Introduction to ghg reporting and sustainability strategy

Your Green Journey
Greenhouse Gas Emissions Reporting-
Kick start Your Sustainability Program

Rue Stanley
October 16th 2012

Agenda
• Introduction
• Greenhouse gas reporting: the start of a “Bigger” plan?
• What to measure
• The opportunity
• Why and how to implement a strategy
• Compliance and greenhouse gas emissions reporting
• About Ecobusiness Exchange

Ecobusiness Exchange Ltd October 2012

Introduction
• In June 2012, Nick Clegg Deputy PM announced new legislation requiring LSE UK main
market listed companies to report their greenhouse gas emissions(GHG). This
legislation will be effective in 2013, and is in addition to existing legislation such as the
CRC- carbon reduction energy efficiency scheme that requires over 2000 companies to
report their energy emissions.
• The GHG legislation will affect over 1000 companies, a number of whom are not
reporting their emissions under other legislation. Defra is considering extending the
legislation to all quoted companies by 2016. Those who sell to affected companies are
likely to receive information requests sooner than 2016 from their supply chain.
• 60%* of listed companies are reporting environmental, social and governance strategies
and action in their annual reports and some are taking actions that: reduce emissions,
costs and risk, create new products, engage employees and increase investor
confidence.
• This is an opportunity to use the need for compliance to kick start a more proactive
approach to sustainability- the new legislation will bring sustainability issues to the
board’s attention. GHG reporting will need resourcing and funding. Rather than a
burden on business, its better if the process can generate bottom-line benefits.
• Compliance with the legislation alone will not generate benefits- to achieve
benefits- organisations need to decide on a strategy and take action

* Source: Defra

GHG Reporting: The First Step
Be More Sustainable


Market Leaders & Sustainable Companies

www.global100.org

Reduce Costs & Emissions
The printing industry spends about £67 million on
energy bills every year in the UK, resulting in an
Marks & Spencer Plan A savings estimated 2 million tonnes of CO2 emissions. The
Carbon Trust estimate that the sector could cut its
energy bills by 15% through basic energy saving
measures.

For every 1ºC that you overheat your premises,
you add 8% to your heating costs. (The maximum
recommended temperature is 19º.)

A single computer and monitor left on 24 hours a
day will cost over £50 a year. Switching it off out of
hours and enabling standby features could reduce
this to £15 a year each and prolong the lifespan of
equipment.
Report by The Carbon Trust

23 companies join KKR’s Green Portfolio program & make $365m savings


Opportunities
Green Data Centres
Unilever Wash at 30° Product
innovation and environmental
good

Power generation: 100MW
installed capacity

NISP: one mans waste
is another’s product
www.nispnetwork.com


A Bigger Plan

Institute for Sustainable Development
www.iisd.org


Strategy
Communicate to stakeholders and increase shareholder value

• A survey of more than 300 financial experts in Europe, carried out at the end of 2001, has
revealed a high degree of confidence in socially responsible investment (SRI). Eighty-six
percent of respondents said they believed social and environmental risk management would
have a long-term benefit for a company's market value.
http://www.iisd.org/business/banking/sus_survey.aspx


Design
The UNGlobal Compact
Strategy Blueprint provides a
framework for executing a
sustainability program in line
with the Ten Principles of the
UNGlobal Compact.

The UNGlobal Compact has
8700 members, of which 6000
are private and publicly owned
enterprises report their
performance to the UNGlobal
Compact on an annual or
biannual basis.

Questions relating to the UN
Global Compact frequently
appear as part of the
procurement process
www.unglobalcompact.org

Staged Approach: Much More than Compliance

Social
Responsibility

Products

Employees
suppliers
investors

Operations
Risk
Management
Compliance

The Green Journey ™

Every Journey Starts with a Single Step
Regulatory Compliance
Risk Management
CEO + board commitment &
Increase, manage and measure Transparency & disclosure
leadership
operational efficiencies own, &
across value chain

Encourage employee
sustainable thinking & work
Robust management
Mainstreaming into corporation practices everyday. Deliver
procedures & policies
stakeholder transparency &
responsibility

Embed into product Innovation
Social Investments &
Reduce negative and increase
philanthropy Partnerships &
positive impacts across the
collective action
value chain


Join The Leaders
• http://www.youtube.com/watch?v=t9Fxp3HK6DI


What Where When & How

GREENHOUSE GAS REPORTING

GHG Emissions Reporting
• On June 20th At the Rio +20 UN Conference on Sustainable Development, Nick
Clegg, Deputy PM announced the introduction of mandatory greenhouse gas
reporting for listed companies to be affective from April 2013.Initial press reports
were confusing, referring to FTSE companies or quoted companies and the
number of companies affected as 1600
• Draft regulations have been published and a Defra consultation commenced on
July 25th which closes on the 17th October 2012.The consultation will finalise
aspects of the legislation, including the effective date which will be either from
April 7th or October 2013
• In 2013 approx 1000 companies will be required to report emissions from the
period covered by their annual report
• The legislation affects LSE Main Market UK owned listed companies and includes
all the entities and businesses under financial or operational control in the UK and
internationally


GHG Reporting Support
• Business groups such as the CBI and Aldersgate Group have been supportive of the
legislation and have been lobbying for a level playing field for environmental
reporting for a number of years supported by business leaders:

"The CRC has become a tax that pretends to be green and does nothing to
strengthen the business case to invest in energy efficiency," said Rhian Kelly, the
CBI's director for business environment policy.
"We urge the Government to recognise that this policy is past the point of no
return - it should be scrapped, and its reporting elements replaced with
mandatory carbon reporting.“

• A report from Grant Thornton UK LLP released on the 12th October shows that 67
per cent of UK mid-sized firms include sustainability information in some form of
external reporting
• http://www.businessgreen.com/bg/news/2184550/cbi-demands-formal-review-green-taxes


GHG Reporting, in Brief
• Report to be included in narrative of annual report, and enforced under
section 456 companies Act 2006, Directors responsibilities
• Report greenhouse gases( GHG) from fuels combustion, owned transport,
process emissions, fugitive emissions, indirect/purchased energy
• Report GHG from all locations; UK & international owned/controlled by
the company
• Establish a baseline: all locations and sources year 1
• Companies can choose methodology and intensity metrics
• New requirement, in addition to the Carbon Reduction Efficiency
Scheme(CRC)
• Effective immediately legislation approved- October or April 2013


What to Measure

Greenhouse • Defined by the Kyoto Protocol
gases • Defra defined scopes 1 & 2

• Owned transport, Fuels combustion
Scope 1:
• Process emissions, fugitive
Direct emissions

Scope 2: • Energy : consumption of purchased
Indirect electricity, heat steam and cooling


GHG Sources

Greenhouse • Carbon Dioxide; methane; nitrous
oxide;hydroflurorocarbons;perflurorocarbons;
gases sulphur hexafluride converted into CO2 equivalent

• Owned transport: includes travel from company
Scope 1: cars and owned vehicles, excludes travel from
other means- personal vehicles and business
Direct travel planes, trains etc

Scope 2: • Energy : consumption of purchased electricity,
heat steam and cooling – from all locations in the
Indirect UK and internationally under company control


In Summary
• Affects Main Market listed companies from April or October 2013
• Report Material Scope 1 and 2 emissions from all six greenhouse gases
• Companies will have to report across the same boundary: entities and
locations as defined in the annual report and prepared for the same period as
the annual report
• Emissions data will be required to be included in the narrative section of the
report and signed off by directors and auditors
• Companies can choose a base year to report against in future years: this will
provide challenges to organisations as they change acquire merge or divest
• Companies will be required to state the methodology or framework used to
calculate emissions and choose an intensity metric. For example: headcount,
revenue or units of production
• Companies will be allowed to include data from their other reporting
obligations such as the CRC, EU ETS and Climate Change agreements


Implementation
Annual Report Reporting Budget &
Deadline Boundary Ownership

Analysis & Identify
Report emissions

Data
Collection Method &
Systems & Metrics
Processes
Software Selection Bring in the Experts?


Next Steps
If your company is UK headquartered and is LSE Main Market listed, then this
reporting requirement applies once the legislation has been approved for April or
October 2013.

Research best practice, or speak to an expert:
• Define your sustainability direction and strategy
• How can your program deliver benefits or be cost neutral?
• Investigate International greenhouse gas reporting best practices
• Evaluate software: speciality software provides a resource efficient, accurate and
auditable way of managing data
• Choose the intensity metrics: that are meaningful to stakeholders
• Set up data collection and reporting process
• Prepare and stay updated, future reporting requirements are likely to include
waste and water

Not affected immediately?
Start your sustainability program now, reduce emissions, costs and increase advantage


About Ecobusiness Exchange
We can advise you on creating and
implementing your sustainability approach and Systems &
offer practical help in meeting the new Processes
requirements for greenhouse gas emissions
reporting. Software

Sustainability as a Service launched in 2012
offers a modular approach to delivering all Resource
aspects of sustainable business. Sustainable Efficiency
Program Design
Strategy Energy
Delivery
For more information please contact: Design & waste
communication Communications
Rue Stanley
E: info@ecobusiness-exchange.com
T: 01737 214364
www.ecobusiness-exchange.com Governance
Greenhouse gas
emissions reporting
Policy & voluntary
Blog: Top Ten Tips on GHG Reporting reporting
http://www.ecobusiness-
exchange.com/toptentipsemissionsreporting/


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