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Recent Blog Comments
Most industrial buildings could increase their energy-efficiency.
Michael Blichmann, general manager of Bosch Energy and Building
Solutions GmbH (BEBS),
explains which parameters companies have to adjust to systematically lower their energy consumption.
What is the energy efficiency situation in German companies?
Some manufacturers have already been able to achieve a remarkable level of efficiency, particularly in production. But there is still considerable potential to be harnessed in ancillary processes such as heating, cooling, compression, and ventilation. Many of these processes have seen very little invested in them over the past few years.
Can you put a number on the savings potential?
We generally work on the assumption that energy consumption for any existing building can be trimmed by at least 20 percent.
Why weren’t such steps taken long ago?
Not only have dramatic rises in energy costs escalated the urgency of the situation, but also technical solutions are available today that didn’t exist a few years ago. Thanks to these technological advances, we can unlock new potential for greater energy efficiency in our customers’ operations. At the same time, power supply systems are becoming more and more complex. That’s why companies, especially medium-sized companies, are looking to entrust this aspect of their business to a specialist service provider – leaving them free to devote their time and resources to what they do best.
What has changed in this sector to make things so complex?
The ranks of devices and systems connected with one another via the internet are swelling. In our business, the internet of things and services is a growing phenomenon. In the coming years, these networks will give rise to many more solutions and services geared to increasing energy efficiency. In the case of facilities that require a constant supply of electricity, acquiring a dedicated power plant, for example, should be seriously considered – especially as the plant can be precisely tailored to the customer’s needs.
What kind of rates are those?
They depend on total demand. Electricity is very expensive during peak hours, but it becomes more affordable at night. This is the energy industry’s way of attempting to flatten out the spikes in demand. We can take advantage of these rates today because we are able to precisely meter and control current the electricity, heating, and cooling requirements in a building at any given time. At times when electricity prices are high, certain equipment can be switched off and then put back into full operation when rates drop at night. This calls for legislators to act as well – such rates are legally permissible but they are still not being offered everywhere. A considerable amount of potential is squandered here.
In the domestic construction sector, we have passive houses and even houses that produce more energy than they use. Are factories that are self-sufficient in their energy needs conceivable?
Absolutely. There are an increasing number of sites and companies that have made their production CO2-free or are powered entirely by renewable energy. Both large and small companies have already set this as as their goal, for example for power or heat, or because it allows a particular product to be marketed as having a small “carbon footprint.” By systematically using every available option for saving and regenerating energy, this already works quite well.
The full interview with Michael Blichmann can be found here
The energy turnaround is far more than a technical challenge
Professor Manfred Fischedick, vice-president of the Wuppertal Institute for Climate, Environment, and Energy, on decentralized power supply concepts, innovative energy storage solutions, and the need to involve consumers more in redesigning the energy system.
By 2050, renewable sources of energy are set to make up 80 percent of Germany's energy mix. What role will virtual power plants play in this regard?
To integrate renewable sources of energy into the current supply system, we have to tackle several challenges. One of them is managing their expansion more intelligently than we have so far. This applies both to the fuel mix and the geographical distribution of energy. We need to expand and strengthen the grid, and ensure efficient load management. In addition to this, high-performance storage systems are required, as are power-to-x solutions. These make it easier to turn power into more storable forms of energy such as heat, hydrogen, and fuel. With the help of modern information and communication technology, virtual power plants bring the energy system's individual elements together. They can be decisive in including renewable sources in system services, for instance by making balancing energy available.
What are currently the biggest challenges on the path to a decentralized energy supply?
The energy turnaround and the resulting need to change our energy systems is a complex transformation process, especially in light of today's central coal-fired and nuclear power plants. Promoting renewable, decentralized sources of energy not only calls for technical solutions that reliably integrate solar and wind power, both of which are heavily weather-dependent. It also involves addressing another decisive topic: the future design of the energy and power market, which needs to ensure a reliable power supply and stable systems. In order to succeed, the energy turnaround must involve tackling infrastructure challenges and improving social acceptance. These two factors are crucial. Ultimately, this is a project that calls for broad participation, and which will take a generation. We can only master the challenges ahead if everyone commits. Clearly, the challenges of the energy turnaround are not only technical in nature.
And yet technical innovations are an important component of the enegy turnaround's success. How well developed are current storage and control systems?
The use of storage power plants is not new to the electricity industry. To name just one example, we have been using pumped-storage plants for decades. However, the operating conditions for these very plants have changed. In the past, the rule of thumb was that electricity prices were high during the day and low at night. This reflected the laws of supply and demand. But as renewable sources of energy are increasingly being fed into the grid, such rigid rules no longer apply. And this is why today's storage systems must be far more flexible. In light of the energy turnaround, continuing work to further to develop storage technologies thus makes sense. This applies to everything from advanced battery concepts and compressed air reservoirs to redox flow batteries, flywheel energy storage, and superconducting coils.
What types of storage systems will be needed in the future?
In the long term, there will be an ever-greater need for systems that can store power for longer periods of time. From today's point of view, only chemical storage systems come into question. With such systems, power can be stored indirectly in the form of hydrogen, synthetic methane, or synthetic liquid fuels. Even though the basic principles of these "power to gas" and "power to fuel" concepts already exist, a number of development steps must still be taken on the road ahead. Above all, storage costs must be significantly reduced. In addition to this, managing power generation and demand intelligently via load management will be decisive in the future. Virtual power plants are the perfect places to do this. In recent years, there have been a number of demonstration projects that provided valuable insights. Among other things, they demonstrated that by making system services available, virtual power plants could potentially become the cornerstone of a promising and safe energy supply for the future.
What must companies consider to succeed in the market for a decentralized energy supply?
Above all, they must be aware that technical innovations alone are not sufficient. To redesign the energy system, a link must be drawn between technologies and social change. This is needed to develop system innovations. Technologies require the right framework, for instance intelligent service offers and adequate connections to infrastructure. Innovations can only succeed on the market once this framework has been established.
Which political framework conditions are needed to push the expansion of virtual power plants ahead?
In the coming years, the energy and electricity markets need to be overhauled, or rather redesigned. The current system is strongly based on a power generation structure in which large power plants dominate. During the period of transition, ensuring that there is sufficient incentive for the establishment of central system services is important, as this is the only way to maintain a reliable supply. The aim should be to find a solution that is as competitively neutral as possible, one that doesn't favor certain technologies over others. In such a political framework, virtual power plants will find their place.
How is power going to shift in the global energy market as a result of the energy turnaround?
A few large companies still dominate the energy market, but it will become more complex in the future. It is conceivable that models promoting self-sufficiency will become more common, and that new actors with specific service offers will enter the energy market. Thanks to their proximity to customers, public utility companies will one day also have good opportunities to position themselves with customized service offers in the field of renewable sources of energy and energy efficiency. Overall, the market of the future will be more service-oriented, and not nearly as driven by the simple selling of kilowatt-hours of power or cubic meters of gas.
More information on Bosch's efforts to shape the future of energy can be found here.
A Bosch associate visits the Linde Group
While a part-time management position is normal for a Bosch associate like Elke Wörner, it is far from being the norm in Germany. To change this state of affairs, the executive was a guest at the Linde Group’s headquarters in Pullach in August. The aim was to promote knowledge sharing on part-time working models. In an interview, Elke Wörner spoke of her personal experience.
You work for the Bosch Security Systems (ST) division, where you are one of the only executives who work part-time. It seems this model works for you. What is your personal recipe for success?
Elke Wörner: The most important thing is that my supervisor and my team support me. The concept can only work with their acceptance and support. At the same time, individual associates have to figure out which model works best for them. Once they have done this, they need to be proactive in approaching their bosses. The model works well for me also because I run a tight ship in my private life. Everything is well-organized, all the way down to an emergency plan: whenever it’s needed, I can always call on the “grandpa shuttle”. And the option of telecommuting is helpful as well.
So you presented your idea and made suggestions to your supervisor yourself? Would you advise other associates to take this approach if they were interested in flexible working models?
Elke Wörner: Absolutely. I thought about my situation and came up with ideas before my first child was born. When I was ready, I went to my supervisor with my suggestions, and they were accepted. Of course, some people were skeptical along the way, both at home and at work. But I would advise my colleagues to be proactive. In my opinion, you can’t assume that a company already has a concept that is well-suited to your individual needs.
What did you learn from the meeting at the Linde Group?
Elke Wörner: Mainly that flexible working models still aren’t the norm in 2015 – and that also applies to executives. However, I think we are on the right path at ST.
More information on female specialists and executives at Bosch can be found here.
People, profit, planet – the famous triple bottom line. How has this concept evolved, and maybe even changed, since you first coined the phrase in 1995?
Indeed, we have had 20 years of mutation since then. At the time, the key sustainable business concept was eco-efficiency, which meant making or saving money through resource efficiency and better products. So thinking in terms of a triple bottom line (TBL) was slightly heretical.
The idea that there was not just financial but wider economic dimension to value creation, and also destruction, encouraged companies to take a wider view of their contributions, while the social dimension was a considerable shock to some business leaders – particularly in the USA. Think of Walmart post-Hurricane-Katrina: they went for an eco-efficiency version of sustainable business, not the full TBL approach.
One of the thrills of recent years has been to see a fair number of social entrepreneurs talk about their TBL inspirations – and also to be part of Sir Richard Branson’s B Team as it embraces the People, Planet, Profit formulation.
In your experience, are ESG (environmental, social and corporate governance) indicators currently playing a role in corporations when it comes to their business models, processes and products?
I think the efforts of organisations like the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC) have mainly led to better, if increasingly complicated, accounting, reporting and verification. None of that is bad, of course, but to date the direct impact on the underlying business models has been small. A few outliers pioneered, among them Patagonia, Interface and large corporations like Unilever. But the most striking business model innovations are coming from companies like Tesla and Uber, who don’t strike me as ESG junkies. They are simply responding to the zeitgeist, the growing sense that the future the sustainability movement warned us about is here, whether it’s drought in California and Brazil, or for different reasons the swelling northward surge of economic and soon climate migrants into Europe.
You are often referring to the next ten years until 2025 as the “Breakthrough Decade”. What does this decade stand for – and why is it coming up now?
Futurist Alex Steffen put it succinctly in a May 2015 tweet: „What happens in next 40 years [is] critical for all humanity for centuries to come. What happens in next 10 years sets [the] range of what's possible.’ Our sense is that the next decade will determine whether we make this work for our and other species, or not. The aim is also to inject a greater sense of urgency into the discussion, given that many people are setting their targets out to 2050 or even 2100. The next decade will also see the Millennials beginning to take over from the Baby Boomers, which is a huge demographically-shaped opportunity for culture change.
In The Stretch Agenda, one of your latest publications, you decided to write about corporate transformation for this “Breakthrough Decade” in the form of a play. Why did you choose to write about this topic in such an unusual format?
Partway through the project, one of my colleagues said, “Everyone’s writing reports these days, but no-one’s reading them! Why don’t we do a play?” My initial reaction was, “What a stupid idea! Impossible!” But then we thought it through – and concluded that this might be a way of creating the business equivalent of a Trojan Horse. It’s only just out, but it’s interesting that we have already people like a major Italian bank and a Sri Lankan cell phone company saying they are keen to use the play in executive education and training.
One character in the play says, “many companies are reporting their sustainability numbers – and setting targets – with little or no reference to the wider context.” How can this issue be resolved?
Much corporate reporting is about integration across various forms of capital, but gives the reader or user no sense of how what the company is reporting fits into a wider context. We use an aircraft to show that there is a horizontal dimension to all of this – integrating across physical, financial, natural, human, social and other forms of capitals. Additionally, a vertical dimension is increasingly linking from the field or factory out to the biosphere or atmosphere, and a longitudinal dimension with most reporting on a quarterly or annual basis, when we ultimately will need to report over decades-long timescales. Because those are the timescales over which the most critical trends are developing – whether it be global competitiveness or climate change.
“Today’s unmet needs are often tomorrow’s markets,” is another interesting statement in The Stretch Agenda. Do you have an insight into one such unmet need that could develop into a future market?
We are fascinated by the way that cell phone technology is enabling breakthrough business models that help bring finance, solar lighting and education to some of the world’s poorest communities. We have begun to map and quantify some of the emerging ‘Sweet Spots’ in this space in our Breakthrough Forecast.
Change happens on a timetable and people need constant wakeup calls to breakthrough to new forms of behaviour and economic activity. What is currently the most important wakeup call that needs to be amplified and heard by everyone?
I’m not religious, but the Pope’s recent encyclical is as great example of a leader calling out the nature and scale of the challenge, particularly in respect of climate change. But there has been little mention of population, as yet. Since I was born in 1949, 4.8 billion people have been added to the global population. This has already had major consequences, and forecasts that we are headed to up to eleven billion people suggest that the pressures can only intensify over time. And all of this at a time when the global governance mechanisms we have inherited from the post-WWII era are sadly, despite huge efforts from those involved, no longer truly fit for purpose.
You said that we are waiting for the next big sustainability “wave” to come. Prior societal pressure waves changed businesses and markets drastically. What could trigger such a wave, and how can businesses prepare for the inherent change coming with it?
The diagram shows a series of great wave structures in the OECD world since 1960, when I first started getting interested in all of this. In 1961, for example, aged eleven, I raised money for the World Wildlife Fund in its first year of existence.
The first wave focused on the environment and the role of governments, the second expanded to a wider green agenda. Our own Green Consumer Guide sold around one million copies in the late 1980s. Then the beginning of a third, anti-globalisation wave in the late 1990s, but that was cut back by the events of 9/11. More recently, we have seen wave four focusing on sustainability, with surveys showing very high proportions of CEOs around the world saying they have already embedded the concept.
We don’t think so, as explained in a recent book, The Breakthrough Challenge, I wrote with Jochen Zeitz, former Chairman and CEO of Puma, and now co-chairman of The B Team with Richard Branson.
It is no accident that this expanded agenda is increasingly pushing up to the Board and C-suite levels in companies. This is now a strategic agenda about how we create and grow the biggest markets of the 21st century.
The Baby Boomer generation of leaders and executives still struggles to see how they can adapt incumbent business models to the new realities. But the Millennials, who are heavily represented among the most interesting innovators, are not going to wait. Whether they Uberize the competition because of a desire to save the world or to make money doesn’t really matter. Joseph Schumpeter would have recognised them as the agents of the next wave of creative destruction. The question now is do we back the future, or cling on to the wreckage of the past?
Interview: Dr. Volker Hauff - Former Chairman of the Federal Government's Council for Sustainable Development and member of the Brundtland Commission
Since the World Commission on Environment and Development published the Brundtland Report in 1987 describing for the first time the possibility of sustainable development, discussion about sustainability has become increasingly important for industrialized and developing countries alike. Has the varying importance attached to sustainability by industrialized and developing countries changed during this time?
Hauff: The megatrend sustainability has taken its place at the center of society – in Germany and on a global scale. This is evidenced by the vast number of initiatives being implemented on wide-ranging topics and in a large number of countries. The developments are impressive and encouraging. Particularly at local level, there are some inspirational examples of sustainable development projects. Many scientists are keen to get involved, too – often with unconventional research methods. All DAX-listed companies are also engaging with this topic. And the number of national and international alliances dedicated to sustainability is growing day by day.
The now almost legendary “spirit of Rio” at the first Sustainability Conference in 1992 was shaped by a euphoric mood of optimism after the fall of the Berlin Wall. The world today is beleaguered by numerous crises, and Achim Steiner, Executive Director of the United Nations Environment Programme, talks about a zeitgeist shaped by the “primacy of mutual competition.” Are we seeing the end of a time when the international community stands together against climate change and widespread poverty?
Hauff: You're right. The Sustainability Conference in Rio in 1992 was indeed a milestone. Back then, the government representatives did not shirk their historical responsibility. You could really feel the desire and capability to take on political leadership. In the 1990s, this resulted in a massive worldwide move towards sustainable development, with countries all taking action, but with different levels of responsibility. In contrast, the Sustainability Conference in Rio in 2012 was more of a stumbling block than a milestone. No clear objectives were set, no agreements made on a timeframe, no suggestions made for the establishment of a powerful UN organization for sustainability, and no breakthrough achieved with regard to the problem of poverty and the destruction of the environment. It was a summit of vagueness. This failed meeting of giants reminded me of an African proverb: “Words are all well and good, but chickens lay eggs.”
Klaus Töpfer, former German Minister for the Environment and Steiner's predecessor, believes that our last-minute mentality can only be broken down by restoring the primacy of politics. Gro Harlem Brundtland, on the other hand, attaches great importance to pressure from civil society. Can governments win back their ability to govern or must we bid farewell to the illusion of a global domestic policy?
Hauff: In my opinion, national and global control of the transformation to sustainable development is the key. The problem today is not a lack of ideas that enjoy widespread acceptance. The problem lies instead with the implementation. And this is not an easy task – there aren't any fundamental role models that we can draw on either. The task of governments is clear-cut: Common welfare must be given a political framework; it can't be delegated to the various markets. But it is essential that we get representatives from business, science and civil society involved as well. Autonomous processes and responsibilities must be defined for these players – in the knowledge that they will then go on to take independent decisions. This is the only way to create a joint venture. And sustainability is such a joint venture.
Sustainability has become a mainstream topic today, as evidenced by all the legal regulations and the many institutions, such as the German Council for Sustainable Development. What do you see as the biggest successes and the biggest disappointments in the last 25 years' of discussion about sustainable development?
Hauff: Without a doubt, the biggest success is that sustainability has now taken center stage in society. This is a valuable asset.
In business, too, sustainability and environmental protection have led to a rethink and environmentally friendly innovations. As a result of the international laws and regulations on environmental protection, Bosch is observing a process of ecological globalization, which is also opening the door to numerous business opportunities. But it has not been possible to break the connection between economic growth and resource consumption on a national and international scale. What are the biggest challenges facing a “green economy” as outlined in the closing document of the Rio+20 Conference?
Hauff: That's the problem – the green economy is not described in detail in this closing document. The draft of the closing document was a disappointment in itself, but then, to make matters worse, any concrete or controversial measures were deleted following the discussions in Rio, including U.S.$ 30 billion a year for fighting poverty in poor countries, a cap on the U.S.$ 600 billion subsidies for coal, oil and gas, an effective and well-financed UN organization, strict protection plans for the world's overfished oceans and much more. It is a disappointing document that you shouldn't try to make look good – as Mrs. Merkel does when she talks about “new political support and new motivation.” These timid and vague statements are no match for the challenges that we will have to face when tackling the major transformation that lies ahead.
Today, we are able to calculate the planet's ecological limits far more accurately, and we know that we are already exceeding these limits by far when it comes to climate protection and diversity of the species, for example. That is why the German Advisory Council on Global Change (WBGU) is talking about the need for a major transformation towards a climate-friendly society. Is there sufficient awareness of this need for fundamental changes given the results of the Rio+2 Conference – and which players, in your opinion, have the biggest influence when it comes to driving the change?
Hauff: For the foreseeable future, I am placing my trust in the “pioneers of sustainability” – including companies like Bosch – who are found in all areas of society. These pioneers are particularly important right now. We have to publicize their success stories to encourage others to follow suit. Maybe there are also benefits to “sustainability from the bottom up.” Ultimately, this will increase the number of people who recognize that sustainability is the big topic of the 21st century.