Sustainability Report 2017

Interview with Marco Nix


„We take the principle of sustainable efficiency very seriously.“

Marco Nix, Chief Financial Officer

Over 300 years ago, the Freiberg Chief Mining Officer Hans Carl von Carlowitz adopted sustainable forestry as a principle. Just as the concept of sustainability once advanced forestry, it has been increasingly determining corporate activity for a number of years now. Carlowitz called for nature and raw materials to be handled with care. Today, the topic of sustainability has long been expanded upon with further content. 50Hertz has adopted sustainability as a company maxim in its principles and policies. Can the historical principle of sustainability even be transferred to a modern company like 50Hertz?

— Marco Nix: We have to weigh up what we should and shouldn’t do! In my opinion, this is the essential lesson to be learned from Carlowitz. It is not always possible to balance financial and efficiency goals, occupational safety goals and the 50Hertz corporate culture without conflict. But above all come the objectives of demand-oriented grid expansion and ensuring security of supply. Company management has prescribed principles that set out working norms and standards for occupational safety, environmental protection, human rights and combating corruption. Since April 2017, we have been involved in the German Global Compact Network, and are part of this world-wide value alliance. Our employees work according to policies based on these values. In IT and occupational safety, we comply with the basic statutory requirements and have set out our own policies. In many places these go beyond the legal requirements.

Why do you consider it so important?

— Marco Nix: In the future, nobody who fails to respect these values will be able to be commercially successful. It is becoming increasingly common for investors to demand sustainable strategies, in order to thus reduce their own risk. 50Hertz investments are already measured by how sustainable and resource-conserving they are in the medium and long term. And this no longer only applies to so-called sustainability funds. In the future, anyone who fails to anchor their business strategy in sustainability will find it difficult to survive. Reputation and sustainability are decisive for the success of a company.

„Sustainability will become more and more an integral part of our corporate strategy.“

Your investments are, in particular, long-term investments. How can you successfully oversee the risks over these periods?

— Marco Nix: Our company consists of more than just masts and transformers. With these investments, we keep a very close eye on the risks; in the area of offshore grid connections, our learning curve is also very steep. Energy markets, energy procurement, system management and IT are moving far more quickly. Here, we are constantly setting ourselves new challenges. Technical components and standards in these areas are developing very dynamically. In system management, we have rolled out and had a comprehensive security system certified on the basis of the Bundesnetzagentur (Federal Network Agency) IT Security Catalogue. This certification is demanding on businesses and employees, I realise this. But at the same time, with the information security management system, we now have information structures that notify us of critical points in our applications. We are currently assessing this with our system partners and suppliers to find out where we need to be even better.

Does this make the company’s internal processes more efficient?

— Marco Nix: The new system has helped us to examine our processes with a view to the safety requirements and, if necessary, to correct them. Based on the regulatory period specified by the BNetzA, 50Hertz reviews the efficiency of company-wide processes every five years. In 2017, this was particularly important, as our business had grown very strongly over the past few years. Our internal company processes were also changing at a rapid pace and in part had to be completely revised. In the context of the efficiency project, we carried out an extensive process inspection in 2017. We can be quite satisfied with the initial results. With a cost base that is below what is legally prescribed for efficiency efforts, we undertook to save about eight percent compared to the planned cost. These savings initially benefit 50Hertz and, in the medium term, our grid customers. We can prove to the BNetzA that we keep an eye on the costs of the energy transition us and that we take the concept of sustainable efficiency seriously.