initiative to promote the transformation of sustainable packaging to remove single-use plastic packaging: such as replacing plastic packing belts, plastic packing bags, sealing tapes, plastic bubble bags and plastic stretches with paper and recyclable packaging materials. 100% of the paper products used are made of green and recyclable cardboard. These actions helped reduce carbon emissions by more than 3,500 tonnes for ourselves and our customers in 2022 alone.
Organization and talent are the guarantee of sustainable development. "We will tilt our internal resources to empower our employees, give them enough room to develop, and have the opportunity to use sustainable capabilities in their work, so that they dare to disrupt and innovate. Li Xifeng, energy manager of Schneider Electric's global supply chain in China, said. It is understood that the employees of Schneider Electric's Xiamen factory spontaneously researched, designed and built a wastewater recycling and treatment system for electroplating production lines, which recycled 93% of industrial wastewater, greatly saving water resources and reducing environmental risks.
"Although it takes a certain amount of resources to implement a sustainability strategy, companies can turn that investment into economic returns in the long, medium and even short term through a shift in cultural awareness, management and organizational empowerment. Wang Jie said.
Practical combat is the key to building an end-to-end green value chain
Building a cultural organization system that integrates with strategy is the foundation and guarantee of sustainable development, but culture alone is far from enough, and only by integrating sustainable development into real business scenarios can the strategy be implemented. The practical experience honed over a long period of time is the endogenous driving force for sustainable development.
For Schneider Electric, the end-to-end green value chain is the secret to action.
As we all know, the carbon footprint exists not only in all aspects of the manufacturing process, but also in the supply chain procurement, delivery and user use. Schneider Electric, for example, accounts for less than 10% of its own carbon emissions in the entire supply chain, while the remaining more than 90% of carbon emissions come from upstream and downstream. Therefore, Schneider Electric integrates the concept of sustainable development and technical capabilities into the entire business system, and has created an end-to-end green value chain covering green design, green procurement, green production, green delivery, and green operation and maintenance.
Taking green production as an example, Schneider Electric uses its global pioneering experience to promote and accelerate the construction of "zero-carbon factories" through the development of digitalization, circular economy, and clean energy.
- By deploying a variety of digital operating systems, Schneider Electric has reduced the overall energy consumption of its supply chain in China by 13% in the past three years.
- Through the maximum recycling of various production materials and resources, while saving energy and reducing consumption, it has achieved zero waste to landfill in more than 200 factories around the world;
- Through the widespread adoption of clean energy, solar photovoltaic systems have been deployed at 21 factories in China, including the largest in-house photovoltaic project installed on the roof of the Beijing plant, generating more than 2.3 million kWh of electricity annually and providing 30% of the plant's annual energy supply.
Schneider Electric Beijing factory rooftop photovoltaic project
By the end of 2023, among Schneider Electric's 29 factories and logistics centers in China, there are 19 Schneider Electric "zero-carbon factories", 15 "green factories" recognized by the Ministry of Industry and Information Technology, and 14 third-party certified "carbon neutral" factories, providing a reference for the low-carbon development of the industry.
With its outstanding performance in the supply chain, from 2016 to 2023, Schneider Electric has been listed in Gartner's "Top 25 Global Supply Chains" list for 8 consecutive years and climbed to the top of the list. It is worth mentioning that Schneider Electric, as a sustainable impact company, launched the "Zero Carbon Plan" in 2021, hoping to help the world's top 1,000 strategic suppliers reduce their operational carbon emissions by 50% by 2025, including 230 suppliers in China. To date, global suppliers have reduced carbon emissions by an average of 27%.
The end-to-end green value chain not only enables Schneider Electric to achieve low-carbon development, but also promotes the carbon reduction process of upstream and downstream partners in the industrial chain, and realizes two-way returns in social and economic benefits.
Empowering us to explore sustainable growth models
At a time when the goal of limiting warming to 1.5 degrees Celsius is imminent, sustainable development is becoming an urgent issue for the whole society. However, sustainable development is a systematic project, and it will not succeed alone. According to a report by the Schneider Electric Institute for Business Value, nearly 80% of the executives surveyed look forward to using external help to achieve carbon reduction goals, including sharing experiences, providing practical methods, and technical support.
Therefore, in order to run out of the "acceleration" of sustainable development, the leadership and empowerment of pioneers are particularly important.
Schneider Electric is clearly an excellent enabler – not only with long-term practical experience and practical methodology, but also with the responsibility and willingness to empower externally. In order to solve the pain points faced by enterprises in the process of carbon reduction, such as unclear thinking, poor implementation, and poor results, Schneider Electric has also explored a "companion" service that takes consulting as the guide, from target planning to path design to implementation.
Star charging is one of the cases of Schneider Electric's external empowerment. Star Charging's business is mainly engaged in the R&D and manufacturing of charging equipment for new energy vehicles. With the continuous expansion of enterprises and supply chains, there is an urgent need to accelerate the digital transformation of enterprise management, and at the same time, it is also facing carbon reduction requirements from different countries and downstream customers around the world.
To this end, Schneider Electric provided a comprehensive solution covering supply chain consulting, dual carbon planning consulting and energy management for Star Charging, helping it effectively improve operational efficiency and greatly improve supply chain efficiency and resilience. With the help of Schneider Electric, the demand forecasting accuracy of the Star Charging supply chain has increased by 20%, the AC and DC production cycle has been shortened by about 30%, and it is expected to reduce carbon emissions by 674 tons per year.
"Empowerment" itself is a new business model, and Schneider Electric has not only empowered the sustainable development of the industry, but also excavated business growth points that bring positive economic benefits. Since 2018, Schneider Electric has helped customers around the world reduce carbon emissions by a cumulative 553 million tons, and its sustainable impact revenue has accounted for 74% of total revenue.
epilogue
From a practitioner to an enabler, Schneider Electric has brought new ideas to the sustainable practice of Chinese enterprises - sustainability is an investment, an income, and an emerging business model for long-term growth.
In the past two sessions, topics such as new quality productivity and AI+ have become hot topics, and scientific and technological innovation will become an accelerator for sustainable development. However, no one enterprise can have all the capabilities, and ecological synergy is an important support for the sustainable development of the industry.
Schneider Electric proposes to be an "impact creator", to be a good person, empower society, and create an efficient and sustainable future. In the next step, the actions of the century-old giant are still worth looking forward to.
*Zhang Bing is a pseudonym
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