By Anand Nair and Ravi Ramamurti

On October 5, 2024, D'Amore-McKim's Center for Emerging Markets organized a Global Sustainability Summit that included a keynote by Jean-Pascal Tricoire, Chairman, Schneider Electric, a multinational firm that has been a leader in sustainability practices. This note captures his main observations, as gleaned by the authors of this summary.1 A companion piece does the same for three other speakers who addressed the sustainability challenges facing South Asia (and India in particular).  The Summit Agenda and videos of all sessions are also available.

Jean-Pascale Tricoire, Chairman, Schneider Electric made several interesting points about how he and his company view the sustainability challenge.

  1. In 2022, 88% of the world population of nearly 8 billion lived outside US and Europe. By 2050, world population will increase by 1.7 billion, mainly in Africa (1 billion) and Asia (0.5 billion). To provide reliable and sustainable energy access by 2050 to all those people, we will have to switch from fossil fuels to electrification, and generate electricity much more efficiently and cleanly by transitioning out of fossil fuels to renewable sources.
  2. The per-capita carbon dioxide emission, in tons per person per year (TPPPY), is vastly different across regions: in Africa it is 1 TPPPY; in India 2 TPPPY; in Europe 6 TPPPY; in China 8 TPPPY; and in North America 15 TPPPY. If the whole world followed the North American pattern, emissions would quadruple by 2050 and the planet would be unlivable.
  3. Tricoire saw first-hand in poor countries just how difficult life was for people who lacked access to energy. He concluded that the 3 billion people who lacked access to energy would have to be provided reliable energy, even as the world worked towards its goal of net zero emissions by 2050. Tricoire highlighted two strategies for pulling that off: digitization (including such developments as IoT, big data, AI, metaverse, etc.) and electrification.
  4. Emerging economies have tremendous opportunities to leapfrog with new technology. Solar is already the cheapest source of energy and by 2030 its price will fall further by half. Clean technologies are also three times more efficient than fossil fuels—and more secure.
  5. For the past 20 years, electricity's share of total energy consumption has remained remarkably steady at 20%, with fossil fuels accounting for the remaining 80%. Twenty years from now, electricity's share will rise to 50%, and 80% of new electricity capacity will be renewables. Normally, we think of energy as being produced by large companies, but today 50% of renewable energy comes from decentralized, local units. This trend empowers people to manage their energy production and pollution.
  6. Priorities for investing in new technology will differ across markets. In developed-country markets only about 1% of existing buildings are retrofitted each year—which means it will take nearly a century to upgrade all their buildings. However, emerging markets will be constructing a lot of new buildings that can be built to net zero standards for much less than it costs to retrofit old buildings. By 2050, buildings will have 10 times the current levels of heat pumps, 20 times distributed solar, 85 times net-zero retrofits, and 20 times net-zero new constructions.
  7. While there will be a decrease in energy consumption in mature economies and China, in new economies (such as Brazil, South Africa, Indonesia etc.), and India there will be a net increase in energy consumption. China has been 9 times faster in electrification as the rest of the world; China's electrification is at 30% while the rest of the world's is at 17%. China is also an important supply source of renewables: it produces 90% of solar panels, 50% of electric vehicles, and 70% of battery storage. China is also investing in 20 nuclear plants.
  8. By 2047, India's energy demand is going to grow to 2 times its current level. The demand for electricity will grow by 6 times and 82% of it will be generated using renewables.
  9. In the industrial sector electric, hydrogen, and circularity will increase by 2x, 3.5x and 4x, respectively. Transportation will witness 20x more electric vehicles, 150x increases in electric vehicle chargers, and 30% increase in rail activity.
  10. In its pursuit of digitizing and powering a sustainable world, Schneider Electric has employed about 150,000 employees, working with more than a million partners, and operating in more than 100 countries. The organization is working towards building smart homes, smart buildings, smart transport, data centers, smart industries, smart utilities, microgrids, and smart grids.
  11. Over the course of past 20 years, Schneider Electric's revenue from digital and electric has increased by more than $15 billion (16x) and $28 billion (5x), respectively. There has been more than a $26 billion increase in revenue from sustainable innovations (68x). Emerging markets have grown over the past 20 years to contribute more than $14 billion of revenue (15x). In other words, Tricoire notes that sustainability and financial performance go hand in hand. Between 2003 and 2023, Schneider Electric's revenues have grown by 4x, market capitalization has grown by 12x, and it is the third most widely held security by ESG funds globally. It has received many awards for its sustainability initiatives.
  12. Schneider's own carbon footprint has been low, but a large portion of it is with suppliers and customers. Hence, the company considers it important to work with its stakeholders to promote sustainable practices.
  13. Tricoire noted that a company can make a huge impact on sustainability by bringing in the right people, the right financing, etc. and by mobilizing suppliers and customers. Schneider Electric accomplished some of these objectives by getting more companies in its value chain to join the UN Global Compact initiative, and by showing the connection between sustainability and suppliers' competitiveness. The company also emphasized training, developing right technologies, and making sure that decentralized operations worked well. Schneider Electric's experience is that decentralization creates more interesting and safer jobs than centralization.
  14. Artificial intelligence (AI) can help improve energy efficiency. Although data centers have the highest density of energy per square foot, accounting for 1.3% – 2% of world electricity consumption, AI can more than pay for itself by reducing emissions by 20%.
  15. In his concluding remark, Tricoire advised the new generation of learners to remember that organizations need people who can not only think but also act. He also encouraged students to go to places that are outside their comfort zone, where people are most different from themselves, because if one can survive in those places it is possible to gain invaluable strengths.
  1. This summary is the authors' understanding of Schneider Electric Chairman Jean-Pascal Tricoire's presentation at the summit. Readers can view his presentation in his own words (video) on CEM's website. ↩︎