This document outlines a workshop on making carbon information work for business. It discusses how measuring carbon can help businesses identify inefficiencies, engage staff, enhance reputation, and manage supply chain pressures. Carbon information can improve profitability by focusing investment on opportunities with high returns. The workshop will include table discussions on how carbon measurement adds value for business objectives and processes. It will also discuss how policy could encourage SME carbon reporting and use of carbon budgets in procurement.

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ICARB WORKSHOP:
Making Carbon Information Work
For Business
Paul Adderley, 13 March 2013
5th International Conference
Initiative for Carbon Accounting (ICARB)

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OUTLINE
! Introduction
! Carbon’s Global Context
! Carbon Information:
– Internal Business Benefits
– External Business Benefits
! Table Discussion Topics
! Conclusions: Future is Approaching Fast
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Carbon’s Global Context
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3bn
More middle income consumers
in CHINDA by 2030
Rise in Energy Costs &
Price Volatility
70
%
Efficiency Opportunities
with at least 10% return
Source: McKinsey Global Institute
1C
100yrs show unprecedented rapid rise
in global temperatures for 11,300yrs

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Using Carbon Information
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Business Evaluation
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Businesses respond to clear market signals:
opportunities and risks
Impacts Profitability & Cashflow
Focuses Investment with
Max ROI to stakeholders

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Finding ROI through a
Carbon Lens
Carbon
Information
Identify
Inefficiencies/
exposures
Constraints
Create Innovation
Staff
Engagement
Enhance
Reputation
Supply Chain
Pressures
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Internal Business Benefits
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Identifying Inefficiencies
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! Carbon as measure of inefficiency & cost
– Carbon per tonne of product, hour worked, £ Turnover
(Carbon Intensity)
! Process Review
Inputs
Production/
Service
Outputs
Infrastructure/ Energy Needs
Storage
Waste
Logis-cs
Storage
Waste
Logis-cs
Processes
Packaging

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Case Study: Process Efficiency
! Business Outcomes
– Better Procurement: Right
Quantity, Time and Place
– Use of local suppliers to
reduce logistics
– Reduced waste (stock
damage & obsolescence)
– Reduced travel & time
– Adaptable: Increase
revenue opportunities
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! Carbon Outcomes
– 47.8 TCO2e Saving
– Carbon Intensity reduced by
27%
– 48.7 TCO2e vs business as
usual
– Verified by Carbon Trust
Standard
– £27,500 cost savings
– Carbon ROI 16TCO2e /£’000
! Action by Construction Business
– Closed large warehouse facility to reduce fuel/energy
use & compliance risk

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Low Carbon Infrastructure
! Scottish SME Food Producer (estimates)
Reduce Energy Use & maintain Carbon Commitments
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324,000
125,000
LED
LIGHTING
OLD
LIGHTING
30 184
£’000/yr
11 67
Carbon
(TCO2e)
kWh
33%
10 TCO2e/
£’000
ROI
Life Time Carbon ROI

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Renewable Infrastructure
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Actual
CAPEX £98,000
Income & Savings £16,000 (FITs Feb 2012)
ROI 16%
Annual Generation 37,131 kWh
On site Use 60% 22,279 kWh
Carbon Savings 19.5 TCO2e
Carbon ROI 5 TCO2e /£’000
Midlothian Manufacturing Business:
reduce carbon emissions & exposure energy price volatility

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Staff Engagement:
Making Carbon Tangible
! Eco-Driver Training backed up with data
£2.5k Fuel Savings
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Pride in
Achievements
Share Benefits
Carbon Savings
5 TCO2e YTD
Carbon ROI
25 TCO2e
1
2
3
4
5
6
7
8
£2.5k Savings
1
2
3
4
5
6
7
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Carbon ‘Opportunities’ Hierarchy
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Behaviour
Monitoring &
Communication
Efficiency Processes
Renewables Infrastructure
IncreaseinCapitalCosts
&ReducingROI

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External Business Benefits
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“Baking-In” Reputation
! Growth of Ethical Market - £47bn (2011)
! Generally Recession Resistant
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Supply Chain: Pass it on
! Global CEOs expect
– “low carbon” innovation from the supply chain
– suppliers to contribute to a shared agenda
(source PwC: Factoring Sustainability into IPO Planning, October 2011)
! Supply Chain Analysis reaching Scottish SMEs
– Global Companies requesting Carbon Data (Ecodesk)
– Carbon Footprinting of Seed Potatoes Bags!
! Public Sector Procurement (Reform Bill)
– Drive to increase SME access to public contracts
– No clear signal how carbon will be assessed
– Operational and capital carbon and cost impacts
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Upstream Risks
! Financial KPIs - Gross Margin, may not highlight
supply chain risks
! Is Carbon KPI a possible identifier of exposure
to ?
– Responsiveness: Local vs Global
– Freight costs volatility (air vs surface)
– Climate Disruption
– Opaqueness/lack of transparency in supply chai (data
collection)
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Suggestions
Table Discussion
Business Topics
1. For three business objectives consider how measuring
carbon impacts adds value (or not), and why?
2. For a production/service process think how carbon
efficiency (CO2e /unit) could be improved? (energy/waste)
3. What knowledge/expertise is there in your business to
respond to the opportunities/risk in a low carbon economy?
Policy Topics
1. How can public policy encourage carbon measurement &
reporting by SMEs without legislative measures?
2. Would also setting carbon budgets for public sector
procurement make better decisions ? Discuss.
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The future is approaching fast
! Can’t manage if we don’t measure.
! Carbon is a measure of efficiency
! Carbon KPIs work alongside Financial KPIs
! Assess supply chain risks
! Ready to create value in the supply chain
! Requires adaptive business models
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Carbon reporting is a lever to discover other business benefits
& manage risks, not a merely number crunching exercise.
And finally…an Accountant’s View

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Further Information:
Email: pauladderley@sos4business.uk.com
Web: www.sos4business.uk.com
Tel: 0845 475 1275 / 07917 372573
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