Environmental Management & Sustainability ALEX HETHERINGTON - Benefits Beyond Compliance Libstar Manufacturing Forum May 24 2012 Irene Country Club.

Environmental Management & Sustainability

ALEX HETHERINGTON - Benefits Beyond Compliance

Libstar Manufacturing Forum

May 24 2012Irene Country Club

ALEX HETHERINGTON - Benefits Beyond Compliance

Agenda

1. Environmental legislation and policy

2. Increasing consumer demand

3. Best practice

4. Steps to implementing sustainability

Sustainable Development

“… ability to meet the needs of the present without compromising the ability of future generations to meet their own needs”- Brundtland Commission on Sustainable Development “Our Common Future”

ALEX HETHERINGTON - Benefits Beyond Compliance

ALEX HETHERINGTON - Benefits Beyond Compliance

Policy & legislationm- primary

ALEX HETHERINGTON - Benefits Beyond Compliance

Policy & legislation - specifics

ALEX HETHERINGTON - Benefits Beyond Compliance

Other policy & legislation

2. King Code of Governance Principles for South Africa 2009 (King III) – best practice

ALEX HETHERINGTON - Benefits Beyond Compliance

Other ‘legislative’ drivers

1. Companies Act (2008) – “to act in the best interests of the company”.

3. Integrated Report – form of communication with all stakeholders

ALEX HETHERINGTON - Benefits Beyond Compliance

Future policy/legislation

1. National greenhouse gas targets

34% by 2020

42% by 2025

2. Carbon tax

Second paper for public discussion due

Proposes: R120/tonne (10% pa thereafter) 2013/14-2020

3. Price hikes

Electricity – 15,33%; 13,5%; 16,09%

Water

ALEX HETHERINGTON - Benefits Beyond Compliance

Consumer perspectives

Consumer Protection Act 2011Information on environmental impact of goods/services

Purchasing preferenceCarbon Trust: April 2012 – Generation Y (18-25 yrs)

82% believe recent disasters are a result of climate change

64% consider the environmental impact of the products they buy

80% - companies should be obliged to reduce carbon footprints

86% - want favourite brands to reduce carbon footprint

30% - currently look for carbon information on products they buy

76% - would be more loyal to a brand if it was demonstrating carbon reduction

ALEX HETHERINGTON - Benefits Beyond Compliance

Measuring environmental impact and sustainability

1. Define boundaries - organisational

- operational

ALEX HETHERINGTON - Benefits Beyond Compliance

Carbon

Energy

Water

Waste

2. Data intensive - management

3. Appoint responsibility

4. Report and analyse

5. Explain trends

Link environmental savings to financial savings!

Best practice

• Strategy – why and how

ALEX HETHERINGTON - Benefits Beyond Compliance

• Define boundaries

• Establish team & determine responsibility

• Measure

• Set targets

• Report to stakeholders

Leading lights

ALEX HETHERINGTON - Benefits Beyond Compliance

Target: Reduce emissions 12%/FTE; 2007-15

Achieved: 13% energy reduction/FTE; Carbon neutrality

Interventions: Motion sensors, heat pumps, building retrofitting; offsetting

Financial investment: R6,6 million (excl. offsetting)

Financial savings: R36 million

ALEX HETHERINGTON - Benefits Beyond Compliance

Target: Reduce absolute emissions 10% by 2009-12

Achieved: 29% energy efficiency at Medupi expansion; 60% reduction in eco- friendly housing; 17% savings from co-generation at Namakwa Sands

Interventions: wind & solar; co-generation; carbon credit trading

Financial savings: R21 million per year

ALEX HETHERINGTON - Benefits Beyond Compliance

Target: Reduce emissions 30%/m2 2006-12

Achieved: 10% reduction in relative energy use from 2004; 35% reduction in refrigerant energy in select

stores; Midrand distribution centre savings 9 370km per week.

Interventions: Energy efficiencies; reduced product miles

Financial savings: R10 million

ALEX HETHERINGTON - Benefits Beyond Compliance

The ecological journey

Type of business

Organisational boundary & Operational boundary

Identify key areas of impactSA-n competitors/activities

Int. best practice

Opportunities (value-add)

Int. & local initiativesComms. & marketing

Sustainability reports

Opportunities (environmental)

Direct

Resource consumption

Decrease consumption

Education

Cost savings

Target setting

Financial bottom line

Indirect

Procurement

Clients

New products

Monitoring & improvement

Sustainable & leading org(Not CSR)

ALEX HETHERINGTON - Benefits Beyond Compliance

What’s in an audit

• Evaluation of current performance• Benchmark against peers - intensity• Review of legislation• Recommendation of environmental initiatives• Analysis of business case of initiatives

Thank you

Alex HetheringtonTel: 021-671-9883

alex@ahmedia.co.zawww.ahmedia.co.za/alexhetheringtonwww.alexhetheringtonsustainabilityblog.com