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Corporate Strategy, CER & Carbon Neutrality

supporting document files Class 11, Date: 14-Dec-13

Deepa More Consultant - Energy, Env, Sustainability Faculty, Gitam School of International Business Founder, Greenfeathers Advisory, Eco-Portal Greenfeathers

Summary: Successful transition to Green

Essentials:
CSR & CER values need to be a continuously reinforced through in-house and external best practices Need to be integrated - internally driven than otherwise (which one can try to insulate from) Policies in place for specific situations where unethical practices may be tempting These must be synchronized with the company's organizational structures, its culture and its leadership Integrated with rewards and accountability of people who occupy corporate structures

Corporate Strategy, CER & Carbon Neutrality

Conventional approaches to CSR & Environment Aligning Corporate Strategy with CER What is Carbon Neutrality Case-studies: Carbon Neutral Companies
1. 2. 3. 4. Yahoo Inc Dell Inc HSBC ONGC
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Conventional approaches to CSR & Environment

Conventional CSR mostly seen
As an obligation to society that companies operate in Time and effort put could at most be 10%(?) of all business efforts More a Reactive approach than a Pro-active one

Conventional approaches to environment management

Mainly compliance measures and hence far from effective

Financial support to both CSR and Environment issues

More as a PR initiative and to avoid penalties with little regard to genuine social & environmental impacts
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Aligning Corporate Strategy with CER

Climate change alters all that
Organizations are increasingly seeing themselves as part of the solution and want to take early steps to do their bit To address climate change risks Mitigation and Adaptation measures are being actively sought out Assessing ones Carbon Footprint and then finding ways and means to reduce the same going Carbon Neutral
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What is Carbon Neutrality

Being Carbon Neutral or having Zero Carbon Footprint, means achieving net zero carbon emissions It means for every ton of emissions released into the atmosphere, an equivalent amount needs to be captured or saved in another process or location This is achieved via sequestration and through offsets

Sequestration and Offsets

Sequestration means means capture of emissions from atmosphere & storing them physical bodies in trees, water bodies or underground Trees is preferred - via afforestation and reforestation projects Offset is Compensating for emissions in one location by saving an equivalent amount elsewhere through investing in green projects or purchasing carbon credits Choice of offsets are driven by economics and are chosen where ever it is more cost-effective to adopt energy efficiency 7 or energy substitution projects

5 Steps to go CarbonNeutral

Case 1: Yahoo! & Carbon Neutrality

Name & Org: Yahoo! Inc - Fortune 500 Company, founded in 1994 by Stanford Ph.D. students David Filo and Jerry Yang, HQ in Sunnyvale California, US Business: Internet services, with 500 Mn user base

CEO Speak : were committed to being environment neutral and hope to inspire our internet community to make their own positive impact

Yahoo! - Footprint & Targets

Carbon Footprint: 250,000 tons of CO2e for the year 2007 accounting for offices, data centers and all forms of employee commuting Targets Set: to become carbon neutral by end 2007 Targets achieved: through energy savings, purchase of green power and offset projects in Brazil & India Offset Details: Mini hydropower project at Primavera in W. Brazil Wind turbines in two locations - Tamil Nadu & Maharashtra in India

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Yahoo! - Carbon Neutrality Impacts

Neutralizing 250,000 tons CO2e = taking of 35000 cars off the road! Recycling efforts = 80 tons approx. of materials out of landfills every year Opting for suggestions from internet community resulted in some innovative and rewarding changes for data center cooling CDM project in Brazil provided internet connectivity in addition to green power to a remote and deprived community Yahoo! leverages its connectivity with users for exchange of ideas - portals Yahoo! Green and Yahoo! for Good
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Yahoo! Recognition & Branding

External Awards & Landmark Achievements: Through its efforts Yahoo! Ranked among Corporate Responsibility Officers (CRO) 10 Best Media Companies Ranked #1 in Environment Corporate Citizen category Designated - Best Workplaces for Commuters by the U.S. EPA Yahoo! lists 2nd in the list-of-contenders for the Most Admired Company Internet Services, Retailing and ranks 6th overall
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Case-2: Dell & Carbon Neutrality

Name & Org: Dell Inc. Dell Inc - Fortune 500 Company, founded by Michael Dell, HQ in Round Rock Texas, US is a leading global systems and services company Business: Revolutionary direct business model, Dell offers broad range of electronic products mainly computing and server systems

CEO Speak : were driving green into every aspect of our global business, setting new standards, including suppliers and reducing impacts at customer end use
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Dell - Footprint & Targets

Carbon Footprint: estimated at 420,000 tons CO2e for year 2008 accounting for operations, offices, suppliers, employee commuting Targets Set: to become carbon neutral by end 2008 Targets achieved: 5 months ahead of schedule! emissions cut primarily through in-house initiatives maximizing green power for key locations and offset project in Madagascar

Offset Details: Habitat and forest preservation initiative in the Republic of Madagascar

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Dell - Carbon Neutrality Impacts

Dell committed being the greenest technology company on the planet Carbon neutrality is a major milestone in this regard Neutralizing 420,000 tons CO2e = creating an impact twice as large as that of Yahoo! Has set an ambitious annual reduction target of 15% in emissions Safety is important and all Dell products are EU RoHS compliant wherever sold Only computer company that offers free recycling of its machines including those of other make Finally Plant a Forest for Me program by Dell enables sharing 15 best practices

Dell Recognition & Branding

External Awards and Landmark Achievements: Through its efforts Dell Ranks ahead of HP, IBM and Apple in U.S. EPAs Green Power Partnership registry First IT company to join the Carbon Disclosure Projects Supply Chain Leadership Coalition Adopted the 80 PLUS efficiency standard for its products a year ahead of schedule Launched its first hybrid PC that integrates green power supply 16

Case-3: HSBC & Carbon Neutrality

Name & Org: HSBC Holdings plc is world's largest banking group and world's largest company, HQ in London, UK Business: Banking and financial services, has significant lending, investment, and insurance activities around the world

CEO Speak: climate change represents the largest single environmental challenge this century. It is therefore a major issue for our customers and our staff, as well for every organization on the planet, no matter how large or how small"
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HSBC - Footprint & Targets

Carbon Footprint: 550,000 tCO2e for year 2003 & 170,000 tCO2e for 3rd quarter of 2005 accounting for operations, offices and employee commuting Targets Set: Offset carbon footprint of 170,000 tCO2e for 3rd quarter of 2005 as a trial run and beginning Jan 2006, HSBC would also target reducing energy use and sourcing green power Targets achieved: Successful trial run in stipulated time!
Emissions cut primarily through offsets
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HSBC Offset Details

Four projects at a cost of US$750,000 (= US$4.43 per tCO2e) 1. Wind Farm in New Zealand is Gold Standard certified 2. Organic Waste Composting Project in Australia 3. Agricultural Methane Capture Project in Germany 4. Vensa Biotek is a 4MW biomass co-generation project in Andhra Pradesh, India
generates power from agricultural biomass supplements existing power supply & feeds the balance into the state grid economic benefits like employment generation and opportunities for regional growth & development

business
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HSBC - Carbon Neutrality Impacts

HSBC believes that CSR underpins sustained earnings and growth and Is one of the earliest companies and the first major bank to go carbon neutral HSBCs efforts would help it gain a deeper insight into the emerging low carbon economy & Would also position the Bank to understand the needs of and opportunities for its clients

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HSBC Recognition & Branding

External Awards and Landmark Achievements: HSBC has been in the top 50 companies in the Carbon Disclosure Project's Climate Disclosure Leadership Index since 2004, which means that HSBC is in the top 50 companies globally in terms of climate leadership HSBC is the third highest-rated bank in the Dow Jones Sustainability Index HSBC has also adopted The Climate Principles- a voluntary and comprehensive framework offered for the finance sectors response to climate change
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Case-4: ONGC & Carbon Neutrality

Name and Organization: Oil & Natural Gas Corporation Ltd. (ONGC) is an Indian PSU & Navratna enterprise, it is a Fortune 500 company and also among the highest profit making corporations in India Business: exploration and production of oil & gas and related oil field services CEO Speak : ONGC will spearhead corporate action to mitigate climate change, leading to zero carbon footprint a commitment for a Green Society

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ONGC Footprint & Targets

Carbon Footprint: GHG inventorization is currently underway Targets Set: Like Dell, ONGC seeks to take carbon neutrality to its core operations and has worked out an elaborate program to become carbon neutral in a few years Set specific targets to complete organization wide Green House Gas (GHG) accounting by 2011 Targets achieved: would be through energy savings in core processes at site and offices
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ONGC - Carbon Neutrality Impacts

ONGC is not new to environment preservation or carbon credits field ONGC CMD, R S Sharma - President of the Indian arm of United Nation's Global Compact Forum ONGC has an envious record with respect to Green Initiatives Only central PSU with 4 projects registered under CDM Total annual accruable CERs = 120,000 tons CO2e = half of Yahoo!s carbon footprint!

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ONGC - Carbon Neutrality Impacts

ONGC looking to increase its presence globally in addition to its investments in Vietnam, Sakhalin in Russia and Sudan The oil major realizes it too would have to take a leadership role with respect to the environment and climate change and hence the move towards carbon neutrality In addition to this being a step in the right direction where environment issues are concerned, being carbon neutral
would help ONGC to improve operational processes adoption of better technology leading to better business economics with respect other international players in the industry 25

ONGC Recognition & Branding

External Awards and Landmark Achievements: Through its green initiatives ONGC Identified as Indias Greenest Company in 2004 Secured the Greentech Excellence Environment Award from Greentech Foundation in 2004 Received the inaugural Earth Care Award on 22nd April, 2008 Won 2008 Golden Peacock award for its impeccable record in Climate Change Mitigation Further, ONGCs Institute of Drilling Technology secured the Golden Peacock award under ECO-Innovation category in Oil & Gas Sector, 2008 Corporate Health Safety & Environment (HSE) section of ONGC bagged the award under the 26 Environment Management category, 2008

Case - Analysis
In addition to greening measures, all Cos. use leadership in core capabilities to similarly address climate change Yahoo! tries to leverage its extensive reach to people to bring about favorable changes Dell & ONGC plan to use carbon neutrality to minimize emissions at customer end use HSBC has subscribed to international benchmarks the Equator Principles & the Climate Principles that
necessitate support to only environment and society friendly projects and assist in bringing out financial products that would encourage a beneficial response at all levels

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Corporate Strategy, CER & Carbon Neutrality

Important reading
Carbon Disclosure Projects Supply Chain Leadership Coalition Dow Jones Sustainability Index The Climate Principles- a voluntary and comprehensive framework offered for the finance sectors response to climate change United Nation's Global Compact Forum Golden Peacock Award in India

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Env & Disaster Management (E&DM)

Discussion

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