June 2011

Carbon as a Strategic Tool

WSP Environment and Energy

Andrew Bright, Technical Director

What are we going to cover?

Four Key Objectives:

� Why carbon is important to business?

� How carbon can be used in decision making?

� Example Case Studies

� Discussion: 'Where Next?'

Carbon in the News - 2025 Carbon Floor Price Escalator

Increases cost to £200 Per Tonne

MANUFACTURING BUSINESS REDUCES

OPERATING COSTS BY 15% THROUGH

IMPROVED CARBON MANAGEMENT

ANALYSTS PREDICT FURTHER RISE IN PRICE OF

CARBON

Carbon Strategy of Major Corporate

Results in Share Price Boost

DIRECTORS BANNED OVER

CARBON NEUTRAL SCAM

GHG Protocol - 16 Source Categories for Scope 3

Policies and more policies?

� It effects everything your business does

� Consumer awareness of the environment is at an all time high

� Carbon and climate on the news daily

� Carbon now being viewed as a commercial risk & opportunity

� It has a commercial value

Key Message – Why is carbon important to business?

Carbon as a strategic tool

How it can be used

“…“…“…“…systematically understand systematically understand systematically understand systematically understand business risks & opportunities business risks & opportunities business risks & opportunities business risks & opportunities associated with climate change.associated with climate change.associated with climate change.associated with climate change.””””

The Carbon Trust

Carbon Management

Strategic Carbon Management

Where Do the Business Risks Arise?

�Loss of market share

�Increasing cost of raw material

�Increased taxation

�“Carbon Leakage”

�Regulatory compliance

�Investor relations

�Operational efficiencies

�Consumer awareness

Responsibility for Carbon

Top Down

Bottom Up

The Strategic Carbon Management Cycle

Carbon as a strategic tool

� Should be supported at the senior management/board level in the client organisation

� Goes beyond traditional energy efficiency measures

� Considers the full scope of an organisation’s activities

� Considers all carbon emissions, both direct and indirect and incorporates a life-cycle perspective

� Covers all types of measures which can be employed to reduce those emissions

� Assigns monetary value to carbon and tries to build carbon into investment decisions

� Involves change management across the organisation

Why Calculate Your Carbon Footprint?

� Understanding your organisation’s footprint will ensure the action is focused.

� Carbon footprinting is an effective tool to measure your current impacts and

develop mitigation strategies.

� Aim to produce a clear and visual profile of your company's carbon footprint

which is typically broken down into your direct, upstream and downstream

emissions. It enables you to prioritise action upon critical areas

� Establish a clear action plan to reduce this footprint

Types of Carbon Footprint

Business Benefits

� It considers all carbon emissions, both direct and indirect and incorporates a

life-cycle perspective – it is more than energy efficiency

� It provides a commercial perspective – what is the value at stake for a

business?

� It is a change management process across the value chain of the business

� It is a systems based approach with a tradition plan do check review cycle

Key Message – carbon as a strategic tool?

Example Case Studies

Procurement - Supply Chain

How do you do this?

1. Create a framework for

the project based on an

output specification

2. Design a tool to enable

all the bidders to work

off a level playing field

3. Provide guidance to the

bidders

4. Evaluate returns

5. Establish the forecast

as a contractual

obligation

6. Reward/Penalise the

contractor on year on

year performance

Behaviour Change – power of the employee

Membership has increased from 80 to 1500 in seven

countries in 2010

Thank you for Listening - Any Questions?

Andrew Bright

Technical Director

Climate Change &

Sustainable Strategy

T. +44 (0)131 344 2307

M. +44 (0) 7825 028301

E.

andrew.bright@wspgrou

p.com