Discovering the impact of sustainability on the automotive industry
Conor Peick: In this episode of the Future Car Podcast Nand Kocchar, VP of Automotive and Transportation Industries and I, Connor Peick, Thought Leadership Team Writer continue our series of conversations on autonomous vehicles and how they will shape the future of mobility. Today we are looking at the overall dynamics in the automotive industry, with a special focus on the crucial topic of sustainability. Automotive companies and manufacturers have retooled their strategies to get us to a greener future. But how can these companies achieve this without sacrificing innovation, particularly in their pursuit of automated driving to help us dive into the? To help us dive into how the automotive industry is working to achieve sustainability standards and goals, NAND and I are joined by Eryn Devola, head of sustainability at Siemens Digital Industries.
So welcome, Eryn, and thank you so much for joining Nand and I today. We’re really excited to have you on the podcast. To get started, I was hoping you could give our listeners a summary of your role as head of sustainability and your experience as well.
Eryn Devola: Thank you, Conor, and Nand so much for having me today. I’m super excited to talk a little bit about the automotive industry and the role that sustainability plays in my current role at Siemens Digital Industries. I’m responsible for three things. The first is the sustainability in our own operations. These are our scope 1and scope 2 emissions in the CO2 lane, but also looking at are efficient use of resources, how we’re driving circularity and how we’re providing the right environment for the societies and the people in which we operate. We look at this through the lens of our offices, our production facilities, and the vehicles that we use as part of our own fleet.
The second area of my responsibility is in that of our products. Both our hardware products that help with automation and our software products for design and operation and what we do there is really look at those life cycle impacts on the environment of those products. So, what’s happening in their supply chains? What’s happening in their production and then what’s happening in the use phase and ultimately at the end of life of those products and my third area focus is really on our own portfolio and our offering.
These challenges that we’re facing to be more sustainable in our operations and our products are not unique to Siemens and we have a wide variety of tools that are available that can help others in our industrial space become more sustainable. So those are really the three big areas that we focus on and the sustainability practice here at Siemens DI.
Conor Peick: Awesome. So, as we move into the future, it’s sustainability is clearly become a priority in the automotive and transportation industry. Eryn, I’m curious how this is impacting the overall strategies and priorities of automotive companies and umm, on top of that, does it make industry partnerships more important to success?
Eryn Devola: Yeah, I think what you’re seeing so much, especially in automotive and transportation and really those industries that are tied to consumers, they’re really aware of the market environments around them. We’re you see trends around legislation coming, you see commitments around that zero and the Paris Agreement for that one point 5C limiting those aren’t as far away as they used to be. And companies are really looking for those strategies to implement and execute to become more sustainable. And what they’re doing every day, the other thing as a manufacturer that becomes very apparent is that your own emissions and your own impacts within those factories within those buildings is 1 level. But you have to really be looking at both your scope 3 upstream, which means your supply chain and your scope 3 downstream, which is what’s happening with your products during their use phase. And in the case of automotive industry, they’ve really taken it a great approach at looking at that scope. We downstream with the invent and the really the scaling of electrical vehicle production in participation in the market.
Nand Kochhar: Yeah. Conor, I agree with everything Eryn said. One additional point is the automotive companies have recognized to make a business case out of the sustainability to be a viable business for medium and long term not only just a short term, but it fits so, it is adding a lot of value. It’s the right thing to do. It’s not only just the in the past was a mandate from a regulatory requirement and meeting the criteria and emissions and so on, but now companies have realized that sustainability is the right thing to do for their business, both from a brand recognition perspective and delivering value to their end customers. So that’s a very important aspect and to deliver those partnerships no one company can do such a big initiative on their own.
So, partnerships have become very important, and they recognize that. Eryn touched on, partnerships. They could be at a very upfront stage of digging the raw materials with the mining industries at the tail end, partnerships with the recycling and the reuse of stuff because not every OEM and automotive company have the entire vertically connected chain. So, they’ve built partnerships so they can address the sustainability in a holistic sense.
Eryn Devola: You know, Nand hits on an interesting point there, which is that the role that some of these partnerships really play. And I think the first one is, as we look at some of the legislation and look at some of the targets, there is not yet the landscape that has a common language or common definitions or common calculation methods. And what we’re seeing in automotive, in particular with organizations like Catena-X is really competitors within the same industry coming together and saying, hey, what our language maybe for our industry and how do we drive that in the first space as you know, what are the rules of the game so to speak.
The next place for those partnerships come in handy along the value chain is now that I know what I’m trying to count and how I’m going to count it, we really don’t have all the transparency to these really varied environmental impacts. That’s another place where being locked up with your supply chain with your distributors or how you with your dealers, how you’re bringing products to market. And then really understanding how your consumers are using those products, our critical to having those full life cycle impacts and you can’t no one enterprise can do that alone. You really do need to have a network or an ecosystem of partners working together to really be effective here.
Conor Peick: We talked a bit about sort of business goals for automotive companies and how sustainability plays a role. Obviously one of the other big things that a lot of these companies are targeting is autonomous vehicles, hence the topic of this podcast. So, I guess I’m curious, how do these things synergize to autonomous vehicles, play a role in the sustainability ambitions of these automotive companies? You know, do AVs bring any advantages in the pursuit of environmental goals?
Eryn Devola: You know, from my perspective, there’s been a couple of articles, but not merely nearly enough studies done on what autonomous vehicles mean to transportation, but I can share with you all that I have a 16 year old driver at my house and how he operates a vehicle I’m sure is not optimized for fuel efficiency and this is one of the things that we can really think about quite a bit is how you operate that piece of equipment has an impact on its environmental impacts.
I guess to use the same word again there, but really being able to look at and optimize for those parameters alongside performance alongside. Range and safety are key to where autonomous vehicles can really play a bigger role long term. It’s a complicated problem to solve, and I think that’s where a lot of the tools and data management that comes in is there. But I think Nand might have a lot more technical information to share here.
Nand Kochhar: I fully agree. As you know, autonomous vehicle comes with all the basics. What’s needed for constant learning and constantly updating and making it next generation of vehicles better than the ones before? So, it is the sensing technologies, it’s the processing of all that information and then reacting to that information. Autonomous vehicles by the definition come equipped with all those data collection modes and now companies can either collect the driver behavior, just like Eryn’s example. They can also collect a lot of other information from a traffic standpoint and driving behavior standpoint and proposed based on all the computing power, which is on autonomous vehicles, what the optimum solutions are, what the next generation of vehicles need to be modified with, etcetera. So that’s why autonomous vehicles play a big role in overall delivering the sustainability. And again, it’s might not be a single silver bullet. It’s combination of all these little things you can add up and as things evolve, companies find ways of leveraging that data, that information, which is available for free, so to say. Now, since all the equipment is already in the in these vehicles.
We tend to focus on how digitalization and digital twin technologies and all the other digital tools can help overcome the engineering challenges of the future. In your mind, Eryn, how does digitalization and the collection of data and power companies to achieve sustainability targets while maintaining profitability and keeping up with the pace of innovation?
Eryn Devola: We look at digitalization or becoming a digital enterprise as the how supporting the why of sustainability and I think about this, and I had a conversation just a couple weeks ago about how hard the role of a design engineer has become. If you go back 30-40 years, they were looking at performance maybe a little bit of quality, but really weren’t thinking about design for service, design for manufacturability and now we’ve got design for sustainability coming in.
We really are adding more and more parameters that we need to manage to and this is where data management and having a very comprehensive digital twin that can speak to performance metrics can speak to geometry, can speak to the physics of a product at the same time as though it’s those environmental impacts is so key because you’re not trying to deliver just one thing, you’re trying to deliver products that are better, that are faster, that are more profitable and more sustainable all at the same time. And I know it sounds like an almost impossible job, but I think the technology is there to really help people make those better decisions in the future.
Nand Kochhar: That’s a very good point.
So, it’s not only a digital twin of product during development and manufacturing is also doing operations and then having a closed loop process to provide insights and that’s where we I think end up leveraging a lot of the IoT and analytics technologies to get that closed loop processes continuously updating and refining the models for next generation. Let’s switch to now upcoming government regulations. They’ll have a huge influence on automotive industries and sustainability initiatives.
Now, how can digitalization help automotive companies comply with these new regulations?
Eryn Devola: From my perspective, there’s a few things that really stand out. The first is really driving that transparency and connecting data. You know, I was at climate week a few weeks ago, when I listened to this great speaker talk about taking collective action and how we need to take action as an ecosystem. But that action really needs to be based on some collective intelligence, and that collective intelligence comes from taking these data sources, getting more complete and more comprehensive information and then being able to make decisions that drive sustainability impacts wherever they go along that lifecycle.
And I think that that’s an interesting thing is when you look at regulations, at least in the EU is that there’s a drive to hold the manufacturer responsible for those emissions, cradle to next cradle. To do that, you need to understand what those impacts are, both in the supply chain phases in the phase when it’s inside your factory and then what’s going on in the use phase and pulling using digitalization to pull those data sources together to point to the right decisions from that data is really what we mean by leveraging collective intelligence and being able to say we understand what’s going on from end to end and now I know where I need to work to optimize instead of doing these smaller and more localized optimizations because you only have a segment of the complete picture with the data. When we have those regulations, what they start doing is providing us with transparency. Once we have that transparency now, we’ve got the power to really make huge impacts.
Nand Kochhar: That’s very good point. When I was in the industry, we were always optimizing for cost, and it was always making decisions of what the landed cost of the parts is going to be no matter where it is being built. So, you could start to take into account, and I look back and say our CO2 calculations or the environmental impact is equally important, just the way we calculate our measure cost, it impacts the same way where we build the parts and what it takes to build those parts from environment perspective.
Eryn Devola: If you’re a podcast listener today, maybe you love podcasts as much as I do, but there’s a great podcast that Malcolm Gladwell did as part of his revisionist history, where he talked about the environmental footprint of a load of laundry and how the best thing that Procter and Gamble, the manufacturer of detergent, could do was look at that whole load of laundry and what they learned is that the largest environmental impacts were happening with by heating the water to run the wash cycle.
So, the most impactful decision they could make was to make their detergent work just as effectively in cold water. And that’s one of those impacts you don’t see if you’re only looking at what’s happening with inside your factory. So maybe that’s a good example of what I mean when we talk about looking at that whole life cycle. And I think with the autonomous vehicle that’s really within that driver behavior that has an impact that you want to have more control over. And I think this is one of those ways that we can really drive those overall impacts by managing them and optimizing for impacts alongside speed or safety and all the other important impacts that you’re looking for out of an autonomous vehicle.
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