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Siemens is one of the worlds most prominent companies and Europes largest technology conglomerate. With 430,000 employees, $77

billion in revenue and industrial manufacturing, the company naturally has a major impact on greenhouse gases emissions emitting 4.53

million tons CO2e.

Siemens has acknowledged the importance of climate change as one of the most important challenges facing humanity, alongside

world poverty and access of all people to proper sanitation and energy. This perspective has helped the companys manufactured

products eliminate 15 times the companys total emissions. Investing 2 billion annually in research and development, Siemens has a

hefty 30,000 environmental technology patents and offers efficient solutions that better combat climate change.

The companys goal is to become a leader in climate change reduction by improving the performance of customers through efficient

products. In fact, it has proclaimed to media that it has the most environmentally-friendly industrial technologies portfolio. Further,

Siemens has publicly embraced the need to address climate change and energy efficiency into its operations, communications, cross

functional boards, product development and its membership at non-governmental organizations. Beyond this, Siemens has set tangible

targets for the future: its leadership expects by 2011 a 20% increase in energy efficiency and a 20% reduction of global carbon dioxide

emissions. Given the companys size, global research and industrial technology solutions, the company has a strong platform to impact

climate change.

Central Question of Inquiry

This inquiry seeks to answer a central question: How has Siemens implemented plans to manufacture green products and make its

operations green? Indeed Siemens has a vertical organization comprised of many strategic business units with vastly different

operations. This question delves into how a very diverse conglomerate like Siemens has integrated climate change among its units.Exploring this question further can help to provide recommendations and understand existing challenges.

Analysis on Siemens embracing climate change

Siemens overall stance and message on climate change is that climate change fits into a larger discourse on serious challenges facing

humanity and the socially responsible corporation. Essentially, Siemens views its role as providing the technologies to better resolve

those issues while creating shareholder value. Its management acknowledges the seriousness of climate change to human life, without

neglecting the complexity of issues.

Another consideration is advancing a sustainability campaign mirroring that of its competitors, which have largely incorporated climate

change into their sustainability goals. For example, Phillips (EcoVision) was one of the first competitors to launch major global PR

efforts to demonstrate its green credentials to publics and customers. General Electric (GE) launched its salient Ecomagination

campaign in 2005. ABB had a slogan Power and productivity for a better world.

Addressing these issues after many of its competitors, Siemens joined these efforts with its own campaign and advanced a definition of

environmental best practices in industrial engineering along with the Boston Consulting Group. They arrived at the definition

Environmentally intelligent products and solutions that apply to significantly superior environmental standards in comparison to the

installed-base average. This definition favored Siemens products, by showing Siemens as having the largest volume of green

products. With Siemens definition, Siemens claims 19 billion versus GEs 13 billion and Phillips 6 billion. In addition, Siemens can

claim that the share of green products among its manufacturing composes 25% compared to GEs meager 14% and Phillips 23%.

Exploring Siemens Green Initiatives

Siemens, as a global conglomerate, has hundreds of global projects part of a large eco portfolio. This paper will only illuminate several

most recent international projects, with the purpose of showing how different business units are combating climate change in diverse

ways. Indeed, Siemens is a global German company in industrial manufacturing requiring complex cross-border transactions with global

clients. Thus, analyzing its operations in the United States is within the international scope of this analysis. Generally, the company

focuses on renewable power generation, efficient traditional power generation, efficient energy transmission systems, efficient heating

and lighting, efficient transportation, and energy / greenhouse gas monitoring systems.

Siemens Power Generation (SPG) is focused three key solutions. First, it embraces Carbon Capture and Storage (CCS) in coal power

generation longterm. The approach is based on increased efficiency in Integrated Gasification Combined Cycle Plants (IGCC) pre-combustion carbon capture. Siemens management expects that this will be ready for wide scale commercial use by 2014. Secondly,

Siemens is focused on Post-Combustion Carbon Capture by optimizing current solvents and processes, and incorporating the unit into

the energy facility. For Siemens, the overall post-combustion capture system involves another stage to remove CO2 and is particularly

used in retrofitted older power plants. Also, Siemens is a member of the CASTOR project under the European Commission, which is

committed to lowering the cost of Post-Combustion Carbon Capture to 20-30 /t CO2. Thirdly, the company is focused on CO2

Compressors efficiency, particularly gear type compressors. Analytically, Siemens approach accepts that coal has enormous cost

advantages that economically outweigh dramatic changes, but still seeks to responsibly capture and store carbon to fight climate

change.

Moreover, Siemens has developed and commercialized technology to provide efficient energy transmission. One of Siemens advanced

transmission initiatives is High Voltage DC (HVDC) transmission links targeting the grid efficiency. For example, Siemens Energy won a

2008 contract to build a 3000-megawatt HVDC system between Chinas Guizhou province to Guangdong. The project, in conjunction

with Chinese partners, consisted of developing a system that could transport energy by 800 kV transmission voltage. The benefits werereductions in Greenhouse Gases by more easily connecting remote power plants. This boosted the amount of energy into the grid and

simultaneously made energy transmission more efficient. Another similar Siemens HVDC project in China connected a hydroelectric

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Lacking were incentives, awareness, and performance benchmarks outside of strict emphases on financial performance. Put bluntly,

Fang proclaimed, The results indicated a significant gap between what is important for Siemens and how well Siemens is performing in

terms of environmental and social sustainability. Essentially, Siemens needs to better harness and optimize its human resources to

achieve its goals.

Experts have taken issue of Siemens definition of being green, particularly because it was favorable to Siemens in showing publics a

stronger commitment to combating climate change. Specialist Gunter Schoech at GL Group raised his concern. Siemens offers

combined gas and steam turbine. His point was how could it be considered green when this turbine system will still annually emit 2million tons of carbon dioxide. His analysis was that it could be considered green only in the sense that it offers efficiency gains over the

past generations. Siemens would have to claim explicitly that it is 2% more efficient than the last generation of turbines.

Additionally, Schoech analyzed that Siemens sustainability board may face a dismal inefficacy that preceded manyof Siemens cross-

functional company wide boards. The source of their failure has been an inability for cross-functional implementation across units, which

certainly vary across Siemens diverse specialties. He hypothesized that in the past there were not sufficient incentives and motivation

to work together among units for sustainable solutions, similar to Fangs aforementioned findings.

Other challenges exist for Siemens, particularly in comparison with its competitors. Siemens message of its stronger commitment to

climate change may have less salience than GEs robust marketing campaign Ecomagination. To this day, Siemens initiative does not

have a salient slogan or messaging program to convey to publics a commitment to climate change unlike GE and ABB. Instead, publics

see climate change on the Siemens Youtube channel, a point of contact with consumers and businesses, as only one of many other

issues that Siemens is addressing.

Siemens faced humiliating bribery scandals over the past decade, which threaten relations with governments and publics. First, the

company participated in the Oil-for-Food program and was alleged to have paid surcharges to Saddam Husseins government.

Secondly, Siemens was in the spotlight for 1.3 billion in corruption scandals in the past few years. Thirdly, the company was forced to

pay a fine of $300 million to a court in Germany due to corruption abroad. Siemens also faces a lawsuit in Chattanooga for poor design

of a sludge treatment plant. Other scandals involve funding AUB, a rival trade union, to disarm its primary rival trade union, IG Metall

Union. On April 23 2009, the Defense Department Criminal Investigative Services raided Siemens Medical Solutions offices in

Pennsylvania following an awarded military imaging contract. Thus, Siemens needs to build trust not only for its climate initiatives but

also for its ability to win government contracts.

Publics are also not fully satisfied with Siemens commitment. While Siemens ranks highly in its policy stance, Climate Counts calls

Siemens a Striding company that still has a lot of work to do outside of its strong 2007 gains. In fact, Climate Counts gave Siemens

unsatisfactorily half marks in transparency (6 out of 12 points), internal usage of energy (23 out of 56 points), and internal carbon

auditing (14 out of 22 points). Furthermore, Greenpeace has questioned how forthright Siemens was in disclosing and eliminating

harmful chemicals from its operations and manufacturing. For example, Fujitsu-Siemens has not promised to disclose chemical usage

and has not committed to eliminate polyvinyl chloride (PVC) and brominated ?ame retardants (BFRs).

Recommendations & Evaluative Conclusions

Siemens is a paragon of a company that sees environmentally-friendly products as a way to fight global warming while becoming more

efficient in its own operations. With fewer inputs to make more outputs, Siemens is providing shareholder value and environmental

benefit. Its strategy has not limited revenues or jeopardized its operational integration; on the contrary, it has grown them to the extent

that Siemens management is proudly proclaiming that 25% of its eco-portfolio will come from environmentally-friendly products by

2011. With collaboration with governments and prominent NGOs, Siemens is quietly building goodwill for stakeholders concerned with

climate change.

The major issue lies with Siemens optimizing its commitment and implementing a unified effort across diverse business units. Research

showed that employees and managers are not fully aware of how to manage sustainability, particularly among different units. As a

result, the efficacy of Siemens efforts may not be at their potential. As suggested earlier, Siemens cross functional sustainability board

may be ineffective because of the past failures in similar boards at Siemens.

There are several recommendations, according to Fang Zhou who extensively conducted fieldwork research on sustainability among

Siemens employees. First, Siemens needs to develop both managements awareness and skills to be socially responsible. Secondly, it

needs to provide robust performance metrics that can be audited for proper implementation. Thirdly, incentives need to be improved.

Fourthly, communications need to better assert Siemens visions to stakeholders. Lastly, sustainability needs to be integrated into

strategic planning and global strategy to better balance performance, operational excellence and sustainability.

Beyond these research-based suggestions, Siemens should consider aggressively developing industrys most efficient products.

Efficiency is a major paradigm in industrial products because of (1) climate change, (2) the global recessions emphasis on e fficiency

and (3) rising energy costs. Companies with the most efficient products can develop competitive advantages. Such competitive

advantages are crucial because competition among GE, ABB and Siemens is fierce.

Additionally, publics are less aware of Siemens commitment to climate change, in comparison to GEs initiatives. Siemens self-defined

metrics show the company to be the best in its class with efficient products and having one of the largest annual investments inenvironmentally friendly products. But its communications message are not as salient as GEs. This leads back to the issue of

optimizing and enhancing the sustainability campaigns implementation.

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Furthermore, although Siemens is transparent about its activities, that has not prevented publics like Greenpeace from questioning its

disposal of dangerous chemicals. As Siemens Power Generation embraces Carbon Capture and Storage (CCS), the company should

consider clearly defending the merits and safety. This is because anti-clean coal organizations are making claims in mainstream

television and online media. Simultaneously, Siemens should cultivate relations with governments as it faces very serious corruption

allegations. Not doing so can jeopardize its aims in combating climate change.

With an optimized effort at implementing further efforts throughout different businesses, Siemens can optimize a currently robust climate

change effort and simultaneously deliver superior value to customers and investors. ?

Tables

Exhibit 1: Siemens Power Generation company witnesses major profits and growth in providing efficient energy transmission due to the

ageing US power grid.

The overall message to shareholders in this speech was that Siemens advanced technologies are not only contributing to profits, but

also upgrading the grid to fight inefficient energy transmission impacting climate change.

The chart shows a red spike showing a ballooning need to replace ageing infrastructure, and Siemens can fulfill that need with efficient

grid solutions.

Highlighted summary of data:

According to UBS and Siemens, the major needs for replacement of European ageing infrastructure in 2012, 2016, 2018, 2026

and 2030

The value of European replacements range from 5 billion to 26 billion per year