* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Title style in Arial Bold Sentence case 30pt
Effects of global warming on humans wikipedia , lookup
Climate change and agriculture wikipedia , lookup
Climate change, industry and society wikipedia , lookup
Surveys of scientists' views on climate change wikipedia , lookup
Public opinion on global warming wikipedia , lookup
Global warming wikipedia , lookup
Emissions trading wikipedia , lookup
Kyoto Protocol wikipedia , lookup
Climate-friendly gardening wikipedia , lookup
Climate engineering wikipedia , lookup
Climate governance wikipedia , lookup
Economics of global warming wikipedia , lookup
Climate change feedback wikipedia , lookup
Climate change and poverty wikipedia , lookup
Solar radiation management wikipedia , lookup
2009 United Nations Climate Change Conference wikipedia , lookup
Decarbonisation measures in proposed UK electricity market reform wikipedia , lookup
Citizens' Climate Lobby wikipedia , lookup
Climate change mitigation wikipedia , lookup
German Climate Action Plan 2050 wikipedia , lookup
Climate change in the United States wikipedia , lookup
Economics of climate change mitigation wikipedia , lookup
Climate change in New Zealand wikipedia , lookup
United Nations Framework Convention on Climate Change wikipedia , lookup
Years of Living Dangerously wikipedia , lookup
Views on the Kyoto Protocol wikipedia , lookup
Politics of global warming wikipedia , lookup
Carbon governance in England wikipedia , lookup
Low-carbon economy wikipedia , lookup
IPCC Fourth Assessment Report wikipedia , lookup
Mitigation of global warming in Australia wikipedia , lookup
Step - by - step Climate Change Arvind Sharma Setting the Context Providing insight and strategies to help organizations understand and manage the business implications of climate change Climate Change…hitting the headlines!! © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 2 Stakeholder View on Climate Change Consumers are starting to avoid carbon intensive products and services Increased Demand of Go Green CO2 neutral Shipments by consumers • Consumers want information on the effects of products on climate change • Consumers willing to pay a premium for goods produced and transported responsibly • Consumers want credible, independent verification Governments are increasing the amount of regulations and penalties • Kyoto Protocol • EU Emissions Trading Scheme • WEEE Directive • Climate Change Levy • Renewable Energy Certificates Leading Corporate are already responding to the opportunities GE plans $6billion green investment by 2010 Tesco to ‘Carbon label’ its products FT Significant investments made by logistics companies for green fleet procurement © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 3 CDP G 250 Report 2011 Double Digit Growth of Cys listed on CDLI /CPLI 68% 74% disclose absolute or intensity emission reduction targets Integrate CC into business strategy 65% 45% Provide monetary incentives to staff for achieved emission managing climate change issues reductions in some/all initiatives © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Low carbon growth is now widely accepted as fundamental to generating long term shareholder value, avoiding dangerous climate change and helping the global economy recover from recent turmoil. 4 Regulatory / Voluntary codes 1. Kyoto Protocol • Adopted in Kyoto, Japan, in Dec. 1997 Sets binding commitments for industrialized countries to return their GHG emissions to an average of approx. 5.2% per cent below their 1990 levels during 2008-2012 • The major greenhouse gases as per the Kyoto Protocol are: • • Carbon Dioxide (CO2) • Methane (CH4) • Nitrous oxide (N2O) • Per fluoro carbons (PFCs) • Hydro fluoro carbons (HFCs) • Sulphur hexa fluoride (SF6) Carbon Markets Voluntary JI Market Clean Development Mechanism (CDM) Market 2000 2012 The Kyoto Protocol has the following schemes to mitigate greenhouse gas emissions: • • European Union Emission Trading Scheme • Joint Implementation • Clean Development Mechanism © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 5 Regulations related to Climate Change 2. Carbon Tax • An environmental tax that is levied on the carbon content of fuels • implemented by taxing the burning of fossil fuels proportional to their carbon content • increases the competitiveness of alternate energy sources • countries including Denmark, Finland, Italy, Germany, Sweden have imposed energy taxes based partly on carbon content 3. Legislations in California • California has been extremely proactive in the fight against climate change • taken legislative steps by implementing stringent caps on polluting industries • provided incentives for clean cars • promoted renewable energy very aggressively (utilities must provide a third of their energy from renewable sources like wind, solar and geothermal power) • developed a Scoping Plan that mandates reduction of greenhouse gas emissions to 1990 levels by 2020 • full deployment of Million Solar Roofs initiative © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 6 Other Bodies in the Climate Change Arena 1. Carbon Disclosure Project • Independent, not-for-profit organisation • Launched in 2000 • Over 2500 companies from 60 countries around the world disclose their greenhouse gas emissions and climate change strategies through CDP • Holds the largest database on corporate climate change information • Represents 534 institutional investors, holding $64 trillion in assets under management 2. Intergovernmental Panel on Climate Change • Established in 1988 - develops Assessment reports (state of knowledge on climate change) • Special Reports and Technical Papers on topics where independent scientific information and advice is deemed necessary • Methodology reports -supports the UNFCCC through its work on methodologies for national GHG inventories © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 7 Other Bodies in the Climate Change Arena 3. Cement Sustainability Initiative • A voluntary business initiative • formed to help the cement industry address the challenges of sustainable development • founded in 1999 • 21 members across the globe • is currently working to understand the impact of cement’s whole life cycle, i.e., as concrete and recycled aggregates, and a potential next step from this is the development of a technology roadmap to reduce greenhouse gas emissions 4. Funding Available • World Bank • Asian Development Bank • First Climate • Syndicate and Carbon Capital • Climate Change Capital © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 8 Other Bodies in the Climate Change Arena 5. Bureau of Energy Efficiency • Created in March 2002, under the Ministry of Power under the provisions of India’s 2001 Energy Conservation Act • Function is to develop programs which will increase the conservation and efficient use of energy in India 6. Carbon Trust • A company created by the UK government, with an objective to help businesses and public organisations reduce their emissions of greenhouse gases • Promotes energy efficiency and low carbon technology • The Carbon Label Company is a subsidiary company that labels products with their embodied carbon footprint © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 9 India’s Response to Climate Change Indian government: • Has ratified the Kyoto Protocol • Currently does not have any binding emission reduction targets • Has declared the National Action Plan on Climate Change (NAPCC) in June 2008,which outlines the Government’s long term strategy to address issues of climate change National Solar Mission National Mission for Enhanced Energy Efficiency National Mission on Sustainable Habitat National Mission for Sustaining the Himalayan Ecosystem National Mission for a “Green India” National Water Mission National Mission for Sustainable Agriculture National Mission on Strategic Knowledge on Climate Change © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 10 What Makes Management of Carbon a Strategic Priority? Forecasts of negative climatic impacts Competitors investing in carbon management Preparing for energy supply risks Challenges from the investor community Correlation between emissions and energy costs Financial Risks due to Regulation © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Customer expectations Strategic Risks and Opportunities Procurement Criteria 11 Getting to measure Measurement and reporting are a vital part of a company’s overall carbon strategy Carbon Footprint – The First Step Accounting of the exclusive amount of Green House Gases (GHG) emitted on account of human as well as organizational activities and / or accumulated over the full life cycle of a product or • Carbon dioxide (CO2); • Methane (CH4) • Nitrous Oxide (N2O) • Hydrofluorocarbons (HFCs); • Perfluorocarbons (PFCs); • Sulphur hexafluoride (SF6). Measuring the footprint is precursor to determining the plausible mitigation steps service, in a specified boundary and over a limited time period A few steps towards carbon efficiency: • Reducing CO2 emissions by improving efficiency • Purchase of renewable energy • Moving towards carbon neutrality • Working with suppliers to reduce carbon footprint • Developing low Carbon products and services • Engaging with key stakeholders and create awareness © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 13 Footprint Measurement – A Precursor to Climate Change Mitigation Global Mitigation Policies: Reporting, measurement and verification Use of renewable energy Funding: • The CDP represent s 543 institutional investors with a combined $ 65 trillion under management • The investor network on climate risk consists of 70 investors managing nearly $ 7 trillion in assets Carbon offset Energy efficiency Alternative fuels Technology Transfer © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Action on Ground In the energy industry Exxon mobil and BP are the leading figures in climate change and are making huge investments in working towards mitigation steps All the major players in the manufacturing sector are increasingly directing their efforts towards attaining a low carbon economy Dupont has reduced its CO2 emissions by 65% from the 1990 levels saving hundreds of millions of dollars in the process 14 Footprint Measurement – A Precursor to Climate Change Mitigation 9 Reporting Standards Setting of baseline and targets Transparency of reporting issues related to Setting scope and boundaries Carbon footprint Identification of high impact areas measurement and reporting Data management, data quality, KPI’s that one must and calculation methods get right Double counting of GHG emissions Forecasting of GHG emissions Assurance challenging the reporting process © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 15 Governing principles of GHG accounting 1 Relevance Ensure the GHG inventory appropriately reflects the GHG emissions of the company and serves the decision-making needs of users – both internal and external to the company. Transparency 2 Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used. Accuracy 3 Account for and report on all GHG emission sources and activities within the chosen inventory boundary. Disclose and justify any specific exclusions. Consistency 4 Use consistent methodologies to allow for meaningful comparisons of emissions over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series. Completeness 5 Ensure that the quantification of GHG emissions is systematically neither over nor under actual emissions, as far as can be judged, and that uncertainties are reduced as far as practicable. Achieve sufficient accuracy to enable users to make decisions with reasonable assurance as to the integrity of the reported information. © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 16 Plotting a course 1 4 stage process to plan an effective way to measure footprint, reduce emissions and report on performance 4 2 3 STEP1: Strategy “It is extremely important to consider the overall objectives and drivers for a successful Carbon strategy” 1 The overall objective of Carbon Footprint should answer • What is the baseline and what kind of targets need to be set? 4 2 • What is the scope of the footprint? • What is the expectations from the external stakeholders form reporting? 3 • What kind of systems are in place/ needed to track progress against targets? © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 18 STEP1: Strategy 3 levels of reporting… III II I. Product/ Service Level Company Level I Specific reductions/ efficiency projects The scope broadens with each level of reporting © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Specific reductions/ efficiency projects- Typically this covers regulated projects (Projects that qualify for compliance credits), Voluntary Projects (projects aimed at delivering tradable carbon credits to the voluntary markets) or projects demonstrating action towards climate change. The projects should deliver long term sustainable reductions that would not occur in business as usual scenario. II. Company level accounting- This involves accounting for all emissions generated form all company operations. There are specific standards and guidelines such as the WBCSD/ WRIGHG Protocol and ISO 14064 for GHG accounting. It is essential to use a recognized methodology to ensure credibility. III. Product/ service level accounting- Measuring emissions from the product/ service perspective requires information from the entire life cycle (cradle to grave). The challenge in this type of accounting lies in assessing the ease in collecting the data from all stakeholders throughout the life cycle of the product 19 STEP 2: Defining boundary The scope and boundary of accounting should be pre decided to freeze on… 1 • Whether the company should report only on its own operations or include holding company’s operations as well (control or equity based approach) 4 2 • Whether it should report on upstream and downstream operations as well. • Whether to report on direct/ indirect emissions or both. 3 © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. • Whether to report on third party emissions related to the company’s operations such as employee commuting, business travels etc. 20 STEP 2: Defining boundary Process Emissions: Chemical/physical changes in the materials during the manufacturing process Scope 1 Stationary Emissions: Burning fuels in stationary machines, equipment, boilers, kilns/furnaces etc. (Including Captive Power Generation Scope 2 Use of purchased electricity from the grid or use of purchased energy (Steam) Scope 3 Other indirect emissions such as Inbound Logistics, Outbound Logistics, Production of purchased materials, employee business travel, employee commute, disposal of waste etc. © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Mobile Emissions: Combustion of fuels in the mobile equipment/vehicles owned by the company. 21 STEP 2: Defining boundary - Example Scope III III Emissions Emissions Scope Emissions Electricity consumed by the plant Fuel burnt in kiln •• Logistics (Inbound/Outbound) Fuel burnt business power generation •• Employee travel •• •• Preparationofofpurchased raw material Production material Equipment and onsite Disposal of waste vehicles(company owned) • Employee Commute © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 22 STEP 3: Data Collection 1 Developing internal procedures and guidance for data collection is essential to ensure correctness and reliability of data The 3 necessities… 4 2 • Establish data requirements- data collection formats, frequency of data collection, materiality, accuracy and treatment of anomalies. • Establish quality control/ monitoring procedures to reduce reporting risk. 3 © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. • Integrate systems with the day to day management reporting framework 23 STEP 3: Data Collection Identify Sources Select Calculation Approach Collect data and choose emission factor Apply calculation tools Roll up data to corporate level Fossil Fuel Emissions Calculation Method Scope 1 (metric tonnes) Scope 2 (metric tonnes) CO2 Power Generation CH4 N2O Mobile Combustion ( within the boundary of the plant) CO2 CH4 N2O CO2 Fugitive Emissions CH4 N2O CO2 Consumption of Purchased Electricity CH4 N2O Mobile Combustion ( transportation of CO2 fuels/waste, employees business travel, CH4 employee commuting N2O Fugitive Emissions ( CH4 and CO2 from CO2 waste landfills, pipelines, SF6 CH4 emissions) N2O Total (metric tonnes CO2e) © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 24 Scope 3 (metric tonnes) STEP 4: Reporting The report may touch upon: • The baseline and targets and assumptions made when deciding the baseline. 1 • The scope of report, methodology used and assumptions made for calculations 4 2 • An understanding of risks and opportunities for the business from Climate change. • A description of the governance structure and data collections systems, controls and KPI’s in place. 3 • Performance data with respect to GHG emissions © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 25 STEP 4: Reporting – 11 point checklist 1. Assurance – are you realising maximum value from assurance or is it just a tick-box exercise? Independent challenge of your reporting processes can help identify improvements in efficiency and data integrity 2. Data management – have you set up practical and reliable procedures to collect data on an ongoing basis? 3. Double-counting – will any of your partners be accounting for the same emissions? 4. Forecasting – does your system allow you to forecast performance and report regularly, therefore effectively manage progress against targets? 5. Impact areas – will your emissions scope allow you to identify your largest impact areas – where your reduction efforts will be most effective? © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 26 STEP 4: Reporting 6. Internal engagement – have you communicated with and trained your international operations around your measurement and reporting objectives, requirements and the likely benefits? 7. Internal reporting – are you reporting the organisation's carbon footprint internally? This is equally as important as external reporting and is often forgotten. 8. Legislation – are you aware of upcoming legislation that requires you to report on your emissions – for example an emissions trading scheme? 9. Organisational Boundaries – will your organisational boundaries enable you to account for the emissions your stakeholders think you are responsible for? 10. Standards – have you chosen a recognised reporting standard? 11. Transparency – have you disclosed any omissions or assumptions made in estimated calculations? © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 27 Benefits of accounting Carbon • Differentiate from competition (voluntary action) Strategic • Attract investment by improved access to capital through ratings • Informed investment planning (CAPEX, emissions trading, etc.) • Management decision making Tactical • Manage risks (carbon risk exposure) • Prepare for impending legislation • ISO 14064 certification Operational • Cost reduction opportunities © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 28 Peek a boo Low carbon business is profitable and examples here are the testimony of this fact Kobe Steel Group Kobe committed to minimize environmental impact by adopting measure against global warming through resource recycling measures, proper control of chemical substances and reducing environmental burden. To reduce specific energy consumption in fiscal 2010, Kobe promoting alternative fuels to improve combustion efficiency. Over the years Kobe made cautious effort to address global warming and it allocated considerable amount towards energy saving related initiatives in the last few years. Kobe committed to reduce average specific energy consumption by an average of 9.05% and 12.2% in their Aluminum and Copper & Brass units by fiscal 2012 Kobe disclose carbon emission by participating in Carbon Disclosure Project (CDP) Klobe’s Energy – Saving related investment “Promoting energy savings in every aspect of our business activities Reducing greenhouse gas emissions in partnership with industry” © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 30 BASF Conducted first GHG emissions inventory in fiscal year 2008 and updated in October 2009 BASF have succeeded in reducing absolute greenhouse gas emissions by 27% and the reduction in specific greenhouse gas emissions, i.e. per tonne of product sold, is as high as 61% despite 86% increase in product volumes. Goal is to reduce specific greenhouse gas emissions per metric ton of sales product by 25% compared with 2002. Involved in reforestation project at Ethiopia and the goal is to create greater biodiversity and more jobs and this project expect to reduce approximately 5 million metric tons less CO2 in the atmosphere over the next 10 years. BASF offers CDM, JI projects and also a complete greenhouse gas project service to support its customers from the application process through to the issuance of greenhouse gas certificates. “We see energy efficiency as the key to combining climate protection, conserving resources and achieving a competitive advantage." © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 31 BASF BASF offers CDM, JI projects and also a complete greenhouse gas project service to support its customers from the application process through to the issuance of greenhouse gas certificates. In United States, BASF has been a member of the Business Environmental Leadership Council of the Pew Center on Global Climate Change since 2008. Membership is attained by invitation from the Center and is offered to companies that actively advocate climate protection. BASF became the first German company to join the World Bank’s climate fund. The Community Development Carbon Fund (CDCF) invests in projects in developing countries that reduce greenhouse gas emissions © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 32 Rio Tinto Rio Tinto has a programme of stakeholder engagement, which includes advocating for climate change policy as well as detailing Energy and Climate strategy. The company has a internal standards on Greenhouse Gas Emissions to ensure continuous improvement in GHG emission minimisation by identifying GHG sources, evaluating and prioritising according to significance, and then designing and implementing a greenhouse gas and energy efficiency action. Reducing the greenhouse gas emissions intensity of Rio Tinto production is a key performance indicator for the company and it aim to improve the energy intensity of all the operations “Reducing the greenhouse gas emissions intensity of our production is a key performance indicator for the Group and we aim to improve the energy intensity of all our operations”. © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 33 Rio Tinto Achieved 7.5% reduction in total greenhouse gas emissions per unit of commodity production in 2009 and planned to deliver an overall ten per cent reduction by 2015 against fiscal 2008. Rio Tinto is a member of the US Climate Action Partnership (USCAP). Committed to work with International sectoral agreements (ISA) and advocates transitional arrangements for Energy Intensive Trade Exposed industries (EITE) on Emissions Trading Scheme (ETS) when implemented, so as to avoid carbon leakage. These arrangements could include free allocation of allowances. “Reducing the greenhouse gas emissions intensity of our production is a key performance indicator for the Group and we aim to improve the energy intensity of all our operations”. © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 34 Thank You © 2010 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International").