A Smaller Footprint for a Better Life — Why Industry Needs to Produce More with Less

We’re living in a time of crises. Currently we’re facing a triple shock: Climate—Conflict—COVID. The Big Three C’s that are impacting everyone.

The first challenge: the climate crisis. Heatwaves have become more frequent, setting off deadly wildfires. Droughts, floods and hurricanes have forced people all over the world to evacuate their homes and flee their countries.

Second, conflict. The war in the Ukraine is first and foremost a human catastrophe. It’s the people who suffer. The war has also exposed our economic dependencies. For example, Germany was dependent on Russian gas for 55% of its supply at the start of the war.

Third, the ongoing Corona crisis. The pandemic has caused much suffering. And it has exposed weaknesses in our global supply chains.

How to counteract these challenges? We must innovate and use the best available technology to accelerate the shift towards renewables. We must become more energy efficient. Industry is still responsible for 30% of the global CO2 emissions. If we don’t act now, it will be too late.

We must innovate and use the best available technology to accelerate the shift towards renewables. We must become more energy efficient. Industry is still responsible for 30% of the global CO2 emissions. If we don’t act now, it will be too late.

30 years ago—times were different. I had just turned 18 and wanted to see the world. Indeed, I fulfilled that dream by taking a once-in-a lifetime solo trek across the USA and Canada, and then on to the Middle Kingdom of China. But I didn’t want a bird's eye view from a plane. I wanted to be closer to the ground, closer to the people, so I travelled by train.

During those weeks, countless impressions burned into my memory. But one thing stood out for me personally. It was the warm contact I made with all the people I met during my journey who welcomed this young, inquisitive kid from Germany with open arms. All great memories, but one in particular seems like an anachronism today: The millions of bicycles traversing through China’s crowded cities, often packed with goods. Cars? Barely any on the road.

Fast-forward to today: That aspect of China’s daily life is now virtually unrecognizable. Cars and trucks now jam China’s main and secondary roads. Continuous economic growth has now made China the world’s largest growth market for industrial products.

But rapid growth also has significant downsides, and we can see this in many regions of the world: endless traffic jams, air pollution, garbage. So how can we get all this under control? It’s one of the central questions of our time, but one where I see a lot of hope.

Practically the entire world seems like it’s living larger than ever before these days. But the consequences are larger, too. For example, a person in Berlin today uses 20 times more resources than someone in Jakarta. That’s neither fair nor sustainable. The COP26 world climate summit in Glasgow made this clear by again raising a key question: How can we balance the justified economic striving of many countries—locally—to create more prosperity for their people on the one hand with the absolute need—globally—to limit the planet’s average temperature increase to no more than 1.5 Celsius on the other?

It’s why industry perhaps faces more challenges than ever before. Simply put: How do you meet people’s growing demand for goods that improve living standards yet simultaneously deal with the fact that you’re also producing 30% of global CO2 emissions as well as responsible for one-third of the world’s energy consumption? It’s the proverbial squaring of the circle—industry must produce more goods, but not more carbon.

It’s the proverbial squaring of the circle—industry must produce more goods, but not more carbon.

But how? The good news is there are solutions.

It starts by doing business essentially “on a smaller footing” while also simultaneously meeting legitimate economic interests. After all, the transition to a low-carbon economy offers decisive economic advantages for business and society alike. By saving energy and emissions and protecting limited resources over the long term, we can reap savings by avoiding financial and environmental costs.

The key strategy for industry is the same as it’s been for dealing with the three C’s: digitization, automation and the intelligent use of data. How? Although resources are finite, data are infinite. Digitization and automation make production more flexible enabling them also to more quickly respond to changing requirements. An innovative product can today be created digitally on a computer where it can also be extensively tested and optimized, including with the help of cloud technologies and artificial intelligence (AI). Similarly, production lines—or even entire factories—can also be designed in the virtual world. Finished products can then feed data from their lifecycle back to the developer so that the product’s ongoing design and production can be continuously optimized in what’s essentially an ongoing improvement loop.

The result is a fascinating data cycle that essentially merges the real and digital worlds. Many companies around the world are already benefiting from these cutting-edge developments. One example includes the British company Yorkshire Water which is responsible for 55,000 kilometers of sewer pipes in northern England. Siemens developed a solution for them that uses AI and the Internet of Things (IoT) to locate blockages in pipes before rivers overflow and water contamination occurs. The AI solution assesses the characteristics and performance of the sewer network in real time, detecting possible weak points before problems arise and is a decisive contribution to that region’s environment protection.

It’s clearly obvious: Digitalization and data offer greater potential for time, energy, and resource savings—especially in our highly networked and globalized world today. Take the value chain of our own industrial controllers as an example: Only 10% of the product’s carbon footprint is generated at the point of production; up to 90%, however, is created in the upstream supply chain. As a result, decarbonizing value chains is a multi-stakeholder task that can be achieved when suppliers, partners, logistics providers, and customers work together. Transparency is key, though. Only when all emissions are openly measurable and comparable can a product’s true CO2 footprint become apparent. It starts with the manufacture of the raw materials through the—often globalized—value chain of the intermediate products all the way to the manufacture of the end-product itself.

Only 10% of the product’s carbon footprint is generated at the point of production; up to 90%, however, is created in the upstream supply chain.

A challenge, no doubt. But a solvable one. All thanks to the latest information technology.

The small Bavarian town of Amberg offers an excellent example of how such solutions can work. The Siemens plant there was included among the World Economic Forum’s “Lighthouse Factories” in 2021 and is already able to track the complete CO2 footprint of its products across the entire supply chain. Siemens achieved this by working with several partners to set up an open and decentralized association called Estainium . By using this association, companies from a wide variety of industries and countries can now exchange information about their products’ CO2 footprints. And this ecosystem partnership underscores an important point: Siemens does not want to sell sustainability. We want to enable it.

Siemens does not want to sell sustainability. We want to enable it.

The principle is simple: Every device and system in a modern production environment is already equipped with sensors that continuously supply data, for example: runtime, temperature, and maintenance requirements. But they also provide data on power consumption which means we also have data on emissions. Our newly developed SiGreen software uses large amounts of this field data (Operating Technology—OT) as well as the IT infrastructure of a factory to calculate the CO2 footprint of individual products.

SiGreen also includes emissions from the upstream value chain, i.e. the CO2 footprint of all the purchased materials required to manufacture the product in the first place. Siemens receives this information from its partners via Estainium and makes the CO2 footprint of its own products available to stakeholders. Thanks to highly secured channels and cryptographic certificates, Estainium ensures that the data is trustworthy and that no strategically relevant information such as the participating companies' own supply chains are disclosed. The result is the openness of data transparency combined with the security of data confidentiality.

The advantage is obvious. Thanks to Estainium and SiGreen, all stakeholders receive a transparent evaluation of their respective products’ footprints—from the individual component to the end-product. Another advantage? Now they can more quickly spot the best opportunities for agile improvements: Where is our resource consumption unnecessarily high? Should we replace certain system components with more energy-saving solutions? Can we find shorter transport routes for parts and products? Does it make sense to combine globalization and local value chains to form a “glocalization”? All of these questions can be now answered. But only when industry mines, interprets and leverages the data with its partners—together.

All of these questions can be now answered. But only when industry mines, interprets and leverages the data with its partners—together.

Our common goal in industry should be this: Not too long from now, every ice cream, every mobile phone, and every car should tell us how much CO2 was generated in the development or production process. We want to make the global value chains more sustainable as well as take big steps towards our goal of climate-neutral industry. Siemens benefits from this because it enables us to live up to our promise of developing meaningful technologies. We all benefit from this because we protect our livelihoods with it. And the chances of this becoming reality have never been as good as they are today.