Presentation of 2011 CDP Report

Jonathon Hanks Incite Sustainability

This report focuses primarily on presenting an objective and largely quantitative account of the corporate responses – and leaves the numbers and responses to speak for themselves.

The 2011 CDP Report

Executive Summary

1.Introduction and overview

2.JSE 100 sample and brief analysis

3.The CDP 2011 leaders

4.Sector snapshots

5.Conclusion: Partnering for a low carbon future

The 2011 CDP Report

Executive Summary

1.Introduction and overview

2.JSE 100 sample and brief analysis

3.The CDP 2011 leaders

4.Sector snapshots

5.Conclusion: Partnering for a low carbon future

Progress on many fronts…

Continuing improvements in disclosure

– High response rate: 83% of JSE 100, second highest rate globally

– General improvement across most sectors and most issues

– 82 companies reported their GHG data (17 in 2007, 67 in 2010)

– Continuing disclosure on Scope 3 emissions and on emissions intensity

Progress on many fronts…

Continuing improvements in disclosure

– High response rate: 83% of JSE 100, second highest rate globally

– General improvement across most sectors and most issues

– 82 companies reported their GHG data (17 in 2007, 67 in 2010)

– Continuing disclosure on Scope 3 emissions and on emissions intensity

Evidence of improved performance

– 40 companies with voluntary GHG-emissions reduction targets

Increase in adoption of voluntary GHG targets – some example

Progress on many fronts…

Continuing improvements in disclosure

– High response rate: 83% of JSE 100, second highest rate globally

– General improvement across most sectors and most issues

– 82 companies reported their GHG data (17 in 2007, 67 in 2010)

– Continuing disclosure on Scope 3 emissions and on emissions intensity

Evidence of improved performance

– 40 companies with voluntary GHG-emissions reduction targets

– Some signs of mitigation efforts within sphere of influence

– Integration of climate change in governance practices– 68 companies have an executive body with responsibility for climate change

– 40 companies have introduced performance incentives on climate change

– Increased recognition of the need for a collaborative approach, with greater reported uptake of partnerships

Progress on many fronts…

This proactive response by the SA corporate sector has been acknowledged by government in its National Climate Change Response Paper.

These activities reflected in the CDP responses could provide a valuable basis for informing the government’s:

proposed national GHG emissions trajectory

determining the sectoral emission reduction outcomes

clarifying the possible carbon budget allocations

assisting in the establishment of sectoral and company mitigation plans.

…but there are some continuing challenges

Gaps in terms of disclosure

– Some high-profile companies and sectors that do not appear to have sufficiently considered climate change risks and opportunities

– Very varying responses within sectors in their understanding and investments

And some concerns around performance

– On targets, concerns remain regarding: the scope of coverage, the rate of progress against some of the commitments, the robustness of some baseline assessments, and the level of ambition

– No improvement in number of companies verifying their emissions

– Scope for more on adaptation, despite evidence of some exciting initiatives

– Predominant focus on direct impacts rather than using leverage throughout the organisations’ spheres of influence

Focusing on sphere of influence

Focusing on sphere of influence

…but there are some continuing challenges

Gaps in terms of disclosure

– Some high-profile companies and sectors that do not appear to have sufficiently considered climate change risks and opportunities

– Very varying responses within sectors in their understanding and investments

And some concerns around performance

– On targets, concerns remain regarding: the scope of coverage, the rate of progress against some of the commitments, the robustness of some baseline assessments, and the level of ambition

– No improvement in number of companies verifying their emissions

– Scope for more on adaptation, despite evidence of some exciting initiatives

– Predominant focus on direct impacts rather than using leverage throughout the organisations’ spheres of influence

– Difficult to assess the extent to which the many risks and opportunities that companies identify have really impacted on their business strategy.

The 2011 CDP Report

Executive Summary

1.Introduction and overview

2.JSE 100 sample and brief analysis

3.The CDP 2011 leaders

4.Sector snapshots

5.Conclusion: Partnering for a low carbon future

The 2011 CDP Report

Executive Summary

1.Introduction and overview

2.JSE 100 sample and brief analysis

3.The CDP 2011 leaders

4.Sector snapshots

5.Conclusion: Partnering for a low carbon future

The Sector Snapshots

A brief analysis of the implications of climate change for that sector

Summary of reported risks & opportunities

Summary of response type and emissions data

Sector comparison against JSE 100 and CDLI

Graphical representation of disclosure and performance scores

Detailed description of targets (Appendix III)

The 2011 CDP Report

Executive Summary

1.Introduction and overview

2.JSE 100 sample and brief analysis

3.The CDP 2011 leaders

4.Sector snapshots

5.Conclusion: Partnering for a low carbon future

The 2011 CDP Report

Executive Summary

1.Introduction and overview

2.JSE 100 sample and brief analysis

3.The CDP 2011 leaders

4.Sector snapshots

5.Conclusion: Partnering for a low carbon future

The investment community

Various initiatives suggest growing awareness and increasing integration of ESG issues into investment decisions

Code for Responsible Investing in South Africa (CRISA)

UN Principles of Responsible Investment

Nedbank Capital’s Green Index

CDP’s Carbon Action initiative

Mercer study on climate change and portfolio risk

Investec Asset Management’s climate change & shareholder value

The business media

irresponsible |ˌiriˈspänsəbəl| ?adjective

(of a person, attitude, or action) not showing a proper sense of responsibility

such irresponsible behavior is unthinkable for a man your age: reckless, rash, careless, thoughtless, foolhardy, foolish, impetuous, impulsive, devil-may-care, delinquent, derelict, negligent, hare-brained, unreliable, undependable, untrustworthy, flighty, immature.

ANTONYMS sensible.

The business media

“Business cannot rely on government to give it policy clarity – if this is what we are waiting for, then we have a serious challenge.”

UNFCCC Executive Secretary Christiana Figueres

“A big part of the problem lies with companies, who remain trapped in an outdated approach to value creation that has emerged over the past few decades.

They continue to view value creation narrowly, optimising short-term financial performance in a bubble while ignoring the broader societal influences that determine their long-term success.”

The first big challengeA flawed approach to value-creation

The first big challengeA flawed approach to value-creation

“Capitalism does not address very long-term issues easily or well.

It seems to me that capitalism’s effectiveness moves along the spectrum of time horizons, brilliant at the short end, but lost, irrelevant, and even plain dangerous at the very long end.”

Jeremy Grantham, Co-founder and Chief Investment Strategist (GMO)

The second big challengeThe psychology of denial: facing up to some inconvenient truths

“Economies will eventually reach a stationary state when they have acquired that full complement of riches which the nature of its soil and climate… allowed it to acquire; which could therefore advance not further and which was not going backwards.”

Adam Smith – An Inquiry into the Nature and Causes of the Wealth of Nations

Jonathon Hanks – Incite Sustainability

Incite Sustainability - www.incite.co.za

jon@incite.co.za / +27 (21) 447 2043