Sustainability at Siemens September 2018 © Siemens AG 2018. All rights reserved. siemens.com Five Megatrends shaping our world of tomorrow Digitalization By 2020, around 55 billion devices will be linked online Urbanization By 2050, 70 percent of the world’s population will live Demographic change in cities (2014: 54 percent) The earth‘s population will increase from 7.3 billion people today to 9.7 billion in 2050. Average life expectancy will then be 83 years Globalization The volume of world trade nearly doubled between Climate change 2000 and 2014 In the summer of 2016, Earth's atmosphere had the highest CO2 concentration in 800,000 years Sources: IDC, United Nations, UNCTAD Statistics, SCRIPPS INSTITUTE OF OCEANOGRAPHY, “The Keeling Curve”, November 11, 2015 Slide 4 © Siemens AG 2018 UN Agenda 2030: 17 Sustainable Development Goals to transform our world - Siemens impact Impact via products & solutions Mostly direct impact through innovative product portfolio along the value chain, thought leadership Impact via sustainable and responsible business practices Impact mainly via the way we do business, global operations, partnerships Indirect impact SDGs where Siemens has only limited and mostly indirect impact Slide 5 © Siemens AG 2018 Sustainability at Siemens aims to optimize the impact of our business activities on a global level Sustainable development is the means to achieve profitable and long-term growth. At Siemens we have a clear commitment to think and act in the interest of future generations, balancing People, Planet and Profit. Slide 6 © Siemens AG 2018 Siemens helps advance societies and create value for our business partners We make real what matters by enhancing responsible business practices, preserving the environment and developing people and society. Responsible Business Practices Environment People and Society . Supply Chain . Decarbonization . Safety . Compliance . Resource conservation . Health . Human rights . Product stewardship . Diversity . Education . Corporate Citizenship . Siemens Arts With our Business to Society methodology, we assess our impact on societies on a global, country or project level as well as our contribution towards the UN’s Sustainable Development Goals. Slide 7 © Siemens AG 2018 Environmental Responsibility will fail without Economic Reality Climate change Climate change and global warming threatens and global warming threatens our existence our…… business z z z z z z z z z z z z z z z z Slide 8 © Siemens AG 2018 „Siemens – Business to Society“: We make real what matters What matters to societies? What impact does Siemens create for societies? Egypt Megaproject will boost the country’s power generation capacity Megatrends by 50% through 3 combined cycle power plants, 600 wind turbines, and intelligent power distribution Digitalization Siemens is a trusted partner to >200 cities globally, improving the lives of millions - be it through our rail systems transport over 50’ people Globalization daily or through infrastructure that increases safety, air quality and Urbanization resilience in urban environments Demographic Change In 2017, about 1.3 bn patients from emerging countries had access to Siemens imaging systems Climate Change Innovative solutions from within our Environmental Portfolio help UN Agenda 2030 for sustainable development our customers save the equivalent of > 70% of Germany‘s annual CO2 emissions. Siemens is committed to become carbon neutral in its own operations by 2030 and invests €100’ in energy efficiency measures at its own sites until 2020 Examples of positive impact highlights Slide 9 © Siemens AG 2018 Key Sustainability figures FY17 € Our € We help our €100M Environmental Portfolio is customers reduce will be invested until 2020 in >10,000 internal energy efficiency apprentices world-wide as part mio tons of CO2 worth 570 measures to become CO - of our dual education program €39bn emissions 2 neutral by 2030 55 23% anti-corruption projects >€260 941 proportion of women of total mio invested in the training supplier quality audits in 40 countries worth employees and education of employees > US$ 70 mio 90,000 suppliers committed to 6.2% of company revenue ~63,000 90% Siemens supplier granted patents of waste recycling rate spent on R&D investment code of conduct Slide 10 © Siemens AG 2018 Environment Siemens contributes to decarbonization along the value chain Sustainable CO2-neutral Siemens Supply Chain Siemens operations Environmental Portfolio Supply Chain Own operations Customers We measure and report Siemens aims to become supply chain emissions and carbon neutral by 2030 and We support our customers in increasing encourage our suppliers to halve its energy efficiency and reducing their carbon footprint increase transparency CO2-footprint by 2020 Solutions range from sustainable power generation, low-loss power transmission, intelligent distribution and storage, and efficient energy use Slide 11 © Siemens AG 2018 Environment Our biggest lever toward decarbonization is the Siemens Environmental Portfolio 1 Energy efficiency 38.7 32.7 36.3 2 Renewable energies Environmental 75% Portfolio revenue (in billions of €)1 25% FY 2015 FY 2016 FY 2017 equal to more Environmental 570 than 70% 487 522 >70% Portfolio CO2 of Germany’s abatement total annual (in millions of CO2 emissions metric tons)1 FY 2015 FY 2016 FY 2017 1 On a comparable basis Slide 12 © Siemens AG 2018 Electrification for Decarbonization – Automation and Digitalization enable further emission reductions Electrification Automation Digitalization Wind Power – 7 MW gearless Ships – Metros – Wind Power – offshore turbine World's first electric ferry Driverless operation Remote Service © Norled E-buses – E-aircraft – World-record Industry 4.0 – Energy Smart grids – Automated fast charging electric motor savings with PLM Software Virtual Power Plants Slide 13 © Siemens AG 2018 US 2020/2030 Carbon Emission Reduction Initiative Buildings and Buy Infrastructure Generate Reduce Certifiable Clean Consumption Green Electricity Manufacturing Electricity Processes Passenger Hybrid Car Fleet Buy Certifiable Reduce Fleet E Vehicles Carbon Emissions Hybrid Service Offsets Vehicle Remote Fleet Services Slide 14 © Siemens AG 2018 Environment We complement our carbon neutral efforts with our industrial environmental protection program Environmental Program Examples “Serve the Environment” 36% 416k • Number of energy Higher energy CO2 emissions management systems efficiency1 reduced2 increased to 64 covering now 25% of Siemens electricity consumption. • New evaporation technique 1% 13% / 29% for liquid waste at site DF More waste Less ozone depleting substances/ efficiency1 volatile organic compounds2 Chemnitz reduced waste volume costs drastically by €180,000 p.a. and also shows opportunities 8,521 91% 67% for scaling. Environmental measures Total recycling rate Total water risk assessments worldwide Siemens wide incl. climate risks 1compared to baseline FY14; 2 compared to FY16; all numbers without WP, SGRE FY17 Slide 15 © Siemens AG 2018 Responsible Business Practices Supply Chain Management provides value to our business and our partners Measure Achievements FY 2017 Code of Conduct 90,000 for Siemens Suppliers suppliers committed Corporate Responsibility ~2,400 Self Assessment suppliers assessed Supplier Quality Audit ~940 suppliers audited by internal auditors External Sustainability Audit ~400 suppliers audited by external auditors Slide 16 © Siemens AG 2018 Leadership Commitment Slide 17 © Siemens AG 2018 Key Success Factors Leadership Collaboration Common Vision Communication Aligned Agenda Tenacity Commitment Investment Slide 18 © Siemens AG 2018 Final thoughts………………. The best way to predict the future is to invent it. Alan Kay The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it Michelangelo Opportunity is missed by most people as it is dressed in overalls and looks like work Thomas Edison Slide 19 © Siemens AG 2018 Contact Information Robert J. Dixon Head of Sustainability Siemens USA 1000 Deerfield Parkway Buffalo Grove, IL 60089 USA Office: +1 (847) 941-5070 Mobile: +1 (847) 212-0482 usa.siemens.com Email: [email protected] Slide 20 © Siemens AG 2018 Questions & Answers Thanks! Slide 21 © Siemens AG 2018.