Economy of the common good
Immediately after our interview Michael Hetzer welcomes a group of school pupils from the local region. They want to find out more about Elobau and discuss climate protection and entrepreneurship with the company’s managing director. They submitted their questions in advance, although Hetzer had not requested them to do so. But now he is surprised: “One question is: do sustainability and economic success rule each other out?” Michael Hetzer shakes his head in disbelief.7 Jun 2019
He keeps on encountering this question – not only from pupils. “Young people still see a discrepancy between ecology and economy.” Hetzer has resolved this supposed conflict. Located in Leutkirch, in the Allgäu region of Germany, Elobau produces CO2-neutral non-contact safety switches, sensors, push-buttons and complete control panels.
The polluter must pay
Michael Hetzer has never been an environmental activist. “Of course, we kept track of our energy consumption, but never acted consistently,” he recalls. Things changed in 2009, when the world began discussing climate reports. “We began to experience the first effects of climate change and I was convinced then – and still am today – that an entrepreneur has great leverage to protect the environment.” Elobau set off on its journey. For the first time, consultants came to the company – not strategy consultants, but engineers. They analysed the processes, energy consumption and electricity and heat production from a technical perspective. “We invested in two micro gas turbines, converted to biogas and bought a gas boiler for peak loads,” Hetzer explains. But he wanted to go a step further. “We bought certificates according to the gold standard for everything that we cannot technically save in terms of CO2.” The first climate impact assessment was produced. And what about today? “We compile our balance sheet according to the ‘economy of the common good’. In short, this means that those who pollute more or consume more should pay more.” The ‘common-good balance sheet’ is a stringent sustainability report which is audited annually and extends beyond the question of environmental standards. This is not a problem for Michael Hetzer. On the contrary: he cannot understand why the general public should pay for pollution caused by industry. “I can’t just take the profits and leave the environment destroyed and exploited. That does not work.”
Sustainability as a competitive factor
What does this look like in practice – alongside green electricity, e-cars, biogas and waste management? The company compensates for every business trip – by car, plane, ship or train. “We sometimes need to visit our colleagues in the USA.” By way of compensation Elobau leased a plot of land in Costa Rica, where farmers plant new trees and grow ginger, coffee and cocoa. This commitment entails additional accounting work and higher costs. “Nevertheless, we are making a profit. We are growing and looking to recruit large numbers of new employees,” Michael Hetzer emphasizes. He is convinced that in the near future companies will find it even more difficult to recruit personnel if they do not commit themselves to environmental protection. “Some of our employees were sceptical at first. But today most of them come by bike and are proud that we are so successful – both ecologically and economically.” Elobau employs over 950 people worldwide.
And what about the customers? “They admire our commitment, but are unwilling to pay higher prices.” Nevertheless, closer business relationships are developing with customers who think in a similar way to Michael Hetzer and his team. Suppliers sometimes cause problems for the Elobau purchasing staff. “Ten years ago it was very difficult to determine how much CO2 is produced per square metre of printed circuit board. However, there are now databases from which we can extract this information,” Hetzer reports. Elobau evaluates its suppliers. “We had to cease doing business with some of them,” explains the managing director. He wants more transparency from his partners and would like to see greater optimism in German companies for climate protection.
But not with an ROI period of twelve months. That must be clear to everyone. Family businesses, in particular, must continue to plan for the future,” Hetzer argues. For him and his employees one thing is clear: CO2 taxation must be conceived differently. “Currently it is cheaper to pay a fine for pollution.”
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