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As part of our management spotlight series our managing director Liam Dowd talks with Markus Strangmueller, VP of Sustainability – Business to Society at Siemens, on total impact reporting, non-financial reporting and future opportunities
The expectation on business to act responsibly, tackle social and environmental problems, and deliver positive societal impact is only increasing. A sustainable-first approach to a company’s supply chain can deliver significant gains and impacts.
As part of the knowledge exchange in the build-up to the 12th Annual Responsible Business Summit Europe I spoke with Markus Strangmueller about Siemen’s approach to sustainability reporting.
Liam Dowd: Tell us, in a sentence, what it is you do?
Markus Strangmueller: Engrain societal impact thinking into sustainable business practices to create shared value
LD: A focus at this Sustainability Reporting and Communications Summit is how companies can portray its full impacts on society and the environment. This topic is the focus of the keynote that you are speaking on at the event. Can you share how Siemens is portraying its total impacts through your reporting activities?
MS: Our global reference for determining the value we create for society is the United Nations’ 2030 Agenda for Sustainable Development broken down to national development plans. We report on our impact to society in various ways based on stakeholder needs:
a) Through our Business to Society reports for different countries – here we address governments, society / employees and customers
b) Through our Sustainability Information as part of our annual report – here we address shareholders, investors, NGOs
c) Through our general communication activities incl. social media – target specific audiences with relevant content development
d) Through dedicated thought leadership events/ activities (e.g. Energiewende, Digitlization Day, etc)
LD: An increasing trend we’re seeing is the involvement of the finance and accounting departments to put values on non-financial data. How is Siemens approaching this critical task?
MS: That really depends. I am convinced that you need to be very clear about the purpose of putting monetary values to non-financial data.
In some cases it does make sense, in others not, so key questions are:
Where does monetization really make sense?
Why and how do you put monetary values towards it and what is the added value?
E.g. If you have safety issues, in the worst-case fatalities – does it makes sense to put a value to it?
If you do a long-term investment into a future plant, putting several values towards the cost of carbon and other externalities and develop certain scenarios could make sense.
If governments and public authorities evaluate different tenders it may be worthwhile to not just evaluate CAPEX (Capital Expenditure) but going for TOTEX (Total Expenditure) plus different kind of externalities.
LD: Your colleague Nicoletta Heilsberger will also be speaking at the event, sharing your approach to Human Rights reporting. How is Siemens ensuring that both the data and culture is there to go beyond compliance and showcase leadership within the industry?
MS: At Siemens, Human rights is considered to be a material topic. We are fully committed to further orientate towards the UN Guiding Principles and derive a coherent human rights roadmap to be implemented in the course of the next years – systematically and for all high risk areas. For that purpose, we have undergone a thorough risk identification process across all our value chain: supply chain, own operations and our downstream activities. Siemens is member of the Global Business Initiative on Business and Human Rights. We consider peer-group exchange to be a fundamental cornerstone in our transformative Human Rights journey and we are hopeful to move one day to a sector-wide industry standard with regards to Business and Human Rights project due diligence that prevents or at least adequately mitigates community related Human rights risks.
LD: What was one of the hardest hurdles to overcome and how did you resolve this?
MS: “Find the right time for the right topic”.
Here I have two examples for you:
Firstly our Carbon neutral program 2030: I guess it was in 2011 when we first put forward a proposal to set very ambitions CO2 targets for Siemens, but as Sustainability department we did not succeed. The next attempt came in 2015 and it seems we then had the right arguments in place: there is a clear business case behind it.
Secondly our Business to society approach: we put forward a proposal to evaluate our contribution and our impacts to society some years ago, but it was not deemed necessary at that time. Then we ran a few preparatory projects in the background before we asked for approval again. By today we have finished around 20 projects and are currently doing another 10 or so, won an internal award and lots of external recognition.
LD: What do you see as being the big issues to watch for in the coming 12-18 months?
4th industrial revolution, digitalisation and its impacts
Integrity (shall not be forgotten)
LD: And finally, in the space of sustainability reporting, what do you see as being the biggest opportunity in the next 12-18 months?
MS: There are many different players with different interests active in this field, quite often with good intent but sometimes too idealistic and a bit unrealistic
Aligning the many different activities to come up with a pragmatic approach to impact measurement and reporting and allow for some freedom for businesses is important.
Markus will be speaking on our keynote session titled ‘Total Impact Reporting: Portraying your total impact through your report. Joining Markus on this keynote are senior executives from Puma, Datamaran and Land Securities. Click here for more information http://events.ethicalcorp.com/reporting/conference-agenda.phpSiemens reporting data compliance Human rights CO2