May 9, 2019 / 8:39 AM / 3 months ago

Bosch sets goal of being carbon neutral by 2020

BERLIN (Reuters) - German automotive supplier Bosch plans to become fully carbon neutral by 2020, making it the first major industrial company to take that step, as it forecast sales would stagnate this year due to headwinds from a global downturn and trade disputes.

View of the entrance of German automotive parts manufacturer Robert Bosch Belgian plant in Tienen April 21, 2009. REUTERS/Thierry Roge

Bosch Chief Executive Volkmar Denner said on Thursday that rising sea levels, extreme weather conditions, drought and flooding made it imperative for companies to act without delay to stop the planet from overheating and endangering global stability.

“Climate change is not science fiction; it’s really happening,” Denner said in a statement. “If we are to take the Paris Agreement seriously, then climate action needs to be seen not just as a long-term aspiration. It needs to happen here and now.”

Manufacturing accounts for around one third of global carbon dioxide emissions, according to the International Energy Agency, and Bosch said it currently emits around 3.3 million metric tons of C02 emissions every year.

The Stuttgart-based company aims to achieve its goal by increasing energy efficiency, expanding the share of renewables in its energy supply to as much as 40 percent, buying in more green power and offseting unavoidable CO2 emissions.

This includes financing climate protection projects such as wind power in the Caribbean or forest conservation in Africa to offset just under 40 percent of its energy consumption.

The maker of spark plugs and diesel injection systems said it consumed 7.8 terawatt hours of energy in 2018 - equivalent to the annual power consumption of all private households in Berlin and Munich.

It expects the measures to cost it 2 billion euros ($2.24 billion) but to reap savings of around 1 billion euros in energy efficiency.

Bosch notched up record sales of 78.5 billion euros in 2018, generating earnings before interest and tax (EBIT) of 5.5 billion euros.

However, the company said it expects sales this year to only “slightly exceed” last year’s level as it faces headwinds from a downturn in the global economy, trade disputes and Brexit.

The world’s largest automotive supplier forecast car production would fall by 3 percent this year to just under 95 million vehicles - the first time that production figures have contracted for two consecutive years since the financial crisis.

Bosch said it expects its EBIT margin from operations to fall to 6 percent after 7 percent last year, as it steps up investments.

Reporting by Caroline Copley; Editing by Michelle Martin

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