Expansion to meet increasing corporate demand for pathways and solutions to act on climate crisis
Company builds on 10 years of success providing energy and sustainability software and services to more than 30% of F500
Announcement follows acceleration of own sustainability commitments, including avoiding 800M metric tons of CO2e on behalf of customers by 2025
Schneider Electric, the leader in the digital transformation of energy management and automation, and recognized by the Corporate Knights Global 100 Index as the world’s most sustainable corporation in 2021, has announced the acceleration of its global sustainability consulting business to meet the increasing demand of organizations making meaningful progress on their energy transition and decarbonization goals.
The division expansion will double the company’s existing consulting practice and include new services and digital solutions across sustainability strategy, climate action and risk management, ESG reporting and materiality, circularity, and traceability, among others, bolstered by enhanced growth in Europe, APAC, and the Americas.
An established leader
The announcement builds on Schneider Electric’s track-record as a sustainability leader and its recently published 2021-2025 Schneider Sustainability Index (SSI), which will accelerate the company’s sustainability ambitions through 2025, inclusive of a goal to save or avoid up to 800 million metric tons of emissions on behalf of its customers.
The accelerated growth in consulting will supplement the company’s 10-year track record of success in energy and sustainability services. Today, the company is the world’s leader in energy efficiency, energy management, renewable energy procurement, carbon reporting, climate risk, and supply chain decarbonization, providing end-to-end software and services to more than 30% of the Fortune 500, across more than 100 countries on six continents.
Schneider is one of the largest energy managers in the world by volume, managing, on average, more than USD$30B in global energy spend every year on behalf of its customers. The company is also the leading advisor on corporate renewable energy purchasing, having advised clients on the execution of more than 150 bilateral PPA agreements, for a total of more than 11,000 megawatts of renewable power, since 2014. The company’s clients include Johnson & Johnson, Walmart, Faurecia, Kellogg, Takeda, Velux Group, and T-Mobile, among others.
Decarbonization reaches new urgency
The urgency to rapidly decarbonize was again reinforced by the release of the 6th report from the Intergovernmental Panel on Climate Change (IPCC) in August. The report found that climate change has begun to affect every natural system to some degree, but that “strong and sustained” emissions reduction may yet limit the worst impacts of these planetary changes.
Businesses have increasingly recognized the importance of proactively managing energy and emissions to manage and mitigate climate risk. The disruptive effects of the COVID-19 pandemic heightened this awareness, with some calling the pandemic a “trial run” for how business and the economy may be impacted by climate change.
Further, as companies grapple with the impacts of climate-driven extreme weather events such as droughts, flooding, and hurricanes, investor sensitivity to climate-related investment risks has also grown. To date, more than 10,000 companies are disclosing their emissions to CDP on an annual basis, while more than 1,000 businesses have set science-based carbon reduction goals. A recent study by Pimco found that mentions of environment, society, and governance (ESG) on corporate earning calls have increased from 0%-1% from 2005-2018 to 19% in May 2021.
Pressure to decarbonize has particularly intensified for companies with significant disruption/climate risk exposure or activist investors, including oil & gas, financial services, commercial real estate, food & beverage, cloud & service provider, and those in hard-to-abate sectors such as heavy industry and manufacturing. Many companies report feeling these pressures for the first time in 2021 as investors scrutinize their portfolios for environmental and social responsibility.
Yet, mounting evidence suggests that organizations are not moving nearly fast enough to align efforts with the 1.5 degree Celsius warming pathway recommended by the IPCC. The Science-based Targets Initiative recently found that only 20% of G20 companies have climate targets aligned to prevailing science. Further, Schneider Electric’s own recent global research of companies earning more than $250M annually found that only 29% of respondents have developed and published climate action plans, while 36% report that they will explore climate action over time (25%), or intend to maintain their current business model indefinitely (11%).
“We know that addressing climate change is the defining issue of our generation, and that business plays a key role – but we also know that we must go faster if we are to avoid the worst impacts of warming this century,” said Olivier Blum, Chief Strategy and Sustainability Officer for Schneider Electric. “By combining our own experience in sustainability with our market-leading services in decarbonization and energy strategy and action, we can escalate the transition to a cleaner, greener future.”
Schneider Electric uniquely positioned as partner of choice for Net-Zero
This increasing market need, and demand, for high-value skills and Schneider’s unique “ambition + action” approach to consulting, is behind its ambitions and enhanced capabilities. To date in 2021 alone, the company has launched four new services to meet this growing challenge:
- Climate action consulting
- Affiliated supply chain decarbonization and climate risk assessment services
- Communications services, including CSR/ESG reporting/ratings, climate action plan development, and reputational and sustainability claims (i.e. greenwash avoidance)
The consulting group is developing additional services in circularity and traceability, and new ESG modules for the award-winning EcoStruxure™ Resource Advisor software platform to meet growing organizational demand for the expanded tracking of societal and governance metrics.
These new services enhance Schneider’s existing portfolio of digital, sustainable, and efficient solutions, including the company’s Green Premium™ product label and EcoStruxure stack. When taken together, Schneider’s solutions provide one of the most comprehensive paths to net-zero emissions in the market today.
“We are seeing increasing market momentum as businesses set and work towards decarbonization commitments. But the current trajectory of emission reduction is still not bold enough, not fast enough. By growing our consulting business, we can help our clients accelerate this momentum,” said Schneider Electric consulting group president Susan Uthayakumar. “The decisions and actions of business leaders in the next decade will be some of the most consequential of our lives, and it is an honor for Schneider Electric to stand alongside our clients at the vanguard of this global movement for change.”