Greenhouse gas reporting & sustainability strategy

Your Green Journey

Rue Stanley

October 16th 2012

Greenhouse Gas Emissions Reporting- Kick start Your Sustainability Program

Agenda

• Introduction

• Greenhouse gas reporting: the start of a “Bigger” plan?

• What to measure

• The opportunity

• Why and how to implement a strategy

• Compliance and greenhouse gas emissions reporting

• About Ecobusiness Exchange

Ecobusiness Exchange Ltd October 2012

Introduction • In June 2012, Nick Clegg Deputy PM announced new legislation requiring LSE UK main

market listed companies to report their greenhouse gas emissions(GHG). This legislation will be effective in 2013, and is in addition to existing legislation such as the CRC- carbon reduction energy efficiency scheme that requires over 2000 companies to report their energy emissions.

• The GHG legislation will affect over 1000 companies, a number of whom are not reporting their emissions under other legislation. Defra is considering extending the legislation to all quoted companies by 2016. Those who sell to affected companies are likely to receive information requests sooner than 2016 from their supply chain.

• 60%* of listed companies are reporting environmental, social and governance strategies and action in their annual reports and some are taking actions that: reduce emissions, costs and risk, create new products, engage employees and increase investor confidence.

• This is an opportunity to use the need for compliance to kick start a more proactive approach to sustainability- the new legislation will bring sustainability issues to the board’s attention. GHG reporting will need resourcing and funding. Rather than a burden on business, its better if the process can generate bottom-line benefits.

• Compliance with the legislation alone will not generate benefits- to achieve benefits- organisations need to decide on a strategy and take action


* Source: Defra

GHG Reporting: The First Step Be More Sustainable


Market Leaders & Sustainable Companies


www.global100.org

Reduce Costs & Emissions


Marks & Spencer Plan A savings

23 companies join KKR’s Green Portfolio program & make $365m savings

The printing industry spends about £67 million on energy bills every year in the UK, resulting in an estimated 2 million tonnes of CO2 emissions. The Carbon Trust estimate that the sector could cut its energy bills by 15% through basic energy saving measures. For every 1ºC that you overheat your premises, you add 8% to your heating costs. (The maximum recommended temperature is 19º.) A single computer and monitor left on 24 hours a day will cost over £50 a year. Switching it off out of hours and enabling standby features could reduce this to £15 a year each and prolong the lifespan of equipment. Report by The Carbon Trust

Opportunities


Unilever Wash at 30° Product innovation and environmental good

Green Data Centres

Power generation: 100MW installed capacity

NISP: one mans waste is another’s product www.nispnetwork.com

A Bigger Plan


Institute for Sustainable Development

www.iisd.org

Strategy Communicate to stakeholders and increase shareholder value

• A survey of more than 300 financial experts in Europe, carried out at the end of 2001, has revealed a high degree of confidence in socially responsible investment (SRI). Eighty-six percent of respondents said they believed social and environmental risk management would

have a long-term benefit for a company's market value. http://www.iisd.org/business/banking/sus_survey.aspx


Sustainable survey

Design


The UNGlobal Compact Strategy Blueprint provides a framework for executing a sustainability program in line with the Ten Principles of the UNGlobal Compact. The UNGlobal Compact has 8700 members, of which 6000 are private and publicly owned enterprises report their performance to the UNGlobal Compact on an annual or biannual basis. Questions relating to the UN Global Compact frequently appear as part of the procurement process www.unglobalcompact.org

http://www.unglobalcompact.org/



Social Responsibility

Products

Employees suppliers investors

Operations

Risk Management

Compliance

Staged Approach: Much More than Compliance

The Green Journey ™

Every Journey Starts with a Single Step

Regulatory Compliance

Risk Management

Increase, manage and measure operational efficiencies own, &

across value chain

CEO + board commitment & leadership

Transparency & disclosure

Robust management procedures & policies

Mainstreaming into corporation

Encourage employee sustainable thinking & work practices everyday. Deliver stakeholder transparency &

responsibility

Embed into product Innovation Reduce negative and increase

positive impacts across the value chain

Social Investments & philanthropy Partnerships &

collective action


Join The Leaders

• http://www.youtube.com/watch?v=t9Fxp3HK6DI


http://www.youtube.com/watch?v=t9Fxp3HK6DI

GREENHOUSE GAS REPORTING

What Where When & How

GHG Emissions Reporting

• On June 20th At the Rio +20 UN Conference on Sustainable Development, Nick Clegg, Deputy PM announced the introduction of mandatory greenhouse gas reporting for listed companies to be affective from April 2013.Initial press reports were confusing, referring to FTSE companies or quoted companies and the number of companies affected as 1600

• Draft regulations have been published and a Defra consultation commenced on July 25th which closes on the 17th October 2012.The consultation will finalise aspects of the legislation, including the effective date which will be either from April 7th or October 2013

• In 2013 approx 1000 companies will be required to report emissions from the period covered by their annual report

• The legislation affects LSE Main Market UK owned listed companies and includes all the entities and businesses under financial or operational control in the UK and internationally


GHG Reporting Support

• Business groups such as the CBI and Aldersgate Group have been supportive of the legislation and have been lobbying for a level playing field for environmental reporting for a number of years supported by business leaders:

"The CRC has become a tax that pretends to be green and does nothing to strengthen the business case to invest in energy efficiency," said Rhian Kelly, the CBI's director for business environment policy.

"We urge the Government to recognise that this policy is past the point of no return - it should be scrapped, and its reporting elements replaced with mandatory carbon reporting.“

• A report from Grant Thornton UK LLP released on the 12th October shows that 67

per cent of UK mid-sized firms include sustainability information in some form of external reporting

• http://www.businessgreen.com/bg/news/2184550/cbi-demands-formal-review-green-taxes


http://www.businessgreen.com/bg/news/2184550/cbi-demands-formal-review-green-taxes

GHG Reporting, in Brief

• Report to be included in narrative of annual report, and enforced under section 456 companies Act 2006, Directors responsibilities

• Report greenhouse gases( GHG) from fuels combustion, owned transport, process emissions, fugitive emissions, indirect/purchased energy

• Report GHG from all locations; UK & international owned/controlled by the company

• Establish a baseline: all locations and sources year 1

• Companies can choose methodology and intensity metrics

• New requirement, in addition to the Carbon Reduction Efficiency Scheme(CRC)

• Effective immediately legislation approved- October or April 2013


What to Measure


• Defined by the Kyoto Protocol

• Defra defined scopes 1 & 2

Greenhouse gases

• Owned transport, Fuels combustion

• Process emissions, fugitive emissions

Scope 1: Direct

• Energy : consumption of purchased electricity, heat steam and cooling

Scope 2: Indirect

GHG Sources


• Carbon Dioxide; methane; nitrous oxide;hydroflurorocarbons;perflurorocarbons; sulphur hexafluride converted into CO2 equivalent

Greenhouse gases

• Owned transport: includes travel from company cars and owned vehicles, excludes travel from other means- personal vehicles and business travel planes, trains etc

Scope 1: Direct

• Energy : consumption of purchased electricity, heat steam and cooling – from all locations in the UK and internationally under company control

Scope 2: Indirect

In Summary • Affects Main Market listed companies from April or October 2013

• Report Material Scope 1 and 2 emissions from all six greenhouse gases

• Companies will have to report across the same boundary: entities and locations as defined in the annual report and prepared for the same period as the annual report

• Emissions data will be required to be included in the narrative section of the report and signed off by directors and auditors

• Companies can choose a base year to report against in future years: this will provide challenges to organisations as they change acquire merge or divest

• Companies will be required to state the methodology or framework used to calculate emissions and choose an intensity metric. For example: headcount, revenue or units of production

• Companies will be allowed to include data from their other reporting obligations such as the CRC, EU ETS and Climate Change agreements


Implementation

Reporting Boundary

Identify emissions

Method & Metrics

Data Collection Systems & Processes

Analysis & Report


Budget & Ownership

Software Selection

Annual Report Deadline

Bring in the Experts?

Next Steps If your company is UK headquartered and is LSE Main Market listed, then this reporting requirement applies once the legislation has been approved for April or October 2013. Research best practice, or speak to an expert: • Define your sustainability direction and strategy • How can your program deliver benefits or be cost neutral? • Investigate International greenhouse gas reporting best practices • Evaluate software: speciality software provides a resource efficient, accurate and

auditable way of managing data • Choose the intensity metrics: that are meaningful to stakeholders • Set up data collection and reporting process • Prepare and stay updated, future reporting requirements are likely to include

waste and water

Not affected immediately? Start your sustainability program now, reduce emissions, costs and increase advantage


About Ecobusiness Exchange

We can advise you on creating and implementing your sustainability approach and offer practical help in meeting the new requirements for greenhouse gas emissions reporting. Sustainability as a Service launched in 2012 offers a modular approach to delivering all aspects of sustainable business. For more information please contact: Rue Stanley E: [email protected] T: 01737 214364 www.ecobusiness-exchange.com Blog: Top Ten Tips on GHG Reporting http://www.ecobusiness-exchange.com/toptentipsemissionsreporting/


Program Design

Delivery

Communications

Systems & Processes

Software

Resource Efficiency

Energy

waste

Governance

Greenhouse gas emissions reporting

Policy & voluntary reporting

Sustainable Strategy

Design & communication

http://www.ecobusiness-exchange.com/



Documents

Greenhouse gas reporting & sustainability strategy