Baker Hughes faces an industry-wide challenge: meeting the world’s increasing demand for energy, whilst ensuring it is sustainable, affordable and secure. Following its separation from GE, the company saw an opportunity to define its purpose of taking energy forward in a sustainable way, and innovate for the future. This translated to a renewed focus on reducing the carbon intensity of its operations, and applying proven low-carbon technology to help its customers meet their environmental goals.
To build credibility Baker Hughes needed to ensure coherence between its commercial strategy and sustainability strategy. This requires meeting its announced commitments to reduce Scope 1 and 2 CO2e emissions by 50% by 2030, and achieve net zero by 2050. Baker Hughes needed a robust plan and the ability to operationalise this net zero ambition, with a mature sustainability function to deliver on it.
To support the transition, Baker Hughes partnered with PwC, to accelerate change and cement its renewed purpose. PwC worked with the client to set up a transformation programme covering both Cost and ESG Transformation, with several strategic objectives:
- identifying and delivering fast cost-reduction opportunities, allowing the business to reinvest in services and technologies for the transition;
- support in reducing operational emissions by 400,000 Mt CO2e by 2030;
- support in delivering critical sustainability transformation initiatives, such as sustainability strategy development and regulatory reporting; and
helping to establish a distinctive, market-leading position in ESG.
PwC’s work helped to map the company’s whole carbon footprint, across Scope 1, 2 and 3, and identified the key emissions hotspots and the effective levers for making reductions across all scopes whilst delivering on a Scope 1 and 2 carbon-reduction programme. PwC also helped deliver investor-grade ESG disclosures from an information governance perspective, as well as developing net zero and sustainability strategies, and transferring knowledge to Baker Hughes to help the team continue to drive enterprise-wide change.
To date, the project has helped Baker Hughes achieve US$500m of cost savings to create an investment fund for the transformation. In parallel, PwC deployed an assessment model to measure Baker Hughes’ ESG strategy and maturity, combined with TCFD analysis, to focus on the key benefits and opportunities of embracing a clean energy future. PwC helped to build and implement Baker Hughes’ ‘Carbon Out’ programme for Scope 1 and 2 emissions, which comprised over 600 projects, driving progress towards the client’s 50% emissions-reduction goal by 2030.
Importantly, Baker Hughes’ sustainability transformation is helping the company contribute to three of the UN’s Sustainable Development Goals. Its development of a more sustainable product portfolio is helping improve the availability of Affordable and Clean Energy (SDG 7). Its radical transformation is influencing the move to clean energy across the sectors it serves, leading the way for Industry, Innovation and Infrastructure (SDG 9). By identifying many levers and initiatives, Baker Hughes is reducing its emissions, and is well on the road to a 50% emissions reduction by 2030, and net zero by 2050, as a clear demonstration of its Climate Action (SGD 13).
View the PwC profile in the MCA Members Directory.