Siemens goes ahead with Australia coal project despite Greta Thunberg objection | Business News

To some people, it will be a principled decision by a company not to let down its customer and stick to a contractual agreement.

To others, it will be a wilful decision to ignore an unfolding climate catastrophe.

Siemens, the German engineering conglomerate, announced today that it would be continuing with its involvement in the development of a controversial coal mining project in Queensland, Australia.

The decision was taken in the face of calls from climate campaigners, including Greta Thunberg, for it to walk away.

The protests have intensified following the recent bushfires in Australia that are thought to have killed nearly 30 people along with hundreds of thousands of animals.

It looks likely to make Siemens the focus for demonstrations across Germany, including at its headquarters in Munich, later today.

A dozen protests are planned in total.

Some 60,000 Germans signed a petition calling for Siemens to walk away.

Siemens signed an €18m (£15.4m) contract last month to supply signalling for a railway line between what is expected to be one of the world’s biggest coal mines and a port.

The Carmichael coal mine, which is being built by the Indian company Adani in Galilee Basin in central Queensland, is expected to extract up to 60 million tons of coal each year.

The open-cast mine, which is due to open next year, has also attracted criticism because the coal would be shipped overseas through the Great Barrier Reef World Heritage Area.

Opponents of the project say that, without Siemens providing rail signalling, Adani would not be able to build a railway line to the Galilee Basin.

The region is one of the world’s great untapped coal resources and there are currently no mines there.

Critics have also warned that the project could result in the displacement of indigenous peoples.

Despite the campaign, Joe Kaeser, chief executive of Siemens, said today that the company would not be pulling out.

Mr Kaeser said that he had received messages from Australian people, urging Siemens not to go ahead with its involvement, which had moved him personally.

But he added: “There is practically no legally and economically responsible way to unwind the contract without neglecting fiduciary duties.

“However, given the importance of legitimate environmental concerns, we have secured the right to pull out of the contract if our customer violates the very stringent environmental obligations.”

Mr Kaeser said that, even if Siemens were to pull out of the project, it would still go ahead as other companies had tendered to supply signalling.

He pointed out that, as well as being approved by Australia’s government and courts, the Adani project had also been approved by the indigenous Wangan and Jagaingou people.

He went on: “The local and federal governments approved the project based on the Environmental Protection and Biodiversity Conservation Act 1999 as well as hundreds of pages of environmental impact statements.

“These included public consultations.

“The decision came after carrying out a strict regulatory and decision-making process including from the highest courts.”

He also highlighted a letter from Matt Canavan, Australia’s resources minister, which had pointed out the strong support for the mine in Queensland itself and urged Siemens not to “insult…the working people of Australia and the growing needs of India”.

Mr Kaeser said he realised most people who had been in touch with the company “would have hoped for more”.

But he added: “While I do have a lot of empathy for environmental matters, I do need to balance different interests of different stakeholders, as long as they have lawful legitimation for what they do.

“This is my responsibility as a CEO and that of the management team.

“Keeping our promises is Siemens’ highest priority.

“Only being a credible partner whose word counts also ensures that we can remain an effective partner for a greener future.

“In this case, there is a legally binding and enforceable fiduciary responsibility to carry out this train signalling contract.

“Had it been my own company, I may have acted differently, although there is factual clarity that the installation of our signalling system – and thereby making the already existing rail track safer – does not impact whether the coal mine will happen or not.”

He said Siemens would, for the first time, set up a sustainability committee with external members.

He said that, in particular, he hoped young people would participate in the committee which, he promised, would have the power to stop or escalate projects of a “critical nature to sustainability”.

Mr Kaeser said Siemens had invited Germany’s most prominent climate activist Luisa Neubauer, who leads the German arm of Ms Thunberg’s Fridays for Future movement, to join the committee.

Ms Neubauer, who met with Mr Kaeser on Friday last week, later said she declined the invitation because she needed time to concentrate on her climate activism.

She said in a tweet: “With the position, I would be bound to the interests of the company and couldn’t concentrate any longer independently on Siemens. That cannot be reconciled with my role as [a] climate activist.”

The episode highlights the difficulty many big businesses face as they seek to reconcile often sincerely held environmental credentials with doing business legitimately and legally.

In the case of Siemens, it was one of the first global industrial businesses to commit to being carbon neutral by 2030 and, since making the announcement five years ago, has cut its CO2 emissions by two-fifths, which it expects to rise to 50% by next year.

Siemens, which last year announced plans to spin off its gas and power unit into a separate company, can also argue that its very business is geared, in large part, towards helping customers reduce their energy consumption and hit their own sustainability targets.

The company’s UK division, which employs more than 15,000 people, has a significant business building wind turbines in Hull for offshore wind projects run by the likes of ScottishPower and RWE Npower.

It has invested tens of millions of pounds in Hull to enable such work.

The company also argues it is one of “only a very few global companies of material size” to have built long-term sustainability targets into its management incentive schemes.

The danger for Siemens is that, in agreeing to go ahead with this project, a lot of that work will be overlooked.

Other companies will be watching closely to see how much damage is done to Siemens as a result.

Investors are increasingly urging companies to improve their environmental credentials – and, at the same time, rigorously testing those credentials and looking for evidence that companies are not just coming up with greenwash.

The German giant is unlikely to be the last to find itself conflicted in this way.