Podcast: Play in new window | Download (Duration: 24:25 — 22.4MB) | Embed
Companies across the globe are increasingly focusing their efforts on more sustainable environmental performance. This includes increasing energy efficiency, reducing waste, lowering emissions and working across supply chains to help others to do the same. Emerson is deeply committed to sustainability as reflected in our global purpose:
We drive innovation that makes the world healthier, safer, smarter and more sustainable.
In this podcast, Emerson Chief Sustainability Officer Mike Train joins me to discuss Emerson’s “Greening Of, Greening By and Greening With” sustainability framework and the recently released 2021 ESG Report with firmly established net zero targets.
Give it a listen and visit the Sustainability section on Emerson.com and the Sustainability category here on the blog for more on ways to drive your sustainability initiative forward.
Transcript
Jim: Hi, everyone. I’m Jim Cahill with another “Emerson Automation Experts” podcast. Today, I’m joined by Mike Train, Emerson’s first chief sustainability officer, to discuss Emerson’s sustainability initiatives and what we’re doing to help our customers. Welcome, Mike.
Mike: Great to be here, Jim. Pleasure and a privilege to join your podcast series.
Jim: Well, it’s a great day here in Austin for me too. You’ve had a variety of broad experiences within Emerson, how have these experiences set you up for your role as chief sustainability officer for Emerson?
Mike: You know, Jim, I’ve been with Emerson for more than 31 years, a lot of it in business leadership. I was in Asia Pacific for a couple of assignments. I led one of our big business units. I led our automation solutions platform, at one point in time. And then, most recently, I’d served as Emerson’s president. So, had a lot of business leadership, strategic kind of perspectives. And I’m finding that that area has been very useful in the context of being a chief sustainability officer. You know, I’ve got appreciation for our technologies. I’ve had a lot of experience with our customers. And, of course, a lot of discussions with our 86,000 employees. So, I feel like I’m perfectly suited to go into this space now, and provide some of that context. That’s really important.
Jim: Well, that is nice broad experience in that whole area. And I recently saw a statistic that there are, as of March 31st of last year, 95 chief sustainability officers in Fortune 500 companies. And this has grown from 29 a decade earlier. So, what drives companies to invest in this role, and programs a CSO is responsible for?
Mike: You know, I think we’ve seen environmental sustainability come to the forefront, especially in the last few years. I think investors have started asking a lot of questions about what does the future look like, climate science and how we deal with climate, and the net-zero commitments of the world by 2050 to make those things happen. So, I think from a company’s perspective, you know, there’s so many stakeholders now in the conversation that it’s become important for companies to put the focus on it, have leadership in that space. And again, I think you’re going to see more and more companies create this role to make sure that we’re driving these initiatives going forward.
Jim: Yeah, I would bet even by this time, next year, we’re going to see that number more than double. I just have a feeling about that.
Mike: I would agree with you on that.
Jim: So, what changes have you been able to make since coming into this role?
Mike: You know, for me, a few things, first of all, going full time in this space and spending every day on this space is really important. And there’s so many things to do, so many things to do, whether that’s the greening of Emerson working on our facilities and that type of thing, or being in the marketplace, talking about, you know, what does energy transition look like, maybe how do Emerson technologies and global reach help those perspectives? And then, of course, our employees are very passionate about this space. And it’s really been fun to sort of harness that passion and take advantage of that as well.
Jim: Well, that sounds like, even in the time you’ve been in there, that’s getting involved in a lot of activities. So, that’s a great thing. What are some common misconceptions you hear from people about the broad topics of sustainability and decarbonization?
Mike: You know, I think trying to get some facts in front of people is still a really important discussion. For those that have seen me present, sometimes I use a Sankey diagram of the U.S. energy system as a proxy for the world’s energy system, and try to teach what happens in that system, right? We put a lot of primary energy into the system, we do transformations in that system. We have a lot of losses in that system. And then, of course, we have the different use cases and what the relativity of those are from an energy and emissions perspective. So, I think trying to just bring some factual base for people, so they understand what that means. And then as we talk to energy transition and being net-zero, that’s a big mission to pull off in 30 years of time and trying to make that happen. And again, kind of bringing reality, if you want to call it that, to the discussion.
Jim: Yeah, that certainly is a tall order, not only for companies but countries, everyone else involved in doing that. Now, I’ve heard you speak about our Greening Of, Greening By, Greening With sustainability framework. Can you give our listeners a little bit of an overview of this framework?
Mike: Yeah. So, the greening of Emerson is the first element of that. The greening by Emerson is really our portfolio and our technologies enabling a lot of solutions for our customers. And then the greening with Emerson is really around collaborations that are required, and the focus on maybe innovation or policies, and those kinds of things, kind of that whole dialoguing process. But let me start with the greening of Emerson. That’s really our first and foremost responsibility. This is to take care of ourselves first, right? And make sure we build a solid contribution from the greening of Emerson aspect. So, for us, we’ve had an existing target around our carbon intensity reduction. We’ve had that for about three years. That’s been really helpful to motivate progress and focus with our employees on energy efficiency. We’ve started buying renewable electricity, trying to really to amplify what we can do in our own facilities.
And I think it’s been really helpful to sort of get sustainability, starting to be built into our culture, and bringing our employees to a level of awareness and a level of commitment. That’s very similar to other things we do, you know, ethics and all the other kinds of things, safety, all the other things we kind of do in our daily lives. So, it’s been really important. And it was Emerson’s first-ever long-range target. We didn’t have long-range financial targets. It was the first long-range target that we ever had. And it’s been useful in that context. So, that’s the greening of Emerson and the activities there.
The greening by Emerson, of course, is we have a tremendous sustainability portfolio. I’m trying to get people to see us that way. I think it’s really important that they understand that. We have two platforms, the Automation Solutions platform that you are familiar with and you share a lot about. But we also have the Commercial & Residential platform, which has Climate Technologies. It’s an automation stack similar to what we have on the automation solution side, but it’s on that compression, refrigeration, air conditioning, of course, heat pumps, as a form of electrification versus traditional combustion. It has remote monitoring, you know, it has a lot of the same kind of column automation elements in that commercial residential side of the business. So, across the spectrum of what we do, we touch so much, potentially touch and impact so much. So, the greening bike stuff I get really excited about.
And then the greening with Emerson, collaborations with universities, research institutions, government bodies. You know, in the U.S. context, we do a lot of work with the Department of Energy and the EU context. We spend a lot of time with the EU commission on what are the pathways forward, in some of these spaces, you know, methane, hydrogen, things of that ilk. We work with industry groups. And ultimately, we’re trying to have those dialogues to figure out those pathways, where actually make this change happen.
Jim: Yeah. I know from a blogging standpoint, I get to talk about so many of the technologies that can have such an impact, whether it’s energy efficiency, the material usage, being more efficient in that part of it. So, it’s exciting that greening with, but what we’re doing greening by and our work with universities. Yeah. That’s a good solid framework there. So, can you give some specific examples of each of these three areas that Emerson is leading or supporting? I know you already shared a couple things there, but anything specific?
Mike: Yeah. I’d say a couple of, you know, things I’m learning. You know, what’s fun about being a CSO that doesn’t have like a steep environmental background, right, I didn’t grow up in the environmental sciences space, is I get to be a rookie in this space. And, frankly, I use that to my advantage sometimes. But, you know, in the whole greening of activities, you know, I would say, the thing that’s helped spark a lot of our activities, what we call the energy treasure hunts. We have over 200 major facilities and about 700 facilities in total around the world. And we’ve asked our teams to go conduct an energy treasure hunt. We have a few experts that help go and help work through and guide some of those activities. But they’ve been amazing efforts. You know, typically, for us, at energy treasure hunt, we go in on a low production day, like a Sunday in the U.S. context.
Listen and learn, you find so many places where we’re just wasting energy, and people forget to turn off the monitors, and there’s lights on. We don’t have things on controls, and you hear hissing sounds, and you sort of get tuned into, “Oh my gosh, there’s a lot of energy going on in this building on a day when we don’t really need to have energy.” Then you go back on a high production day, again, you observe all the processes again, and then you prioritize, “Hey, there’s some things we can do here. Some of it’s low-hanging fruit. Some of it we need to make investments in.” But we’ve been coming out of those sessions with kind of a roadmap for about 15% reduction in our energy use in these facilities. And then, of course, then the teams will follow up and go to work on those things. And I think it’s engaged everybody in the organization. We’ve been helping figure out the hows, the how of all of this is really important. And I’d say, with the employee base, especially everybody’s for this topic, you know, sustainability is not a push topic. Everybody wants to is for it. Again, trying to bring in the tools so they can make progress is what we’re trying to do.
Jim: Yeah. If energy’s just being wasted for no use, then that makes complete sense. And from when you were describing, it almost sounded like cybersecurity or other things. You’re starting with an assessment, you’re looking, what’s the easy things to get done, prioritizing the other things. So, kind of a common process there, but really neat that we’re applying it to sustainability. I’d say, among Emerson customers, what are some of the challenges that you’re hearing from your peer chief sustainability officers?
Mike: You know, what’s been really fun about this job of, I have gotten the opportunity to go spend a lot of time with customers. They want to learn, and they’re open to ideas. And I think the one thing about the sustainability space, it’s not like a secret space. We can all learn from each other, we can share competitors, peers, customers, whoever. You know, for the most part, we’re all trying to figure this out, we’re all trying to learn, and proceed on this. So, I’ve been fortunate to have a lot of those kind of meetings, and discussions, and dialogues. And again, you know, we’ve had a little bit of experience now, especially in the last two years, about some of the things that we’ve learned. I love sharing those and giving those away.
We’ve been having summits with our suppliers to kind of bring them the whole topic, give them some tools. I’ve promised them I want to give every tool away to them. I want them to do treasure hunts. I want them to go stand up a culture of sustainability. You know, anything we learn, we want to share with them and vice versa. We learn from them a lot of things as well. So, I think from that regard, it’s been great. I’d say, the customers, specifically, you know, they’re looking for ways to reduce their emissions. I think a lot of their organizations have made commitments from the top is, you know, we need the tone from the top, obviously. But now that it’s kind of getting to the middles of the organizations like it, as at Emerson, people want those ideas, they want to know if they make an investment in something that they get a carbon, we’ll call it, return on investment. And again, having those discussions about what those ideas are. Some of this is experimentation, right? Trying some things and see what happens. I don’t think you can wait to have a perfect plan, I think you gotta get on the road and make some progress.
Jim: Yeah. It seems like if you can get that energy started and just build on that and build some momentum, and then the culture grows around it.
Mike: Yeah. And you get smarter through that process as well. You’re more tuned in, and then you learn more beyond that.
Jim: Yeah. Nothing like focus to get after that kind of thing. So, I was just reading the fresh-off-the-press ESG report, and I guess you own the E, environmental in ESG. I saw that we had achieved a 17% decrease in emission intensity since 2018. Now, you’ve shared a couple things we’ve done, but are there some other things we did to accomplish that?
Mike: Yeah. Yeah. I would say a couple of things in that regard. The first one is the energy efficiency activities, finding those opportunities, obviously making changes in what we’re doing. And, first and foremost, everybody should just try to have less energy need, right? That’s the most important thing. On top of that, then, of course, we’ve started to buy renewable electricity and some other things that also have an emissions profile to them. And I’d say, in the last year, we’ve gotten a little bit aggressive around that. And we’ve made good progress in Europe. We’ve made good progress in the United States. I still gotta go figure out how to do that in China. We’re having discussions right now on that. I still gotta go figure out how to do that in Mexico. But we have that in focus, and we’re going to work on those things. So, I think those are some of the places where we’ve gotten that progress and that emissions intensity number that you talk to.
Jim: Well, that’s great that we’ve got a rolling start in building momentum because, also, in that report, we have a goal, our net-zero greenhouse gas emissions, and that includes scopes 1, 2, and 3 by 2045 to get to net zero. And I guess that’s compared to last year at 2021 baseline. And I notice it with a science-based approach. In what way can we accomplish this? And what are some of the ways Emerson’s employees can pitch into this effort?
Mike: Yeah. As you indicate. So, we have announced, finally, I’ve been…you know, it’s one of those things where you’re working on it and you want to expose it, but you can’t expose it. Finally, we got to expose it, right? So, we do have a science aligned, and actually a near-term set of targets that have been approved by the Science Based Targets initiative, which is a group that evaluates your plan and tests whether it’ll meet the needs of the climate science to get to net-zero world by 2050, right? There’s kind of a reduction rate that you need to achieve that. So, we did announce that we will have a net-zero by 2045 across all the scopes. And just for your listeners’ benefit, a scope1 is a combustion in your facility, a scope 2 is the electricity that you use in your facility. So, those scope 1 and 2 things, consider those your four walls. And that’s what we’ve been working on with that carbon intensity reduction that we already focused on.
Scope 3 now goes beyond our walls, right? It lives upstream of us. So, our supply chain activities, the logistics to move things, our employees commuting to the office, our business travel. Those are all kind of scope 3 upstream things that we can influence. Downstream, we have some products that need energy to perform the role, right? And those have associated emissions. And we have a shared responsibility with the ultimate customers in those emissions downstream of us. So, across that scope 1, 2, and 3, by 2045, we’ve committed to try to get there in net-zero. And what’s interesting about the Science Based Targets initiative, in their world of net-zero, that means you reduce absolute emissions by 90% plus. And then they allow for that last 8% to 10% or whatever the number is to be something where you could have some kind of a neutralization activity. They’re science-based, but they’re very ambitious, they’re very aggressive. And, you know, as an engineering company, we wanted to spend some time and really think about the depth of how we’re going to do that. So, it took us a little longer to come to the world with these, but I think we feel very prepared now as we go forward.
Jim: Yeah. It sounds like some solid key performance indicators that we can use and like to drive our results to get there on the path.
Mike: You know, the fun part about that is a lot of the solutions we’re working with our customers on, we will use in our own scope 3, call it context, right? As we help our suppliers decarbonize because they could trial some hydrogen, they can electrify some things. The same things we’re talking about with our portfolio will be the solutions that we’ll see, in both the scope 3 upstream and the scope 3 downstream. So, I think, for us, maybe versus a lot of other companies out there in the world, we actually kind of see the roadmap for how to get there.
Jim: Yeah. And we can see really how to help a lot of people across our supply chain with the things that we can help them do, which is really a great thing. Now, the ESG report highlights some technologies that help our customers drive sustainability improvements. Can you highlight a couple of examples?
Mike: Yeah. You know, as we think about energy transition broadly, right, all across that roadmap of production and use of energy, there’s going to be changes everywhere, right? A lot of solutions are going to be needed. We are obviously very involved across, I would say, every form of lower-carbon energy generation, whether that’s solar, wind, hydroelectric. I would put nuclear back into that equation. If you’re going to solve the mathematics around emissions, nuclear’s going to have to help step up a little bit, I think, and perform in that space as well. So, Emerson gets to touch all of that. We touch it with all of the automation capabilities we have, and we work closely with customers on that. So, in that sense, all the energy going into the system we touch, think about moving electrons around or moving molecules around. And Emerson portfolio is used extensively in both of those distribution of electricity, as well as the distribution of energy, running through pipes and terminals and those kinds of things. So, a lot of activity there.
Emissions management, big space. You know, a lot of our customers want to manage their emissions better, which, of course, everybody’s for that. We give them a lot of capabilities and technologies for that. The thing about carbon capture is kind of that next item that’s going to be utilized in that space. Again, we enable carbon capture and sequestration. And in my mind, that’s still going to be one of the real ways that we actually remove carbon out of the atmosphere and get stuff back below the crust of the earth, where it belongs. Heat pumps and electrification, big category against, I don’t have to use combustion, use electricity. It’s same as an EV, right? You have an electrified process. Now, you go back to the back sources of electricity, and you can work on those kinds of things. And I’ll say, the biggest one is still energy efficiency. Only about one-third of the energy we put into the system actually does things we want it to do. And we lose two-thirds of it, because, you know, the heat leaks through the windows, and we put the brakes in the car, and food gets wasted, and there’s lots of conversions. If we could just crank the energy efficiency up a few percentage points, it would make a big difference in the world. So, lots of opportunities and lots of solutions.
Jim: Yeah. And the neat thing is, as technologies advance, things like being able to add wireless measurements so you can track it better and then drive it better in there that there’s so much more that people have at their disposal than they did when they just had enough to keep the plant operating reliably, safely.
Mike: Totally agree with that. And bringing those insights to people, right? They want those insights.
Jim: Exactly. So, how can we leverage knowledge and experience from digital transformation in sustainability initiatives?
Mike: I think they go one and the same together. Using digital means, again, you’ve mentioned sensing, for example, a lot more sensing points. We can gain a lot more understanding of what’s going on. We can then kind of use that for better control, tighter control, better control. Obviously, we’re involved around control systems at all kinds of sizes and spaces and those kinds of things. And then using analytics, right? Digital transformation. A lot of what you can do there is kind of, again, using analytics to get more insights and give that information back to the users in those, let’s call them those organizations so that they can each perform the roles better as we look forward. So, the digital transformation space enables, I think, every one of these sustainability solutions that we’re talking to.
Jim: Yeah, it’s kind of, like, you can’t have one without the other really, it comes together. And that’s what’s able to drive these initiatives forward. Now, I’ve had you in the hot seat for quite a while here. Let’s just wind it all down. And if you could deliver one key message for our viewers and listeners here, what would that be for their sustainability initiatives?
Mike: One is so tough. You’re so tough. I knew there was a reason why I hadn’t been on this podcast yet. You’re so tough. Let me summarize just a few points. One is I think be focused on building the culture of sustainability in your organization, right? Everybody’s got their own starting points. Get on that road, have some urgency to making that happen. The tone at the top is important. But I know, from all of my worldly experience from the past, the middle of the organization is what matters. There’s a lot of reflex. There’s a lot of muscle there. The middle of the organizations know what success has looked like in the past. We gotta use that muscle somehow to get success and sustainability. So, again, I think making it urgent, having KPIs, having focus on it. You know, a lot of people debate, should we have targets? Should we…? Because what if we don’t reach them? Well, I don’t think we get anywhere close to them unless we don’t have the target.
So, establishing some targets with a pathway towards them, I think is a big step in the process. And then getting on the road to the future. I don’t think it can wait for perfect solutions. I think we’re going to use everything that’s being discussed out there, in some forms, we’re going to have EVs, but we’re going to have some hydrogen-powered vehicles too, either because of the battery dimensions, because of the nature of things, maybe transportation will look different. Different forms of transportation are going to need different solutions. Getting hydrogen available now. A lot of people get into the colors of the rainbow discussion around hydrogen. We need hydrogen available now to support the use cases so we can decide if the use cases are going to be on the roadmaps. So, getting on the road, getting committed, get your first levels of progress, and driving this into the culture of your company, I think, is the way to go.
Jim: It’s interesting what you said, you know, hydrogen today and the different ways they’re getting it and you got battery technology. So, some of this is we’ll just see how it emerges over time. But if everyone gets on it going down, you know, if one turns out better than the other, that’s where we’ll go with it.
Mike: Yeah. Go and adapt and move forward, right?
Jim: Whatever it is in there. Is there anything that I didn’t ask you that I should have asked you about any of the things we are doing, or our customers are doing, or anything else?
Mike: You know, I would say that I like to bring it back to our employees a lot. Our employees, and generally, everybody’s employees, right? The talent of the world right now, this sustainability issue, especially I’ll use the word younger since I’m not so much anymore. I mean, I have a runway, I still have a runway.
Jim: You and me both.
Mike: You know, they’re passionate about this topic. And they want to make a difference. And we need that talent to come to these critical industries to make the change happen, right? So, we gotta make sure that, that they hear us, they see the opportunities to come and make an impact. So, that future talent, or that next talent, or unleashing the talent, however you want to view it, is really critical in this space. And we gotta keep enabling that. And, you know, for us, we have some targets. Now, I need to get out of the way and let people go. If they don’t get the opportunity to make a change, they’ll get frustrated. And we gotta trust that we’re going to make those changes, and we gotta let people go and go after it.
Jim: Yeah. I’m so glad you brought up the people side of it, because that is such a critical element, especially the people with enthusiasm and energy as they’re coming up through it, because they’re the ones driving it and they’re the ones that are going to be there as we’re getting closer to 2045, 2050 and driving this forward. Well, I want to thank you so much for joining us today, Mike, this has been a real pleasure.
Mike: Jim, great to be with your group here. Love being on your podcast. And again, we have a lot of work to do, collectively, as we look forward. So, I’m really looking forward to it.
Jim: And I want to thank everyone for listening, and look for other podcasts in our series.
-end of transcript-
