Sustainability And Siemens: A Case Study Essay.

Sustainability has been on the radar of many forward-thinking organizations for more than three decades.

As we will discussed in class, some organizations pursue sustainability because they believe it is the right thing to do, some are motivated by cost savings from energy efficiency or other projects and some see it as a way to differentiate themselves in an increasingly competitive business environment.

Just as motivations may differ, so too may regional factors such as culture, government, etc. which may facilitate, constrain or otherwise shape sustainable initiatives and actions at any given organization.

The purpose of the course project is to get you to better understand how regional factors shape sustainable actions, the various types of sustainable initiatives and actions that organizations pursue and the future course of sustainability.

To achieve these objectives, you will profile a global organization, ideally one that you may be interested in working for one day. Successful completion of the project will also further develop your research critical thinking, writing and presentation skills.

Siemens’ Company Overview

Sustainability has been emerging as a vital determinant for all global organizations across all industries. Reports by Kolk (2016) reveal that over 75% of business executives identify a sustainability strategy fundamental to be competitive in recent times. Sustainability is regarded as a business approach in creating enduring value by considering ways in which organizations function in the environmental, social and economic environment. The following paper will evaluate the way Siemens; one of the renowned global powerhouses in the field of industrial, energy as well as healthcare and for infrastructure solutions maintains sustainability to foster the longevity of the company.

Siemens Limited is a holding company operating its business operations in conglomerate industry. The company is recognized as a global powerhouse focusing on areas of electrification, automation as well as digitization (Siemens, 2018). Being one of the largest producers of energy-efficient and resource-consumption technologies in the world, Siemens has received substantial rate of recognition as a leading supplier of systems for producing power generation as well as transmission along with medical diagnosis. Siemens constitutes an intriguing story to articulate with its almost 170 years of successful journey starting from a establishing a back building workshop to setting up a multinational business enterprise (Siemens, 2018). Byrch et al. (2015) reveal that during the 1950’s Siemens entered into the manufacturing sector and efficiently manufactured computers, semi-conductor devices alongside washing machines and other electronic pacemakers. In the later phase of 1990’s Siemens financial services was founded by expanding its services into the financial sector (Siemens.com, 2018). Furthermore, in 2000 Siemens Medical Solutions started when Shared Medical Systems Corporations had been attained by Siemens’ Medical Engineering Group. However starting during the 2000’s, the multinational organization significantly diversified to other industrial process optimization along with consultancy and other engineering services and engaged in several successful merger and acquisition (M&A) endeavours (K?lk??, 2016). However, among all these business endeavours the recognized one is Nokia Siemens network in 2007 and it was in the year 2010, Siemens decided to sell its IT Solution as well as services subsidiary to Atos- one of the international leaders in the domain of digital transformation with an annual revenue of almost € 13.2 billion (França et al., 2017).

Sustainability is typically defined as supervising the triple bottom line that is a development through which global corporations manage their monetary, social as well as environmental risks, threats and opportunities. However according to Tang and Lee (2016), such an approach primarily depends on an accounting based perspective and does not wholly capture time factors which is inherent within business sustainability. With sustainability identified as an intriguing subject, during the past few years, corporations across the world have been experiencing stirring rate of demands from varied types of stakeholders to successfully develop sustainability plans that illustrate assertive offerings towards environmental and communal aspects and to enhance intelligibility in corresponding these endeavours. Siemens has received immense prominence for its sustainability approach and performance, specifically in the ecological domain that is industrial conglomerate Siemens (Siemens.com, 2018). At Siemens, sustainable development is rooted into the corporate strategy as well as culture, a characteristic highlighted in the course of the central position it embraces within the company, as sustainability efforts are regarded as a vital part of effectively implementing the Siemens Vision 2020 strategy program. Siemens has been efficiently generating its cent percent Renewable energy distribution in energy and electricity that has been purchased with around 50% of the company’s German locations by employing 100% green energy (Sustainability Report - Home – Siemens, 2018). Klopp and Petretta (2017) have revealed that Siemens show great dedication to enhance its power and reserve efficiency and to acquire the increasing global requests related to environmental safety. Furthermore, the company has a comprehensive Environmental Protection along with Health Management and Safety (EHS) management mechanism in position for all its significant business centres and invention facilities. This management system has followed the demands of the ISO 14001 standard (Svensson & Høgevold, 2017).

Discussion

Digital technologies play a decisive role in the energy sector which acts as a vital determinant for Siemens to adopt an inclusive sustainable approach to its business. However according to Issa and Al Abbar (2015), in order to utilize them to amplify efficiency level in the generation, transmission as well as supply of energy, Siemens has implemented a business case sustainability in their pilot project strategy in Germany and has been aiding small producers of solar energy develop an energy platform based on block-chain technology that enables both producers as well as consumers to trade power resourcefully (Siemens.com, 2018). Furthermore, Bonou, Laurent and Olsen (2016) has stated that the increasing rate of corruption and crime is another vital factor that has led the company embrace a reliable sustainable approach for the welfare of the company. Siemens has recently adopted a Zero Tolerance Policy (ZTP) for misconduct and disobedience if applicable laws from its employee base. The company however, methodically secure integrity as well as compliance in its cultural pattern (Stewart, 2015). Thus strict compliance training is obligatory for all employees and employees are supported to report unlawful conduct. In addition to this, Siemens’ Environmental Portfolio is a significant factor for the company to implement decarbonisation efforts. Reports by Goldin (2015) have revealed that in fiscal 2017, technologies of Siemens’ Environmental Portfolio has facilitated customers across the world to lessen their carbon dioxide emissions by around 572 million metric tons. This quantity however has been equivalent to around 70% of Germany’s gross revenue rate and comprises technologies related to smart grids, industrial automation as well as energy-efficient mechanisms along with renewable power technologies (Issa & Al Abbar, 2015).

Planet-The Green City Index- This program is identified as a research project that has been executed by the Economist Intelligence Unit (EIU) and aided by Siemens (Siemens.com, 2018). This sustainability approach aims to emphasize on the important areas of concerns related to urban environmental sustainability by proficiently creating an exceptional mechanism that facilitates cities yardstick their effort and share most efficient practices (Siemens AG - AnnualReports.com, 2018). This sustainable agenda in 2009 and entails over 120 cities in parts of the European region, Asia and Africa.

                                                                       The Green City Index

                                                                      Source: (Siemens, 2018)

Goldin (2015) has noted that environmental problems in the U.S and Canadian cities are comprehensive which shows those GHG (greenhouse gas) emissions are high by any standard and urban collapse tends to remain as a challenge. However Rainey (2015) is of the opinion that US and Canadian cities surpass in several areas. For example, water infrastructure, recycling levels along with environmental regulation systems correspond to the most efficient cities in which the Green City Indexes have assessed across the world.

People- Dual Vocational Education Program- Siemens through its Dual Vocational Education Program has been offering access to proper education in various ways such as learning and education opportunities for all of its employees and VET (vocational education and training) delivered in association with educational institutes (Stewart, 2015). Current reports of Siemens.com (2018) reveal that Siemens offer around 11,450 apprentices and learners with around 6750 for Siemens and over 2400 for third party agencies in Germany and another almost 2300 for Siemens in almost 20 more nations enabling the company to be one of the largest as well as most innovative contributor of professional education and training for secondary-school graduates in the world (Sendler, 2017).

Concept of sustainability and Siemens' Sustainable Development

Profit- Pearl Initiative-The Integrity sustainable initiative developed by Siemens proficiently encourages the Pearl program to exert lucrative trade practices in the Gulf Cooperation Council (GCC) (Wang & Buckeridge, 2015). This initiative introduced in 2015 has been investing over US$880,000 in three years to the Pearl Initiative for a mutual action program in order to increase awareness and further acknowledge the implementation of partnership practices in business across the GCC (Messner, 2015).

Messner (2015) has revealed that Siemens is highly committed to responsible water management and emphasizes on water management in present as well as for future climatic benefits.  As according to Klopp and Petretta (2017), climate change necessitates a management of water resources turned towards the future, millions of people on earth are impacted by floods and shortage of primary resource. The company consequentially for all its sites have guaranteed that climate protection programs pose least impact on local water resources.

                                                       Siemens plan for carbon neutral by 2030

                                                                     Source: (Siemens, 2018)

Dietz (2018) has revealed that Siemens comprises over 20 factories across India with 8 Centres of proficiency and around 12 R&D Centres with a nation-wide sales and service network. The company is endorsing skill development initiatives by the means of Corporate Citizenship initiatives namely ITI up gradation, along with Technical Skills Development Center and faculty development. Cooke (2015) has revealed that according to the Indian Ministry for Commerce and Industry, the Indian government is highly eager to develop exports and resourcefully offer greater number of job opportunities for youths and semi-skilled as well as unskilled labour force of India. Furthermore, India’s foreign exchange reserves have been estimated to be around US $ 401 billion in 2018 thus implying a dynamic future of the country as global trade is anticipated to expect a rise of around 4% in 2018 from 2.5% in 2016.

Siemens India has primarily focused on Green Building initiative equivalent to the sustainable approaches of Siemens Germany (Sendler, 2017). For Siemens India, digitalization tends to serve a vital role that would help the company increase its energy productivity and proper power distribution in various sectors of the country (Siemens.co.in, 2018). Issa and Al Abbar (2015) claimed high energy deficiency in various regions of India results declined economic growth. India is experiencing difficulties in obtaining coal whereby other sources of domestic gas has been shrinking Siemens believe that conventional energy sectors can attain India’s power demands (Siemens.com, 2018). Waste water treatment is identified as a varied sustainable approach which Siemens India has efficiently started to offer high-tech water treatment solutions for agricultural as well as industrial implementations and adequate safe drinking water (Goldin, 2015). In addition to this, as per reports by Dietz (2018) Siemens India is concerned about the impact of climate change Thus with ecology emerging as a vital factor in strategizing for a better world, the company has introduced diverse initiatives and have illustrated when it comes in safeguarding the environment.

People- Green+ Hospitals- Similar to Siemens’ HQ, Siemens India believes that the benefits of Green + Hospitals extend beyond the environment and further offer important cost savings as well as higher excellence (Siemens.com, 2018). Siemens India proficiently offers flexible and inclusive solutions for healthcare providers which aids in reducing expenses and improve clinical results and improve the patient experience (Siemens.co.in, 2018). Siemens India’s Green + Hospitals is identified as a modular program which health services of all sizes can utilize to successfully attain their environmental efficiency as well as excellence objectives both simultaneously and rapidly. This approach however is contradictory to Siemens Germany Green City initiatives.

Siemens Germany Implementation of Sustainable Approach to Business

Planet- Energy efficiency program- The current Siemens Energy Efficiency Program helps modify the existing infrastructures related to production plants. This program results to a greater level of energy productivity with fewer Co2 emissions with lower operating expenses. Reports by Economictimes (2015) have revealed that once the measures have been applied, continual energy monitoring executed by Siemens India’s Advantage Operation Centre (AOC) guarantees that mechanisms are accessible and continuously optimized.

Profit- Disaster relief sustainable program- Siemens has joined with non-governmental organization (NGO) Oxfam India to successfully offer emergency supplies of water, hygiene, sanitation along with healthcare provisions to the people living in regions of Rudraprayag and Uttarkashi districts in India (Siemens AG - AnnualReports.com, 2018). Siemens, in affiliation with a renowned NGO called Srinivasan Services Trust, operates on a holistic progress initiative for the affected communities of the Indian Ocean Tsunami that had its occurrence in 2004.

Siemens India’s proficient public transportation, unlimited access to drinking water aligns with a consistent energy supply is recognized as vital elements for Siemens India’s sustainable urban growth. Stewart (2015) has noted that mobility in India’s urban areas specifically regarding air quality and congestion tend to have a crucial impact on the quality of life of India’s citizens. As the country according to Goldin (2015), gradually progresses, India must seek innovative strategies to amplify transportation efficiency level to elevate their capacity by reducing carbon dioxide emissions simultaneously. Furthermore, as per reports by Dietz (2018), with advanced operation regulation and traffic management mechanisms for traffic lights, roadways, metro lines an d electrification systems, Siemens India efficiently creates optimized advanced mobility solutions for customers as well as passengers (Cooke, 2015). The company thus will install smart transportation management system that will continuously examine traffic situation and further will direct over 600 traffic signals in order to operate as per the flow of traffic (Sendler, 2017).

South Africa has been aiming to efficiently develop an economy that provides security, accomplishment with an improved quality of life to its people. Svensson and Høgevold (2017) in his studies have stated that the South African Government’s fundamental purpose is to increase the economy to around 2.8 times its existing size of f R3,8tn and further to expand sectors related to mining, automotive, manufacturing and transport which tends to estimate for approximately 25% of GDP (Siemens AG - AnnualReports.com, 2018). Siemens expertise is applied in order to proficiently direct and control approximately 5,100km or 22% of South Africa’s important rail and pipeline infrastructure Siemens.co.in, 2018). Furthermore, reports by Kolk (2016) have posited that Siemens underpins diversity in the work place and further has developed a notion that diversity offers competitive advantage. Siemens SA approach towards employment justice attainably aligns with South African government’s goals to progress the ethnic and gender mix, chiefly in experienced, technical and administrative positions (Kates, 2018).

Siemens SA is encouraged not only by increasing rate of awareness of rising markets for example the “Africa rising” description. This narrative has been prevailing since last twenty years. According to Bitzer and Glasbergen (2015), Siemens South Africa has long recognized that a company and its workforce do not function autonomously of society. The Business to Society Report introduced in 2015 is recognized as an ongoing function with evaluations that are updated at an annual rate to record the developmental progress (Messner, 2015). This sustainable report according to studies conducted by Klopp and Petrettam (2017) have been designed to modify the company and further illustrate its sustainable accountability as a proud corporate citizen of SA. The primary determinants which stimulate Siemens SA to implement inclusive sustainable initiatives relies on stimulating the economy, develop value-adding innovations, endorsing progressive transformation, developing local job opportunities and expertise as well as satisfying the environment, recuperating value of life (Svensson & Høgevold, 2017).

Siemens’ Current Sustainable Programs and Policies

People- Skill Development Program- At Siemens South Africa, empowerment is considered as a business imperative with a focus chiefly on local value creation, by implementing sustainable endeavours that aid the society as well as education progress, job availability, skills growth with local manufacturing. Reports have revealed that over 10 years, Siemens SA has been aiding to upgrade services at Power Academy that is an R8 million skill development investments introduced in 2012 to successfully provide induction for workers engaged in the energy sector of South Africa.

Planet- Sustainability in the Supply Chain- Reports have revealed that in financial year 2016, in fiscal 2016, around nine nations accomplished the Zero Harm Culture Siemens Label, and South Africa is identified as one of primary countries (Sustainability Report - Home – Siemens, 2018). Siemens SA is engaged in various other internationally rolled-out practices in order to guarantee that employees have the ability to work in a safe environment.

Profit- Siemens compliance system- Compliance system introduced by Siemens South Africa constitutes an inclusive system of measures to guarantee the business is typically executed in full agreement with legal and company’s internal values and regulations (Siemens.com, 2018). Communication networks such as “Tell us” reporting method and reasonable internal examinations are necessary to recognizing matters of delinquency. 

Siemens Gamesa renewable energy is expected to supply to wind farms in South Africa that includes 109 units of onshore wind turbines (Svensson & Høgevold, 2017). Sustainable initiative is considered to be the upcoming major milestone for Siemens gamesa in South Africa and further with supplementing the two wind farms the company will have installed over 850 MW of wind capacity in the country. According to Messner (2015) the company executives draw a man's Pride to provide services with a localised agency that is based in Johannesburg with engineering experience and highly regulated two proficiently generate sustainable value and significance for South Africa by increasing job opportunities and supplying local manufacturing with driving development sustainable projects within local communities. Furthermore Klopp and Petretta (2017) has noted Siemens Gamesa has been proficiently delivering several sustainable projects to the mainstream society in the past with an aggregate of around 500 MW. The first 138 MW have been distributed for the difference be wind farm in 2014 where as in 2017 a total of 298 MW have been commissioned for Khobab wind farms accounting around 140 MW each (Messner, 2015). Thus company has secured comprehensive service agreements for the next 10 years for Khobab and following 5 years for Jeffreys Bay. Issa and Al Abbar  (2015) have revealed that Siemens Gamesa has attained the leading position in African business sector almost two decades of experience along with over 2000 to 20 MW installed base in countries namely Egypt, Kenya, Mauritius, morocco and South Africa. Furthermore the growth of Siemens South Africa blade factory in Morocco has represented a significant dedication towards a sustainable future of the entire region that is the first blade plant of the wind turbine manufacturers in Africa and the Middle East (Stewart, 2015).

Conclusion

Therefore the above discussion it can be concluded that Siemens has successfully stood unsupported innovative strength with a passion for technology sustainability responsibility with an uncompromising dedication towards excellence and value. Being recognised as a globally operating technological organisation Siemens have vigorously leveraged the benefits which the establishment of the company offers. Show the more in order to target business opportunities in both new as well as established markets the company have arranged its business in 24 sector mainly energy industry infrastructure and Healthcare. However in fiscal 2014 Siemens approximate employee base have successfully generated revenue from continuing business operations of around 76 billion Euro along with an income from continuing business operations of about five billion Euro. These revenues however have been recognised as accurate evidences that the company has been proficiently thinking for long term services towards sustainable development.

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