By EMA staff | 17 June 2011
|A recent keynote speaker at the inaugural National Energy Efficiency Conference co-organised by EMA with EDB and NEA, Mr Pasquale Pistorio is Honorary Chairman of STMicroelecronics and of STFoundation. He is also Founder and President of the Pistorio Foundation, a non-profit organisation that aims to assist underprivileged children in the fields of education, nutrition, and primary healthcare. Throughout his career, Mr Pistorio has been a staunch advocate of environmental protection and corporate social responsibility. He passionately believes that companies should continually strive to be at the forefront of the sustainable development movement.|
Pasquale Pistorio: The potential of energy efficiency and energy conservation is huge and the payback is very fast, so that in the medium term it yields a net positive economic result both for the major public organisations like a city or a country as well as for a business corporation. In the case of a country it is important to apply three instruments and involve three subjects. The three instruments are incentives, regulations, education. And the subjects are the institutions, the corporations, and the citizens.
The institutions should take the lead, granting incentives to correct the past and stimulate the present, but also to emanate regulations that will drive the future. Finally they should promote a widespread educational campaign through schools and media to educate all the citizens to adopt an individual behaviour that is compatible with an environmentally sustainable society without sacrificing quality of life. Just as an example of how to apply incentives and regulation, I will mention the energy consumption for heating and cooling of buildings, which is one of the major sources of energy consumption.
In Europe, many countries give tax incentives to citizens and corporations that restructure their buildings to be more energy-efficient, but at the same time, they regulate the energy efficiency of future buildings. For example, in the UK, all civil buildings must be 0 emissions from 2016, and from 2019, all buildings including industrial ones must be 0 emission. Similar examples can apply to all sectors, including transportation, appliances, electric motors, illumination.
As far as renewable energies are concerned, today the most advanced are wind and solar (thermal, photovoltaic, thermodynamic). Once again, institutions must favour the diffusion of renewable sources of energy by a planned medium-term scheme of declining incentives so as to favour the diffusion of the various technologies until they become economically viable without incentives. This is happening in many countries of the world, particularly in Europe
2. As CEO of STMicroelectronics, you made a US$300 million investment to improve energy efficiency that saved the company US$900 million over 10 years. Based on your experience, what are some of the policies and high-impact technologies that companies should evaluate for implementation?
PP: At ST, in order to implement our environmental programme including energy efficiency and conservation, we did not use particular technologies but simply a well-run corporate-wide programme.
We started noticing that environmental responsibility was 1) an ethical mandate for the corporation; 2) it was very important to attract, retain and motivate our people, in particular, the young talents; and 3) it was good for the bottom line because it was intuitively obvious that a corporation that used less raw materials and less energy for its products and processes would be more competitive than the other corporations that were less effective in this aspect.
The key to the success of our programmes could be synthesised in five main factors:
- Management commitment (from the CEO down, including the appointment of a Corporate Vice President reporting directly to the CEO, responsible to implement what we called a TQEM (Total Quality and Environmental Management) culture across the corporation)
- Create a vision (our vision was to be neutral to the environment as an objective to pursue indefinitely)
- Deploy the culture at all levels of the organisation (through the diffusion of information, literature, education, training programmes, recognition ceremonies, etc.)
- Establishing a roadmap (in our case, it was what we called the Environmental Decalogue, a 10-point policy document establishing precise quantitative targets)
- Driving the execution and recognising results (targets of the Decalogue were an integral part of the reward mechanism – MBO – of managers at all levels, priority allocation of capital when needed, recognition for all the achievements through widespread information within the company, and ad hoc ceremonies).
3. Technological innovations have helped to make available new energy sources, but at the same time our over-reliance on technology is also to blame for climate change and other eco issues. How does one reconcile the two?
PP: Economic development has generated several environmental issues, but not because of technology. Rather, it is because of the inadequate use of the right technologies and the short-sighted quest for immediate returns over a sustainable development capable of giving continuous and more solid long-term returns. In fact, technological development, and the proper application of the technologies, can solve the environmental issue.
For example, road transportation absorbs more than 25 percent of the world's energy consumption because most countries have given priority to private road transportation in the cities rather than public transportation, and in general to road transportation rather than rail transportation across countries. And also because we still have very fuel-inefficient vehicles built in the past several decades on the base of cheap gasoline and low sensitivity to environmental concerns.
Things are changing today, and technology allows us now to build much more fuel-efficient cars like the plug-in hybrid electric. In the near future, technology will allow us to build a passenger car that can transport four people at normal speed, but consuming just 1 litre per 100km (Toyota has already announced for next year a new Prius capable of yielding 2 litres per 100km).
Another example can be the electrical power plants. Those built in the past were very polluting and inefficient from an energy transformation point of view because many of them burned coal and were not properly fitted for low pollution and high efficiency. If, say, we used modern cogeneration and trigeneration gas-fired power plants, we would reach double the energy efficiency of the old coal power stations, and at much less pollution. The new electrical sources from renewable energies like photovoltaic cells are moving towards economic competitiveness while minimising their environmental impact. Technology is going to be the solution, not the cause of problems.
4. You mentioned WWF's report in your speech at the inaugural National Energy Efficiency Conference (NEEC) in Singapore that renewable sources could meet the world's energy needs by 2050. What do you think are the existing renewable sources that have the most potential in the next 10 years to reduce our reliance on fossil fuels, particularly in Asia?
PP: Today, the most promising renewable energy sources are wind (which in many cases is already competitive with fossil fuels, and which still has huge exploitation potential, particularly with the extension to offshore installations). Then there is solar in its various forms of exploitation (thermal, thermodynamic and photovoltaic).
Moreover, a growing contribution will come, with proper treatment, from biomass to generate biofuels, but without using land and agricultural products that can produce food. For the purpose of generating biofuels, only agricultural waste must be used, as well as waste from the wood industry and special plant species that grow on land not suitable for food production. Finally, there is the cultivation of special algae in water reserves intentionally set up as biofuel. I believe those three technologies will be by far the most important in the next 10 years. In some particular regions, geothermal can also offer a good source.
I think that China is already doing an outstanding job in promoting renewable sources of energy. Today, 46 percent of the world's production of solar cells is in China, with another 14 percent coming out of Taiwan, so that 60 percent of the entire world's production of photovoltaic solar cells is from that area.
5. As a staunch advocate of environmental protection, what inspires your continued commitment in this area?
PP: As a business executive, I was convinced and I proved with the results of my company that environmental commitment is not only good for the environment, but also for society. It is helps to generate profits and improve competitiveness for the corporation. Every business executive should understand this simple concept and become committed in pursuing a strong environmental policy. By the way, I believe this is happening more and more in corporations around the world.
As a citizen and as a father and grandfather, I want to be sure that every one of us does whatever is necessary to leave to future generations a planet that is as liveable as it was in our time, rather than a planet plagued by dramatic pollution and the devastating impact of global warming.