Addressing the Challenge to the I ndustry A few slides on: Why - - PowerPoint PPT Presentation

Addressing the Challenge to the I ndustry

A few slides on:

Why have a carbon management strategy The UK carbon challenge Latest policy drivers Consumer pressure on the supply chain Reducing carbon in the supply chain & carbon labelling

W hy Manage Carbon?

Company

Policy & Regulation

Costs

Reputation & Consumer pressure

Existing pressures

Reduce Costs

Reduce energy bill through energy management important as prices have risen significantly Improve operational effectiveness

Com ply w ith Regulation

Ensure compliance for up-coming rounds of Climate Change legislation, EU ETS, Buildings Directive, and more

Enhance or Maintain Reputation

Maximise brand & reputational impact of reducing carbon emissions

lead to opportunities to..

The UK carbon challenge

The UK s direct emissions of CO2 are 560 million tonnes (MtCO2) a year

40% of UK CO2 emissions are created by business

The Government s target is to reduce the UK s emissions by 60% by 2050 The move to a low carbon economy presents significant challenges but huge opportunities

Meeting the projected 60% emissions reduction requires technology innovation in addition to energy efficiency

Meeting the UK carbon challenge

* Assumes full implementation of all CCPR measures and central impact of energy white paper measures. Sources: Climate Change Programme Review (CCPR), Energy White paper emissions projects, June 2007. Note that current BAU emissions projections post 2020 show rising emissions which would tend to increase the size of the gap to the 2050 60% reduction target

UK CO2 Emissions Trajectories

Moving the debate forw ard

Scientific Case

In 2007, 600 scientists on the UN Intergovernmental Panel on Climate Change (IPCC) agreed that climate change is caused by human activity

Economic Case

In October 2006 the Stern Review on the Economics of Climate Change found that if climate change is left unchecked it could cost the equivalent of 5-20% of Global GDP to tackle

Political Case

Business and the public are increasingly calling on the Government and politicians for leadership

Policy Latest Budget 2 0 0 8

UK is taking a leadership role on EU and international action:

Phase III of the EU ETS 20% target reductions by 2020 20% renewables by 2020 Regulatory framework for carbon capture & storage London promoted as centre for expertise in carbon trading

Other Highlights

Carbon budgets to be set alongside financial budget for 2009 Incentives for increased use of bio-fuels All new commercial buildings zero carbon by 2019 Promotion of energy services Increased support for R&D Increased Climate change levy rates Proportion of electricity from renewables x3 by 2015 EMPHASIS IS ON A COMMERCIAL APPROACH

Energy Perform ance Certificates

Required on construction, sale or let April 08 > 10,000m 2 July 08 > 2,500m November 08 the rest Last for 10 years

UK Quarterly press coverage of climate change issues

Source: Factiva and Lexis Nexis: UK English language press mentions including global warming, climate change, greenhouse effect or greenhouse gas

1000 2000 3000 4000 5000 6000 7000 8000 9000 94 95 96 97 98 99 00 01 02 03 04 05 06

Stakeholder aw areness is grow ing

People do not think business is doing enough to cut carbon emissions and tackle climate change Consumers remain sceptical of green claims currently being made by business 79% do not think businesses is doing enough to help consumers make informed choices about the carbon footprints of the products they sell 70% of respondents in the UK said that climate change claims should be proven by independent parties. Scientists, environmental groups are seen as credible.

Responsibility

67% say they are more likely to buy a product with a low carbon footprint Consumers say they are willing to alter their purchasing decisions based on product/ service carbon footprint information

Consum er behaviour

W hat is the footprint of a product?

Aluminium Production Sugar farming Cola production Packaging Transportation Chilled storage Refrigeration Can collection Recycling or disposal

Disposal & recycling Consumer use Raw material Product manufacturing

Total carbon footprint of the can of cola (illustrative) Supply chain / value chain of a can of cola

Distribution & retail

Hot topic: food m iles

W alkers

34.5g Cheese & Onion

I nnocent

250ml Mango & Passion Fruit Total = 75g CO2e Total = 294g CO2e Potato distribution: < 1% Making nitrogen fertiliser: > 15%

Source: Carbon Trust Low Carbon Supply Chain Pilot, March 2007

Cutting food miles is important to reduce transport impacts

BUT

Food miles is a poor indicator of the overall impact

Local sourcing m ay increase the footprint of a product

Growing & Packing: 23% Raw materials transport: 14% Making the packaging: 30% Smoothie-making: 21% Distribution: 10% Disposal: 2%

I n March 0 7 , launched the initiative w ith 2 com ponents

• 2. Company Engagement
• 1. Standards Setting

Developing standards to:

Measure; Reduce; and Communicate

the GHG emissions from goods & services Product footprinting & reduction projects Testing the Carbon Reduction Label

About the Carbon Trust

The Carbon Trust was set up by government as an

independent company

Our mission is to accelerate the move to a low carbon

economy

We work with organisations to reduce carbon emissions and develop commercially viable low carbon technologies To deliver our mission we bring together public and

private funding and encourage cross sector partnerships

As a Company Limited by Guarantee any profits we make are reinvested to help deliver our mission

Our activities cover 5 com plem entary business areas

Insights

Explains the

• pportunities

surrounding climate change

Innovations

Develops low carbon technologies

Investments

Finances clean energy businesses

Solutions

Delivers carbon reduction solutions

Enterprises

Creates low carbon businesses