Bosch: climate targets met by breaking old think
At Thinking the Unthinkable (TTU) we work to inspire leaders on how they can change, innovate and adapt. A great way to do that is using examples of success.
Here we profile Bosch, the German multinational engineering giant. They have significant successes to share, which many leaders can be inspired by and learn from.
Torsten Kallweit is the Chief Technology Officer for Bosch Climate Solutions. In this interview with TTU’s Founder and Co-Director Nik Gowing he details remarkable achievements.
Bosch met new emission targets earlier than planned. The board backed a dramatic scaling up of research projects with far more enthusiasm than expected. The resulting impact on staff commitment and enthusiasm has been remarkable. They were urged to “drive by themselves” with no fears of failure. So Bosch “opened the box and gave them that playground”. The result was “win-win”.
This is an edited version of the interview at Climate Action’s Energy Transition Summit on 25 May 2021.
TK: We started a programme two years ago for our more than 400 locations worldwide to be climate neutral by the year 2020. We also announced that we wanted to spend an investment of 1 billion euros to the year 2030 for energy efficiency. How did we do it?
We have a programme consisting of four levels.
First is the most important one: energy efficiency. The kilowatt hours that we don’t use at all. It is saving resources and CO2 emissions. So at the end it’s also saving costs for sure. And this is what we are interested in.
We planned to reduce our energy consumption absolutely by minus 20% compared to the base year 2018. And this is a volume of 1.7 terawatt hours. You can compare it with the CO2 emissions coming from the electricity consumption of private households in four huge German cities like Stuttgart, Hamburg, Cologne and Berlin.
So, you see, it’s a very huge amount of energy that we wanted to save. But this is not enough. We will still use energy.
The second level is renewable energy. What is important for us is to add new additional capacities to the market. On the one hand, by using our locations, and our roofs. But also to make purchasing agreements for wind farms in order to get higher volumes. What is very important - just to emphasise again - this is additional capacity that we bring to the market.
The third level is the electricity budget. It is very simple. You can do it, but you just have to do it. The only problem is how to do it in more than 40 countries all around the globe. The wonderful news is that in a lot of countries, not only in Europe, you can find green energy markets. The energy is available. So you just have to make the contract.
The fourth level is for all the things which are unavoidable over a short period of time: we have to think about a carbon offset. But, because all the other three levels were so successful in the last three years, we were able to reduce this amount to 20% of the old CO2 emissions that we had in our base year 2018. We want to reduce this further by a minimum of 15%.
NG: You met your deadline well in advance of the timing you set?
TK: Yes we did. We are carbon neutral for these four levels. We are much better than we planned in our long term plan to 2030. What’s very important is that we are not just saying something. We also validated this achievement by an external auditing.
We love it: give us more
NG: One of the fascinating things is the board process you went through in order to get all this approved. Tell us what happened when you put these proposals to the board, expecting them to be rather lukewarm about spending so much money. What was their reaction?
TK: In our project team we were not really sure what might be the reaction of our board members. Do they really want to give us feedback on whether they want to go this way; that they want to spend some money on this?
The reaction was always very, VERY positive. And the board feedback that we got in different steps was: is more possible? So we started with a programme for climate reduction. We started with ideas to reduce 30, or 50, or 60%.
In the end there was something like a race with our management. Is it possible to become carbon neutral? And what might be the business case behind it? It was absolutely the different reaction to what a lot of people would suggest in such a situation. I encourage everyone to go the same way. Just to ask. Just to make some suggestions. I’m sure that a lot of managements and boards will also give positive reactions.
NG: So you first proposed 400 projects which became 2000. Almost overwhelming. Then there is the issue of the speed, the rapidity with which you got the money, and were told to get on with it fast.
TK: Yeah. Before we started the programme we had a long experience in energy efficiency. We had an average of 400 projects for energy efficiency per year. With our new programme we were able not just to double it. It was a factor of five. We now have more than 2000 projects which are active that people are working on. It’s like a competition.
No central planning: cash in just four weeks
We don’t plan centrally for the whole process. We use motivation, the ideas of our employees at the locations. They can make suggestions for improvement, and for saving energy. When they send us their ideas we promise feedback in four weeks, and in a positive case to also give them the money in four weeks. So that there’s not really a timeframe between an idea, and the start of the implementation.
NG: But one of the remarkable things is what happened to the mindset of employees. Engineers don’t like to fail, for example. Were they being encouraged to take risks, to think differently? Has that really endured as a change of mindset?
‘Failure is allowed’
TK: Yes, for sure. I think two things are very important.
The first is that there’s a clear management commitment that failure is allowed. It is really a little bit strange for a technology company that you have a failure culture. But this is necessary. Otherwise you don’t get the new ideas and you’re not really innovative.
The second thing that we have learned is that people are motivated. The only thing that you have to avoid is the demotivation of the people. When you just take what is out there, tell them to be creative, give them the chance and then get a positive feedback: it’s the best thing you can do.
NG: Were you thinking that this is quite a risk, a professional risk you’re taking? Have you been almost surprised at the change in culture, the change in mindset, and the result has been so very positive?
TK: No, I don’t think that it is any kind of risk. I just give you some figures on feedback from employees. We have acceptance level of more than 80% by the upper management and the middle management of the company to the overall procurement strategy for carbon neutrality. What is more, our employees show positive feedback of 85% saying: yes, you’re on the right way, this is a great project, we have to support it. And a lot of initiatives come out of the different locations. The people get active, try to participate in this programme and say “let’s take part. It’s really great to be a part of it.”
Win-Win situation for climate
NG: I’ve got a question here from Dirk Neversteam of Neversteam Insights. Do you expect a positive life cycle return? Would you expect in the end a financial cost to becoming carbon neutral?
TK: Yes, we think so, we are convinced of it. We think that we can save the money that we spend. I talked about how we spent on energy efficiency for the timeframe of the next year. So at the end, we have a Win-Win situation for the climate, and also for the money in our pockets.
NG: I can imagine other companies and other corporates - both large and SMEs who are less confident; who have cash liquidity challenges in this very difficult time; who say this has to be a cost, we cannot see a benefit initially, despite the imperative of Net Zero solutions. What is your message to those who are more anxious, who are more worried about whether they could survive?
TK: We are convinced it’s more expensive to wait, than just to start and do it. The more you go into the details, and the more you focus on the main parts of the business, the more you find business cases behind it. You’re not just seeing the risks, you also see the chances for your business behind the transformation we see now in our environment. It will happen if we change or not. Therefore our position is let’s take the chance. Let’s start today, and do the best of the situation that we have.