respond to cdp % global 500 pricewaterhousecoopers llp november 2008 slide 11 business contribution...
TRANSCRIPT
PricewaterhouseCoopers LLP
November 2008
Responding to climate change
Richard Gledhill, Head of Climate Change Services
Tuesday 11 November 2008
SALim
PricewaterhouseCoopers LLP
November 2008
Presentation contents
1. Scientific and policy context
2. Climate change as a boardroom issue
3. Climate leadership in the corporate sector
PricewaterhouseCoopers LLP
November 2008
Slide 3
Scientific context:Situation deteriorating faster than previously thought
Fourth Assessment Report (2007):
Warming unequivocal, human caused
Risk of abrupt and irreversible changes
Lord Stern, June 2008:
“I badly underestimated the degree of damages and risks of climatechange… All of the links in the chain are on average worse than wethought a couple of years ago”
"To get below 500ppm ... would cost around 2% of GDP.”
WWF Living Planet report 29 Oct 2008:
“The world is heading for an ecological credit crunch as human demandson the world's natural capital reach nearly a third more than earth cansustain.”
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November 2008
The road to Copenhagen…
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November 2008
EU ETS Dominates the Carbon Market….
2007 volume (2.7 Gt) 2007 value (€40bn)
PricewaterhouseCoopers LLP
November 2008
EUA & Secondary CER Prices 2005-08
Source PointCarbon
0
5
10
15
20
25
30
35S
ep-0
5
Nov-0
5
Jan-0
6
Mar-
06
May-0
6
Jul-06
Sep-0
6
Nov-0
6
Jan-0
7
Mar-
07
May-0
7
Jul-07
Sep-0
7
Nov-0
7
Jan-0
8
Mar-
08
May-0
8
Jul-08
Sep-0
8
€perto
nne
EUA 2005 EUA 2006 EUA 2007
EUA 2008 Sec CER 2008 (Bid) Sec CER 2008-12 (Bid)
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November 2008
Climate change policy discontinuitiesRoad Transport
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November 2008
PwC 11th Annual CEO Survey 2008:Principles vs practice
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November 2008
Carbon Disclosure Project
“In terms of investment policy,companies which are ill-preparedfor more stringent environmentalregulation may face unexpectednew expenses and a decreasingability to sustain their returns,thus decreasing their value inAXA’s investment portfolios.”
AXA GROUP
n
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November 2008
Carbon Disclosure Project:Response rates for the Global 500
Level and detail of response from Global 500
10
41
43
55
62
73
0 10 20 30 40 50 60 70 80 90 100
Disclose emissions forecast
Disclose emission targets
Verify emissions
Disclose emissions (scope 1 or 2)
Include climate in annual report
Respond to CDP
% Global 500
PricewaterhouseCoopers LLP
November 2008
Slide 11
Business contribution to the climate change policydebate
• Breaking the Climate Deadlock initiative
• WEF: Climate Change policy recommendations to G8
• WBCSD: climate programme and sector initiatives
• Copenhagen Climate Council: supporting new treatydevelopment
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November 2008
Questions our clients are beginning to ask
“How do I embed climate change in my corporate strategy?”
“What do investors really care about around climate change and sustainabledevelopment?”
“What are the real drivers of value around climate change?”
“Where are the growth opportunities?”
“What is the best way to manage our climate change and emission tradingrisk?”
“How can I manage emissions and climate change risk in my supply chain?”
“How can I engage my employees on climate change?”
PricewaterhouseCoopers LLP
November 2008
Framework for Strategic Planning
Scenarios
ImpactAnalysis
Regulation TechnologyPhysicalimpacts
Socialtrends
Economictrends
StrategicpartnersCompetitors
Supply chain
Market
Company
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November 2008
Framework for Analysis
Regulation
Reputation
Market
dynamics
Physical
impacts
Physical impacts:
Assessing asset vulnerability
Supply chain disruption Workforcedisruption
Risk management, insurance andadaptation costs
Reputation:
Communicating long term vision toinvestors
Engaging customers and employees
Defending/enhancing brand value
Market Dynamics:
Consumer attitudes and demandpatterns
New technology, products & markets
Competitor behaviour and positioning
Carbon as a value driver in M&A
Regulation:
Carbon constrained production
Compliance costs
Participation in carbon markets
New product standards
Taxes, subsidies and credits
Disclosure of climate risks
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November 2008
Valuecreation
ValueErosion
Compliance:• Operational risk• Regulatory compliance• Reputational risk
Leadership:• Extending impact• Innovation• Market leading
Leverage:• Relationships• Assets
Operational effectiveness:• Reduce direct impact• Organisational savings
Corporate Maturity and Positioning
PricewaterhouseCoopers LLP
November 2008
Slide 16
Response in the financial sector – HSBC
HSBC has taken a proactive approach to managing itsclimate change impacts. This includes:
1. Carbon neutral operations
2. Climate Change Research
3. Investment into low carbon opportunities
4. Applying standards to fossil fuel plant finance
PricewaterhouseCoopers LLP
November 2008
Slide 17
Response in the retail and consumer sector – Tesco
Tesco has developed a climate change plan to tackle theissue which has 3 central components:
1. Measure Carbon Footprint
2. Created a £100 million Sustainable Technology Fund
3. Work on development of carbon labelling withsuppliers and stakeholders
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November 2008
Slide 18
Response in the utilities sector – Dong Energy
DONG Energy is a utility company that is leading thedevelopment of low carbon energy production. Fourexamples of this from the companies activities are:
1. Highly efficient coal fire power plant
2. Off shore wind farm development
3. Research in to carbon capture and storage
4. Research into other renewables
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November 2008
Swiss Re first identified climate change as an emergingrisk 20 years ago. Important component of the company’slong-term risk management strategy include:
1. Climate Adaptation Development Programme
2. Climate Change Futures
3. Greenhouse Neutral Programme
4. Bali Communiqué on Climate Change
5. High level discussions
Response from insurance sector - Swiss Re
PricewaterhouseCoopers LLP
November 2008
Slide 20
Response in industrial products sector – Grundfos
Pumps account for >3% of world energy use. Grundfosaccept that as a leading pump manufacturer they must playan important role in combating climate change.
Technology leadership has helped them to become thenumber one global pump producer - 80% of all newproducts developed must have energy consumption at least5% lower than previous model.
But they are also looking beyond traditional products andmarkets…
PricewaterhouseCoopers LLP
November 2008
Leadership on climate change
1. Shaping the regulatory environment
2. Seizing growth opportunities
3. Preparing and protecting the business
4. Setting an example
5. Empowering others
6. Leading the way