What are the major challenges in climate protection?
Gehmacher: In view of the current COVID-19 pandemic, the topic of climate protection may take a back seat, but in the long term the climate crisis is the major global challenge. In order to cope with this, on the one hand, governments and companies need to work together, but also communities and individuals. There are already some who are involved here. But everyone has to be brought on board. The second issue is the transformation we are facing. This greatest change in history requires investment not only from business but also from governments. A central challenge here is the speed with which we have to react in order to minimize the negative effects of climate change - the goal of becoming climate neutral by 2050 is more than ambitious. In order to achieve this, companies have to break down climate protection into their own actions and set themselves appropriate short, medium and long-term goals.
Heneis: For me, a major challenge is to find the balance between what I can immediately and socially accept and how much I should invest in the future under which conditions. As a globally active company, we see that social expectations in Asia and Africa are different from those in Austria, and that the company's contribution must therefore be different. It is certainly important for acceptance to also take effective climate protection measures at short notice. In the energy sector, this is the focus on gas instead of coal, because in Europe you can quickly get CO2-Save emissions in the order of magnitude that of Spain. That works with existing technologies. It is important to us that every euro is so CO2-investing as efficiently as possible in order to generate both fast and long-term maximum impact in the different regions of the world.
Gaber: A major contribution to climate protection is, in addition to the technology in the direction of green energy, the reduction of resource consumption. Because the United Nations is expecting a world population of 2100 to 9,3 billion people by 13,5. This is a very important environmental factor if the per capita energy consumption is not reduced. If we don't immediately get out of fossil fuels, which currently cover around eighty percent of consumption, time will be running out. This year, for the first time, the World Economic Forum named only environmental risks as the five largest global risks and spoke of a planetary emergency. In addition, there is migration caused by climate change in emerging and developing countries: By 2050, around 200 million people are expected to set off.
How does the topic of climate protection measures work for your company?
Gehmacher: We saw the urgency. RHI Magnesita realigned the entire sustainability area in 2018, we are now reporting directly to the Executive Board. In 2018, we set ourselves specific emission reduction targets, which we revised last year and doubled in the process. International corporations also have a role model function for the many small and medium-sized companies so that they too systematically reduce their emissions. We not only look at our own emissions, but also include the value chain. Eighty percent of our customers come from the steel and cement industries, which together account for 13 percent of global CO2Emissions is responsible. We work closely with these customers to support their climate action plans. We also work with universities worldwide, from Leoben to Brazil to China, to identify and implement new technologies.
Heneis: OMV has been pursuing an ambitious CO for more than ten years2-Strategy, thanks to which we have a total of 1,7 million tons of CO in our production2 saved. However, our products are at least as important an issue. And here are further questions: How can you further develop the product portfolio? Maybe you have to rethink the raw material? In the case of oil, this goes from combustion to permanent products, which I return to the raw material at the end of their use in a circular economy. In our opinion, gas is the energy source of the future, with natural gas as a transition fuel and long-term supplement to renewable energies and decarbonised with hydrogen in the future. The infrastructure already exists in many countries. We are also faced with the question of how we can also help our customers to contribute to climate protection. For example, we offer natural gas and e-mobility at many petrol stations or, for customers who are not yet converting to sustainable mobility solutions, we rely on offsetting offers, the CO2-Compensate for emissions. Added to this is our social commitment, in which we have had a key performance indicator for CO since last year2- have established savings. This means that all community activities should in future also include an environmental aspect.
Gaber: The Austrian Development Bank also focuses on climate protection projects. Our strategic goal in the long term is forty percent of the portfolio with such a focus - in 2019 new business was already more than 50 percent. Above all, we finance strategic projects in the field of renewable energy, for example the largest solar park in Africa or the largest wind farm in Central America - in short: projects that have a very large impact. With our Africa facility, we also support Austrian SMEs in internationalization in emerging and developing countries and want to bring more sustainable energy solutions to the African markets - not least because Austria has a lot of know-how here. There is no point in making Europe climate neutral by 2050 by outsourcing emissions-intensive production. On the way to climate neutrality, government support, a pragmatic approach, suitable financing instruments and, last but not least, projects that can be implemented quickly are needed.
Where does the pressure on companies come from?
Gehmacher: Investors, regulations, but also extreme weather conditions or social movements can be drivers. Drivers can also be employees if they think the CO2Strategy of your company is not ambitious enough. In addition, science plays a role when we think of simulations that break down different global warming scenarios onto the individual company. One thing is clear: Business as usual will no longer be possible.
Heneis: The pressure comes from many areas and from different stakeholder groups. The best-informed stakeholder group is the capital market, where every company has to be competitive. There are investor initiatives with a focus on climate protection, such as Climate Action 100+, which are becoming increasingly important at general meetings. For a listed company, this is of course an essential driver.
Gaber: The insurance industry also plays an important role here: We can already see that with individual financing in emerging and developing countries that no insurance company is prepared to cover environmental risks.
What are the most important next steps?
Gehmacher: The Austrian government has set the ambitious goal for our country to become climate neutral by 2040. Austria is playing a pioneering role within the EU. I see the challenge more at an international level. The past world climate summit in Madrid has unfortunately failed. I hope that at the end of the year at COP26 in Glasgow, the merger will finally be created, thereby setting a direction in which companies can also orientate themselves.
Gaber: The key is to reduce resource consumption per capita, not just in Europe but worldwide. We still have the chance to avert the major climate damage. The problem is that many states only rethink when they are themselves affected by natural disasters caused by climate change. Thanks to the initiative of multilateral and national development banks, a lot of money is being mobilized so that green technology transfer can take place in the direction of emerging and developing countries and that they can embark on a more sustainable development path from the start. Ultimately, however, it is due to political will and cooperation between the public sector, companies and science.
Heneis: We have to invest more in new technologies, especially when it comes to the path towards a circular economy. This is also a future topic for OMV, for example we are working on the use of plastic waste in our ReOil project. Dealing with carbon is quasi the core competence of OMV. We are therefore already putting solutions on the table, even if they are not yet economical or the current framework conditions do not fit. The latter is the case, for example, with hydrogen or with the storage of CO2, which has been recognized by the IPCC for years as an integral part of a climate-neutral future, but is prohibited in Austria with the exception of small plants. You can either see a barrier in it, or take an active position as a company and enter into a dialogue with politics. Of course, one can criticize that we have to make faster progress, but companies need business models so that money can flow into new technologies accordingly. And that requires political will.
Vielen Dank für das Gespräch!
Ulrike Gehmacher has headed the sustainability agenda of the refractory group since the end of 2017 RHI Magnesita.
Bernhard Heneis has been Head of Sustainability & Reporting at the beginning of 2017 OMV.
Sabine Gaber has been a member of the board of the Austrian Development Bank since 2018 OeEB.