Why a Sustainable Strategy Is the Only One That Pays Dividends

In spite of the pledges and policies made to tackle climate change and make the world more sustainable, the planet is currently on course to emit twice the greenhouse gas emissions in 2030 than is permitted under the 1.5°C limit of the Paris Agreement, according to the Climate Action Tracker. In the face of ongoing conflict, soaring energy prices and the growing impact of climate change, the sustainability imperative facing all businesses is an ever-increasing challenge.

Although investment in the global energy transition grew 27% between 2020 and 2021 to $775 billion, the current gap between net-zero pledges and the investment required to keep things on track by 2030 is $6.25 trillion, according to BloombergNEF. For the world to accelerate the energy transition, we must reduce our reliance on fossil fuels, cut emissions and install more sustainable and cost-effective sources of energy.

This requires not only more renewable energy and storage capacity, but also that the value chains in every sector become more sustainable. In line with global business trends, companies actively embracing sustainability will deliver the best returns for investors and the planet.

Accepting the sustainability challenge

Mytilineos, an energy and industrial lynchpin of the Greek economy, is taking a lead role in the global clean energy transition. In 2021, it became the first Greek company to set defined targets to minimize carbon emissions. By 2030, it plans to cut total direct and indirect CO2 emissions by at least 30% compared with 2019 levels, and aims to become completely net zero by 2050.

The company’s innovations, overall sustainability performance and management of environmental, social and governance risks have been recognized by leading assessors such as EcoVadis, which places it in the top 7% of performers. Sustainalytics ranks Mytilineos second out of 114 companies in its Industrial Conglomerates category.

By adopting and implementing a sustainable approach throughout its business, Mytilineos is facing today’s challenges and achieving success. “Mytilineos has responded on time by taking appropriate and targeted measures, focusing in particular on energy cost as well as the security of supply, thus managing to not only remain unaffected, but also to record historically high performance while simultaneously accelerating the implementation of the largest investment program in its history,” says Evangelos Mytilineos, the firm's Chairman and CEO.

By investing strategically in this transition, the company is adapting to the new environment, and made its biggest-ever capital expenditures in 2022 while significantly increasing profitability.

The company's financial performance at the end of 9M 2022 confirmed its ability to respond promptly and successfully even under adverse economic conditions. In November, it reported record-high quarterly results for the fourth consecutive quarter. Net profit (after minorities) at the end of 9M 2022 increased by 171% to €312 million ($327 million), over the same period in 2021.

A strategy for success

To reflect the changing business environment, the Mytilineos management team has shown foresight in its investments in decarbonization over the past few years. It has built a renewable portfolio of 8.6 GW, comprising 2.4 GW in Greece—40% wind and 60% solar—and 6.2 GW of solar projects at various stages of development across five continents. The group also provides turnkey infrastructure projects around the world—including energy storage integration, electrical substations and grid interconnections—that help secure a stable power supply and have sustainability embedded in their construction and operation. One example is a 110 MW combined heat and power plant in Slovenia, which has reduced its coal consumption by 70%.

Mytilineos has developed several fuel-efficient gas-fired power plants, including cogeneration plants that provide heat that can be used for industry, and combined-cycle gas turbine power plants, the most efficient thermal power plants currently available. The company’s 826 MW Agios Nikolaos combined-cycle plant in Viotia, in central Greece, is one of the largest and most efficient combined-cycle gas turbine power plants in the world.

Beyond energy solutions

Beyond the energy sector, Mytilineos provides a range of solutions for water treatment and treatment of liquid and solid waste, that boost the performance and efficiency of treatment plants for urban, industrial and agricultural waste, as well as waste from ships.

It also builds plants that recover energy from municipal, commercial and industrial waste, using RDF (refuse—derived fuel) and SRF (solid recovered fuel), biomass, anaerobic digestion and landfill gas technologies to provide low-carbon energy.

An example is the Protos Energy Recovery Facility in the UK, which can treat 400,000 metric tons a year of non recyclable waste as well as generate electricity, with a net power output of around 45 MW.

Offering expertise in projects ranging from energy-efficiency programs to smart energy solutions, the company is also exploring the introduction of hydrogen fuel cells for both power generation and transportation.

In Greece, Mytilineos has developed projects ranging from railway lines and hydroelectric power plants to energy-efficient school upgrades. Its own offices in Athens have been certified LEED (Leadership in Energy and Environmental Design) Platinum for new construction.

Rethinking aluminum production pays off

Mytilineos’s commitment to cleaner energy and efficiency extends to the company's industrial core. Aluminium of Greece, its aluminum and alumina (aluminum oxide) processing business, has reduced it's energy consumption and production costs through recycling and innovation. This has allowed Mytilineos to maintain its profitability at a time when other European smelters are suffering production curtailments.

In 2019 the company acquired EPALME, the largest independent producer of recycled aluminum in Greece, and set a target to produce 60,000 metric tons of recycled metal annually and reduce its electricity consumption for aluminum production by a quarter. Aluminum is infinitely recyclable, and recycling it uses 95% less energy than producing virgin aluminum. Mytilineos has committed to reduce carbon emissions from its metallurgy operations by 65% by 2030 primarily by increasing recycled aluminum production and the use of renewable energy.

By electrifying its smelter and using renewable sources, the company aims to cut costs and emissions and avoid the price volatility currently affecting European energy markets; this move will also reduce earnings volatility.

A plan for socially inclusive growth

The challenge for future businesses is to remain agile and responsive to global challenges. For Mytilineos, this means becoming completely sustainable and achieving net zero by 2050 across its entire portfolio.

Evangelos Mytilineos describes sustainability as the “driving force behind the company’s aspiration to remain competitive.” Beyond the pages of its annual reports, the company refers to the wider ambition of contributing to socially inclusive growth as outlined by the UN’s Sustainable Development Goals. “We aim to create long-term sustainable value for our shareholders, as well as for our other stakeholder groups, by adopting a holistic approach in pursuing our activities, combining the safeguarding of jobs and growing our business, our profitability, always in terms of social and environmental sustainability,” says Mytilineos.