The French multinational Schneider Electric has been around for 188 years, making it older than electricity itself.
But far from being obsolete, Schneider is among the most sustainable companies in the world and is a leader in this field, working with around 40% of companies. Fortune 500 companies about their sustainability goals.
“Climate change is one of the biggest challenges of our generation. The future of energy was at an impasse,” said Jean-Pascal Tricoire, Chairman of Schneider Fortune‘s Claire Zillman at the Fortune Innovation forum last week in Hong Kong.
To accelerate the transition to clean energy, Tricoire relies on demand – governments, consumers and businesses demanding lower-emission energy – rather than supply.
“In the story of humanity, the energy transition to something net zero never happens through supply,” said Schneider’s chairman. He gave the example of electric cars: they are taking off now not because there is more electricity available, but because there is already a movement to decarbonize transportation around the world.
In other words, Tricoire says, the pivot to achieving lower emissions predates changes in energy supplies. As an energy management company, Schneider sees opportunities for the future in facilitating the shift to cleaner forms of energy.
“It’s not complicated. Climate change is 80% due to carbon emissions, and carbon emissions are 80% due to the way we use and produce energy,” he said.
To help giant corporations adopt cleaner and more energy-efficient infrastructure, Schneider put its bets on two things: digitalization and electrification. AI and automation also play a role, he said.
Applying “software [and] AI to optimize everything… from design, to construction, to operation and maintenance” can deliver enormous energy savings, Tricoire said.
Achieving ESG objectives and more
Sustainability is now a top priority for many companies. But that’s a recent phenomenon: For the first 15 years of Tricoire’s 20-year career at Schneider as COO, CEO and chairman, he said, investors didn’t care.
As discussions around environmental, social and governance (or ESG) factors started to heat up in 2019, Tricoire points out, more and more investors started paying attention.
The topic of ESG has been fraught with issues and controversy lately, with critics saying it is a sham, politicized and lacking clarity.
For companies pursuing ESG goals, Tricoire says it is important to set strong standards to reduce the company’s risks in every way possible. The transformation would also require aligning the entire company—its people, culture, workflow, and governance—so everyone can work toward the same mission.
Whichever way you look at it, investing in the environment and minimizing CO2 emissions in the world will only become more important from now on. The good news? We don’t have to wait for breakthrough innovations to move businesses forward, because according to Tricoire, we already have many of the tools available now.
“Before we think about the great revolution, let’s use what we have, because time counts, right?” Tricoire said, adding that the carbon emissions we reduce today are far more valuable than the same thing 10 years from now.