2. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
ROUTE2
INTEGRATED SUSTAINABILITY
INTEGRATES Route2Sustainability is an
advisory company that works with
SUSTAINABILITY organisations to link sustainability
INTO DAY-TO-DAY to business performance, provide
clarity to decision making and
BUSINESS
create value for your business.
MANAGEMENT
Route2 merges science, finance
and strategy into a framework
and tool-set that identifi es and
determines the financial materiality
of issues & opportunities, then sets
goals, evaluates investments and
manages performance.
The outcome: An informed strategy
that enhances, not compromises,
short and long term performance
objectives and integrates
sustainability into an organisation.

3. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
OVERVIEW
KEY MESSAGES
1 Business is being challenged to 4 Route2 achieves alignment
grow sustainably through a unique framework
based on decades of experience:
2 Sustainability initiatives are not sustainability science and
as effective as they might be: economics; business planning
no common language; tenuous link to and investment analysis
performance; low level of integration
to core business functions 5 Route2 places your business on
a sustainable footing:
3 Route2 aligns the pursuit of sustainability integrated not
sustainability and value creation: separated from your core
impact of environmental and business, enhancing not
social pressures, expressed compromising both short and
financially, linked to performance; long term performance objectives
integrating sustainability into
core business functions

4. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
WORLD VIEW
GLOBAL SQUEEZE
An increasing global population chasing quantitative Route2 transforms the challenge
growth and consuming finite resources is creating a of sustainable business into the
global squeeze. opportunity it represents. A Route2
engagement aligns the goals of
Depletion of resources, social disruptions and rising business value creation
input prices are driving increased regulation, new taxes, and sustainability and leads to a
and shifting consumer and stakeholder expectations. sustainable business through
Add to that the pressure for greater ‘social responsibility’ innovation – in strategy, process
and transparency and it is clear that the way we do and technology.
business is changing. The message is to keep growing,
but grow sustainably.
THE WAY WE DO
However, the idea of ‘sustainable growth’ is creating BUSINESS IS CHANGING
confusion and confl icting goals for business, limiting
progress toward a sustainable business footing.

5. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
‘COMPANIES THAT
TAKE THE LEAD
ON SUSTAINABILITY
WILL BE MARKET
MAKERS RATHER
THAN MARKET
TAKERS’
WORLD
ECONOMIC FORUM

6. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
SUSTAINABILITY MAINTAINING CAPITAL STOCK, INDEFINITELY
4 CAPITALS BUILT
CAPITAL
REAL ECONOMY Tomorrow’s winners are the These stocks depreciate (through
organisations that optimise the mix wear and tear) and appreciate
MAN-MADE of revenue and cash flow whilst (through investment and sometimes
MATERIAL investing in capital stock such that it is use). Natural capital provides the
maintained or enhanced, indefinitely. basis for all human activities.
HUMAN SOCIAL
CAPITAL CAPITAL
Route2 recognises four types From this platform human
of productive capital stock, each capital, facilitated by social capital,
INDIVIDUAL NETWORK &
contributing directly and indirectly transforms raw materials, into
CAPACITY CONNECTIONS to economic output: natural, human, built capital and intermediate
social and built capital. Each stock goods (i.e. product components).
NATURAL produces a fl ow of functions, which
CAPITAL
input into production processes. This is the real economy.
RAW WASTE OTHER ECO-
MATERIALS ABSORPTION SYSTEM SERVICES

7. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
NATURAL HUMAN
CAPITAL CAPITAL
SOCIAL
CAPITAL
BUILT
CAPITAL

8. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
NATURAL
CAPITAL
NATURAL RESOURCES
HUMAN SOCIAL BUILT
The stock of natural resources,
renewable and non-renewable,
both tangible assets as in raw
materials such a minerals and
intangible services such as carbon
CAPITAL CAPITAL CAPITAL
dioxide absorption, soil formation
and water purification.
In construction, think of
aggregates, sand and water.

9. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
HUMAN
CAPITAL
INDIVIDUAL CAPACITY
NATURAL SOCIAL BUILT
The stock of knowledge, physical
labor and refined skills that
transform natural resources (and
previously produced intermediate
goods and services) into economic
CAPITAL CAPITAL CAPITAL
goods and services.
In construction think of laborers,
carpenters and electricians.

10. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
SOCIAL
CAPITAL CAPITAL
NETWORKS & CONNECTIONS
NATURAL HUMAN BUILT
The stock of trust between people
(social networks) in the workplace,
in the community and with public
bodies that determines the ease at
which anything is accomplished.
CAPITAL CAPITAL In construction think of the ease CAPITAL
of interaction between architects,
planners and builders.

11. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
BUILT CAPITAL
INDIVIDUAL CAPACITY NETWORKS & CONNECTIONS MAN-MADE MATERIALS
NATURAL HUMAN SOCIAL
The stock of knowledge, The stock of trust between people The stock of property, plant,
physical labor and refi ned skills (social networks) in the workplace, equipment, infrastructure and
that transform natural resources in the community and with public inventory through which economic
(and previously produced inter- bodies that determines the ease at goods and services are produced,
mediate goods and services) into which anything is accomplished distributed, consumed, disposed,
CAPITAL CAPITAL CAPITAL
economic goods and services. reused or recycled.
In construction think of the ease
In construction think of laborers, of interaction between architects, In construction think excavation
carpenters and electricians. planners and builders. machines, trucks and bricks.

12. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
SUSTAINABILITY
RECONNECTING THE FINANCIAL AND PHYSICAL
Operating alongside and all connection with the real
supporting the real economy is
the financial economy.
economy, this distortion is
exaggerated causing
significant volatility.
ECONOMIC
Within this fi nancial economy is
another type of capital, Economic Understanding, accounting
Capital, which is generated as the for and managing the flows,
real economy output is translated depreciation and appreciation
into money. of these four capitals, is
critical to removing the
The real economy and the financial distortion between the real
economy are in tune when the pricing and financial economy and
of real economy goods and services key to sustainability and
is aligned to their underlying value. Sustained Value creation.
INDIVIDUAL
If the pricing of real economy outputs
CAPACITY
is not right or missing then there is
an imbalance. ACCOUNTING FOR THE
FOUR CAPITALS IS KEY
This mismatch creates distortion,
which encourages organisation’s to TO SUSTAINABILITY
inadvertently undermine the four AND SUSTAINED
capital foundations weakening the
VALUE CREATION RAW WASTE
real economy itself. When financial MATERIALS ABSORPTION
products such as derivatives lose

13. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
VALUE
BROADENING THE LENS
The pursuit of value creation is that we broaden the lens – panning
fundamental to resource allocation out from the typical focus on built
and therefore decision-making capital to incorporate natural,
within organisations. human and social capital.
At Route2 value creation Applying a four capitals lens to value
underpins our approach. We use creation is not easy, but the results
familiar techniques to measure are clear: better scenario planning
value creation and build classical and assumptions, better forecasts,
discounted cash-fl ow models to better overall decision-making
support an organisation’s decision resulting in Sustained Value creation.
making whether that is to evaluate
investment decisions, inform APPLYING A FOUR CAPITALS
ambition or input into incentive
programmes. The difference is
LENS TO VALUE CREATION

14. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
LINKAGE
SCIENCE-FINANCE
Route2 use science as the starting your organisation’s strategic direction. Execution of KEY METHODS INCLUDE
point to understand and quantify this wider strategy, with appropriate planning and
the association between, and the performance management processes enhanced by Input-Output Analysis [IOA]
economic functions performed by, our analysis, will deliver sustained value.
the four capitals.
Material & Energy Flows Analysis [MEFA]
Route2 have a combined twenty years worth of Process Analysis [PA]
The economic valuation of your experience in developing these linkages - linking
organisation’s use of and investment natural science and economic valuation -
Life Cycle Analysis [LCA]
in the four capital functions provides linking investment analysis to business planning and Impact-Pathway Analysis [IPA]
linkage to finance – and the many value creation. This deep expertise combines to form
aspects of business planning. a unique, comprehensive (four capitals – direct,
Economic Valuation [EV]
The four capital stock and flows upstream & downstream) and flexible framework Scenario Planning (SP)
understood in financial terms enhance (sector neutral, country to business unit to product)
scenario planning and financial entitled Sustained Value Management.
Discounted Cash-Flow Modeling [DCF]
forecasts that more readily inform

15. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
MEASURE MANAGE MOVE MESSAGE
OUR OFFER
SUSTAINED VALUE MANAGEMENT [SVM] IS ROUTE2’S
FOUR-MODULE FRAMEWORK COMPRISING MEASURE,
MANAGE, MOVE AND MESSAGE.
The four modules aren’t necessarily sequential, as each
engagement requires a tailored set of solutions and tools.
SUSTAINED VALUE MANAGEMENT

16. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
OUR OFFER
SUSTAINED VALUE MANAGEMENT
MEASURE MANAGE MOVE MESSAGE
Measure is core to our approach. Manage is how we integrate Move supports an organisation Message supports engagement
Identifying where and how value is sustainability into an organisation. to implement solutions. with employees, customers,
created across the four capitals. consumers and stakeholders.
Speaking the language of the Route2 can identify established
We measure at all levels from organisation merges sustainability and cutting edge solutions and By demonstrating issue or
national level to organisation to into the traditional business planning provide an organisation with the opportunity materiality,
product. Quickly focusing efforts and processes. Manage establishes, tools to evaluate, programme quantifying benefits of a diverse
resources on where the value lies. cements and maintains the link and measure the progress of your set of sustainability initiatives or
between sustainability and an investments. Move is about reporting against progress our
DELIVERABLES organisation’s value. executing the programme to realise approach assists organisation’s
your Sustained Value goals. report and communicate their
• Identification and quantification of
DELIVERABLES sustainability, plans and progress.
material financial, environmental
DELIVERABLES
and social issues and opportunities • Multi-year financial plans
DELIVERABLES
(P&L’s, balance sheet, cash-flow) • Identification and evaluation
• Top and bottom line performance
of solutions • Sustainability metrics
impact on business • Goals and metrics
• Cost-benefit and ROI analysis • Sustainability labels
• Risks and opportunities • Agenda development
to existing corporate goals • Project planning and • Integrated reporting
• Performance management tools
performance management
• Peer-set and portfolio performance

17. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
VALUE
THE COMPONENTS OF INCOME, CASH-FLOW AND THE BALANCE SHEET INTERACT TO OVER CREATING SUSTAINED VALUE
TIME CREATE OR DESTROY SUSTAINED VALUE
= RESULT
INCOME NET PROFIT FREE
BENEFITS FLOWING FROM ALL FOUR CAPITALS CASH-FLOW SUSTAINED
VALUE
OPERATING COSTS
COSTS FLOWING FROM ALL FOUR CAPITALS
OTHER CASH DISCOUNT
INCL. INVESTMENT,
DEPRECIATION OF
RATE
ALL FOUR CAPITALS RISK ADJUSTED
FINANCING & TAX COSTS COST OF CAPITAL

18. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
VALUE
THE COMPONENTS OF INCOME, CASH-FLOW AND THE BALANCE SHEET INTERACT TO OVER CREATING SUSTAINED VALUE
TIME CREATE OR DESTROY SUSTAINED VALUE
Route2’s approach enhances each of the drivers of value resulting in sustained value creation = RESULT
INCOME NET PROFIT FREE
BENEFITS FLOWING FROM ALL FOUR CAPITALS CASH-FLOW SUSTAINED
• Continued right to trade
• Brand appreciation, increased market share
VALUE
• Innovation, new markets
OPERATING COSTS
COSTS FLOWING FROM ALL FOUR CAPITALS
• Less exposure to resource scarcity /
cost inflation
• Less exposure to regulatory burdens
• Lower risk, lower insurance costs OTHER CASH DISCOUNT
INCL. INVESTMENT,
DEPRECIATION OF
RATE
ALL FOUR CAPITALS RISK ADJUSTED
FINANCING & TAX COSTS COST OF CAPITAL
• Lower risk, lower financing costs
• Improved stakeholder interaction,
lower tax costs

19. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
VALUE
THE COMPONENTS OF INCOME, CASH-FLOW AND THE BALANCE SHEET INTERACT TO OVER CREATING SUSTAINED VALUE
TIME CREATE OR DESTROY SUSTAINED VALUE
Route2’s approach enhances each of the drivers of value resulting in sustained value creation = RESULT
INCOME NET PROFIT FREE
BENEFITS FLOWING FROM ALL FOUR CAPITALS
CAP CASH-FLOW SUSTAINED
• Continued right to trade
• Brand appreciation, incre
creased market share
VALUE
• Innovation, new mark
arkets
OPERATING COSTS
COSTS FLOWING FROM ALL FOUR CAPITA
ITALS
• Less exposure to resource sca
scarcity /
cost inflation
• Less exposure to regula
• Lower risk, lower in
ulatory burdens
r insurance costs OTHER CASH DISCOUNT
INCL. INVESTMENT,
DEPRECIATION OF
RATE
ALL FOUR CAPITALS RISK ADJUSTED
FINANCING & TAX COSTS
S • Greater insight,
smarter investment
COST OF CAPITAL
• Lower risk, lower financing costs • Better solutions, better
return on investment
• Improved stakeholder interaction,
lower tax costs • Enhanced scenario
planning, better cash
management

20. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
VALUE
THE COMPONENTS OF INCOME, CASH-FLOW AND THE BALANCE SHEET INTERACT TO OVER CREATING SUSTAINED VALUE
TIME CREATE OR DESTROY SUSTAINED VALUE
Route2’s approach enhances each of the drivers of value resulting in sustained value creation = RESULT
INCOME NET PROFIT FREE
BENEFITS FLOWING FROM ALL FOUR CAPITALS
CAP CASH-FLOW SUSTAINED
• Continued right to trade
• Brand appreciation, incre
creased market share
VALUE
• Innovation, new mark
arkets
OPERATING COSTS
COSTS FLOWING FROM ALL FOUR CAPITA
ITALS
• Less exposure to resource sca
scarcity /
cost inflation
• Less exposure to regula
• Lower risk, lower in
ulatory burdens
r insurance costs OTHER CASH DISCOUNT
INCL. INVESTMENT,
DEPRECIATION OF
RATE
ALL FOUR CAPITALS RISK ADJUSTED
FINANCING & TAX COSTS
S smarter investmen
ment
COST OF CAPITAL
• Greater transparency,
• Lower risk, lower financing costs
sts • Better solution better
ions, resulting in higher
return on in
investment investor confidence
• Improved stakeholder intera
eraction,
lower tax costs • Enhanc scenario
nced • Lower risk, lower
plan
anning, better cash discount rate
management

21. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
PLAN PERFECT
BUILD DO
HOW WE WORK
We recognise our clients as the
dedicated experts they are. When
clients state “understand our
organisation and objectives”,
“transfer your capabilities”,
“breakdown the challenge into
manageable phases”, we listen.
We only ask executives to visibly OUR APPROACH
support the project and to foster
collaboration as far as resources allow.

22. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
HOW WE WORK
OUR APPROACH
PLAN PERFECT
BUILD DO
1. PLAN 2. BUILD 3. PERFECT 4. DO
This is where we understand our This is where we work efficiently to This is where we perfect the This is where we safeguard the
client objectives and our client’s undertake the work however, we do project output through workshops, continual meeting of our client
available resources. not disappear (unless instructed to) teleconferences and if necessary in objectives long after project
person meetings. completion.
We also familiarise ourselves with Our objective is to work as effectively
the organisation and sustainability as possible to meet our client’s The result is work that delivers on During this handover stage, we
programme. We then develop a challenges. We continually request objectives, achieved through the support clients to integrate the work
project plan that refl ects our under- and listen to feedback. collective experience and ideas of into their organisation’s systems
standing, clearly lays out what needs the collaboration. Prior work is and processes. We remain ‘on call’
to be done, by when and by who - wasted unless this step is successful to update and refresh as required.
which we then all sign up to. We therefore work hard to meet
our objectives

23. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
HOW WE WORK
BY HAVING A COMPREHENSIVE, OBJECTIVE AND FLEXIBLE APPROACH, ROUTE2 IS ABLE TO DEVELOP SECTOR EXAMPLES
SOLUTIONS THAT DELIVER LASTING VALUE REGARDLESS OF SECTOR OR MATURITY OF THE SUSTAINABILITY
PROGRAMME. SEE BELOW FOR A SNAPSHOT OF SOME OF THE CHALLENGES WE CAN SOLVE
CITRUS EXPORTER BEVERAGE PRODUCER COMMERCIAL BANK
SECTOR AGRICULTURE Grower and exporter of fresh produce committed to creating a thriving local community
but aware of significant environmental pressures jeopardising the sustainability and
performance of their business.
QUESTION APPROACH BENEFIT
What are the material • Perform quantified four capital full • Achieve an objective and compre-
environmental and social issues value chain assessment (direct plus hensive assessment of market &
facing our business over the next up- and down-stream operations) non-market costs / benefits
5 years and how will these impact
the financial performance of our • Assess the fi nancial materiality of • Quickly focus resources on the
business and the businesses we identifi ed environmental and social material issues / opportunities
support locally? issues and isolate the value drivers
• Enhance scenario development and
• Develop scenario-based 5-year financial planning
financial plans for the business
(P&L, balance sheet, cash-fl ow)
incorporating value driver insights

24. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
HOW WE WORK
BY HAVING A COMPREHENSIVE, OBJECTIVE AND FLEXIBLE APPROACH, ROUTE2 IS ABLE TO DEVELOP SECTOR EXAMPLES
SOLUTIONS THAT DELIVER LASTING VALUE REGARDLESS OF SECTOR OR MATURITY OF THE SUSTAINABILITY
PROGRAMME. SEE BELOW FOR A SNAPSHOT OF SOME OF THE CHALLENGES WE CAN SOLVE
CITRUS EXPORTER BEVERAGE PRODUCER COMMERCIAL BANK
SECTOR MANUFACTURE Regional bottler of a portfolio of CSD brands with good understanding of their material
sustainability issues with clear set of sustainability goals but struggling to integrate
sustainability into the broader business
QUESTION APPROACH BENEFIT
How do we bring our business • Develop multi-year, multi-scenario • Gain competitive advantage over
leaders into the sustainability financial plans (P&L, cash-flow) peer group
programme in order to ensure to demonstrate financial impact of
that we deliver on our internal achieving sustainability goals • Implement good practice across
and external commitments? the business
• Identify key value drivers; Develop
performance metrics and relevant
• Embed sustainability into company
goals / hurdle rates
culture
• Understand current executive
bonus scheme and capital
expenditure approval process
• Recommend performance metrics
for integration into current schemes
and processes

25. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
HOW WE WORK
BY HAVING A COMPREHENSIVE, OBJECTIVE AND FLEXIBLE APPROACH, ROUTE2 IS ABLE TO DEVELOP SECTOR EXAMPLES
SOLUTIONS THAT DELIVER LASTING VALUE REGARDLESS OF SECTOR OR MATURITY OF THE SUSTAINABILITY
PROGRAMME. SEE BELOW FOR A SNAPSHOT OF SOME OF THE CHALLENGES WE CAN SOLVE
CITRUS EXPORTER BEVERAGE PRODUCER COMMERCIAL BANK
SECTOR SERVICE Commercial bank that understands broad environmental and social risks and
opportunities within its customer base but not clear how these risks / opportunities
may impact performance of its loan book now and in future
QUESTION APPROACH BENEFIT
How exposed is our current loan • Perform high level assessment of current • Gain information advantage through
book to the material environmental loan book (sector level only) to isolate deeper understanding of risk /
and social risks and opportunities, ‘hotspots’ / ‘sweetspots’ within portfolio opportunities faced by current and
how do we best address that prospective credit customers
exposure now and how could we • Identify and quantify fi nancial impact
• Enhance credit approval process (data,
mitigate against these risks of material environmental and social
metrics, hurdle rates) and T&Cs of
going forward? issues / opportunities (within
loans (conditions, covenants, etc)
representative sample)
• Determine appropriate client
• Determine risk levels (and clearly engagement based on environmental
identify drivers of risk) to loan book and social risks
• Understand current credit approval
process and terms & conditions of loans

26. ROUTE2 SUSTAINABILITY COMPANY INTRODUCTION
tasked with
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Challenge us to fi nd a solutio
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