Siemens 2013 Annual Report Download - page 219

253 D. Consolidated Financial Statements
357 E. Additional Information
245 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report
246 C. Siemens AG ( Discussion on basis of
German Commercial Code)
250 C. Notes and forward-looking statements
19
of Environmental Portfolio elements based on the criteria de-
scribed below. This covers the inclusion of newly developed
elements as well as the integration of additionally qualified
elements where evidence of fulfillment of the qualification
criteria was not available in prior reporting periods. For addi-
tionally qualified Environmental Portfolio elements, we report
their prior-year revenue and prior-year contribution to reduc-
ing customer carbon dioxide emissions on a comparable basis.
Elements that no longer fulfill our qualification criteria are
excluded from our Environmental Portfolio.
Prior to inclusion in the Environmental Portfolio, potential new
Environmental Portfolio elements have to undergo a multilevel
internal evaluation process. Our Sustainability Board annually
acknowledges changes in the composition of the Environmen-
tal Portfolio. A further task of the Sustainability Board is to
discuss potential concerns of stakeholders with regard to the
inclusion or deletion of certain technologies in the Environ-
mental Portfolio.
C... CRITERIA FOR INCLUSION
OF ENVIRONMENTAL PORTFOLIO ELEMENTS
An Environmental Portfolio element can be a product, a sys-
tem, a solution or a service as defined above. Furthermore, a
core component of a system or solution may qualify as an
Environmental Portfolio element if the component provided by
Siemens is key to enabling environmental benefits resulting
from the system’s or solution’s overall application. To qualify
for inclusion in the Environmental Portfolio, an element must
meet one of the selection criteria described below, which are
energy efficiency, renewable energy or environmental technol-
ogies. Products, systems, solutions and services with planned
application in military use or nuclear power are not included in
the Environmental Portfolio.
> Energy efficiency: The criteria for energy efficiency are an
improvement in energy efficiency of % or more during the
customer use phase compared to the applicable baseline, or
a reduction of at least , metric tons of carbon dioxide
equivalents per reporting period in the customer use phase.
Examples of elements that meet the energy efficiency crite-
rion are combined cycle power plants and intelligent build-
ing technology systems.
> Renewable energy: This criterion covers technologies in
the field of renewable energy sources such as wind turbines
or smart grid applications and their respective core compo-
nents.
> Environmental technologies: This criterion is related to
water and wastewater treatment, air pollution control,
waste reduction, recycling, e-car infrastructure and its
core components. It also includes the Siemens Consulting
Service which analyzes customers’ environmental impact.
Additionally, a criterion for the Healthcare Sector is an envi-
ronmental impact reduction in terms of noise, radiation or
total weight of at least % compared to the baseline.
C... BASELINE METHODS
Energy efficiency, annual customer reduction of carbon diox-
ide and environmental impact are all assessed by a comparison
with a reference solution (baseline). There are three different
options for the reference solution: before-after comparison,
comparison with a reference technology or comparison with
the installed base. The baselines are reviewed annually and, if
necessary, adjusted, such as when statistical data on the in-
stalled base is updated because of technical innovations or
regulatory changes. The calculation of the reduction of carbon
dioxide emissions is based on a comparison for every relevant
Environmental Portfolio element with a baseline. For this cal-
culation, we focus on those elements that have a material im-
pact on the overall carbon dioxide emissions reduction. For
some emission reduction calculations, the baseline reference
for the installed base is determined using known global emis-
sion factors such as those for power production. The baselines
used for our calculations are mainly based on data of the Inter-
national Energy Agency (IEA) for gross power production and
for grid losses, on data from the Intergovernmental Panel on
Climate Change (IPCC) for fuel-based emission factors, and our
own assessments of power production efficiency. For consis-
tency reasons, we generally apply global emission factors for
calculating emission reductions.
C... REPORTING ESTIMATES
The inclusion of elements in the Environmental Portfolio is
based on criteria, methodologies and assumptions that other
companies and other stakeholders may view differently. Fac-
tors that may cause differences, among others, are: choice of
applicable baseline methodology, application of global emis-
sion factors that may be different from local conditions, use
patterns at customers that may be different from standard use
patterns used for carbon dioxide abatement calculations and
expert estimates if no other data is available.
To date, there is no applicable international standard that ap-
plies across companies for qualifying products, systems, solu-
tions and services for environmental and climate protection, or
for compiling and calculating the respective revenue and the
quantity of reduced carbon dioxide emissions attributable to
such products, systems, solutions and services. Accordingly,
revenue from our Environmental Portfolio and the reduction of
our customers’ annual carbon dioxide emissions may not be
comparable with similar information reported by other compa-
nies. We report the annual carbon dioxide emissions reduction
in the period of installation of the Siemens Environmental
Portfolio element. The period of installation will be determined