Transcript Introduction to the Carbon Trust

Dramatically reducing the corporate
carbon footprint
World Environment Center &
Environment Science Center
Euan Murray
25th October 2007
Agenda
Introduction to the Carbon Trust
How we support companies to drive change
Working in supply chain & product footprinting
Introduction to the Carbon Trust
Who we are:
Independent company, funded by UK Government
Our role:
Help organisations reduce their carbon emissions
and develop commercial low carbon technologies
Last year we:
Worked with >5,000 companies across UK
Identified savings of 4.6 million tCO2
worth £0.5 Billion in cost savings per year
Introduction to the Carbon Trust
We align private sector interests with public sector objectives:
– Our funding comes mostly from government, but
– Most of our board members are from the private sector
– In 2006/7 we had a budget of ~£110m and a staff of ~150
We are a company driven by our mission: to speed the transition to a lowcarbon economy
We are focussed on cost effectiveness - £/tonne CO2 saved now or in future
through new technologies
– We design and manage public sector-funded programmes, leverage in
private sector funds where possible and re-invest our own returns
– As a Company Limited by Guarantee we can make profits but do not
issue dividends
Agenda
Introduction to the Carbon Trust
How we support companies to drive change
– Our 5 business areas
Working in supply chain & product footprinting
We are reducing the technology and market
risks of investing in a low carbon economy
#1: Insights
 Aim: To increase awareness of
climate change and the risks and
opportunities it presents
#2: Innovations
 Aim: To overcome technical barriers
and lower investment risk
 114 R&D projects
 Published 6 reports in 2006, e.g.
 Allocation & Competitiveness in
EU Emissions Trading Scheme
 Brand Value at Risk
 Technology acceleration projects:
marine, microCHP, smart-metering,
biomass for heat, low-carbon
buildings
 36 companies in business incubator
And we are creating the business case for
the low carbon economy
#3: Enterprises
 Aim: To fill gaps in the market and
make commercial returns
#4: Investments
 Aim: To demonstrate good
financial returns from low-carbon
investments
 Launched “Connective Energy”
 2 new low carbon businesses
under development:
 Partnerships for Renewables
 Insource Energy
 Portfolio of 6 investments with a
value of £13.0m* against
acquisition cost of £6.7m (31%
IRR**)
 Launching £75m clean-tech fund
* Made up of a combination of listed and unlisted equity and cash received from sales awaiting re-investment before tax as at March 2006
** Gross portfolio IRR from date of first investment (July 2002) to 31st March 2006, based on BVCA guidelines and including cash returned
#5: Solutions works with companies
to manage their carbon footprint
Through Carbon Management, we help organisations identify current threats
and future opportunities
Current threats…
…lead to opportunities to..
Increase Profits
Reduce costs through energy management
Regulation
Improve operational effectiveness
Develop new products or grow market share
Manage risks to fixed assets & supply chains
Comply with Regulation
Profits
Company
Ensure compliance with legislation e.g. EU
Emissions Trading, Climate Change Levy,
Buildings Directives etc.
Enhance Reputation
Reputation
Maximise brand & reputational impact of
reducing carbon emissions
Engage consumers and other stakeholders
#5: Our Solutions business worked with
>5,000 companies last year
We help companies save energy costs
and reduce their carbon footprint
NPV of Solutions Programme 2005/6
£m
417
245
(32)
(140)
Carbon
Trust
costs
Capital
investment
by
companies
PV of
lifetime
energy
savings
NPV of
total
cost
saving
Source: Carbon Trust Impact Assessment 2006; PIU report Feb 2002; Energy White Paper
What is good carbon
management?
Stage 1:
Direct Company
Emissions Reduction
Stage 2:
Supply Chain
Emissions Reduction
Stage 3 (Optional):
Offsetting
Agenda
Introduction to the Carbon Trust
How we support companies to drive change
Working in supply chain & product footprinting
What is the footprint of a product?
Supply chain / value chain of a can of cola
 Aluminium
 Cola
Production
production
 Sugar farming  Packaging
 Transportation  Refrigeration
 Chilled storage
 Can collection
 Recycling or
disposal
Total carbon footprint of the can of cola (illustrative)
Disposal &
recycling
Raw
material
Product
manufacturing
Consumer
use
Distribution & retail
Why the “product view” is key
Targets >50% of emissions
–Individual carbon
footprint of 11 tonnes
CO2 p.a.
The UN/IPCC, Kyoto
Protocol and China
The market – consumers
and brands
March launch of our work
Launch focussed on 4 key things:
Product Carbon
Footprinting
Methodology
Standard development
& international
consultation
Defra & BSI British
Standards
Product Label
Pilot Development
Projects
Carbon reduction label
 Independent
measurement
 “Reduce or lose”
commitment
New Pilot Projects
CT testing the draft BSI standard with different products
and in different sectors
The partners will work with us to reduce their emissions
and explore the best way to communicate the results
9 new projects:
Aggregate Industries
Cadbury Schweppes
Coca-Cola
The Co-operative Group
Halifax
Kimberly-Clark
Marshalls
Mϋller Dairy
Scottish & Newcastle
Hard landscaping products
Dairy Milk bars
A still and a sparkling beverage
Strawberries
Halifax Web Saver Account
Andrex and Huggies nappies
Hard landscaping products
Yoghurts
Fosters lager & Bulmer’s cider
We will do further pilots throughout the year
Standard Development
BSI are leading the work to develop the PAS Standard
– Appointed a Steering Group from business, NGO, academics
and government
– First draft prepared, using the CT methodology as base
– First of two consultations commencing shortly
– Details on the BSI website: www.bsi-global.com/PAS2050
International engagement in consultation is key
– Single standard for multi-national companies to use
– International expertise
– New markets & partners for the Carbon Trust
Making Business Sense
of Climate Change
QUESTIONS
Backup
Supply chain emissions
reductions
 Supplier energy
efficiency –
encouraging them
directly
 Calculating product
carbon footprints –
identifying hotspots
 Trinity Mirror example
Food miles as a proxy for
climate change
Cutting food miles is important to reduce transport impacts
BUT
Food miles is a poor indicator of the overall impact
Local sourcing may increase the footprint of a product
Innocent
Walkers
34.5g Cheese & Onion
Total = 75g CO2e
Potato
distribution: <1%
250ml Mango & Passion Fruit
Total = 294g CO2e
Disposal: 2%
Distribution: 10%
Smoothie-making: 21%
Making nitrogen
fertiliser: >15%
Source: Carbon Trust Low Carbon Supply Chain Pilot, March 2007
Making the packaging: 30%
Raw materials transport: 14%
Growing & Packing: 23%
The business need is growing
Historical
cost-saving
strategy
Further energy cost savings
– e.g. 20% reduction on Boots Shampoo project
Consumer demand for companies to take
action on climate change
New market
strategy
– Carbon Trust (Oct 2006): 60% of consumers
want to buy from companies doing the right
thing on climate change
Consumer desire for low-carbon products
– Globescan for LRQA (March 2007): 60% of
UK consumers want companies to provide more
PoS information on climate change impacts
– 77% want independent assurance of company
claims on climate change
Standard Development
BSI are leading the work to develop the PAS Standard
– Appointed a Steering Group from business, NGO, academics
and government
– First draft prepared, using the CT methodology as base
– First of two consultations commencing shortly
– Details on the BSI website: www.bsi-global.com/PAS2050
Food & Grocery sector heavily involved:
– 2 representatives on the BSI Steering Group
– Support from IGD, FDF, BRC and NFU
– Lots of members of those organisations
Engagement, support and efforts invaluable