When it comes to discovering and expanding boundaries at Baker Hughes, Luca Maria Rossi is a change agent at the company. A conversation about investing and accelerating the commercialisation of breakthrough decarbonisation technologies.
The current geopolitical situation is claiming lives daily and keeping the world on tenterhooks. From an economic point of view, the energy sector is the main focus in the midst of a crisis whose extent and duration are not yet foreseeable. How does this situation affect Baker Hughes and how are you dealing with it?
Luca Maria Rossi: The global energy sector is changing faster than ever before. At Baker Hughes, our goal is to strike a balance between energy security, sustainability and affordable energy. We’re improving our core competitiveness while simultaneously venturing into new territories to create a more diversiﬁed portfolio that can span across industrial businesses.
My team here at New Frontiers within Baker Hughes is the group venturing into those new territories, making strategic bets on early-stage companies with innovative technologies that can be scaled across a variety of sectors. We make equity investments in a range of clean technology start-ups and companies offering hardware, software, and services targeting climate technology solutions, industrial asset management, geothermal and other clean technologies.
One example is through our investment in Mosaic Materials' Direct Air Capture (DAC) technology that features high-capacity and high-selectivity for capturing CO2 in a proprietary metal-organic framework (MOF). This is really interesting technology, as it enables decarbonisation beyond the energy sector into adjacent industries. The importance of solving for such interdependencies between industries has become even more apparent in the current global situation.
Baker Hughes has already made its Net Zero Commitment in 2019 and announced an objective to halve its greenhouse gas emissions by 2030 and to be carbon neutral by 2050. How is this sustainability thinking reflected in your daily work and how will you ensure the success of your sustainability strategy by 2030 and 2050?
Baker Hughes is one of the leaders in sustainability reporting in the energy sector. Our roadmap to reduce our Scope 1 and 2 emissions from our operations to net zero by 2050 will be realised through reduction of operational energy use, increasing the proportion of renewable energy used, and by increasing electriﬁcation of our vehicle ﬂeet, and we’re well positioned to achieve these goals. We’ve expanded our Scope 3 emissions reporting to understand the full lifecycle emissions of our company. Of the 15 categories that fall under Scope 3 GHG protocol, we measure and report 11 of them.
Our company strategy is underpinned by our sustainability framework, and in line with this our Board’s oversight responsibilities require ongoing, in-depth consideration of economic, social, and environmental risks and opportunities. For our investment in Ekona Power, which produces a solid carbon by-product, we implemented extensive reviews for the health, safety and environmental impacts to the market. Similarly, the New Frontiers team includes an ESG review for all our investments to help ensure they will be sustainable into the future.
How is Baker Hughes helping clients and companies achieve their net zero emissions goals?
In the short term, regular engagement with key stakeholders is crucial to shaping the direction and priorities that will help our customers achieve their net zero emissions goals. We gain insights from peers, customers, governments and academia to help inform our work. We've established knowledge sharing networks for more informed and effective decision making and strategic planning and we've done a tremendous amount of work to ensure our partner organisations are aligned with our corporate purpose in net zero goals.
We're investing in technologies that help our existing oil and gas customers manage their emissions and explore further development in CCUS and geothermal technologies. We'll also leverage Baker Hughes' global manufacturing and supply chains that are already making great strides in decarbonising their footprint. Influencing an even broader set of ecosystem partners and customers only further develops our efforts.
What sectors are you are focussing your effort on in order to identify the technology that will drive the energy transition globally and what key technology developments have you identified in the energy space?
The New Frontiers team is looking at innovative technologies that will continue to mature independently while supporting Baker Hughes' core business offering and customer base. As of today, our focus areas are around CCUS, Hydrogen, Energy Storage and the emerging areas that will help us accelerate our offering. For CCUS, our focus is on improving the economic viability of projects at scale and applying our core technologies across other industrial sectors.
We're also looking at emerging areas we aren't currently operating in where we know our global size can help scale up the technologies faster. We've recently invested in Silbat, a long duration energy storage solution that is for power but also for industrial heat applications. We're also looking at more localised solutions like our investment in Exergo, which is a heating solution provider. And finally, Levidian, a graphene production technology for specialty products and bulk construction materials.The New Frontiers team is looking at innovative technologies that will continue to mature independently while supporting Baker Hughes' core business offering and customer base. As of today, our focus areas are around CCUS, Hydrogen, Energy Storage and the emerging areas that will help us accelerate our offering. For CCUS, our focus is on improving the economic viability of projects at scale and applying our core technologies across other industrial sectors.
The main topics of the current magazine are resilience, intelligence and excellence. How do you ensure these qualities in your company and how do you promote them among your customers?
The team here at New Frontiers believes that changes in regulatory environments driven by climate change will create long term and material advantages for efficient clean energy businesses. We believe these regulatory changes will create massive opportunities at scale in the climate technology sectors enabled by digital offerings that drive asset performance. To accelerate the growth of these technologies, our portfolio companies are given a platform to independently grow, with access to world-class resources and expertise.
But even with the backing of a huge energy technology conglomerate such as Baker Hughes that has industry experts around the world, we're still fully aware this is a changing landscape and success won't come overnight. Our teams need to remain agile and resilient through the process. With every investment, we're learning something new from our portfolio companies and they are learning from us. The mutual exchange of knowledge and expertise is something we hope to continue to build on in years to come.