CEO Sustainability Series | Thomas Baudlot, CEO Energy Solutions APAC, Country Head Southeast Asia, ENGIE South East Asia

Question 1. What has your company's sustainability journey been like so far?

Transformational, and at such a fast pace! As a Group, we have slashed our Scope 1 emissions by 55% since 2017. We were the first Independent Power Producer to announce a complete exit from coal and, in fact, we are just a few years away from our goal of eliminating our use of coal. ENGIE will phase coal out globally by 2027.

With countries across the world pledging to reach net zero emissions by 2050 and the need to limit global warming to 1.5 degrees Celsius, the full decarbonization of the power sector has never been so essential and urgent. Conscious of our critical role to play in the fight against climate change, we have set ourselves an even more ambitious goal of being Net Zero Carbon by 2045, for our clients and ourselves and on all of our scopes (1, 2 and 3) of activity.

To this end, we are deploying 4-6 GW of renewables each year worldwide and working actively to make our gas green. ENGIE is a very strong proponent of biogas and green hydrogen as renewable energy resources for fuelling a more sustainable energy future. Further we are supporting our clients in defining and implementing their decarbonization journey, as shown by our commitment to deploy 8 GW of low carbon infrastructures by 2025.

In short, we are working tirelessly to accelerate the transition towards a carbon neutral economy.

Q2. On a company level, you have set high targets, especially when it comes to environment and climate change. What's the key to achieving these targets?

One of our priorities early on was to align the Group governance on those ambitions. Evolutions have been numerous, from working with a carbon budget, which concretely prevents us to invest in carbon intensive projects, to including an internal carbon price in our Business Plans or even incentivizing our key executives on the achievement of our carbon emission trajectory. Such changes exemplify how the decarbonization of our activities has been put at the core of our managerial system. They underpin a real cultural shift in our company.

We also leverage on a unique integrated Business model. Today our ability to play on one of the largest and most diverse portfolio of renewables in the world, as well as our presence across the energy value chain and our capacity to help our clients reduce their energy needs sets us apart. For example, we claimed the BloombergNEF silver award for 2021, which marked us as one of the largest players in the world, with PPAs (Power Purchase Agreement, contracts used for the supply of renewable energy) signed for more than 2.1GW, for players such as Microsoft, Orange, and Google.

Last, we actively seek out strategic partnerships that will allow us to deploy our solutions at scale. In Southeast Asia only, through our alliances with established players such as Filinvest Group (largest real-estate player in the Philippines), ComfortDelGro (leading land transport company in Singapore), Sunway Group (one of the largest developers in Malaysia), LOGOS Group (logistics specialist in Asia Pacific) and renowned institutions like the Singapore Institute of Technology (SIT) we are able to maximize the decarbonization impact of our projects across Southeast Asia.

Q3. What have been or what would be the challenges to face in pursuing a net zero agenda and where are the opportunities?

Going a Net Zero is a daunting task. It will necessitate a complete revamping of our energy systems in a 20-year time frame, requiring an unprecedented level of investment, coordination and pace of upgrade for our infrastructures worldwide. In the region specifically, rapid population growth and varying levels of developmental and political maturity across countries present a key challenge. Historically, urbanization and economic growth have been powered by fossil fuel-based energy systems across much of Southeast Asia and transitioning to more sustainable, greener energy systems require political, private, and public buy-in and action.

Fortunately, we are living in a pivotal moment. On the one hand, the Covid-19 pandemic has helped increase awareness of the need to change our ways of living & doing business. We are moving away from greenwashing days, and you can see a shift towards action coming from corporates across the region. Public focus is also here as the latest Australian election demonstrated where the local Labour party ran and was elected on a sustainable agenda. Closer to us, countries like Singapore with its 2030 green plan are taking decisive action to accelerate on their transition. On the other hand, we have technologies that are mature and cost competitive to start curbing our emissions. Solar energy has for example become the most affordable power source in most of Southeast Asia’s countries. Energy Efficient solutions or District Cooling offer also a great way for corporates and cities to reduce their energy needs, which is essential in current market’s volatility.

Even if we do not have the full breadth of technology ready to take us to Net Zero, there is enough to start today to curb our emissions within a 3-year time frame, as required by the IPCC to give us a chance to keep temperature increase within a 1.5 degree range. In the meantime, companies like ENGIE are investing and developing next range of technology, such as green Hydrogen, that will help tackle hard to abate sectors. In the meantime, whether it be through solar, cooling, or green mobility solutions, ENGIE stands ready to help clients across the region accelerate their net zero transitions.