Transcript by Kensho.

Lindsey Hall: I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy. 

It's Climate Week NYC and we're doing something a little different here at ESG Insider for the next couple of episodes. Now if you listen to our recent episode on what to expect from Climate Week, you'll know that this week includes thousands of stakeholders gathering for hundreds of events across New York City. And as you might be able to hear from the background noise where I am, I'm currently at one of those events. 

At ESG Insider, we're thrilled to be an official media partner of the Nest Climate Campus, which is taking place here September 19, 20 and 21, at the Javits Center. So over the next couple of days, we'll be bringing you short interviews from the sidelines of the climate week to give you a sense of the conversations that are taking place. 

Okay. Let's dive into today's interview. 

Thank you for sitting down with me on the sidelines of the Nest Climate Campus during Climate Week NYC here at the lovely Javits center. We can see the green roof just out the window here. For starters, can you introduce yourself to our listeners and say a little bit about what you do.

Matt Helgeson: Sure. Thanks. Yes. Happy to be here. My name is Matt Helgeson, and I lead our sustainability office here in the U.S. for Siemens. Siemens is a technology company that's really focused on bringing the real and the digital worlds together. We're trying to apply our technology with purpose to transform what we consider the backbones of economies, so industry infrastructure, mobility, health care. And we're helping our customers accelerate their own digital transformation, reinventing their companies, their industries and becoming more sustainable.

Lindsey Hall: Okay. And those customers are what type of organizations?

Matt Helgeson: Our customers are pretty diverse, everything from cities, governments -- the federal government is a big partner of ours. We work with utilities, building owners and operators, really in the built environment is a space that we have a long history and is a place where we really see a lot of potential in applying our technology in a new way to achieve some of these decarbonization goals that are becoming priorities for our customers.

Lindsey Hall: Okay. So that kind of leads into my next question, which is hat are you doing here at Climate Week? What's the goal for Siemens here at Climate Week?

Matt Helgeson: Yes, absolutely. So Siemens' business strategy is really built around addressing global megatrends. So these forces shaping the future, whether you want them to or not. And each of these presents challenges to us, of course, but our customers as well and opportunities along the way. 

But we really see one force that stands alone in this decade, and that's climate change, of course. And we don't think there's any other force that needs more urgent action than that. And so we're here at Climate Week to connect with this ecosystem of customers, sure, but partners, suppliers that are all here to help find more unique ways to partner to find some of these coalitions that we're engaged with and the things that they're doing to facilitate that and spend a lot of time really looking forward to what we see as a real big opportunity in the next few years here in the US market. So, it's a great place for us to connect and expand that ecosystem and get creative with the way we partner.

Lindsey Hall: Okay. Are there any conversations you're particularly looking forward to having here at Climate Week?

Matt Helgeson: Yes. So I think I'm really looking forward to the conversation around this opportunity we see here in the US in the next few years with the inflation Reduction Act and all of the financial -- positive financial implications that come of that as it progresses and rolls out to be more a bit more productive. 

And we're hoping with guidance that's coming around the corner here and those programs get a little bit more organized that our customers can really take advantage of that. And so there's a lot of good conversation around how do we partner with these government agencies who are responsible for getting that funding out, how do we help facilitate the work they're doing because we know that they have a very significant challenge in organizing themselves around facilitating the funding that needs to get to the places, particularly things like small and medium businesses that we work really closely with.

So I'm really looking forward to that because, for Siemens, of course, there's significant emissions impact with the results of all the projects, but that's really our core business, the projects that will come from the funding and the tax credits out of the IRA will be those levers that get these projects moving for our customers who maybe need that capital to really justify putting these projects on the ground. 

So we're looking forward to that conversation. And there's always but an evolving conversation around supply chain. Scope 3 is, of course, everyone's biggest challenge and we're no different. It's an interesting opportunity for me to see how that conversation changes because we've been pretty specific about our expectations of our supply chain and the emissions reduction there in our upstream Scope 3. So there's a big opportunity for that to grow hopefully, here this week as we connect with some of those suppliers.

Lindsey Hall: Okay. Can I dig in a little bit more there? You said Scope 3 is your biggest challenge like many others. Talk to me a little bit more about that. Why is that?

Matt Helgeson: Yes. So we committed to be net zero in our operational emissions by 2030. So Scope 1 and 2 net zero with a 90% physical emissions reduction. So that's our operational emissions. That's our fleet, our facilities, our production or manufacturing footprint and of course, our energy consumption. 

Scope 3 comparatively is 10x or 11x the size of our Scope 1 and 2 in terms of the actual emissions numbers. And so that's not just upstream. We have pretty significant downstream scope 3 emissions. So that's mostly in the category of customer use of our products. 

A lot of our products use lots of electricity. And so there's a pretty significant footprint there. That challenge is really being addressed by our Ecodesign program. So this is the redesigning of our products to include more secondary materials, right? So kind of connecting the dots on that circularity conversation within our -- within what we can control, even indirectly. And so that downstream piece has a bit longer tail in terms of seeing the impact of those programs because you can imagine redesigning these products takes significant resources and time.

And so we've really begun with the upstream side because we feel like that's a little bit more tangible and shorter-term action can be taken. So we're setting up programs with our suppliers to maybe really start with a baseline. So we're trying to understand as opposed to just calculating like in the spend-based calculation, upstream Scope 3 emissions, which is a generally accepted way to understand what your scale of your impact is. We're trying to get a little bit more accurate there and have real emissions data from our suppliers. 

And to then come alongside them and find either places where sure, our business units can help, but where our partners can come in and help our suppliers set target, set net zero targets and create real road maps for that emissions reduction that we want to see them make, sure for our own Scope 3 emissions targets, but just for the impact that we know we can kind of help generate there.

Lindsey Hall: Okay. Great. Now so we're at the end of day 2 of Climate Week. And you said to me when we were chatting before we started the podcast today, you said, it feels like you've already been here 10 days. And in that space of 2 days/10 days, have you heard anything that really surprised you or anything that had stood out so far?

Matt Helgeson: So far, I've been interested to hear this theme that we talk a lot about, but I just haven't heard elsewhere as much. And that is the alignment between corporate and climate targets. So there's a lot of folks here. It's not all just the private sector corporate perspective, but I'm hearing more about this positive business case for sustainability and how in order for the private sector to really make an impact, those interests must align. 

So it must be good for your business to justify the investment into sustainability broadly or decarbonization, maybe more specifically. I love that because we feel like we're a little bit unique in that our entire portfolio is really designed to advance our customers' sustainability goals, but also make them more productive, more resilient and drive positive business results for our customers. 

So the intention to align their business results with their decarbonization has been a part of kind of how we positioned ourselves and really what our core business is set out to do for a while. So it's been really nice to see some others kind of come along with that. It's not necessarily a new concept, but it seems like it's a bit more in the forefront this year in really trying to answer that question of how do we get the private sector to really get to work because we've probably all heard comments like the private sector is where the work has to happen. 

We need -- of course, there's lots of conversation around regulatory enablement of this to happen and that regulation is absolutely required, and we agree. But we think the real action and the real projects get started in the private sector. So to see that, those 2 things align has been really neat this year already.

Lindsey Hall: Yes. So am I hearing you correctly, you're saying that this trend or this theme you're hearing come through is this idea that about making a business case for sustainability.

Matt Helgeson: Right. And to understand that sustainability or decarbonization has a positive business benefit and is not just an additional cost against your targets?

Lindsey Hall: Okay. I heard someone from Enel speaking on a panel earlier today and he was saying, we don't invest in sustainability: sustainability is our business -- and I thought that was an interesting way to frame it. 

Matt Helgeson: Yes, we would agree. I mean I think we'd say it pretty similarly. I heard just before I came over here someone say that you can't have a sustainability strategy, that sustainability is the strategy. So it's almost like taking this more fundamental definition of the word sustainability. What do you need to do to ensure that you have an existing and positive business for the long term? And that sustainability of long-term positive business obviously speaks to investors and other stakeholders as well and not just kind of the corporate sustainability audience.

 Lindsey Hall: Okay. And I think last question here before we wrap up, I just want to ask, as you look ahead, what would you like to see happen to consider New York Climate Week 2023 a success?

Matt Helgeson: Sure. So I think for me, it's all about momentum. The action seems to find its way to where the energy is the strongest. And so successful week for me is leaving with a little bit more energy than I had when I got here. 

I think for Siemens a successful week is having that space to connect with our partners and to really find those unique places where we can get creative in terms of bringing others into that ecosystem. And to take that momentum that hopefully are individuals who are here personally feel and turn that into organizational momentum. 

So when we're all back in the office that communicating well about what we heard when we were here, particularly for the US market and what we see as opportunities here for an international German company to translate that really well back into our broader employee base back to the rest of our leadership teams into our business units, that's a big success for us.

Lindsey Hall: Great. Well, thank you so much for sitting down with me today.

Matt Helgeson: Absolutely. Enjoyed it.

Lindsey Hall: So as you heard, a big focus on collaboration across the supply chain, and this is a theme we'll continue to tease out throughout Climate Week and in the weeks ahead. Please stay tuned.

Thanks so much for listening to this episode of ESG Insider, and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.

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