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Sustainable business practices

Earn money by protecting the climate

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Climate protection and business are often portrayed as being in fundamental contradiction to one another. In reality, companies have now become a major lever for ecological transformation, and one that is often underestimated. This discussion between the worlds of science and business explains why.

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Editorial team: How has the energy industry’s role in climate protection changed over the last ten years?

Brigitte Knopf: I would describe it like this: from phaseout to phase-in. For a long time, the energy industry has stood for the phaseout of nuclear energy and then coal-fired generation. Now it is focusing on the phasing in of a renewable energy supply. Although it used to be seen as an obstacle to change, the new energy industry is now one of the most important drivers of the Energiewende, because it is facilitating the path to greenhouse gas neutrality to a large extent through increasing electrification.

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Editorial team: And how have things changed from the perspective of EnBW?

Katharina Klein: It used to be a case of earn money or protect the climate. Today, we are able to earn money by protecting the climate. There has been a real paradigm shift. I recall discussions from before my time at EnBW when you could really feel the huge divide between business enterprises and environmental associations. Major corporations were seen as the baddies. They were portrayed as old dinosaurs while, on the other side, idealistic activists were using all kinds of radical ideas to demand climate protection. A turning point was the Paris Agreement: All nations have now jointly acknowledged that everybody has to act together in order to protect the climate. In the business sector, this has also helped to get rid of some deeply entrenched views. Now it’s no longer a question of whether we protect the climate but rather how we can protect the climate together. The energy industry and EnBW have been resolutely pushing forward the gradual transition from an energy supply system that focused on a few centralized power plants to a decentralized, renewable energy world. Today, it is more important than ever to actively seek out contact with citizens, speak to them about energy generation and infrastructure and enable them to participate in this change. The needs and living environments of our customers, whether local authorities or citizens, must be the main focus.

It used to be a case of earn money or protect the climate. Today, we are able to earn money by protecting the climate.

Katharina Klein, Head of Sustainability at EnBW

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Editorial team: Mrs. Knopf, as someone with a PhD in physics, you can look at this transformation from both a scientific and social perspective. Which one is closer to your heart?

Brigitte Knopf: We have all now grasped the scientific facts about climate change for the most part. IPCC reports clearly indicate that man-made emissions lead to climate change. That is a fundamental fact. But we can no longer continue to focus on the problem, we have to find solutions. That’s why I have now turned my attention to the economy and the social sciences. Business has the task of finding out how it can work in harmony with climate protection and must identify which new products and systems we need. There is a lot of talk about technology, but that will not be enough on its own. These new technologies are now much more closely associated with people as individuals – from smart home solutions through to electromobility. People have to consider what car to buy or whether they need a charging station on their doorstep. Climate protection is a social responsibility and we are going to need the whole spectrum of scientific disciplines and a shift to joined-up thinking.

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Editorial team: Let’s look at EnBW as a representative of the business world. How is EnBW going to achieve the climate neutrality targets it has set for the Group?

Katharina Klein: In 2020, we set ourselves the target of becoming climate neutral by 2035. The transformation did not start in 2020, however, but rather ten years ago. We have already been able to reduce the proportion of carbon-intensive generation plants by around 40 percent. In order to achieve our climate targets, we are pushing forward the phaseout of coal. We will invest 4 billion euros in the expansion of sustainable infrastructure by 2025 and thus also in the further expansion of renewable energies. Under the right conditions, we believe that it is possible to phase out coal by 2030 but are naturally examining the situation – and we are always available for discussions with the German government.

2035

is the year in which EnBW aims to achieve its goal of climate neutrality in line with the requirements and targets of the Paris Agreement.

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Editorial team: Mrs. Knopf, in what areas do you think the energy industry has not yet made sufficient progress?

Brigitte Knopf: I think that there is still a danger that the business world is relying too much on state subsidies for the transition to climate neutrality. They are necessary to get started but they do not provide a long-term solution. We need to create the conditions that enable a climate-neutral economic system. For example, higher CO₂ pricing that increases over time. This will set the tone and provide investors with more certainty. I would like the business community to demand more sustainable, long-term framework conditions from politicians.

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Editorial team: What is more important for EnBW on the path to climate neutrality: large infrastructure solutions or small household products?

Katharina Klein: We have a wealth of expertise in the development of system-relevant generation systems. We were the first company to build an offshore wind farm without state funding. And we have now also achieved this with our photovoltaic park in Brandenburg. It can supply 50,000 households with solar energy, saving around 129,000 t CO2 each year. And this is only the beginning: The capacities we require from renewable energies mean that we have to think in bigger dimensions. But we don’t just have a narrow focus on generation, we also know how to provide the infrastructure for the electricity and gas grids. It is important to understand that the Energiewende will not succeed if we try to integrate new energy sources into an old system. Therefore, the entire system must be based around the needs of people and companies that require energy. Electromobility is just one example of how the demands placed on the electricity system will change massively. Our subsidiary SENEC offers the kind of solutions that we need for a climate-friendly life – from own energy generation and e-mobility through to storage systems.

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Editorial team: Mrs. Knopf, many people are scared of change. And fear sometimes does not stay an internal emotion, but can also be expressed in vehement resistance. How can we convince the general public that climate protection offers opportunity?

Brigitte Knopf: The approach that has been used for a long time of saying that there is this new technology and we have to find acceptance for it is no longer appropriate. This sort of public-acceptance propaganda machinery dominated our way of thinking for a long time. We need to start again in society with a clean slate. The Energiewende conjured up positive connotations in people’s minds for a long time. Germany was a pioneer when it came to renewable energies. But I think that the term climate neutrality adds a new dimension to the discussion. It brings us into much closer proximity to people. Cities will change, our mobility will be turned on its head and much more besides. We need to make the effort to develop a new social narrative – based around social responsibility. It is important to give people the feeling that it is also their transformation. We will also need the right infrastructure for this change. We noticed in a recent study that people will only switch to using a bicycle when the right conditions exist, namely bike paths, rental options and bike-parking facilities. It is important to consider what makes certain options attractive because cities worth living in cannot be created by force but rather by creating new perspectives for people.

Katharina Klein: If I could just add something: I have also really come to dislike the term acceptance. It implies that something is happening against your will, something that you have to accept for better or worse. There are also some examples of how change can be perceived positively. At the beginning of the pandemic, 10,000 employees at EnBW suddenly found themselves working from home. This was a little strange to start with but has now become normal. If you ask my colleagues today, they will say that although they miss the contact with people, the fact that they no longer have to sit in traffic jams every day is a big advantage. Almost nobody wants to return to working five days a week in the office. This should embolden us because, even when faced with profound change, people can still find and carve out benefits.

There are now many who want to support this transition, not just companies but also individual citizens.

Dr. Brigitte Knopf, Secretary General of the Mercator Research Institute on Global Commons and Climate Change (MCC)

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Editorial team: Many people worry that climate protection will cost a lot of money and will cripple our economic prosperity.

Brigitte Knopf: The costliest mistake would be to ignore the issue of climate protection, because then our prosperity really would be ruined by the damage caused to the climate. And climate protection is part of a historical modernization process, similar to digitalization, which always brings opportunities with it, not just costs. Of course, this process must be as cost-effective as possible. An important tool in this context will be socially balanced CO₂ pricing. The CO₂ pricing system should generate income that can be redistributed to those with lower incomes so that the burden is shared fairly. Incidentally, it is also perhaps time for us to take a closer look at what prosperity really means. The new annual economic report presented by the Minister for Economic Affairs and Climate Action, Robert Habeck, explicitly mentions aspects such as health provision or good schools, and not only gross domestic product. The fact that we have already been able to decouple economic growth from increasing emissions in Germany and Europe is good news.

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Editorial team: There was a time in the 2010s when the idea of an “Energiewende made in Germany” was an export hit. Mrs. Knopf, do you believe that there is a chance that we can make “climate protection made in Europe” an export hit?

Brigitte Knopf: I also think that Germany has squandered its status as a pioneer. But we need pioneers and it is now not just about renewable energies but also about making changes to the energy system and establishing new production methods, such as green steel. We must ensure that we are not overtaken by the USA. I believe that Germany and Europe have the opportunity to establish themselves as the new technological leaders with respect to climate-neutral business.

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Editorial team: Katharina, let’s talk some more about EnBW as a climate-neutral company of the future. What experience has EnBW had with respect to the realignment within the Group? How do the employees view it?

Katharina Klein: We always speak about companies. Before I started working for a company, it is something I also did. I always saw companies as a single entity that were managed from above. Since I have been working at EnBW, however, it is clear to me that companies are made up of people – in fact, around 26,000 people in our case. I meet a lot of colleagues who have performed a socially accepted role in the energy supply sector for 30 or 40 years of their lives. They are now abruptly faced with the challenge of creating something new. It is not easy to get everyone on board and find a new path. The fact that most employees closely identify with the company shows that we have successfully managed this process of change. I notice this in our long-term employees but also, above all, in those who have recently joined us. Especially as a member of the sustainability department, I receive a lot of e-mails and calls from people who have ideas as to how we can do things better and more sustainably. This inspires me because I can see that it is something that galvanizes people. It gives them a sense of purpose and motivates them to work for EnBW, because they believe that this company can do something to make the world a better place – and this is something that I also believe.

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Editorial team: Mrs. Knopf, what are the prospects for a climate-neutral Europe with a strong economy in 2045?

Brigitte Knopf: Achieving climate neutrality in Germany by 2045 or in Europe by 2050 will be a mammoth task. We have factored in several different scenarios. It will be necessary, for example, to install many millions of heat pumps. At the same time, we lack craftsmen and a comprehensive charging infrastructure. It is more productive for us to initially focus on the near future and taking the first steps on the path towards change. The developments over the last two to three years give me cause for hope. There is a different spirit and there are now many who want to support this transition, not just companies but also individual citizens. I didn’t have high expectations that the last Climate Change Conference in Glasgow in 2021 would bring about substantial change, but the countries made some important proposals and agreed, among other things, to phase out the combustion engine and also to help fund the phaseout of coal in South Africa. There also seems to be a greater drive within the new German government to get things done. This gives me some hope for the future.

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This interview took place on 28 January 2022 before the start of the war between Russia and Ukraine.

Brigitte Knopf has a PhD in physics and is Secretary General of the Mercator Research Institute on Global Commons and Climate Change (MCC). She works on the climate and energy policy issues facing the economy with a focus on the achievement of a socially just Energiewende in Germany. Furthermore, she is actively involved in discussions about scientific policy and maintains dialog with stakeholders.

Katharina Klein is Head of Sustainability at EnBW and spokesperson for the executive board of the Energy & Climate Protection Foundation. She previously worked as a consultant for state-owned enterprises, politicians and private business, and is thus at home in a number of different worlds. She uses discussions and the exchange of ideas to tackle the theme of climate change.

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