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Monday, 14 November 2022

The Enterprise Climate CEO Poll: Schneider Electric’s Sebastien Riez

Enterprise Climate CEO Poll- Sebastien Riez, Schneider Electric: With all eyes on Sharm El Sheikh as COP27 continues, Enterprise Climate and EnterpriseAM are presenting our inaugural Climate CEO Poll, a series of interviews with top CEOs to discuss key issues including climate finance, regulation, and the green economy.

Sebastien Riez (LinkedIn) is the Northeast Africa, and Levant Cluster President for Schneider Electric, a French multinational digital automation and energy management company. We talked to Riez about the MENA EV market, future investments in the region and the outcomes Schneider hopes to see from COP27.

Enterprise: Schneider Electric has made energy efficiency and decarbonization a cornerstone of your business. How much CAPEX does the company plan to invest in 2023 in this area of the business?

Sebastien Riez: Sustainability is a key priority for us, and we continue to invest in research and development to develop our products. To paint a picture, we’re allocating 5% of our global revenues — which came in at EUR 28.9 bn in 2021 — to R&D in the coming year.

E: Which areas of the green economy do you think the MENA region should be focusing on?

SR: Efficiency is the core, at the center of everything. Whatever the segment is, we can be more efficient. As Schneider, at our head office in Cairo, we use Schneider Electric technology to be more sustainable. Today, we are able to cut our energy bill by 50% using Schneider Electric solutions. We’ve also brought our solutions to several corporate clients like Carrefour Egypt, which asked for help to decrease its energy bill. We developed product solutions, which are currently being implemented in 44 sites including supermarkets and hypermarkets, bringing their total energy savings to 7%. Some sites have seen their energy savings reach as much as 25%.

We are also digitizing the electrical distribution grid — which always sees technical losses from the electricity distribution process — here in Egypt, utilizing Schneider Electric solutions. Thanks to that, we are able to optimize the efficiency of the grid and to make savings on electricity production because we are losing less. By losing less, we’re able to produce less, meaning we’re using fewer fossil resources and hereby reducing the carbon footprint. Sustainability is the consequence of being more efficient.

E: There are concerns that the MENA region will be unlivable if temperatures continue to rise by 2050. How much energy will we need to produce sustainably to be able to inhabit this part of the world?

SR: The more temperatures rise, the more energy we will need to cool down our environment, but if that energy source is not clean then we are making the situation worse and worse. It is super urgent to make sure the source of energy we are using is green. We need to look at energy efficiency, looking at how much of this energy we are producing is lost and how do we address that.

E: How do you view the MENA EV market?

SR: The EV market in the MENA region started late in comparison to Europe or some other part of the world. It is becoming a reality in the Middle East and in some countries in Africa. Schneider is supporting that front by supplying EV/EVlink chargers in Sharm El Sheikh in parallel with COP27 and in Cairo.

E: Where do you see the challenges for the region’s EV market?

SR: The challenge is to have the facility to manufacture those EVs so that we can feed the market. In parallel the challenge is to build the right infrastructure. If you have an EV but you don’t have the chargers around, you won’t be able to make the most of it. If you have the chargers but not the EV then you have the same problem. Those are two dimensions that need to be addressed together and they need to progress together at the same time. Globally speaking, we are more than ready to make the EV transition happen and to support the country.

E: How has Schneider Electric adapted to the high inflation, high interest rate environment along with ongoing supply chain disruptions?

SR: The current environment is super challenging, we had the pandemic and just after the pandemic we got the geopolitical situation that we’re facing today, resulting in a lot of consequences on the world, most notably inflation getting higher and higher, and large disturbances in supply chain. This is not easy to cope with, but here in Egypt we have the advantage that we are pretty localized — we have our own factory in Egypt and our own distribution center. We try to localize as much as we can — some of our products source 40-60% of their inputs from the local market — which helps us reduce the impact of all those disturbances. Being local helps mitigate part of the impact.

E: What outcomes, policies, or initiatives that would directly impact your business would you hope to see come out of COP27?

SR: If we manage to have a global framework, a global policy and more and more solutions with regard to energy efficiency and business sustainability that’s going to help speed up the process. If the regulatory framework is pushing and promoting sustainability, that can only help the business. This year in Sharm, we have all the stakeholders in the equation. Years back COP mostly brought together nations and NGOs but today you have added the dimension of the private sector.

Schneider Electric has helped our customers save more than 120 mn tons of CO2 since we began monitoring our impact on people and the planet with our sustainability barometer in 2005. We want to reach 800 tons by 2025 within the framework of our new program. We’ve given 30 mn people access to green energy since 2005 and we want to push that figure to 100 mn by 2025. By 2025, we also want to have 80% of our revenues coming from green business and have 50% of our products use green components.

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