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The Value of Reporting Corporate Climate Change Information: A Case Study of the Top 200 Federal Suppliers

15 March 2011

Agenda

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Case Studies of Companies at the Leading Edge

What is the Carbon Disclosure Project

The Value of Reporting Corporate Climate Change Information

How are the Largest Federal Suppliers Benefitting

The Carbon Disclosure Project launched in 2000 to accelerate solutions to climate change by putting relevant information at

the heart of business, policy and investment decisions.

551Institutional Signatory Investors

3,000+Number of Companies reporting via CDP in 2010

$71TAUM represented by CDP’s signatory investors

82%Proportion of Global 500 companies reporting via CDP in 2010

70%Proportion of S&P 500 companies reporting via CDP in 2010

56CDP Supply Chain Members in 2010

CDP – Overview

4

CDP Supply Chain

“Our analysis suggests that for consumer goods makers, high-tech players, and other manufacturers, between 40 and 60 percent of a company’s carbon footprint resides upstream in its supply chain—from raw materials, transport, and packaging to the energy consumed in manufacturing processes. For retailers, the figure can be 80 percent.”McKinsey Quarterly, 2008

The CDP Questionnaire inquires about:

• Management:– Strategies, Targets, Emissions reduction activities

• Risks & Opportunities:– Regulatory, Physical, Other

• Emissions & Energy reporting:– Energy use, Greenhouse gas emissions

CDP – Asking the right questions

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The Value of Corporate Reporting through the CDP

Q) Has the process of gathering and disclosing your firm’s climate change data through CDP directly resulted in any of the following outcomes:

41%

59%

61%

62%

72%

83%Raised climate change

awareness in firm

Positively impactedcompany’s reputation

Moved firm towardemission reductions

Identified emission hot spots / energy efficiency

opps.Fulfilled customer

expectations

Improved profitability

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• Reduction activities reported by suppliers have achieved savings of 32 million tonnes of carbon dioxide equivalent and £221 million. With 83% of companies now achieving emissions reduction, further efficiencies should be achieved in the future.

• 2010 provided evidence that average supplier performance was maintained or improved in all aspects of carbon management compared with 2009.

• Government suppliers are providing insight into an array of implemented and planned measures that deliver significant reductions in carbon and cost, which contribute to operational efficiencies.

We are participating in this programme as it is key for identifying financially viable energy efficiency opportunities … This is helping us not only to save money from procurement processes, but also rightly to practise what we are asking others to undertake.

- Martin Powell, Mayor of London’s environment advisor.

Efficiency and Value of Reporting – Findings from CDP 2010

Source: CDP Public Procurement Report 2010

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Office based organisation saved 95% of their energy consumption by consolidating their computer terminals into one after measuring their emissions and discovering that computers were responsible for the vast majority. This saved them $500,000 per annum.

Before they measured their emissions they did not consider this a business issue.

Benefits of Reporting for small businesses

The CDP response has highlighted our need to address climate change

issues within the company. Our suppliers in turn are now adopting a "green" policy which we hope to be

able to disclose in the 2011 CDP questionnaire.

Business Furniture Direct

In compiling the response, our organization has become

aware that climate change issues can be addressed

relatively quickly and without considerable expense.

C W Fletcher & Son Ltd -(Precision Engineering for

Aerospace)

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• Identified the largest Federal contractors (by FY 2009 revenue) that voluntarily responded to the 2010 CDP Information Request AND made their response publicly available

• Accounted for over $161 Billion in Federal contracts in FY 2009

Accenture and CDP are working with GSA to evaluate the climate change reporting and management practices of the Top 200 Federal contractors

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By investing in emission reduction projects, the Top 200 Federal contractors are reporting monetary savings of nearly $5.0B, and annual emission reductions of 203M mtCO2e.

$(5,000) $5,000 $15,000 $25,000 $35,000 $45,000

$(200)

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Money Invested in Emission Reductions ($Millions)

Mon

ey S

aved

($

Mill

ions

)

Health Care

Financials

Materials

Industrials

Information Technology

Utilities

* Foreign currencies were converted May 31, 2010 using OANDA

Impact of Emission Reduction Investments(bubble size indicates amount of CO2e reductions)

EnergyConsumer Staples

Telecommunications

Consumer Discretionary

Energy efficiency and clean energy are common approaches to reducing Scopes 1 & 2 emissions

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Common Approach Across Sectors

Energy Efficiency

Lighting upgrade Energy control

modifications Capital improvements

Utilities and Consumer Staples

Energy Generation / Distribution

Solar Wind Biomass Cogeneration Plants

Industrials

Transportation

Increased use of rail Alternative transportation

fuels Fuel-efficient vehicles

Industrials and Consumer Staples

Logistics

Route optimization Reduced idle time Limited top truck speed

Financials

Data Centers/ Green IT

Data Centers PC power mgmt Energy Star

Equipment

Financials, Health Care & Industrials, Information Technology

Real Estate High performance

buildings Reduce real estate

footprint (rationalization)

Additional Emission Reduction Activities

Other

Reduce/ recycle waste Capturing landfill

emissions Waste-to-energy

Technology Non-CO2 GhG Reductions Carbon Offsets Renewable Credits

Specific investments among the Top 200 companies illustrate the innovative ways companies are reducing costs and reducing emissions

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CompanyEmission Reduction

ProjectMonetary

InvestmentMonetary

Savings

Annual Emissions Reductions Achieved

(mtCO2e)

Energy Efficiency machinery and equipment projects

$ 1.54M $ 1.63M 29,868

Switched fuels from coal to natural gas $ 550M $ 27.5M

(in year 1) 2,000,000

Fuel oil was replaced by agro-waste $ 0 $ 130,000 4,000

Use of event recorders and employee training to improve fuel efficiency

$ 18M $ 32.5M 56,000

Server consolidation, decommissioning, virtualization and cloud computing.

$ 450M $ 720M 709

Several of the Top 200 Contractors are working with suppliers to improve GhG performance

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The common goals of companies addressing supply chain emissions :• Calculate GhG emissions in the supply chain• Estimate the proportion of the organization’s total GhG

emissions in the supply chain•Work across suppliers to develop a strategy for GhG reductions• Establish procurement criteria to evaluate supplier

performance on GhG emissions

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• Provides new insights into energy efficiency and cost reduction opportunities

• Improves profitability and organizational reputation• Meets growing public demand for smaller organizational

footprint• Increases engagement / cooperation with suppliers

− Builds new opportunities to reduce emissions and costs− Improves reporting process and results in a more complete

GhG inventory report• Drives entity-wide improvement in data collection, reporting

and operational efficiency….and spurs innovation

Why is Collecting and Reporting Climate Change Information Valuable???

For Follow-up Questions

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Kevin Eckerle Accenture, Sustainability ServicesTwo Commerce Square2001 Market Street, Suite 2400Philadelphia, PA 19013 Kevin.P.Eckerle@accenture.com

Leah Stern Carbon Disclosure ProjectSenior Project Manager 6 West 48th Street, 10th FloorNew York, NY, USA, 10003Leah.Stern@cdproject.net