Business Case for Going Green -- Now

The Business Case for Going Green— NOW! Panel at Fairleigh Dickinson University’ s Jumpstarting the New Green Economy May 19-21, 2009 Victoria Zelin, Hudson Gain Corporation, Moderator Ron Reisman, Board of Public Utilities Kevin Tubbs, Ingersoll Rand Ed Madzy, BASF Dave Stangis, Campbell Soup Hugh Tole, Roche Five Penn Plaza, 23rd Floor, New York, NY 10001 Phone 212.835.1601 www.hudsongain.com Copyright ©2009 Hudson Gain Corporation

Hudson Gain’Evolution to Green s Executive Search Assessment New Hire Integration Talent Talent Leadership Development Acquisition Development Recruitment Process Performance Improvement Improvement Sales Effectiveness Sustainable Leadership Succession Planning Staffing & Engaging for the Green Economy Executive Outplacement Organizational Change 2

The Hudson Gain CSO Research Study* Going Green? Don't Hire a Sustainability Chief Until You Read This Study! The Role of the Chief Sustainability Officer in Corporations * Available on Slideshare or contact victoria.zelin@hudsongain.com 908 306 0272 3

Putting Energy Efficiency to Work for Your Business Jumpstarting the New Green Economy Fairleigh Dickinson University May 20, 2009

Office of the Business Energy Ombudsperson n Legislatively- Legislatively-mandated office n N.J.S.A. 48:2-92 et seq. 48:2- n Mission is “ to provide education and … assistance to any business with regard to energy costs, third-party suppliers, State third- energy programs, subsidies and grants… ”

The Governor’ Challenge s n Energy Master Plan calls for 20% reduction in projected energy growth by 2020 n Would yield annual electric savings of 20,000 gigawatthours n Would also yield annual heating savings of 119 trillion Btu n Energy savings achieved through: n Building Codes n Appliance Standards n Appliance Replacement n Existing Buildings

The Case for Energy Efficiency n Cost- Cost-effective EE improvements to the state’ s 3.7 million existing buildings would save about 15,000 GWh and 98 TBtu by 2020 n This represents 75% of EMP goal on energy savings n Goal would require addressing more than 300,000 per year through 2020 –more than the total number of buildings addressed in the first 5 years of the Clean Energy Program

The Importance of Business n Businesses account for two-thirds of the state’ two- s electric and natural gas consumption n 68.5% of electric savings produced by the Clean Energy Program came from businesses n Business customers saved $11 for every $1 invested in EE, compared to $4 for residential

Communicating the Message n Increase education and outreach to business n Creating partnerships with business groups and communities n “Best Practices”Manuals for 10 industry groups n Supermarket manual now being developed n Local government, hospitality, retail, restaurants and health care facilities among other groups

Energy Efficiency Programs n SmartStart Buildings Program n New construction, renovation and upgrades n Design support, technical assistance and financial incentives for qualifying equipment n Electric chillers n Natural gas cooling n Natural gas heating and water heating n Premium efficiency motors n Prescriptive lighting n Lighting controls n Custom measures

Energy Efficiency Programs (cont’ d) n Pay for Performance (new in 2009) n Existing businesses with average annual peak demand over 200 kW (supermarkets, hospitals, hotels, office buildings, manufacturing, etc.) n Incentives of $5,000 to $50,000 for development of Energy Reduction Plan (based on $.10 per square foot) n Incentives up to $1 million per service payable on installation of recommended measures and completion of measurement and verification report n Additional incentives for combined heat and power, if feasible

Energy Efficiency Programs (cont’ d) n Direct Install n Expected rollout during summer of 2009 n Targeted to businesses with average annual peak demand below 200 kW (restaurants, small retail, professional offices, etc.) n Direct installation of prescriptive measures (lighting, refrigeration, heating equipment, etc.) by pre-qualified pre- contractors n Program pays contractor directly for up to 80% of installed cost; customer pays contractor remaining 20%

Sample Incentives Paid in 2008 Customer Total Incentives Technology Lowes $955,841 (multiple locations) Lighting McCaffey’Market s $200,000 Custom Electric Robesco, Inc $197,435 Custom Electric Woodbury Board of Education $142,234 Ground Source Heat Pumps East Coast Warehouse $140,000 Lighting Connell Real Estate $120,000 Electric Chillers Deluxe Corporation $127,709 Custom Electric Newark Public Schools $114, 832 Geothermal Heat Pump, Custom Electric Chanel Inc. $103,625 Custom Electric, Custom Gas Trump Plaza $102,087 Variable Frequency Drives, Custom Electric 2 Gateway Center Partners $100,000 Lighting Crossroads Condominium Assoc. $100,000 Electric Chillers Cardinal Health $56,259 Custom Electric Dunkin Donuts $43,900 Lighting Munich Reinsurance America, Inc $26,000 Variable Frequency Drives

New Jersey’ Clean Energy Program s n On the web: www.njcleanenergy.com n On the phone: 1-866-NJ SMART 866-

“The Ombuddies” n Joe Sullivan, Business Energy Ombudsman n joseph.sullivan@bpu.state.nj.us n (609) 610-0433 610- n Ron Reisman, Manager of Business Outreach n ronald.reisman@bpu.state.nj.us n (973) 648-3908 648-

Ingersoll Rand Business Case for Sustainability Kevin R. Tubbs Director, Environmental Affairs May 20, 2009

Who We Are •A $13 billion diversified industrial company •Over 60,000 employees worldwide •About 100 manufacturing facilities in every major geographic region •Strategic brands are #1 or #2 in their markets •World leader in creating and sustaining safe, comfortable and efficient environments. 18 General Overview

Market-leading Brands Comfort and Climate Control Brands #1 North America #1 Worldwide #1 US display cases #2 Worldwide transport #1 North America refrigeration Commercial HVAC service provider Equipment Industrial Brands Security Brand #1 Worldwide #1 North America #1 North America golf cars air compressors, lock and door air tools hardware 19 General Overview

Drivers for Change –Tyler, TX. •Tyler Plant produces residential air conditioning systems •Business landscape: – Expiration of five year fixed price electrical contract – Rising energy cost +70% on $4M spend – Dramatic downturn in housing market Ingersoll Rand acquires Trane –June, 2008 – Corporate goal of 15% normalized reduction in manufacturing energy use by 2013 20 General Overview

Facilities & Infrastructure • Campus style facility; Total 1.1 million square feet, 700KSF manufacturing / test, balance Engineering, offices & warehouse • • 100PSI & 400PSI Compressor Dry Air (CDA) Systems; 5,000 SCFM total demand @ -40F DP • Four 900 Ton Trane Centrifugal Chillers running in series / parallel, operating at 380F Comfort cooling in manufacturing area • 2400 Ton Process Cooling Tower Water System • 1-600 HP & 1-35 HP gas fired boiler • • Mix of HID lighting, T12, T8 & T5 fluorescents 21 General Overview

Simple Approach •Policy & Deployment •Energy Efficiency Projects •Management / Factory awareness •Equipment / systems efficiency •Electrical sub-metering •Production methods •Ownership of results and empowerment •Waste minimization, leaks and losses •Metrics, Monitoring and Reporting •Focused investment •Energy Conservation Measures •Pricing Strategies •Behavior changes •Supply / rate management •Off / on controls nights / weekends •Demand management •Basic operations and maintenance •Off-peak load shifting •“Low hanging fruit” projects 22 General Overview

2007 Tyler Electrical Usage by Area Sub-Meters Help! 100.0% 80.0% 60.0% ↑30% of Total Electrical 40.0% 20.0% 0.0% 23 General Overview

Results System Issue Solution Invested Comp Savings CDA 6,000 CFM CDA, 1960’ vintage, s 4X300HP rotary screw $1,000,00 12/08 $400,000 two desiccant dryers, 8% of CDA Air Compressors, 0 (Efficiency) vented to atmosphere, restriction in Dryers, 6”header header Boiler 600 HP boiler @ <70% efficiency; New 400 HP @ 90% $312,000 12/08 $150,000 Process change, capacity 2X efficiency (Efficiency) demand Lighting Mix of HID & T-12 fluorescent, Continue phased Ongoing $125,000 continue phasing lighting retrofits ($300 cum) O&M 24X7X365 chiller operation @ 380F 43F on-shift; +/-48F off- O&M cost 9/08 $180,000 Process shift Neutral (Conservation Temperature specifications ignored & Efficiency) space temp specs Coil cleaning, CDA leaks repair, Loss of chiller plant & control focus O&M supervisor on-site focused on HVAC Weekend 24X7 for years; Currently 5-6 day / Turn off non-critical <$20,000 4/08 $150,000 Consv. week, with maintenance on back equipment, Night / (Conservation shift Weekend setback ) Remote Onsite O&M people, 24X7X365 National Service Analysis <$10,000 9/08 $125,000 Monitoring & Monitoring; Reduced (Labor & stand-by O&M Staff Conservation) 24 General Overview

Project Summary •Multiple Benefits are being achieved: – Improved O & M practices – Use of remote monitoring and engineering support to reduce cost and “ hold the gains” – Delivering better than expected raw cost avoidance ($480,000 in calendar year 2008) •Total Projected Costs: $1,342,000 + lighting retrofit costs TBD •Total Projected Annual Savings: $1.1 M 25 General Overview

We’ Uniquely Qualified re •More than half the buildings in the world rely Trane and Ingersoll Rand and our products to deliver a high performance building that support their goals. •We have over 3,000 engineers throughout our enterprise, including 520 LEED certified engineers •We share knowledge and experience across businesses so our customers can benefit from combined knowledge •Critical Factors: – Savings potential – Practicality – Commercial Viability – Risk Management – Business Differentiation 26 General Overview

Hussmann provides innovative green solutions for retail food industry 27 General Overview

Sustainable Practices Bring Recognition • USEPA Best of the Best Stratospheric Ozone Protection Award • DJSI North American Index • KLD Indexes 28 General Overview

Sustainable Development at BASF 2009 Green Ventures Conference at FDU's College at Florham, Madison, NJ May 20, 2009 E Madzy Director, Product Stewardship / Regulatory

BASF –The Chemical Company n The world’ leading s chemical company n Our portfolio ranges from chemicals, plastics, performance products, agricultural products and fine chemicals to crude oil and natural gas n Sales 2008: €63.3 billion n Employees as of December 31, 2007: 96,924 n R&D Expenses: €1.35 billion

Ensure Sustainable Help our customers to Development be more successful The Chemical Company Form the best team in Earn a premium on industry our cost of capital

What Sustainability Means to BASF l It means combining economic success with environmental protection and social responsibility. As an integral component of a decision-making process, Sustainable Development: l Drives innovations in chemistry that improve the quality of life; l Presents market opportunities for eco-efficient products and practices that result in long-term profitable performance and; long- performance, l Promotes the utilization of natural resources that meets the needs of the present while ensuring that the needs of future generations are met. u Economics are vital to the SD value proposition

Global Leadership

Global Toolbox for Sustainable Development BASF Sustainable Development Strategic Performance Supplier Customer Analysis Measures Relations Support and Risk Management •Issue •EHS Audit •Audit: •Project Success : Management •Product Quality, EHS and Value addition via •Eco- Eco- Stewardship Social EHS and efficiency Sustainability •Social Services analysis performance assessment •Sustainability Screening

Eco-Efficiency : A Life-Cycle Approach Production Basic Chemicals Production End- Products Raw Materials and Energy Production Recycling/Disposal Use Phase

Eco-Efficiency Portfolio: Costs and Environmental Burden 0.0 Environmental Impact (normalized) high eco-efficiency Alternative A Alternative B Customer Alternative C benefit : The most eco-efficient product 1 has the lowest environmental 1.0 functional impact and cost. Eco- unit for … . efficiency is measured from the diagonal line. low eco-efficiency 2.0 Alternative A is 2.0 1.0 0.0 most eco-efficient. Costs (normalized)

Eco-Efficiency Analysis (EEA) UV-Curable, Low-VOC Automotive Primer n Eco-Efficiency Results Presidential Green Chemistry Environmental impact (normalized) Award Winner 0.0 2005 high eco-efficiency 1K UV-Cure 2K Urethane - Thermal • Application of Epoxy- Thermal primer to 1m2 of 2K Urethane - IR a car body, for Epoxy- IR lifetime use of 1.0 1K UV-Cure- Aerosol 200,000 miles at 20mpg. The UV- cured coating in cans is low eco-efficiency the most eco- 2.0 efficient. 2.0 1.0 0.0 Adjusted Costs(normalized)

RESULTS OF OUR EFFORTS

Contact information Thanks for your attention BASF Corporation Edward Madzy Phone: 973 245-6689 Fax: 973 245-6707 Email: edward.madzy@basf.com

The Business Case for Going Green… NOW Dave Stangis Vice President, CSR & Sustainability May 20, 2009 Jumpstarting the New Green Economy

• Approximately 20,000 employees in 20 countries • 140 Year Heritage • Products sold in ~120 countries • ~ $8B in Sales 42

Focusing Efforts –Aligning with Values CSR at Campbell - Driving global wellness and nutrition, helping to build a sustainable environment, and honoring our role in society from the farm to the family. Consumers Environment Workplace Society Deliver on the Lead the Sector An Extraordinary Nourishing our Consumer Promise in Environmental Workplace where Neighbors Stewardship Employees Drive Everywhere, CSR Innovation Every Day Wellness and Nutrition Develop 5yr plan to Engagement measures Resolute commitment Food Safety and Quality reduce resource use embrace CSR to our communities Strategic Partnerships Drive sustainability Model of Diversity and Partnering to address Authentic Nourishment in agricultural systems Inclusion Wellness, Nutrition and Helping the Consumer Reduce the footprint of Benchmark for CSR Hunger be more Sustainable key products Integration Signature programs with Social Impact “ Together we will build the world’ most extraordinary food company s by nourishing people’ lives everywhere, every day.”43 s

Alternative Energy Initiatives • $5,950,000 investment in a fuel cell that provides approximately 65% of the plant electricity. • Annual savings $1,100,000 • CT clean air grant $3,500,000 • Project IRR 33.4% The new 1,200 kW fuel cell was switched on July 2008. • Solar installation in Toronto •Reduce plant's carbon dioxide emissions by about 20,000 pounds • Anaerobic digestion pilot with UC-Davis has already processed > 200 tons of food waste from Campbell’ Sacramento Plant s 44

Operational Sustainability •Manufacturing – Largest fuel cell installation in the US –Annual savings > $1MM – Heat recovery and water recycling system redesign •Savings - 3.5 million gallons/day water and $4 million/yr •Packaging – Right-sizing PF Gold Fish carton saves more than 100,000 pounds of material and $900K. – Eliminating the paper labels from frozen condensed soup eliminate 250,000lbs of material and save ~$550K in one plant alone – Select Harvest labels - Saving 800 tons of lumber, 2MM gal of water – Sustainability Packaging Guidelines 45

Sustainable Packaging Examples, cont. Design w/ Create Environmental $ Benefit Sustainable Economic Partner Externally Mindset Value 39,000 pallets $3,000,000 (800 + trucks) Arnott’ Improved Pallet Utilization s 60 million lbs paper $8,000,000 Pepperidge reusable Shippers 2 million lbs paper $1,000,000 Strategies Score Card TT conversion form carton to Flexpack 46

Sustainability at Roche – Preserving Innovation Hugh Tole

A Global Perspective About the Roche Group • Founded in 1896 in Basel, Switzerland • Employs about 80,000 people • Operates in more than 65 countries • 2008 sales ~ $ 42.34 billion (45.6 billion CHF) • Invests over $8 billion per year in R&D • Completed purchase of remaining shares of Genentech in March 2009

A Global Perspective About the Roche Group Our Mission Our aim as a leading healthcare company is to create, produce and market innovative solutions of high quality for unmet medical needs. Our products and services help to prevent, diagnose and treat diseases, thus enhancing people’ health and s quality of life. We do this in a responsible and ethical manner and with a commitment to sustainable development respecting the needs of the individual, the society and the environment.

The Business Case at Roche Our Mission has led to a focus on long-term success rather “ than short-term gain. As our products take between eight and twelve years to bring to market, protecting the current and future value of our company is critical. We believe this creates a strong business case for sustainability.”

Implementing Energy Conservation • Upper Management Support – Corporate directive designed to “ ensure that all decision-making at Roche supports efficient, appropriate and cost-effective energy use” – Mandated standards (e.g. lighting, building temperatures) – Life cycle cost considerations (NPV vs. simple payback) • Public Commitments – Reduce energy per employee by 10% (2005-2010) – Reduce GHG emissions per sales by 10% (2003-2008) – Commitments to USEPA Climate Leaders • Project implementation and employee engagement

Cogeneration Repowering Nutley, New Jersey • 2 new turbine-gen sets (2004) • Energy consumption reduced by one- third • Carbon emissions reduced by 10,000 metric tons/year vs. older cogen or 40,000 metric tons/year vs. no cogen • Reduced operating costs ($3 to $4 million/year) • Payback period –between 3-4 years

Employee Engagement • Energy Efficient Lighting Fair • State of NJ sponsored and subsidized • Increased awareness work/home

Roche Achieves First US EPA Climate Leaders Goal Roche US Carbon Emissions (metric tons) 350,000 340,000 330,000 320,000 310,000 300,000 290,000 280,000 2001 2002 2003 2004 2005 2006 2007

Results (US only - 2001-2007) • Cost savings ($5.5 MM/year) • Reduced environmental footprint (>40,000 metric tons/year) • Other benefits – Reputational > attraction/retention of high quality employees – Stock value (DJWSI, FTSE, Innovest Global 100 indices)

Sustainability Approach “Roche is conscious of the dynamic interdependence of economic, social and environmental interests and seeks to reconcile them in its daily business activities.” ➙ Conclusion: an integrated network model – Integrate Sustainability into all decisions and monitor with a Corporate Sustainability Committee – Roche identified as role model for Dow Jones SAM SAM = Company for Sustainable Asset Management

Sustainability at Roche Safety, Health & Genetics: Environment: Position, SEAG = Science and Reduce footprint Roche Charter, Ethics Advisory Group reporting by site SEAG Sponsoring and Donations: Access: Patents and access Roche Focus on science, response education, health/social, policies comm./environ. & driven by culture business with support from CSC Corporate Ethics: Governance: Behaviour in business, Principles, transparency ethics initiative, Subject shareholder dialogue understanding Corporate Sustainability: An integrated and innovative way to create value for stakeholders

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Business Case for Going Green -- Now

by Hudson Gain Corporation on May 27, 2009

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