Rainer Karcher, Global Director of IT Sustainability at Siemens, joins Sarah to discuss why service-based business should be prioritizing sustainability, how to do so, and what the future holds related to regulatory pressures, customer expectations, and investment decisions.

Sarah Nicastro: Welcome to the Future of Field Service podcast. I'm your host, Sarah Nicastro. Today we're going to be talking about why and how service should be prioritizing sustainability. Now, I'm excited to welcome to the podcast Rainer Karcher, who is the Global Director of IT Sustainability at Siemens. Rainer, thank you for being with me on today's podcast.

Rainer Karcher: Thank you very much for having me, Sarah. Pleasure being with you.

Sarah Nicastro: Rainer was one of the speakers at the Future of Field Service live tour event in Frankfurt. We had a great conversation, so great that I asked him to come and join me here on the podcast to talk about some of the key points that our audience needs to be thinking about when we think about sustainability.

Rainer, I think at the event we talked about the fact that not everyone eats, sleeps, and breathes sustainability in the way you do, but we all need to be prioritizing, becoming more mindful and more proactive about it right now. It's a very urgent thing. We're going to talk about that a bit, some of the reasons for that; but more specifically, some of the things that are particularly relevant for service as it relates to prioritizing sustainability and making a positive impact on our environment. Before we dig into that, tell everyone a little bit more about yourself.

Rainer Karcher: Thanks very much. I'm based in Munich here in Germany, and as you already introduced, I am responsible for sustainability within IT in particular at Siemens. this is a global role which is focusing mainly on three different pillars in regard of sustainability, which is already describing a bit the definition of what I look at and how I look at it. First of all, it is the sustainability slash Green IT. Making ourselves, making all the services, what we provide to Siemens internally, which is around 300,000 employees worldwide, as more sustainable and as less environmental impactful as possible.

The main pillar of the second pillar is to drive the ambition targets of Siemens as a company with IT digitalization data analytics. So, this is the it for sustainability pillar. The third one then is the IT to society aspect. So wherever digitalization can support societal aspects like education and supporting with equipment donations. So, this is then the third aspect, which is part of my role. I'm doing that together with a small little team. To drive the company, this is, I said, already a governmental role so I'm the one defining the strategy for the company and trying to then involve all the operational units and the responsible respective service owners who is then adopting and just translating what I come up with then into actions and into measures.

Sarah Nicastro: Good. This is a topic that you are very, very passionate about, which means that you also spend a good amount of your time coming to events like you did in Frankfurt and speaking here on the podcast. Even when it's a bit outside of your day-to-day, you have taken it upon yourself to educate and evangelize the importance of the topic. What makes you so passionate about this topic? How did you initially get interested, involved, and ultimately to the point where you've made a career around this?

Rainer Karcher: Thank you very much for asking that question, Sarah. It is always, to think about, is that something where started at birth? Is it something which I had been green and sustainable from day one on? Without any doubt, I had not. It was in particular, my wife being pregnant with our first daughter, in the meantime she's 11 years old, and with a pregnancy, we started thinking about what is the future for our kids looking like, and what is clothings, and what is food, and what is the whole surrounding we are living at, and how can we make that more natural? How can we make that less impactful in regard of pollution and noise and all of that. That was the starting of it. It led me to then furthermore environmental aspects to support local NGOs, local charities, which are here based in the Munich area.

It brought me more and more into the whole area of understanding what sustainability is all about. The term itself, nowadays, if you look at it, is mostly understood with climate, with maybe decarbonization, and with carbon emissions in the atmosphere. But sustainability itself is so much more. You just already mentioned this, I'm in particular stepping out of my regular comfort zone, I would say, and getting to events and taking invitations like the ones I get from you and appreciate it to be able to speak to and get influenced by others and maybe inspire them as well. So everything I do in the meantime is based on the United Nation's Sustainable Development Goals, and one of that 17 goals, the last one, SDG 17 is on partnership for the good. Partnership means work together, collaborate with others, in particular, and you said that as well already, we have to join forces to act now.

We don't have the time to maybe delay and just invent the wheel, everybody by itself. We need to come up with a very quick and fast way of acting and making things happen. This only can be done if we do it together and join forces; meaning, to share knowledge, to share the experience, the good and the bad, just share what has happened good, and what was maybe not successful to just avoid everybody else making the same mistakes. And so, this is maybe how it turned more and more from at the beginning, a very little thing, into something which became my biggest passion. I mean, maybe this explains why I, as a typical IT guy, in IT since 24 years, then had the opportunity to turn two years back from a standard type of an IT person into a sustainability IT person. Nowadays I'm speaking both languages, translating between both worlds, and this became exactly, as I said, my biggest passion.

Sarah Nicastro: That's really cool. I think it's interesting how having kids changes you and your perspective. Just really gives you that broader and longer term awareness. I mean, even it's such an interesting dynamic. You think when you're young, you think you're invincible. The older you get, the more you realize how precious everything around us really is.

For this podcast, I mean, what I want to do is give people a sense of some of the areas of impact that ... We talk a lot on this podcast, Rainer about the fact that service leaders are already tasked with so much. They're supposed to keep up with the day-to-day business. They need to meet the current needs of customers, all the while innovating and thinking about how service delivery is evolving, et cetera. My goal is not to come in here and say, okay, and now also, this also needs to be your number one priority. But the reality to your point is it needs to be a priority for all of us. So I just want people to have it be a part of their consideration and decisions. Because as we're going to talk about, there are some things going on in service that can have a really positive impact on the environment, but also a positive impact on the business and some of the goals that these folks are working towards.

We're going to get into some of the service related points, but before we do that, I know you were at a few conferences this week talking about these topics, et cetera. Just to set the broader stage for those listening who might not be themselves involved in sustainability day in and day out, can you just talk a little bit about where is the most progress happening and what can we learn from that? And what are still the biggest gaps and obstacles we need to overcome?

Rainer Karcher: With pleasure. Thanks for that very important question. I mean, it all starts with transparency. To be sustainable, you first need to know where you currently. That is for nearly everything. If you don't know how much waste you are producing, if you don't know how much miles you covered with business trips, if you do not know how much gas you burned with being physically present with your customers or with anybody you're just trying to support, if you do not know what the carbon emissions are caused by, for example, data centers, which has been operated by yourself or where you host your services at, then you're not able to influence it in any way. Therefore, and this is the biggest progress which has been made from my perspective within the last 7, 8, 9 months, that where it was quite hard as I started my job two years back to get any kind of information in a reliable way without the big chance that there is a lot of marketing part in it as well, and this still happens from time to time.

So the typical term of greenwashing, some of most prominent things is carbon offsets at the moment. A lot of products are declared carbon free or carbon neutral. The reality is that there is mostly offset certificates behind. The product itself is still the whole same thing. Nothing has been changed, no optimization, no increased efficiency, so that the environmental impact of that product still is the same but there is now a sticker on it because it's a very nice prominent thing. It's just paying an offset price, which is way less than the environment impact itself would be. Therefore, what we need to have is a transparency, and we've got that. And the numbers and the reliability of those numbers is now helping to understand what can be done.

In particular, the aspect of energy efficiency, if it comes to understanding how can it further improve consumption of electricity, for example. This is something where we've already made good progress as well. If you take the example of hyperscalers on cloud service providers, they do tremendously good things now and have a good progress made, all of them in the last couple of month, in just optimizing the data center structure and the surrounding in that remark. But this is only one of the aspects, and there is plenty of others where we still not a clue of how to make things happen and whether is standards missing.

One of the aspects which we are currently looking at is a so-called product passport, which is describing the product footprint and the environmental impact of a certain product, which can be even a service. It doesn't have to be physical products. It could be a service provisioning in regards to software, for example, as well. The problem with this is there is no standards defined, which are globally available, and which are then valid to make it comparable. With that, we have hard times in, first of all, getting reliable numbers. Then secondly, we have hard times in calculating and finding algorithms, which are then helping to understand what then a certain type of a component or a product, meaning copper or iron or whatever it might be, what that means from an environmental impact, and how to then measure it. Again, back to what the starting is all about, it is the transparency which we need to have to make things happen and to change. This is something where we are still at the beginning.

In certain aspects, we do have an idea of how to drive things and in certain others, we don't. One thing which I'm always pointing towards is biodiversity. Species, which is maybe even a bigger crisis than we are already facing than climate, and nobody is really having a clue currently. Even the most famous scientists and biologists don't have even an understanding of what could be done and what would be the solution to drive things different. But we have to report that. Why I mention that in particular, now the audience could mention, well, that is an IT guy. Why is he talking about biodiversity? Well, there is directives coming across. Here in Europe, for example, just two days back from the European Commission agreed a so-called CSRD, that's the Corporate Sustainability Reporting Directive. This is hitting companies with a large than 250 employees from the year 2024 on, looking backwards to data from 2023.

This is nothing which is way above in the future. This is quite close to us. That's 107 KPIs from which there is a certain amount facing towards biodiversity. So we need to report what is the current influence on production sites in regard of species, bees or insects, and what is maybe lighting of those buildings having effects on. So, there is a lot of things where numbers are required, where measurement is required, where we don't even have an understanding how to get to the numbers and not even a clue then how to get influenced and maybe then further improve it. So, this is one of the biggest challenges which lies ahead of us.

Sarah Nicastro: I just thought of one other question I want to ask. So, yours is a global role. You're based in Germany, but yours is a global role. What, I guess, region of the world would you say is farthest along and is lagging behind in terms of overall focus and progress related to the topic?

Rainer Karcher: That's a very difficult question to answer politically correct, but I'll try my very best. I mean, in general, you have to always try to get the perspective of people who are affected and who do have a special situation and special challenge they have to face. It would be an easy one to point towards China, towards India, to say, well, as long as they are burning coal as hell, why should we change things what we do? But first of all, we need to understand why things are happening in China, which are happening, or in India. One of the aspects which I didn't had a clue about is that in India, there is still around 80% of households without electricity. Burning coal for them means just fulfilling basic needs. That is cooking, that is heating in winter times.

That is not, in a way, like we look at it. For us, it might be an easy thing to replace coal with more renewable energies and sustainable way of creating electricity. But for India in particular, it is a very much difficult situation. So therefore, it is not something you can just easily point towards and say, "Well, they are behind all of us and lagging behind of us." What I would look at it is a level of awareness. If you just now treat the European world and the American world in particular, I think we do have, at least from an awareness perspective, we are on top. We know way better than most of the Chinese, the Asian world, or the Southern American world, what the current consumption and current emissions look like, what we are responsible for, what the effect is of what we are responsible for with a day-to-day consumption, with whatever we do for business purposes.

From that point of view, I think we are ahead of us and we need to be, because this is the second thing and that's a message which I would like to point towards as well. The current change in temperature, the current climate crisis which we are already seeing, the first outcome of, is a outcome of what we had been responsible for. And that is for a particular reason. Carbon is nothing which reacts immediately. It's not the carbon, which now is being emitted which is reacting a day or two later. There is a time spanning between. This is around 30 to 35 years. The changes which are happening right now is caused by energy emissions by carbon which has been emitted 30 years back. So if you now look at India and China 30 years back, it wasn't them consuming and emitting the most. It was us.

And so, therefore there is a responsibility and we have therefore, at least a bit of a lighthouse function there as well. We need to be front runners. We need to show that we are able to do things different, and we can do things more in a sustainable way and in a different, in a more responsible way than what we've done in the past. Then I am just 100% sure that the Asian world, China, India, and the Southern American world will follow. I hope I answered that in a politically-correct way without pointing towards anyone.

Sarah Nicastro: I realize, and apologize, it may have been a bit of an unfair question. I think the reason I was asking that is because I see Europe being further ahead with this than even the US. I mean, I'm in the US. I think that there are pockets of greater awareness, pockets of greater focus, but there's also pockets of sort of a, I think sometimes you still have a mentality of, "Well, it's not my problem," or "I get it, but I only care about or am so tied to the pressure of this day-to-day stuff."

And so, one of the things I wanted to point out before we talk about some of these specific areas of focus is that while I absolutely appreciate and respect your personal passion for this, that it does not need to be shared to that degree by people to have a positive impact. What I mean is, the content that we're going to share here is not only applicable to people who altruistically want to prioritize this because they care as much as you do. The reality is there's a few other reasons that are very important to consider what we're about to share. Yes, it is the impact and the fact that we should care, but it is also the fact that a lot of the things we're going to talk through simultaneously can positively impact the business and the bottom line and the environment.

There's also the fact of, as you mentioned, particularly in Europe, there are regulations coming along pretty quickly that are going to force more focus on this. I think that will also be the case in the US. So, there's an argument for, don't wait until you're behind to try and catch up. Get ahead of it. Put some emphasis on it now, so that you're in a better position and you're not having to be reactive.

Finally, I think it's a growing reality that your customers, meaning the people I'm speaking to in our audience, care more and more; which means, they're going to be looking more and more closely at this and expecting more from their providers and partners. And so, those are all reasons outside of just genuinely caring that this demands focus from service organizations. So I just wanted to make sure folks understand that even if they're not as personally tied to this topic as you are, they don't need to necessarily get to that level to share the passion for the impact of it, which is also in those other areas. Does that make sense?

Rainer Karcher: If I may comment on that, it does totally makes sense. Thanks for bringing that up. I mean, this is something which I think the history just showed. I mean, science is pointing towards climate crisis this nearly 100 years. So there is scientists all over the world, independent on where they are, which are trying to understand and making us understand what the outcome is of what we do on a day-to-day basis. And so far, unfortunately, it had not been understood in a broader way. There is one term which I always try to come up with, which is, it doesn't require to have a handful of people doing everything perfect. It requires a majority of people doing a lot of things in the right way. This is then the bigger impact.

So exactly as to say, we need to come to an understanding that there is many different ways why it is a good thing and a good idea to take things different and make it a more sustainable product, a more sustainable service in the future than what had happened in the past. You mentioned already the legal requirements, which is indeed one of the major aspects. I mean, the European Green Deal which I've just pointed towards is only one out of currently seven green deals. There is one which is in the US, active and coming up as well. Same for Southern Europe, same for China, same for Asian world. So, that's one of them.

There is the customers. You said that as well. More and more customers are demanding to see what is the outcome of a product, in particular if it is within the supply chain. So pointing towards ourselves, Siemens is working with 65,000 tier one suppliers. To have a transparent view on what's going to happen, I just can't demand it. I need to work together with them. I need to just support them in getting the transparent view on that. Then are we able then to provide the environmental impact aspects to our customers only in a joint approach then as well.

One thing which is coming on top beside the public opinion, which is I think, worth mentioning as well. So it's not only a public opinion, but then employees or future employees. Talent attraction comes here into the game as well. Gen Z, who is coming from universities or used to be prior to pandemic standing on the street we defined as the future, they are the ones not working for a company who's not taking things serious. And so, to be able to proceed with our business, we have to be attractive for people who are interested in sustainability in a real way.

But one thing was, at least I do see in a very increasing way since now six months is investors. We at Siemens are very much faced from investors who are asking and demanding to see real action. They want to have it in a quarterly basis reported what is the KPIs, what Siemens is working towards in regard of sustainability measures. Not only carbon and decarbonized world, but there is female sharing management. There is learning hours of employees. There is diversity, equity, and gender equality aspects in addition. There is so many things which are now demanded from investors. I mean, in that remark, we are talking about money and about financial investment.

If the investors define a company who is somewhere listed and stuck, not as sustainable anymore, and they're pulling out their investments, then we know the outcome. So that's something which I think is hopefully convincing that there is more than just the environmental care aspect. There is more than just taking care on the future of our planet, which should be anyhow a basic for everybody. But without that, even if you're not convinced of things, there is a list of reasons now and requirements which are hopefully bringing you to convince yourself that this is worth thinking about it.

Sarah Nicastro: For sure. All right. At the event in Frankfurt, we touched on a couple of different things that are specific to field service and service that I want to run through. We don't need to get super detailed on each, but we'll just surface these as points for our audience to consider that both can benefit the business but also have a positive impact here.

The first is optimization of resources, particularly related to dynamic scheduling and routing and making sure that we don't have a lot of waste in travel. And so, are we making sure that we're paying attention to first time fix and getting resolution to where we're not doing repeat trips, and making sure that the person that we're sending has the right skills, has the right parts, so that we're not just wasting time on the business side, and then all of that travel on the environmental side. So, that's one. Anything you want to point out there? Or I can just run through these and then we can talk about any of the things that are interesting.

Rainer Karcher: Well, maybe I can give an example of exactly that concrete idea, what you just said to avoid maybe travel, to avoid then the energy consumption or burning gas, in that remark. One thing which my former colleagues from Siemens Energy who is now a separated owned legal entity, so therefore it's nothing which is in my influence, but I think a very good example worth mentioning. Maintenance on windmills or power plants is very specific and requires a lot of experience and a lot of knowledge and understanding. Therefore in the past, it had most been Siemens' employees, technicians from us, who had required to do the maintenance on site. So whenever there was even some little issues, it was always some Siemens technicians physically traveling to then the power plan, to the windmill, to make maintenance or repairing aspects.

What we've then achieved is the way to support customers who are on site and who are anyhow there which might not have the right understanding or experience based on their level of work with a remote way. So there is now a type of augmented reality combined type of maintenance way. There is a tablet which is combined with a helmet camera with inner devices, which is then leading a technician remotely. The Siemens employees, the experienced experts, are sitting somewhere in Siemens headquarters and guiding an onsite technician who's anyhow there through the whole process. There is the information about, I don't know, maintenance parts, part numbers, how to dismantle or mantle some components being displayed then in an augmented way into glasses, or then on the tablet, helping him and supporting him. This is avoiding a huge amount of physical travel and is therefore helping to protect the environment as well because of avoided emissions due to travel. That's just one of the examples exactly facing towards what you said.

Sarah Nicastro: I had that on the list as well. I guess the reason I'm considering those two different things is only because in the situations where it is actually essential to send someone, then let's make sure we're doing so in the most efficient way. So, there's two parts to that: make sure that we're eliminating the things that are not essential; and then make sure that when the visit is essential, that the person going is prepared and has what they need so that they don't have to go back and forth. The remote service and remote collaboration capabilities is another really good point. I think that comes in a few different ways. I mean, certainly there's the element of exactly what you said. Can we use remote assistance, augmented reality to help customers resolve issues that historically someone would go on site to do that are quite basic, that they're probably quite capable of. It gives them faster resolution and it avoids that travel.

We also see this though with things like, even internal to an organization. I'll give you an example. We did a podcast a while back with Munters who implemented remote assistance at the very, very beginning of the pandemic because their technicians could not travel. And so, this was their sort of business continuity plan. But what they ended up finding once they were using it is that when they used to open a new production facility, they would send all of these internal experts there to essentially do what was more of like a quality check. More of an assessment. Now they can do all of that remotely. So, they started to find all of these other ways where it was this technology that allows you to see what someone's seeing to annotate and to provide that type of guidance as if you were also there. There's a lot of situations where that can come into play and really alleviate the need to do as much in-person service and travel. So I think that is a really powerful, powerful thing.

The other thing is if you have technicians again who do need to be on site and they get stuck, They don't know how to complete the job. If you have that technology and they can get help from the back office again, you're avoiding a repeat visit. So, there's quite a bit there between the remote service and the remote collaboration tools, and then making sure that when travel is necessary, it's done in the most efficient manner. Those are things that have a positive impact.

The other one that came up at the event is a greener fleet. And so, what are you seeing in terms of trends of fleet selection and replacement and what opportunities there are there for people to make better choices?

Rainer Karcher: Maybe if I may, I could comment, first of all, to the first point which you came up with, which I 100% agree to avoidance and something to just be quite well aware of what is important, and if there is someone locally required, then to have it as much efficient as possible. One thing which is in my mind is prediction. What we do, in particular with IoT devices, our trains, for example, are producing a huge amount of data which has been used to predict when there is maintenance required.

What we are able to do with that is we can predict where at that moment a train is being physically located if we have to exchange certain parts, if there is a maintenance required. We are able to predict as well, what components might be required, what kind of replacement components might be required. So what we avoid is then that a service technician is in an urgency call somewhere, and then is required to, first of all, identify what type of components are required. Then as soon as he's there, and then he has to maybe order those replacement parts because they are physically located in the same area.

And so, this is first of all, a massive increase of timing. We are way less efficient if we don't have that opportunity. Secondly, it is having a great impact then in regard of maybe a second or a third type of travel back and forth to be able then to do that maintenance or replacement. If you can predict it with using data, with using IT and technology, this is helping in all various aspects. It is increasing the service quality. It is increasing the speed of maintenance. In particular, it is lowering cost. It is lowering efficiency ... not lowering efficiency, lowering emissions in regard of increasing the efficiency. So therefore, I think this is something which can help here as well, and is just a way which already exists. This is not artificial. This is not a future part. This is already something which is there.

Coming towards the question of fleet, indeed for us at Siemens, one of the biggest, biggest portions of greenhouse gas emissions is indeed fleet because we have service technicians and service cars running and for several reasons. Well, for sure, this is the typical type of diesel engines which are being used. One of the aspects is, for sure, electrification. Electrification of fleet and of fleet cars in particular is something which is definitely one of the ways to treat it, because as soon as I've electrified, I can make use of renewable energy as a source, and that is something which helps then to lower the emissions.

Is that the answer and the solution for everything? Well, I mean, that question is as much treated as the question is electrified cars the solution, or is it something which is even worse? Well, my perspective is electrification is the currently only way what we have as an alternative. We have to stop burning fossils in general. There is no alternative and there is no way in keeping what we have. The only way possible is then electrified. Well, this is quite harder, and this is maybe one of the big differences between the US and Germany. I mean, in Germany, the size of the country is just way, way lower and smaller. So with the current capacities of batteries, of electrified cars, we can cover most of our country.

I mean, in the US, some of the US states are the same size than what Germany is all about, so this is harder. Therefore, it requires, for sure, more solutions. Maybe there is some upcoming things with hydrogen, which might be worth looking into, but this is more a future thing. But in particular is I think worth looking into it from, again, the efficiency perspective, if you know which distances had been covered and for what reason you are able maybe to optimize it. Maybe you can just combine ways. Maybe you could just combine some of the trips back and forth and reduce the amount due to knowing what the whole situation is all about. And this is again requiring data.

Sarah Nicastro: It's a good point too, about predictive, and to your point, not only predicting issues and failures and getting ahead of that, because the more you can be proactive, the more you can plan intelligently and in a way that is beneficial. But also to your point, predicting parts needed and coordinating that into everything.

A couple more points to get through. The next one is related to servitization and the move toward as a service. This to me is super exciting because essentially what we're talking about is manufacturing things for lifespan and serviceability versus initial purchase price, which allows us to put more innovation into creating things in a more sustainable way. Then, if a company has shifted to as a service, any of the efforts they put into creating more efficiency, lowering the cost of service, et cetera, benefits them, benefits the environment, but the customer is essentially paying for the outcome.

Then the other part of this is around the circular economy where traditionally a customer purchases an asset, so let's take an HVAC unit. The manufacturer then provides service on that. But at the point that the customer moves to a different building or needs something else, the manufacturer has no visibility or control over what happens with that asset. So in and as a service model, they are able to swap assets in and out of different situations. They're able to put them back into use with another customer. They are able to remanufacture, et cetera. I think this to me is such a big area of potential of where service and sustainability can really come together.

Rainer Karcher: 100% agreed on that.

Sarah Nicastro: What are your thoughts?

Rainer Karcher: 100% agreed. I mean, to stick the example of cloudification and hyperscalers, hyperscalers are itself enforced to be as much economical optimized as possible because of cost efficiency. That's their main interest: to make a data center as much filled from a load perspective as possible to make it as much energy efficient as possible because of economic reasons. What we, as IT companies, are mostly consuming is then a service. So there is exactly the way from what you've described, a way from what we've done in the past with on demand, any kind of own operated data centers and servers to as a service models within the hyperscalers. What it created is a huge opportunity.

So this is theoretical values and very much the optimized way, but there is a number which is calculated from all of the hyperscalers. If you put systems from on-prem data centers into hyperscalers, there is a chance of reducing carbon emissions by 80%, eight-zero. I mean, this is just showing what the opportunity is all about. Exactly, as you said, there is so much more in it because of the responsibility, which is then shifted from the one who is consuming to the one who is providing the service. I think this is something, whether it's huge opportunities to take influence in so many different aspects.

As you just mentioned, that topic of circle economy, I would like to come up with another example. We are worldwide active as a company, 300,000 employees. That makes it 300,000 end user equipment devices. That means laptops, smartphones, any kind of equipment which is used on a day-to-day basis, which is exchanged after a series of time. At the current situation where we purchased the devices in most of the countries, we have to take care on refurbishment or recycling afterwards. If there is a as a service topic, which by the way is being worked on from our perspective at the moment for those equipment, I do have 100% secured that there is a partner which is reliable, which is documenting what he's doing in a societal and environmentally friendly way, what is happening with those devices after using them. And this is something which helps us backwards to the reporting aspect, which I've spoken about. So all the directives, they do have certain KPIs within which is focusing exactly on this. Refurbishment rates, recycling rates, which we have to document.

Secondly, I can't be ensured that there is not a partner, maybe treating things wrong and just making money out of. I do have, therefore, I think, a huge impact with as a service constructions exactly as you described that into various different aspects as well. It makes it a win-win for both sites, because I think this is something which is not only helping those who are consuming, but those who are providing the service the same way.

Sarah Nicastro: That's the thing. Going back to what I said a bit earlier, that's what I want to encourage people to do, at least initially, is look for those win-win scenarios. I mean, this doesn't have to be something that is just a cost. There are areas, if we're smart about this, that can impact both the business and the environment positively. Let's focus on those things at least, and the low hanging fruit, if you will. Then maybe as we make some progress, you can shift toward investing in a new fleet or what have you. Right?

The last thing on my list, and we've done a couple of podcasts on this. One was with bureau Veritas, one was with Tetra Pak, and it's around how those organizations are creating new service offerings for their customers around sustainability. Looking for ways to help their customers focus on their sustainability efforts. This obviously depends on what industry you're in and what types of customers you're servicing. But there is a potential opportunity to look at the option of increasing your portfolio of services by helping your customer base focus on these same things. So, go ahead. Were you going to say something?

Rainer Karcher: I was just going to, again, echo what you said and agree of what you said 100%. This is something I would like to particularly mention, but because there is so much more chances than challenges. I mean, the topic itself is currently on everybody's focus. It is a priority topic. Anyhow, it's quite prominently spoken about everywhere and there is huge, huge opportunities being created out of that aspect. It is something, if you treat that right, if you just be the one taking things serious, you can just separate from competitors, even in that remark as well, and show things which are then valuable. I am 100% then sure that this is a benefit, then not only for the environment, not only for the customers, but for the company providing that service then as well. This is something which is definitely more worth mentioning than just avoiding it and just bypassing and saying, "Well, I don't mind. This is not something I have to look into." I just wanted to agree with you.

Sarah Nicastro: For sure. Two more questions. Let's talk about why companies shouldn't wait until this is more of a mandate or a more urgent customer pressure to start prioritizing these things now.

Rainer Karcher: Well, first of all, there is, they already mentioned directives, which are quite quickly hitting us. If, and now, again back to Europe, look at the timeline, we have to start reporting by January 1st, 2024, which might seem to be far away. But we have to report numbers from 2023. If I do not start collecting those numbers in less than six months, I don't have anything to report at. This is the first. Secondly, the sooner I get into this, the more time I do have to be proactive and not just wait for someone to push me towards something and to enforce me to do something different. Third, I think it is quite of importance to show proactively that we are taking things serious in our enterprises, in our companies, in our surroundings, not only to show to competitors, but to show to the consumers, to our customers as well, that the current perspective is on priority aspects like the sustainability topic is, as I already mentioned.

And so, with that in mind, I think it is more than just one reason why it is of importance not to wait for it beside then the fact that this is once again my passion coming into this. If you take the latest IPCC World Climate Report, it says clearly and points to what the remaining carbon budget. So the emissions, which is able to be covered by the planet to still stick with one to five degree global warming. This is a timeframe of less than seven and a half years. That time window is closing dramatically and the longer we'll wait, the harder the cut has to be. The longer we wait with reducing carbon emissions and keep going what currently by the way is the case.

So after the pandemic, obviously, well, it seems to have stopped even if it probably still is there, but it has not been as prominent at the moment anymore. The emissions are going up at the moment and not going down. What we would have to do? And so, the longer we keep going, the harder the cut has to be. This is something which I think makes it worth looking into it already right now and not wait for it.

Sarah Nicastro: That makes sense. All right, so last question. Stepping away from the business conversation and tapping into more of your passion for this topic. For the folks that are listening who do share some of your passion and recognize the criticality of all of this, are there a couple of things you could point to that as individuals we could focus on to contribute and have a positive impact?

Rainer Karcher: Yeah, definitely with pleasure. Thanks for that question again, Sarah. First of all, don't feel alone. There is plenty of you and of us with the same passion, with the same awareness, and we're getting more. This is the first thing. And joint forces means get together. Even if you're at the starting, don't get disappointed, don't get overwhelmed with all the terms and all the specific areas to look into.

Secondly, don't get disappointed with the overwhelming amount of negative messages which are coming across. There is always a chance to be in a changing position. The change starts with ourselves, exactly as you said. There is sometimes just a little thing. So if you look into the electricity topic, I mean maybe unplugging devices instead of keeping them in standby is one of the first things. This is not influencing only carbon emissions, but your own wallet as well. Because, I mean, energy is getting more and more expensive. If you unplug, this is reducing. A number just to throw at, if you keep your laptop plugged in all the time, 365 days, 24 hours a day, this consumes, even if it's just in stand by $50 per year, just with a standby instead of plugging it off. $50 in my wallet or not makes a difference. This is one of the examples.

Same is with usage of devices. Is it required to exchange the smartphone every two years? Well, the vendors just want us to, and the marketing wants us to. Is it from an environmental perspective, the good thing? It's not. The longer we use it, the better it is for the environment. Then it goes just in the same way with making use of data. Nowadays data and taking the example of a smartphone, pictures are stored mostly in cloud, and it doesn't even cost you a thing so you just forget about it. You take plenty of pictures, you forget about it. They are stored somewhere. Well, the problem with that is we have billions of smartphones all over the world and everybody is using the same thing and doing that picture thing. Whatever is being stored, a single picture currently is with a resolution of modern smartphone, seven to eight megabytes.

If you just sum that up with that multimillion of pictures being taken day to day, there is storage systems behind. And one of the most increasing topic currently is data centers and the energy consumption of data centers therefore is increasing because of we are just not thinking about it. So get aware of what you do, get aware of what the current situation is, of what your behaviors look like, and change. As I've said, the change start with ourselves. If you change our behavior with the little things, all the little things combined make big things as well and make a big step. This is then getting, I think, the stone rolling and hopefully leading then to a bit more of awareness and for the next steps.

Sarah Nicastro: Okay, perfect. Thank you, Rainer. I really appreciate it. I have immense respect for your passion on this topic and your insights, and I'm so thankful for you to come and share with our audience and give them some food for thought.

Rainer Karcher: My pleasure, and always coming back if you want me to. Thank you very much, Sarah.

Sarah Nicastro: Excellent. Thank you. You can find more on this topic and many others by visiting us at futureoffieldservice.com. You can also find us on LinkedIn as well as Twitter, @thefutureoffs. The Future of Field Service podcast is published in partnership with IFS. You can learn more at ifs.com. As always, thank you for listening.