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CLIMATE CHANGE ADAPTATION ZAOUR ISRAFILOFClimate Change Specialist COP 21, Paris 2/12/2015
No. 2
OUTLINE
1. ADAPTATION: MAIN CHALLENGE
2. OUR APPROACH
3. MITIGATION BENEFITS: EXAMPLES
4. ADAPTATION SOLUTIONS FROM SABIC
No. 3
SABIC IN NUMBERS
3rd largest global diversified chemical company*
91 B$ total assets50 B$ annual revenue6.2 B$ net income
40,000 employees50 countries64 world-class plants worldwide
* Forbes 2015
No. 4
ADAPTATION
*Source: IPCC Glossary. https://www.ipcc.ch/publications_and_data/ar4/wg2/en/annexessglossary-a-d.html
“Adjustment in natural or human systems in response to actual or expected … effects, which moderates harm or exploits beneficial opportunities.”*
To adjust to (manage) something we first need to measure it ….
…that is, to adapt, we first need to understand impacts.
How to measure expected effects?
No. 5
Climate change impact
1 Failure to comply with existing carbon regulations in China, Europe, US (fines and affecting reputation).
2 Incorrect or insufficient sustainability reporting (“greenwashing”) affecting reputation
3 Changing customer preferences leading to sales loss4 Assets physically affected by Climate Change5 Pending climate regulations leading to increased
costs6 Additional costs due to compulsory low carbon
technology requirements7 Poor/absence of carbon management (emission
reduction) affecting reputation8 Inability to adequately raise capital (investors refusing
to invest or demanding higher premium)
ENTERPRISE RISK MANAGEMENT MATRIX:PRELIMINARY ASSESSMENT
ERM: •Measures the impact and•Triggers corporate response
No. 6
SABIC ADAPTATION
2014 versus 2010:
Audited/verified by KPMG
25% more efficient production by 2025 (v 2010)
Linked sustainability targets to executive pay
Hundreds of projects completedMore are in the pipeline
No. 7
Water production and delivery is very energy (and CO2) intensive. 20% of total energy consumption in Saudi Arabia is for desalination.
Expensive: Desalination costs $1.09 per m3 (8 x that of ground water).
High consumption per capita: 0.265 m3 (2x world average).
Climate change impacts on water: scarcity, costs, quality, supply reliability
Potential impacts on SABIC: manufacturing, operations, health and safety, supply chain, logistics, etc.
WATER: SAUDI ARABIA
No. 8
WATER: SABIC ADAPTATION
SABIC adapts to expected water related challenges:
1. Reducing its own consumption:
Water intensity (m3/t of production): • 2013: 1.756 • 2014: 1.675 (5% reduction)
Total water consumption (k m3): • 2013: 140,200 • 2014: 135,100 (3.6% reduction)
No. 9
2. Developing and delivering market solutions:
High Density Polyethylene (HDPE) pipes enable savings in transport, installation and use
SABIC has invested in three of its plants to drive the move from ductile iron pipes to HDPE.
Benefits from HDPE water transportation pipes as against pipes made from ductile iron:
50% reduction in GHG emissions25% reduction in energy demand25% reduction in fossil resource depletion
WATER: SABIC ADAPTATION
No. 10
RESOURCE EFFICIENCY
First petrochemicals company to offer polyethylene (PE) and polypropylene (PP) based on renewable feedstock sources.
Use of renewable feedstock (waste fats and oils) instead of traditional feedstock, reduces the amount of fossil fuels needed by 84%.
No. 11
CARBON DISCLOSURE PROJECT
Reporting by more than 4,500 companies, 207 cities on behalf of:
•75 major companies with US$1 trillion annual purchasing power•822 institutional investors with US$95 trillion in assets
CDP assessment methodology examined SABIC’s: •Carbon management strategy •Corporate governance •Emission management •Assessment of risks and opportunities.
2014 score: 97/100 points.
One of the top results among:•Middle East based organizations and•Industry peers worldwide
No. 12
KEY CHALLENGE in ADAPTING to IMPACTS of CLIMATE CHANGE IS the ACCURATE MEASUREMENT of THOSE IMPACTS
TO OVERCOME THIS CHALLENGE SABIC USES CORPORATE ERM
SABIC’S VOLUNTARY SUSTAINABILITY KPIs HELP US ADAPT AND DELIVER MITIGATION BENEFITS
WE HELP OUR CUSTOMERS TO ADAPT
ADAPTATION MAKES BUSINESS SENSE
SUMMARY
