20120228_prashanth vikram singh plenary_external

7/31/2019 20120228_Prashanth Vikram Singh Plenary_External

1/11

1PwC

Risk, competitiveness and sustainability


2/11

2PwC

Key risks CEO survey

2009 2010 2011 2012

Recession/economy Recession/economy Recession/economy Recession/economy

Unstable capital markets Exchange rate volatility Exchange rate volatility Exchange rate volatility

Inflation Unstable capital markets Availability of key skills Unstable capital markets

Energy costs Low-cost competition Over-regulation

Low-cost competition Over-regulation Public debt/deficit Public debt/deficit

Availability of key skills Energy costs Unstable capital markets Availability of key skills

Over-regulation Availability of key skills Shift in consumers Over-regulation

Scarcity of naturalresources Shift in consumers Increasing tax burden Energy costs

Security of supply chain Protectionism New market entrants Shift in consumers


3/11

3footerPwC

Michael Porter

CompanyProductivity

Environment

impact Supplieraccess

andviability

Employee skills

Worker

safety

Employee health

Wateruse

Energy

use

Gender

Povertyin

community

Porter Hypothesis

- Strict environmental regulationsdo not inevitably hinder competitiveadvantage against rivals; indeedthey often enhance it

Social issues- Generic

- Value chain impacts

- Social dimensions of competitivecontext

Creating Shared Value

- Re-conceiving products andmarkets,

- Redefining productivity in the valuechain

- Enabling local cluster development


4/11

4PwC

IT landscape


5/11

5PwC

Landscape in IndiaRecent regulations related to corporate sustainability

National VoluntaryGuidelines - Social,Environmental &

Economic Responsibilitiesof Business

National Action Plan onClimate Change- 9

missions

REC (Renewable EnergyCertificates) -policy

mechanism to promoterenewable energy based

power generation

Department of PublicEnterprises (DPE )

Guidelines on SustainableDevelopment, Corporate

Governance

SEBI Directive on ESGdisclosure

Companies Bill 2011

(CSR committee, 2% ofaverage net-profits of 3

years on CSR activities)

Resource scarcity (water, minerals, energy ) , land acquisition, tribal rights,industrial pollution, increasing regulatory pressure for responsible business,

international pressure for emission caps & low carbon growth


6/11

6

National Voluntary Guidelines

DPE guidelines CSR

AA1000

UN Norms

UN GlobalCompact

Frameworks

Policy Management Reporting

Social

Environmental

Economic

Governance

SA 8000

ISO 26000

ISO 14000

ISO 50000

GRIG3.1

Sarbanes Oxley

Dodd-Frank

SEBI Clause 49

DPE guidelines SD

DJSI


7/11

7PwC

Carbon strategy an illustration

Time

GHG emissions /intensity

Base year GHG inventory

Time

Carbon budgetRs

Shadow price ofcarbon

Rs/tCO2e

tCO2e

AbatementPotential

Low

CarbonPlan

Investible funds(from carbonbudgets)

Barriers to

investmentsRisk of lock-inCo-benefits


8/11

8PwC

Environment P&L - context

Environment impact,economic costs

GHG emissions

Water Consumption

Local pollutants(SOx, NOx, CO,SPM)

Waste

Impact on land-use

Social impact,economic costs

Decent/ Fair WagesHealth & Safety

Working Conditions Standard of Living

Security and Stability

Empowerment

Community Cohesion

Human Capital

Diversity and GenderEquality

Health & Well-Being

Cultural Heritage

Economic benefits

The creation of jobs

Wages

Total taxcontributions

Indirect tax payments

Indirect and Inducedemployment

Indirect and Inducedoutput

Productivity andefficiency gains

Business creationand growth

Source: Puma


9/11

9PwC

Environment P&L - methodology

Environment KPIs

Operationsemission data

Supply chainemissions data Use of

econometric I-Omodel

Collecting datafrom high impact

suppliers Validation with

modeling results

Carbon valuation

Methodology

Social cost ofcarbon estimates[Richard Tol,2009]

Social discountrate of 3.4%

Time adjustmentof estimates

Use of meanvalues

2010 Carbon Value: 66 /tCO2e

Water valuation

Direct use value notconsidered

Indirect use value ofwater considereddriven by scarcity

Review of 18studies, locationspecific

Relationship

between waterscarcity and value

Range of values,average 0.81/m3

Source: Puma


10/11

10PwC

Environment P&L - results

Tier 4: RawMaterials

Tier 3:Processing

Tier 2:Outsourcing

Tier 1:Manufacturing

Operations

0% 20% 40% 60% 80% 100%

Mn

Mn cu.m

Water consumption, 77.5 million cu.m, Euro 47.4 mn

Tier 4 Tier 3 Tier 2 Tier 1 Operations

0% 20% 40% 60% 80% 100%

Mn , ktCO2e

GHG emissions, 717.5 ktCO2e, Euro 47.0 mn

Source: Puma


11/11

11

Key sustainability issues an illustration

Economic

CorporateGovernance

Customer RelationshipManagement

Risk and CrisisManagement

Environmental

Climate Strategy Biodiversity Environmental

Reporting Environmental

Policy/ManagementSystem

Social

Human CapitalDevelopment

Occupational Health &Safety

Stakeholder engagement Talent Attraction and

Retention

20120228_prashanth vikram singh plenary_external

Documents