siemens – henrique petersen

Sustainability@Supply Chain

São Paulo, October 2014

Restricted © Siemens AG 2013 All rights reserved. siemens.com/answers

Sustainability@Supply ChainHenrique Paiva

Megatrends are significantly shaping the future of our planet

Urbanization

Climate change

Demographic change

Effi

cien

t use

of r

esou

rces

November 2013

Restricted © Siemens AG 2013

Corporate Sustainability

Globalization

Effi

cien

t use

of r

esou

rces

The result is huge challenges in terms of infrastructure and efficiency

Efficient use of resources

• By 2050, the urban population will double to 6 billion people

Urbanization people

• By 2025, China will have over 200 cities with more than one million inhabitants each

• In the United States, expenditure for healthcare already accounts for 16 percent of the GDP

• At current trends, a girl born in Germany today has a 50% chance to reach the age of 100

• Limiting global warming to 2° C requires a 15-fold increase in carbon productivity

• This results in investment needs of 10.5 trillion €Climate change

Demographic change

Urbanization

November 2013



• While the emerging regions of Asia / Pacific and Africa / Middle East provide only about 32% of today’s global economic output, they will contribute 50% of growth by 2020

• This results in investment needs of 10.5 trillion €in the energy sector by 2030

Globalization

Climate change

Source: McKinsey; International Energy Agency (IEA)

Siemens views these challenges as a business opportunity

Efficient use of resources

Effective and environmentally friendly infrastructure, whether in developed or rapidly growing emerging nations Urbanization whether in developed or rapidly growing emerging nations (e.g. the supply of energy, power and water; mobility)

Efficient and affordable long-term medical care and age-appropriate infrastructure (e.g. mobility, medical care, nursing care, administration)

CO2 reduction and energy efficiency (e.g. in power generation, transport and distribution; Climate change

Demographic change

Urbanization

November 2013



Specific requirements of regional markets and the management of global processes and development (e.g. products for emerging countries, global value chains)

(e.g. in power generation, transport and distribution; industry; buildings; mobility; households)

Globalization

Climate change

The Environmental Portfolio comprises products and solutions from all the Sectors

Renewable energy generation

Fossil power generation

Power transmission & distribution

Solutions for industry

Mobility Building technology Water Healthcare

November 2013



Initiatives:The Environmental Portfolio of Siemens

Environmental Portfolio revenue (in billions of €)1)

32.332.729.7

Energy efficiencyEnergy efficiency1

FY 2013FY 2012FY 2011

29.7

377333

Environmental Portfolio CO 2 abatement (in millions of metric tons)1)

Renewable energies2

November 2013



1) On a comparable basis

333259

FY 2012FY 2011 FY 2013

Environmental technologies3

As of Nov. 2013

CO2 abatement

at our customers 1)

Siemens GHG

emissions from

production

The CO2 abatement at our customers equals the emissions of several large cities

Approach for calculating GHG emission reductions at customers

The annual emission reductions are calculated by comparison of an Environmental Portfolio Element with a reference solution (baseline). For a reporting

42

47

54

259 Mt

377 Mt

333 Mt

production with a reference solution (baseline). For a reporting year, the emission reduction is derived from the number of units installed (light grey bar).

Installations from previous years that are still in use at the customer, are taken into account, too (dark grey bar).

Berlin Cape Town

London Los Angeles

Melbourne Mexico City

Moscow New York City

November 2013



3

FY 2012 FY 2013FY 2012FY 2011

CO2 abatement from previous installations

CO2 abatement from newly installed products and solutions Total emissions equivalent ΣΣΣΣ ~377 Mt (CO2-equivalent)

Moscow New York City

São Paulo Seoul

Singapore Tokyo

1) On a comparable basis As of Nov. 2013


Knowledge Transfer - suppliers

“Code of conduct” – suppliers qualification

November 2013



qualification

Energy Efficiency Program for Suppliers Our Contribution to Sustainability

FY 2013

985 suppliers*

Sustainability approach

CSCM PS, Birgit HeftrichFor internal use onlyReporting August 2013

* stretched target CSCM

From Supplier to Customer through Sustainable approach

EEP4S

Suppliers Customers

EEP4S: Process and benefits

Suppliers Customers

Web-based tool:• GHG inventory• Equipments• Energy management• Environment policy

(Mainly) Business: I CS + I DT + IC LMV + IC BT + E T

34 Suppliers (Big andmid size companies)

Suppliers Siemens:

July 2013

Restricted © Siemens AG 2013 All rights reserved.


Suppliers• Cost Reduction• Improve energy managt.• Competitiveness• Awareness about carbon footprint

Siemens: • Greener value chain • Relationship with suppliers• Business Opp.• Better positioning in future negotiations

Initiatives: Energy efficiency at suppliers –Example SCHMOLZ + BICKENBACH

Supplier: Tool producer

• Analysis of Krefeld

Examples of measures:

• Replace dust removal systems• Analysis of Krefeld

company location by team of Siemens experts

• Goal: Identify improvement potential for energy efficiency

systems

• Purchase 20-ton medium-frequency furnace

• Install photovoltaic system

Results of the energy analysis:

Energy cost savings potential of 10 – 15 %

November 2013




Knowledge Transfer - suppliers

“Code of conduct” – suppliers qualification

November 2013



qualification

We explained the importance of Siemens Qualification Process, not only to be Qualified at Siemens, but

Code of ConductBasic Quality Requirements

Corporate Responsibility Self Assessment Supplier Self Description

Supplier qualification @ Siemens

only to be Qualified at Siemens, but also to prepare the suppliers to a growingly competitive and demanding business environment

� 'Qualification Classifier'Define qualification

scope

�Sanctioned Parties Screening (DAMEX)�Business Partner Due Diligence�Supplier key data (Corporate Master Data)

Ensure mandatory minimum

requirements for suppliers

Supplier Qualification Process

Decentralized supplier generation process

Supplier Qualification within click4suppliers easy

Corporate Responsibility Self Assessment Quality ManagementEnvironmental Protection, HealthManagement and Safety

November 2013



� 'Qualification Classifier'

Corporate Re-sponsibility Self

Assessment

Risk Evaluation

O pe ration al Co m pe te nc e

Q ua lity Co m p eten ce

Su pp ly Cha in M a nag em e nt Co m p eten ce

Procure me nt Co m p eten ce

Bu sin es s Co llab ora tion

Ba lance o f Po we r

R eg ion al P resen ce

Co m m itm en t

C oo pera tion

B us ine ss Co ntin uity

Bu s in ess Envi ron-m enta l F ac to r

C on trac tua l fram ew ork

Int eg ra ti on Co m p lia nc e

Soc ial a nd E thical R espon sibility

Co m pl ia nce in su ppl y cha in of

sup pl ie r

En v iro nm en t, H ea lth a nd Sa fe ty

Le ga l co mp lian ce

Te chn ology & In no vativen ess

Fina nc ial S itu ation

Risk m a na gem e nt @ Su pp lier

Q uality Integ ratio n

Su pp ly C ha in M a nag em e nt

In teg ration

Procu re m ent In teg ration

Te chnolog y & In no vativen ess

O pe ration al Co m pe te nc e

Q ua lity Co m p eten ce

Su pp ly Cha in M a nag em e nt Co m p eten ce

Procure me nt Co m p eten ce

Bu sin es s Co llab ora tion

Ba lance o f Po we r

R eg ion al P resen ce

Co m m itm en t

C oo pera tion

B us ine ss Co ntin uity

Bu s in ess Envi ron-m enta l F ac to r

C on trac tua l fram ew ork

Int eg ra ti on Co m p lia nc e

Soc ial a nd E thical R espon sibility

Co m pl ia nce in su ppl y cha in of

sup pl ie r

En v iro nm en t, H ea lth a nd Sa fe ty

Le ga l co mp lian ce

Te chn ology & In no vativen ess

Fina nc ial S itu ation

Risk m a na gem e nt @ Su pp lier

Q uality Integ ratio n

Su pp ly C ha in M a nag em e nt

In teg ration

Procu re m ent In teg ration

Te chnolog y & In no vativen ess

Self-assessmentSelf-assessment

Supplier related quality

requirements 1

Self-assessmentSelf-assessment

Trading Partner Security

Code of ConductEnvironmental Protection,

Health Management &

Safety

Monitor Supplier status for every

module

Corrective Actions

scopeclick4suppliers easy

1. Basic Quality Requirements, Quality Management Certificates (within LSA), Supplier Self Description

Code o Conduct a MUST to become a supplier for Siemens

O presente Código de Conduta define os requisitos b ásicos exigidos aos fornecedores de bens E serviços da Siemens, relati vamente às suas fornecedores de bens E serviços da Siemens, relati vamente às suas responsabilidades perante os acionistas e o meio a mbiente.

• Conformidade Legal

• Proibição de corrupção e suborno

• Respeito pelos direitos humanos dos trabalhadores

• Proibição de trabalho Infantil

• Sáude e Segurança dos trabalhadores

November 2013



• Sáude e Segurança dos trabalhadores

• Proteção Ambiental

• Cadeia de Suprimentos

Back up

November 2013



The Environmental Portfolio contributes to climate protection and energy efficiency

Criteria and examples for the Environmental Portfol io

Energy efficiency Renewable energies Environmental technologies

1 2 3

Products and solutions with high energy efficiency

Technologies for renewable energies

Environmental technologies

Energy efficiency Renewable energies Environmental technologies

November 2013



Examples:• Gas and steam turbine power

plants • High-voltage DC power

transmission (HVDC)• Energy performance contracting

for buildings

Examples:• Wind farms• Grid access for wind power• Steam turbines for concentrated

solar power plants

Examples:• Water treatment• Air pollution control systems

Systematic establishment of sustainability

IÖW / future ranking for sustainability reports:

2nd place

Establishment of internal Sustainability Board and dedicated sustainability organization

Barbara Kux

Tata-Siemens Green MoUsigned

Fifth time in a row in Global 500 Carbon Disclosure Leadership Index

Oekom Rating: Best rated company in “Industrial Conglomerates”

DJSI: Siemens most

Definition of Environmental Portfolio and own environmental targets

2008 2009 2010 2011 2012 2013

Establishment of

Barbara Kuxappointed first Chief

Sustainability Officer at Siemens

signed

German Sustainability

Leadership Index DJSI: Siemens most sustainable industrial company (Industry Group Leader)

Environmental Portfolio revenue increase from EUR 19’’ (FY08

Sector Leader of Dow Jones

2007

November 2013



Regional implementation of Sustainability Program

Establishment of external Siemens Sustainability Advisory Board First time

DJSI SuperSector

Leader

First Sustainability

Report published

Sustainability Award (category "Sustainable Strategy –Corporations")

EUR 19’’ (FY08 as reported) to EUR 33’’(FY12)

Page 17 November 2013 Supervisory Board Meeting

Dr. Roland Busch appointed new

CSO

of Dow Jones Sustainability Index

(Diversified Industrials)

• Labor Practice Indicators • Human Capital Development• Talent Attraction & Retention• Corporate Citizenship and

• Corporate Governance• Risk & Crisis Management• Codes of Conduct / Compliance /

Corruption & Bribery

Siemens is the strongest performer in the three dimensions of the Dow Jones Sustainability Index

Siemens is included for the 14th time in a row in the DJSI World Index

• Corporate Citizenship and Philanthropy

• Occupational Health and Safety• Social Reporting

Corruption & Bribery• Innovation Management• Customer Relationship

Management• Supply Chain Management• Strategy for Emerging Markets

Industry GroupLeader

“Capital Goods"

Siemens Score93%

Average Score 1)

Siemens Score

42%88%

Siemens Score

Average Score 1)

96%45%

November 2013



• Environmental Policy / Management System

• Operational Eco-Efficiency• Product Stewardship• Climate Strategy• Water Related Risks• Environmental Reporting

1) Average score of all assessed companies in the “Industrial Conglomerates” industry

Source: RobecoSAM, Sustainability Office

93%Score Score

Siemens Score

Average Score 1)

34%

96%

ScoreScore

We have established a global sustainability network

Dr. Roland BuschMember of the Managing Board,Chief Sustainability Officer

Siemens Sustainability BoardRepresentatives from Sectors and Corporate

Siemens Sustainability Advisory Board

CorporateSustainability

Office

Cluster SustainabilityManagers

Sector Sustainability Managers

Chief Sustainability Officer

November 2013



Office

Cro

ss S

ecto

r

Energy

Healthcare

Industry

Infrastructure & CitiesPacif ic

Natalia KarapanagiotiSouth West Europe

Edgar DuveGermany

Ian BowmanNorth West Europe

Stefan SpeidelJapan

Irina GoncharovaRussia/Central Asia

Steffen EndlerASEAN-Pacific

Beryl LopezSouth Asia

Martin KlarerNorth East Asia

Marvin BenjaminAfricaHenrique Paiva

Brazil

Aniela MarvalAustral - Andina

Alison TaylorNorth America

Mohsen NayebzadehMiddle East

Beate AndresCentral East Europe

Corporate Units

siemens – henrique petersen

Business

restricted siemens ag

supply of energy

energy sector

corporate sustainability1

environmental technologies3as

emerging countries

global warming

water mobility efficient