INTERVIEW: "Driving Luxembourg’s green energy push" with Mr Claude Seywert, CEO of ENCEVO
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Driving Luxembourg’s green energy push
Few companies are required to walk the talk on sustainability like Luxembourg’s leading energy group Encevo. Whether it’s supply (through Enovos), grid operations (Creos) or technical services, all seek to grow demand for green electricity and gas. Company CEO Claude Seywert explained in an ILA short talk how strategy is set with the board, shareholders and other stakeholders.
With their vision of being “a leading and sustainable energy player”, Encevo is at the forefront of driving energy transition in Luxembourg and nearby regions. Most well known for supplying electricity, Encevo also offers natural gas to its household and commercial clients.“Our societies need to move from fossil fuels to renewables and that’s our business, and we are delivering new energy sources, and help for our clients to become more sustainable,” said Claude.
Long term strategy
This broad strategy has been in place for a number of years, not least with all homes receiving electricity generated from renewable sources for a while. Encevo supplies green energy to corporate customers, has been behind the creation of the Chargy electric vehicle charging network, has low-carbon energy production schemes, offers consulting services, and a range of other green business lines.
“Strategy is monitored and adapted by a strategy committee, the full board, and with my weekly or bi-weekly discussions with the chair,” Claude said. He added that this work is coordinated with the investment committee, as affecting significant change in energy production and distribution requires substantial long term financial commitment.
Around three-quarters of Encevo’s equity is held directly and indirectly by the Luxembourg state, with the remaining 25.5% belonging to China Southern Power Grid. This latter stake was purchased in 2018 from a French private equity firm. Claude commented that having this shareholder structure helps with technical discussions as the main interlocutors are energy specialists, in particular Luxembourg’s Energy Ministry. As well, China is a global leader in encouraging renewable energy, so the insights from China Southern Power Grid contribute to discussion.
“The board does not drive the details of strategy: the executive committee proposes the direction, and the board reviews this in light of the national sustainability and energy strategy,” Claude said. It helps that if a law reform is required to further these goals these conversations go straight to the heart of the Luxembourg state.
“We are building up our own production base with photovoltaic and wind. We do not invest in coal or nuclear, and we don’t have those in our legacy production base so we had a clean slate which makes things easier,” said Claude. However he does concede that Encevo sources energy from other providers around Europe which is not always “dark green”. Yet the direction of travel towards net-zero carbon production has been set.
Sustainability targets for group operations were fixed last year, with the firm reducing its carbon footprint by turning its automotive fleet electric, reducing the impact of its buildings, burying power lines, and more. They also have a research project on-going looking into how hydrogen could replace natural gas.
On the social aspect of ESG, Claude said that health and safety at work is the number one priority, and that inclusion and diversity working groups have been established. “We are keen to see how we can improve across the company and the value chain, with many different actions sought to improve our position as an employer,” he said. This includes looking at the stances taken by suppliers.
However he noted that more work can be done on integrating systematic sustainability KPIs into how the company is managed. “We generally work on a project basis when setting sustainability targets for managers, but there isn’t the neat pyramid system we have for financial targets.”
As to whether this pro-green stance is good for the bottom line, Claude said that it went beyond this as increasing numbers of clients are requesting ESG standards to be met. The firm has no choice but to meet this demand. Moreover customers are willing to pay extra to firms they trust to deliver. “Sustainability is in our DNA, and we want to help our clients become more energy efficient,” he said.
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