Heimo Scheuch says that for leaders to pass on to the next generation a business that is fit for the future, they have to learn about sustainability.
For more than a decade, Heimo Scheuch has been the CEO of Wienerberger AG, an international provider of building envelopes and infrastructure, based in Austria.
What inspires you, and how does it play into the way you do things?
If you want to change things, then you need to do it with consistency and vision. This world is sometimes too short-termist – if we were more long-term oriented, we would be better off in a lot of ways in our day-to-day lives, in business and in politics.
I'm from the rural part of Austria, where farmers are doing a great job in the mountains and where they need to work the land in the summer and the winter. These are people to be admired, because they live off the land and they do it in a sustainable way, passing it on from generation to generation. And this inspires me, because in business sometimes people are so driven by quarterly results and KPIs, but not by actually passing on a company to a new generation in good order.
I've seen too many businesses that were in bad shape, financially distressed or strategically not fit. And when it comes to management, not fit for the future. What I view with suspicion are short-termist policies when it comes to environmental targets, and a populist approach. If you have an ever-changing story and a new target every year, then it's very difficult to operate. We need a stable legal framework for the years to come.
In light of that long-term approach, what is your current strategy for the business?
In 2020 we issued our strategy for the next three years. We have simplified the environmental aspect of ESG by specifying CO2 emissions reductions of 15%. We have also stated that every product we design must be recyclable or resuable, and have mandated that all of our more than 200 sites have a clear plan to maintain, improve and encourage biodiversity. And we want to be a 100% carbon-neutral company by 2050. So we are dedicating a three-digit number of millions of euros to research and development over the next three years. That’s an important amount of money that we are ready to invest.
You are using green finance to grow the business and support your sustainability efforts. How has this affected your strategy?
We opted for green financing in 2019. These are corporate loans that come with more attractive interest rates that are linked to our sustainability performance. So we set clear targets with the financial institutions – for example for CO2 reduction – and that comes with the bonus of a better interest rate. This financing model is very attractive for us, and we certainly want to do more of it in the future.
Do circular economy principles apply in the construction business?
A lot of people talk about sustainability, but forget that durability and the lifespan of a product are very important. A sustainable product should have a lifespan of more than 100 years. Some products are produced very efficiently but they might not last very long, and then you have a problem of waste or of integrating it into the circular economy. We look for solutions that last for more than 100 years in serving their primary purpose. Then we ensure that all of our products are 100% recyclable and put back into the building process either by reusing or recycling them. This closed cycle is very important because we want to show that our products can make a positive contribution and have a positive carbon footprint. It’s not enough to only look at production stages.
Wienerberger is the world’s largest producer of bricks, with a total of 201 production sites across 30 countries. Is it difficult to embed sustainable practises in different countries and regions?
While standards are very different, there's a certain awareness by stakeholders and the public that we need to deal with raw materials, with energy and water in a very responsible way. The culture might be a little different in India, the US, the UK, or Germany, but at the end of the day I think people understand that this is important. There's a general awareness, which creates positive momentum.
There's a cost to it – obviously you have to invest in innovation to maintain and improve your business – but I'm a strong believer that only innovative businesses will survive.