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Maximising your 2019 CDP disclosure

14th February 2019 Carbon Credentials, CDP & Jupiter Asset Management

Speakers

Richard Tarboton

Director of Strategic Services

Mark Evans

Analyst, Environment & Sustainability

Sonya Bhonsle

Global Head CDP Supply Chain

Kesi Courtman

Consultant, CDP Lead

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Who we are

People Clients Energy Performance Strategy Data

Integrity Curiosity Excellence

41,000 buildings Data from over 60 countries

14%

Savings

Collaborative Asset Performance Programme

CDP from an investor perspective

IPCC Special Report on 1.5oC

The next ten years will be crucial to limit global temperature rise.

Global CO2 emissions will need to decline by 45% from 2010 levels by 2030, and reach net zero by 2050.

SBTi supports the 1.5oC aim and will be reviewing resources and target validation protocols.

Business as usual won’t cut it anymore

Legal & General names, fames and shames corporate climate leaders and laggards

2018 CDP Results

6% 11% 27% 4% 27% 0% 22% 2%

Key trends in 2018

11% increase

in companies disclosing

4% decrease

in number of UK firms achieving an A grade

Key trends by sector

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Maximising your 2019 CDP disclosure: Customer requests, scope 3 and the potential of supply chain February 13th, 2019

Add your voice to the conversation #CDPSupplyChain SONYA BHONSLE Global Head of Supply Chain CDP

@S_Bhon @CDP

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Add your voice to the conversation: #CDPSupplyChain | @CDP

2018 supply chain members

Your emissions are your customers scope 3

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Add your voice to the conversation: #CDPSupplyChain | @CDP

SC Member Request: Set a science based target

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 This will have a ripple effect,

cascading up and down our value chain, when customers use our energy efficient technology that is manufactured in factories with science-based targets, they will cut their own carbon emissions, achieving exponentially more with less environmental impact.

 Lara Birkes Vice president and chief sustainability officer for HPE

SC Member Request: More action on emissions

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#CDPSupplyChain | @CDP

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Name | @Twitter Add your voice to the conversation: #CDPSupplyChain | @CDP

SC Member Request: Report emissions reductions

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Add your voice to the conversation: #CDPSupplyChain | @CDP

SC Member Request: Report emissions reductions

SC Member Request: Encouraging renewable energy purchasing

 “How will we meet our new supply chain target? Close cooperation with our suppliers will be key. We will be working together to help them switch to renewable energy, and encouraging more of them to report to CDP. This is a critical first step towards action for suppliers, and the data they disclose will enable us to track emissions reductions and uptake of renewable energy in our supply chain”.  Gabrielle Ginér, Head of Sustainable Business Policy at BT Group We will reduce the carbon emissions Associated with our supply chain on 2016/17 levels by 29% by 2030

We will help customers reduce carbon by three times… 67.6% 6.7% 25.7%

3: 1

We will help customers reduce carbon by three times… …BT’s end-to-end carbon emissions 67.6% 6.7% 25.7%

Our supply chain Customer use and disposal of

• ur products

Our own

• perations

BT’s end-to-end carbon emissions As at 31 March 2017

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Renewables in the supply chain: new focus for SC members

Significant consumption in tier 1 suppliers 62% of suppliers reported details of their energy consumption 27% of energy came from renewable sources Just 4% of suppliers report having a renewable energy target Only 83 committing to RE100 out of 5500

Add your voice to the conversation: #CDPSupplyChain | @CDP

Consumer Goods

Retailers

Manufacturing base

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Add your voice to the conversation: #CDPSupplyChain | @CDP

Covering more of the supply chain: The cascade… driving action throughout the value chain

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

We take this responsibility seriously and joined CDP Supply Chain as a founding member for climate, water and forests. This involvement has influenced the environmental performance of some of our most important strategic suppliers. Many are now engaging their own suppliers on these topics.



Alexandra Palt, Corporate Responsibility Officer, L'Oréal Up from 23% in 2017

SC Member Request: engage your suppliers and take action on your upstream emissions

Add your voice to the conversation: #CDPSupplyChain | @CDP

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Name | @Twitter

We absolutely exit suppliers if they don't address environmental issues. We must take very serious measures. And the companies see who is no longer in the room.

Signify Add your voice to the conversation: #CDPSupplyChain | @CDP

Integrating environment into business as usual

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Add your voice to the conversation: #CDPSupplyChain | @CDP

*Includes actions relating to CDP member collaboration and other initiatives

CDP Global Supply Chain Summit: 1.5days, 23+ speakers, 130+ attendees from Japan, Latin America, Europe and across the United States European Launch: 28th February, London. Want to come? Contact CDP via supply.chain@cdp.net

Supply Chain Report Launch

Maximising Your CDP Disclosure

Common pitfalls in the 2018 disclosure cycle

• 1. Board-level buy in: Not having sufficient senior engagement on

climate change

• 2. Targets: Not having robust targets aligned with science
• 3. Scope 3: Lack of transparency and control over scope 3 emissions
• 4. Risks & Opportunities: Insufficient understanding from senior

stakeholders on climate-related risks & opportunities

• 5. Scenario Analysis: Insufficient scenario analysis embedded in the risk

assessment process

Addressing these pitfalls

Board level buy-in Target setting Scope 3 Risk & Opportunities Scenario Analysis Develop an engaging strategy Develop reporting against TCFD Develop science-based targets Risk & Opportunities Workshop Scope 3 Screening Peer Review & Case for Change

3 2 1

Problem Action Quick Win

Quick Win 1: Conduct a peer review and develop a case for change

Board level buy-in Develop an engaging strategy Peer Review & Case for Change

1

Problem Action Quick Win

Quick Win 1: Conduct a peer review and develop a case for change Understanding your position relative to your peers is key to senior-level buy-in

Roadmap Business case Science-based targets Engagement

£

Quick Win 1: Conduct a peer review and develop a case for change

Quick Win 2: Scope 3 Screening

Target setting Scope 3 Develop science-based targets Scope 3 Screening

2

Problem Action Quick Win

Quick Win 2: Scope 3 typically makes up >85%

Quick Win 3: Risks & Opportunities workshop

Risk & Opps Scenario Analysis Develop reporting against TCFD Risk & Opportunities Workshop

3

Problem Action Quick Win

Quick Win 3: Conduct a Risks & Opportunities workshop with senior stakeholders

Acc cceptable Imp Improve control meas easures whe here pr practicable le Hig High ri risk. . Con Control mea easures to to be be implemented Una Unacceptable le ri risk. . Con Control meas easures to to be be implemented

Objectives of R&O workshop

• 1. Gather information to complete the CDP

questionnaire (deadline is mid-August)

• 2. Develop a list of risks/ opportunities to support

Prudential’s ongoing work to align with the TCFD recommendations

• 3. Explore options for scenario analysis and discuss

next steps

CDP’s questions on risk represent a significant proportion of total points available

No. Question Disclosure Awareness Management Leadership 1 Describe what your organization considers to be short-, medium- and long-term horizon 3 3 2 Select the option that best describes how your organization's processes for identifying, assessing, and managing climate-related issues are integrated into your overall risk management. 1 2 2 1 3 Select the options that best describe your organization's frequency and time horizon for identifying, and assessing climate-related risks 2 2 2 1 4 Provide further details on your organization’s process(es) for identifying and assessing climate-related risks. 1 1 2 5 Which of the following risk types are considered in your organization's climate-related risk assessments?

• E.g. Current regulation, Emerging regulation, Technology, Market, Reputation, Acute physical,

Chronic physical 5 5 5 1 6 Describe your process(es) for managing climate-related risks and opportunities. 1 2 3 1 7 Provide details of risks identified with the potential to have a substantive financial or strategic impact on your business. 12 12 15 3 8 Provide details of opportunities identified with the potential to have a substantive financial or strategic impact on your business. 12 12 15 1.5 9 Describe where and how the identified risks and opportunities have impacted your business. 5 5 5 1 10 Describe where and how the identified risks and opportunities have factored into your financial planning process. 7 3.5 3.5 1

Task Force on Climate-Related Financial Disclosure

Case Study: Australia and New Zealand Banking Group

The first bank globally to align their disclosures with the TCFD recommendations, outlining their carbon strategy governance, management, metrics and targets in their 2017 annual review.

Opportunities

• Consumer purchasing trends

for renewable energy and retro fit

• New regulations resulting in

more stable investment

Risks

• Rain and droughts reducing

revenue of companies we invest in

• Regulations impacting key

investment sectors

Scenarios

1) The New Policies Scenario reflects the policies and measures already in place and the aims, targets and intentions announced by countries including commitments under the Paris Agreement. 2) The 450 Scenario reflects what would need to happen in order to “limit the average global temperature increase in 2100 to 2 degrees Celsius above pre- industrial levels”.

Understanding the CDP Scoring Methodology

CDP Scoring

All program-specific scoring methodologies score responses across four consecutive levels:

• Disclosure: the level of detail and comprehensiveness of a response;
• Awareness: knowledge of how environmental issues impact your business;
• Management: evidence of actions and management methods to address these impacts; and
• Leadership: implementation of best practices in the field of environmental management.

Conduct a gap analysis of your 2018 response against the updated methodology

Avoid greenwash and take action to drive performance

Gap Analysis & Scoring Strategy Improvement Engage Complete CDP Review & Submit Plan

Email: cdp@carboncredentials.com Website: https://carboncredentials.com/ Linkedin: https://www.linkedin.com/company/carbon-credentials/ Twitter: @CCESltd