Download - ICARB Presentation
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ICARB WORKSHOP: Making Carbon Information Work
For Business
Paul Adderley, 13 March 2013 5th International Conference
Initiative for Carbon Accounting (ICARB)
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OUTLINE
! Introduction ! Carbon’s Global Context ! Carbon Information:
– Internal Business Benefits – External Business Benefits
! Table Discussion Topics ! Conclusions: Future is Approaching Fast
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Carbon’s Global Context
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3bn More middle income consumers in CHINDA by 2030
Rise in Energy Costs & Price Volatility
70%
Efficiency Opportunities with at least 10% return
Source: McKinsey Global Institute
1C 100yrs show unprecedented rapid rise in global temperatures for 11,300yrs
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Using Carbon Information
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Business Evaluation
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Businesses respond to clear market signals: opportunities and risks
Impacts Profitability & Cashflow
Focuses Investment with Max ROI to stakeholders
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Finding ROI through a Carbon Lens
Carbon Information
Identify Inefficiencies/
exposures
Constraints Create Innovation
Staff Engagement
Enhance Reputation
Supply Chain Pressures
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Internal Business Benefits
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Identifying Inefficiencies
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! Carbon as measure of inefficiency & cost – Carbon per tonne of product, hour worked, £ Turnover
(Carbon Intensity)
! Process Review
Inputs Production/
Service Outputs
Infrastructure/ Energy Needs
Storage Waste Logis-cs
Storage Waste Logis-cs
Processes Packaging
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Case Study: Process Efficiency
! Business Outcomes – Better Procurement: Right
Quantity, Time and Place – Use of local suppliers to
reduce logistics – Reduced waste (stock
damage & obsolescence) – Reduced travel & time – Adaptable: Increase
revenue opportunities
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! Carbon Outcomes – 47.8 TCO2e Saving – Carbon Intensity reduced by
27% – 48.7 TCO2e vs business as
usual – Verified by Carbon Trust
Standard – £27,500 cost savings – Carbon ROI 16TCO2e /£’000
! Action by Construction Business – Closed large warehouse facility to reduce fuel/energy
use & compliance risk
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Low Carbon Infrastructure
! Scottish SME Food Producer (estimates) Reduce Energy Use & maintain Carbon Commitments
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324,000
125,000 LED
LIGHTING
OLD LIGHTING 30 184
£’000/yr
11 67
Carbon (TCO2e)
kWh
33% 10 TCO2e/
£’000
ROI
Life Time Carbon ROI
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Renewable Infrastructure
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Actual CAPEX £98,000
Income & Savings £16,000 (FITs Feb 2012)
ROI 16%
Annual Generation 37,131 kWh
On site Use 60% 22,279 kWh
Carbon Savings 19.5 TCO2e
Carbon ROI 5 TCO2e /£’000
Midlothian Manufacturing Business: reduce carbon emissions & exposure energy price volatility
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Staff Engagement: Making Carbon Tangible
! Eco-Driver Training backed up with data
£2.5k Fuel Savings
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Pride in Achievements
Share Benefits
Carbon Savings 5 TCO2e YTD
Carbon ROI
25 TCO2e
1 2 3 4 5 6 7 8
£2.5k Savings
1 2 3 4 5 6 7 8
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Carbon ‘Opportunities’ Hierarchy
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Behaviour Monitoring &
Communication
Efficiency Processes
Renewables Infrastructure Incr
ease
in C
apita
l Cos
ts
& R
educ
ing
RO
I
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External Business Benefits
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“Baking-In” Reputation ! Growth of Ethical Market - £47bn (2011)
! Generally Recession Resistant
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Supply Chain: Pass it on
! Global CEOs expect – “low carbon” innovation from the supply chain – suppliers to contribute to a shared agenda (source PwC: Factoring Sustainability into IPO Planning, October 2011)
! Supply Chain Analysis reaching Scottish SMEs – Global Companies requesting Carbon Data (Ecodesk) – Carbon Footprinting of Seed Potatoes Bags!
! Public Sector Procurement (Reform Bill) – Drive to increase SME access to public contracts – No clear signal how carbon will be assessed – Operational and capital carbon and cost impacts
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Upstream Risks
! Financial KPIs - Gross Margin, may not highlight supply chain risks
! Is Carbon KPI a possible identifier of exposure to ? – Responsiveness: Local vs Global – Freight costs volatility (air vs surface) – Climate Disruption – Opaqueness/lack of transparency in supply chai (data
collection)
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Suggestions Table Discussion
Business Topics 1. For three business objectives consider how measuring
carbon impacts adds value (or not), and why? 2. For a production/service process think how carbon
efficiency (CO2e /unit) could be improved? (energy/waste) 3. What knowledge/expertise is there in your business to
respond to the opportunities/risk in a low carbon economy? Policy Topics 1. How can public policy encourage carbon measurement &
reporting by SMEs without legislative measures? 2. Would also setting carbon budgets for public sector
procurement make better decisions ? Discuss.
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The future is approaching fast
! Can’t manage if we don’t measure.
! Carbon is a measure of efficiency
! Carbon KPIs work alongside Financial KPIs
! Assess supply chain risks
! Ready to create value in the supply chain
! Requires adaptive business models
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Carbon reporting is a lever to discover other business benefits & manage risks, not a merely number crunching exercise.
And finally…an Accountant’s View
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Further Information:
Email: [email protected]
Web: www.sos4business.uk.com
Tel: 0845 475 1275 / 07917 372573
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