Sustainability: "In case of doubt, we let the customer go"
Jan-Markus Rödger and Lars Karsten are embedding a sustainable approach to business into umlaut’s corporate culture. This requires a lot of energy and sometimes costs them business. A commitment.
Breaking: The Intergovernmental Panel on Climate Change (IPCC) has announced that global warming will reach 1.5 degrees as early as the year 2030. High time for a rethink! Was there a pivotal moment that led to your change in strategy?
Lars Karsten: For me personally, there was one particular event: It was in 2019 and I was at the Paris Air Show – a huge trade fair packed full of airlines. The most sustainable thing that I was able to find there was a vegan hamburger at the food stand outside the hall. It became clear to me that sustainability would become a key area of business. We work for companies that generate a huge amount of CO2 emissions. It is absolutely clear that we need to reverse this. And we can start by looking at ourselves.
Jan-Markus Rödger: With the “green umlaut stream”, this is a three-stage process. In the first step, we tried to explore who we really are – by having conversations with employees at all levels. Together we agreed on a set of principles and set up transparent lines of communication. The second step is “The Core” – our aspiration that sustainability will become established at the very core of our business and will radiate outwards from the inside. And finally – step three – we want our teams to use their technological skills so that we can help customers to achieve a sustainable portfolio of products and services.
And this can only be done with a change of mindset...
Jan-Markus Rödger: Changing a mindset takes a long time. We no longer have the time. Technology is the greatest lever that we have to push ahead fast with sustainability! We have a lot of very clever people here at umlaut. This fascinated me and got me onboard. What we need to do now is incorporate the concept of sustainability into our existing skill sets. And once we have taken a look at our own activities, we also need to enable our customers to become sustainable. With this in mind, we have put together a team of sustainability experts who implement projects internally and who act as satellites, getting directly involved in our customers’ projects in all the industries we work in and all our areas of expertise. In this context, we make use of our network structure in our 20 + subsidiary companies to establish collaborations, not from the top down but rather with a collective approach.
Lars Karsten: The team from our “energy cluster” is also helping to drive things ahead. With their help, we have been providing support for the energy transition for some years now. With our Hydrogen Study, for example, we are having a direct impact on the market. We also have people who are providing assistance with the safe dismantling of nuclear power plants and engineers who are calculating how power grids will sustain the energy transition. They carry out simulations to see what will happen when all the people in rural areas suddenly want to charge their electric cars on a Sunday evening. In the Energy Team alone, we have more than 70 members of staff working directly on sustainability projects with our customers.
How do you teach sustainability – internally and externally?
Jan-Markus Rödger: There are various sources of help available, including the management system ISO 14001. With this system, we are documenting the goals we have set and measures we plan to take in all our subsidiaries. We are also running training courses, setting up clear lines of communication and staying in constant dialogue. Every other Thursday, our "umlaut goes sustainable meeting" takes place, where all employees are able to get together to talk about concrete measures that are being taken. We have a designated page on our intranet where people can get an overview of our projects and the measures being taken, and get an idea of our progress. On top of this, we have also launched our green lunch – currently still in digital form. In a protected, non-public environment, we invite external experts to give us some inside information about their practices. We then use this to develop new ideas.
Markus, you came to umlaut as Director of Sustainability in November 2020. Why did it take until then?
Jan-Markus Rödger: Good question! Lars?
Lars Karsten: The honest answer to this is that we have recently undergone a generational change in our management positions here at umlaut. Prior to this, we had traditional consultants who didn't tackle long-term issues, such as sustainability, diversity or codes of ethics, with the level of ambition that is required. With our new, younger management board, the company is becoming more committed in these matters, and has elevated these topics onto our agenda for strategic development with even more urgency than before. I am convinced that this is the only way to futureproof the company. In areas where we had stagnated for too long, we are now moving ahead at a fast pace.
But presumably it is difficult for you to bring in younger people in your customers’ management teams?
Lars Karsten: This is a matter for our colleagues in Change Management, who are responsible for pushing ahead the transformation with our customers. If you don't start by ensuring that the management have internalised the concept of sustainability, then managers will always opt for a business decision in case of doubt. A good method of creating awareness in a company is to ask people to accurately measure their own carbon footprint for a period of six weeks. Every dishwasher tablet, every pineapple from the tropics, every trip to see a customer. When people have been through this process, they become much more aware. Once the management team have started to focus their attention on the issue, we then look at the entire value creation chain so that we can develop more sustainable solutions for the company’s portfolio of products and services – and ultimately strive for a climate-neutral production process.
What goals have you set for yourselves?
Jan-Markus Rödger: We are taking our lead from the UN Sustainable Development Goals (SDGs) and have set ourselves the goal of reducing our greenhouse emissions by 40% relative to our output in comparison with 2019. We are aiming to achieve ISO 14001 certification in a number of our subsidiaries by as soon as 2022. To this end, we have first of all carried out a materiality analysis and have used the SDGs to identify the key areas of action where umlaut can make a difference, both internally and externally. Of the total of 17 UN Sustainable Development Goals, we are initially focusing on seven, first and foremost the goal of trying to prevent 1.5 degrees of global warming. Our principles are not set in stone, but are currently of great importance in handling the sometimes contradictory interests of management, customers and employees. Our list of projects is steadily growing; umlaut employees can put forward their own ideas and suggestions for measures and we give them support in both financial and strategic terms.
What kind of ideas and measures do they come up with?
Jan-Markus Rödger: The measures suggested range from rethinking issues related to consumption and recycling through to some quite radical approaches. For example, the idea of exchanging our fleet of vehicles for smaller electric cars or bikes. Or of reducing the number of flights taken, or switching our hardware to products with a longer lifespan.
How do you measure your status quo? What does your carbon footprint look like now?
Jan-Markus Rödger: It is a major task to measure umlaut's carbon footprint, with more than 4,200 employees in more than 80 countries, based at more than 50 different locations, but we are on the right course. For our subsidiary umlaut engineering, we were able to determine Scopes 1-3 in accordance with the Greenhouse Gas Protocol. This covers emissions from our own controlled sources, resources that we have bought in, such as electricity, water and heat, and also indirect emissions that arise in the value creation chain, such as business travel, items that we purchase and our logistics operations.
... Does indirect also mean emissions produced by your customers from the automotive sector, aviation or telecommunications?
Jan-Markus Rödger: Yes. Scope 3 also includes the criterion "Impact of sold products and services". Here we will in future be trying to determine the impact we have had through our customers' projects. This is not as straightforward as it may seem because our customers of course want to report their successes themselves so that they will do well with the ESG rating agencies. Yet you have to look at these things on a case-by-case basis – it’s a matter of having good methodology.
What do you do with customers who fail to prioritise sustainability?
Lars Karsten: In case of doubt, we let them go. There have been projects that we have turned down. Only very recently, we were looking at a supposedly sustainable construction project in Brazil. At first glance, it all looked very promising. Then our sustainability experts calculated that the impact in terms of the area of rainforest that would need to be cleared was completely disproportionate to the potential reduction in CO2 emissions. We turned it down. And we apply the same standards when we look at our own internal activities. Not everyone finds this easy. Our profession has always involved a lot of travelling. But it would send out completely the wrong signals if we were to turn up at the customer's premises in an SUV.
What do new members of staff think about it?
Lars Karsten: For the upcoming generation, sustainability projects are becoming ever greater indicators of success. At umlaut, they have the opportunity to help shape the technological transformation in our key industries. According to our recruitment staff, this is now considered more important than money or a title.