Csr measuring outcome

Measuring Performance. April 4th 2013 DCCE Confiden@al: Do not distribute without prior explicit approval . Slide 1

Measuring Outcome What to measure and its ra@onale


Public Private Partnership Par@cipatory approaches in environmental economics

Business-centric approach ensures market participation and fit-for-purpose

Economic development but with socio-environmental competencies

Specifically tailored to the local culture and knowhow

Knowledge repository for carbon abatement, adaptation and mitigation

Leverage local projects as a market enabler activity to foster private sector participation

Generate value for market participants in the form of environmental finance


Green Economy for Sustainable Development A low carbon development Think Tank

“Private sector market enabler”

Vision

Support

DCCE was launched on on Jan. 18th 2011 during WFES by HH the Prime Minister and HE Ban Ki Moon


Energy Cluster created to foster Green

Economic Growth amongst the stakeholders

Private-‐Sector-‐lead, supported by key leaders in u@li@es, smelter and refinery

Close coordina@on with Interna7onal

Organiza7on and especially UNDP

Structured to maximize economic benefits through Porter’s Economic Clusters

Model

Multi-Industry Approach Private sector lead and focused – UAE case study


>

Green House Gas Inventories Managing the Dubai GHG inventory and now conduc@ng a UAE-‐wide Inventory

Industry (Direct emissions)

Power and water

Transport

AgricultureWasteBuildings (Direct emissions)Forestry

203020252020201520102005

Total greenhouse gas emissions,Mt CO2e

2005 2010 2015 2020 2025 2030

Abatement

10 15 20

Abatement cost€ per tCO2e

255 30 3835

-90

-70

-50

-30

-100

60

-80

-60

-40

-20

-10

50

40

30

20

10

0

Ease of capture (in near-‐term)

Readily achievable More challenging DifficultCost today

Negative

Modest

High

▪ Appliances and electronics energy efficiency

▪ New build lighting controls ▪ Cropland nutrient mgmt▪ Energy efficiency, oil & gas▪ Methane leakage prevention,

oil & gas▪ Fuel shift, industry

▪ Geothermal, small hydro▪ Engine efficiency, LDVs1

▪ Energy efficiency packages, commercial new build

▪ Retrofit lighting controls▪ Solid waste (excl. landfill

gas flaring)▪ Cogeneration, other industries

▪ Solar & wind2; smart grids▪ Oil to gas shift, power▪ Energy efficiency packages,

residential new build▪ Reduced deforestation▪ Energy efficiency, other

industries▪ Agronomy practices, grassland

management▪ Soil restoration

▪ LED lighting▪ Tillage and residue mgmt▪ Chemical process

optimization

▪ Carbon capture and storage▪ Livestock feed supplements

and vaccines

▪ Nuclear▪ Biofuels – 2nd gen. domestic

▪ Landfill gas flaring▪ Increased bus transport▪ Reduced flaring, oil & gas▪ Cogeneration, oil & gas▪ Biofuels – 1st gen. imported▪ Solar water heaters

▪ Afforestation/ reforestation, forest mgmt

▪ Increased subway transport▪ Wastewater treatment▪ Engine efficiency, HDVs1

▪  Determine overall “low-carbon” growth path

▪  Based on feasibility assessment, determine overall path for emissions under the “low-carbon” scenario

▪  Assess implementation priorities

▪  Decide where focused policy in short term by weighing cost of abatement against ease of implementation

▪  Define requirement for cost curve and link to potential global measures

•  Cost per tonne of abatement, relative to BAU

•  Tonnes of abatement that this lever could offer

▪  Establish “business as usual” (BAU) emissions baseline

▪  Build picture of 2011 emissions bottom-up, forecast of key drivers through 2030, and assessment of potential scenarios

Methodologies M

• GHG Inventory

R

• Mapping and Analysis

V

• Strategy and Targets

☐ .


UAE Aviation State Action Plan Developing an integrated low carbon roadmap for UAE Avia@on

§  Methodology and criteria §  Defini@on, formats and

procedures §  Baseline emissions §  Growth and expansion §  Stakeholder mapping

ü  Avia%on Sector GHG Inventory

§  Data streams op@miza@on §  Standardized data policy §  Current and forecasted ac@vi@es §  Common areas of development §  Suitability to MBM, NAMAs or

Sectorial approaches

ü M&R Dra6 Policy

§  Descrip@on of ER measures §  Cost and financing of measures §  Assess CO2 reduc@on over cost of

ER measures §  Timing of measures §  Legisla@ve outlook

ü  Compendium of ER measures

Development of CO2 plan Monitoring and Repor7ng Mi7ga7on strategy


Selected Por]olio Ac@vi@es Diverse ac@vi@es with emission reduc@on core competencies

Dubal GTX • Steam Op@miza@on across the en@re plant • 350,000 tCO2 p.a.

Dubal D18+ • Emission Reduc@on in Aluminum Produc@on based on new produc@on process architecture

• 250,000 tCO2 p.a.

Desalina@on • Energy efficiency of desalina@on Pumps through the use of newer technology

• 15,000 tCO2 p.a.

Regenera@ve Burners • Use of waste gases in mel@ng furnaces in lieu of cold air burners

• 35,000 tCO2 p.a.

Green Building PoA • Energy efficiency in Abu Dhabi Municipality • 196,000 tCO2 p.a.

CFL • Free distribu@on of CFL bulbs to Dubai residents (includes EK staff accommoda@on)

• 60,000 tCO2 p.a.

Solar Farm •  Installa@on of a 10MW solar power plant on the Dubai Al Ain road

• 14,000 tCO2 p.a.

Waste Heat Recovery • U@liza@on of waste heat from kiln produc@on to generate 15 MW of renewable power

• 75,000 tCO2 p.a.

Inlet Coolers • U@liza@on of pre-‐cooling stackable units in power genera@on to bring inlet to ISO performance

• 40,000 tCO2

Absorp@on Chillers • U@liza@on of heat as primary mean to generate district cooling power for en@re Dubal facility

• 45,000 tCO2

Alterna@ve Fuels • U@liza@on of Refuse Derived Fuel in industrial furnaces as fuel replacement

• 62,000 tCO2 p.a.

Dubai Municipality STP • Capture CH4 and convert it in bio-‐cng for fleet purposes

• 85,000 tCO2 p.a.


“What gets measured, gets Done.” “… the general tendency in many companies is to evaluate performance primarily on the basis of cost and efficiency. There are many more criteria to judge…”

Peter Drucker (1909 – 2005)


Defining the outcome Lessons leant from project management


0102030405060

% o

f res

pond

ents

Primary reason for measurement

Assessing Performance Operational EfficiencyAligning Employees Behaviours Financial ControlStrategic Decision Making External ReportingStrategic Planning Compensation/RewardingValidating Strategy

Neely, A.D.; Yaghi, B. and Youell, N. (2008) “Enterprise Performance Management: The UK State of the Art”, Oracle and Cranfield School of Management.

Reasons for measuring performance Efficiency and stakeholders


How do countries differ? A compara@ve approach

Australia China Japan UK USA

Performance Assessment (64.37%)


Aligning Employee Behaviours (53.40%)






Improve Operational Efficiency (52.94%)




Improve Strategic Decision Making (43.69%)



Compensation and Reward (35.63%)


Validating Strategy (40.78%)

Financial Control (39.82%)




Strategic Planning (37.86%)






External Reporting (32.87%)



















>

Green Economy for Sustainable Development What does the policy wishes to achieve

Although we are environmentalist at heart, Dubai’s core competency is its business acumen and should focus its efforts towards developing the synergy between business sector lead environmental ini@a@ves. Whilst all governments follow the typical top down approach, Dubai would follow the economic development ODA model (government invest 1 dollar to achieve 100 dollars of GDP)

Pursue a low-‐carbon economy

Develop a long term plan to carbon intensity of GDP through the pursuit of economy-‐wide measures. Pursue a best living environment approach in line with UAE 2021

Develop a set of measures aimed towards anrac@ng best-‐prac@ces and climate change related development to the Emirate of Dubai by leveraging the Ø  Sources of finance Ø  Technology Ø  Intellectual Property


Rationale for the Policy Why is climate change an issue

o  Resources are u@lized inefficiently, which means despite growth, the environmental cost is hidden and is not taken into account

o  The environmental cost will have to be assessed and responsibili@es assigned to avoid an event whereas a global agreement is counterproduc@ve to Dubai’s economy

o  The global communi@es are converging

o  Global environmental concerns can have drama@c effects on the local economy, star@ng form the loss of valuable land, resources and infrastructures

o  The pursuit of energy leadership is a key opportunity seeking complementarity form the business sector


Renewables Demand Side Management

Case study 1 million free CFL bulbs Investment: USD 2.5m Emission Reduc@ons: 60,000 tCO2 per annum

Case study 10 MW PV Solar Park Investment: USD 20m Emissions Reduc@ons: 12,000 tCO2 per annum

Comparability Which project is best for the Environment?


Performance Measurement is a process by which a business unit objec7vely assesses and evaluates the extent to which it is accomplishing a specific objec7ve, goal, or mission. Performance measurement alone is incomplete.

• Performance Management is a systemic link between company strategy, Investments, and processes. Performance Management is a comprehensive management process

Context of measurement


Outcome objectives What is the ul@mate success factor by stakeholder

Enables decision making Manage by results Promote

accountability

Dis@nguish between program success and failure

Allow for organiza@onal learning and improvement

Jus@fy budget requests

Op@mize Investments

Provide means of performance comparison

Fulfill mandates Establish catalysts for change

Raise early warnings And so on…


Common Denominator Why do we use CO2e

Sources GWP

(IPCC 4th Assessment Report)

GWP (IPCC 2nd Assessment

Report)

Chemical Formula Emission

Combus@on Processes 1 1 CO2 Carbon dioxide

Landfills, coal mining, waste water treatment, biomass combus@on

25 21 CH4 Methane

Agricultural soils and nitric acid produc@on 298 310 N2O Nitrous oxide

Subs@tutes for ozone deple@ng substance, semi-‐conductor manufacturing

14,800 11,700 HFCs Hydrofluorocarbons

Electrical transmission and distribu@on, 22,800 23,900 SF6 Sulphur hexaflouride

Subs@tutes for ozone deple@ng substance, semi-‐conductor manufacturing

7,390 -‐ 12,200 6,500 -‐ 9,200 PFCs Perfluorocarbons


Carbon Budget How much have we spent?

Only 40% of human CO2 emissions are being absorbed, mostly by vegetation and the oceans. The rest remains in the atmosphere. A natural change of 100ppm normally takes 5,000 to 20.000 years. The recent increase of 100ppm has taken just 120 years.

(in Gt CO2e) Budget (21st century)

Emission Per year

Emissions to Dec. 31st 2012

Balance to Dec. 31st 2099

CO2 Receivables

1,456 14.6 175 1,281

CO2 Payable 1,456 30 360 1096

Difference 206% 25% 75%


PRISM approach

PRISM Stakeholder Sa@sfac@on •  (Who are the key stakeholders and what do they want and need?)

Strategies • (What cri@cal processes do we require if we are to execute these strategies?)

Processes • (What capabili@es do we need to operate and enhance these processes?)

Capabili@es • (What contribu@ons do we require from our stakeholders if we are to maintain and develop these capabili@es?)

Stakeholder Contribu@on • (What strategies do we have to put in place to sa@sfy the wants and needs of these key stakeholders?)

Value chain analysis


•  Fast, Right, Cheap & Easy •  Purpose, Care, Skills & Pay •  Trust, Loyalty, Profit & Growth

•  Legal, Fair, Safe & True

•  Return, Reward, Figures & Faith

Stakeholder Sa7sfac7on (Stakeholder Wants & Needs)

Stakeholder Contribu7on (Organiza%on Wants & Needs)

•  Trust, Loyalty, Profit & Growth •  Hands, Hearts, Minds & Voices •  Fast, Right, Cheap & Easy

•  Rules, Reason, Clarity & Advice

•  Capital, Credit, Risk & Support

Stakeholders

Customers & Intermediaries

Employees

Regulators & Communi7es

Suppliers

Investors

Stakeholder perspectives Think of a u@li@es provider…


Setting Indicators

Mission: Protect people and property

Strategic Goal #1: Reduce damage caused by motor vehicle accidents

Annual performance goal 1A: Reduce serious accidents by 20% per

100 km traveled by 2012

Measure: Number of accidents per 100 km traveled


Before we can map your strategy . . . Quan@fiable strategic objec@ves

o Improve Costumer Service

o Reduce Costumer collec@on @mes by 30% by year end

Make sure objectives have a direct relationship to goals and goals have a direct relationship to mission and values.

Too vague

More precise


BSC in a Nutshell

•  A framework for breaking strategy into ac@onable components called, Strategic Objec%ves.

•  An effec@ve Strategic Management System for aligning day-‐to-‐day work to an organiza@on’s vision and strategy.

•  An integrated framework for informing strategic budge%ng, and allowing the organiza@on to learn what works and to become more strategy focused.

Green Scorecards?

In other words, the BSC is an integrated performance-‐based strategic planning and management system. It is not just a measurement system!


Strategic Performance Objectives (SPOs) are key to understanding the BSC. They represent

the building blocks of the BSC. Each one of you should familiarize yourself with the 10

SPOs.

Examples from Humanitarian Industry


Cascading and defining outcomes

These are examples of activities designed by

the OPCOs to contribute to the

corporate strategy, based against impact, cost, complexity and

constraints


Dashboard

Monitor only the yellow and red flags….

… from the OPCO dashboard….

… Click on any traffic light to

receive detailed info


Each indicator is explained in details in the

Indicator Sheet

The 2008 corporate targets are included on

each indicator sheet

Click on the “See details by RO” link to get an overview of

the regional targets for the

indicator in question

Planning is key


The Traffic Lights Status page gives you the traffic lights distribution by

perspective, by region and by Strategic Performance Objective

Traffic lights distribution status is updated when new results are available on the BSC

site. The latest update can be seen below the table

Keep it simple


The main BSC dashboard gives you a general overview of UNOPS performance at any given point in time. Performance status for each indicator and region are displayed

on the BSC dashboard

To quickly access detailed results by perspective or by region use the appropriate

dropdown menu

Daily routines


1.  Don’t start with what should we measure. 2.  Instead start with what questions do we want to be able to

answer. 3.  The questions that matter for different organisations are

context dependent. 4.  So do not look for standardised sets of measures that can be

used for CSR. 5.  We can, however, look for standardised frameworks – such as

the Performance Prism – to help structure our thinking.

Reflections


GET INSPIRED

Ivano Iannelli | [email protected] | www.dcce.ae