Compliance and practicalities of using CDSB's Framework

@CDSBGlobal

Joseph'Donohoe'Energy'Reduc,on'

Advisor'Na,onal'Grid'

Lois'Guthrie'Execu,ve'Director'

CDSB'

Mike'Reid'Associate'Director'

Energy,'Environment'&'Sustainability'

Grant'Thornton'UK'LLP'

Ben'Richards'Radley'Yeldar'

Thursday'25th'July'2013

Patrick'Crawford'Corporate'Engagement'

CDSB'

Freddie'Woolfe'Engagement'Manager'

Hermes'EOS'

Compliance'and'prac,cali,es'of'using'

CDSB's'Repor,ng'Framework'

@CDSBGlobal

Compliance'and'prac,cali,es'of'using'CDSB's'Repor,ng'Framework'

Thursday'8th'August'2013

Patrick'Crawford'Corporate'Engagement'

@CDSBGlobal

Financial'statements'capture'less'than'20%'of'corporate'risks'(source:'Eurosif,'IIRC)'

Increasing'ESG'repor>ng'requirements'–'UK,'EU?'

Increasing'requirement'to'integrate'ESG'informa,on'with'financial'repor,ng'

Increasing'impact'of'climate'change'on'decisions'and'ac,ons'by'management,'investors'&'other'stakeholders'

Connec,ng'Non`Financial'and'Financial'Informa,on'

@CDSBGlobal

The$integra+on$of$climate$change1related$informa+on$into$mainstream$corporate$repor+ng.$

Objec,ve'

''When?'

January'2007:'Launched'at'World'Economic'Forum,'Davos,'managed'as'a'special'project'of'CDP'

Climate'change'informa,on'in'CDP'

disclosure'

'CDSB’s'

Framework'

Annual'Report'

''Members'•  Main'accountants,'

ACCA,'ICAEW'…'•  GHG'NGOs'e.g.'GHG'

management'ins,tute,'Carbon'Tracker,'TCR'

•  Investors,'e.g.'Investor'Group'on'Climate'Change,'Ceres'

•  Business,'e.g.''WBCSD,'BT,'WEF'

Standardize'climate'change`related'repor,ng'for'fair'and'transparent'markets'

''Why?'

The'need'for'CDSB’s'Repor,ng'Framework'

@CDSBGlobal

CDSB’s'Repor>ng'Framework''•'Complements'the'CDP'process'

•'Communicates'management’s'assessment'of'climate'change'in'annual'reports'

•''Connects'Financial'and'non`financial'informa,on;''harmonizing'with'exis,ng'accoun,ng'and'na,onal'standards'

•'Conformance'with'the'Framework'is'a'means'of'compliance'with'UK'greenhouse'gas'regula,ons'

•'Download'CDSB’s'Repor,ng'Framework'and'Guidance'from'www.cdsb.net/Framework''

CDSB’s'Repor,ng'Framework'

@CDSBGlobal

Communicating Climate Change “Reporting from the principle of communication rather than compliance.“ Hermes EOS Investors

CDSB’s'Repor,ng'Framework'in'Prac,ce'

@CDSBGlobal

A'stepping'stone'to'producing'integrated'reports''

CDP'Informa>on'request'

CDSB'Guidance'CDSB’s'Repor>ng'Framework'

THE'DATA' THE'LENS' THE'HELP' VISIBILITY'Mainstream'

Report'

CDSB’s'Repor,ng'Framework'in'Prac,ce'

@CDSBGlobal

PuOng'it'into'prac>ce''1.'Determina>on:'Decide'what'to'report''2.'Prepara>on:'Gather'clear,'consistent,'complete'Informa,on''3.'Presenta>on:'Ensure'disclosure'is'clear''4.'Review:'Check'accuracy'and'ensure'relevance'

CDSB’s'Repor,ng'Framework'in'Prac,ce'

CDSB

National Grid Corporate Perspective

National Grid carbon management systems

Carbon targets

Carbon budgets

Carbon data

Carbon performance

Climate change papers

• Reductions on 1990 baseline

• 2020: 45% reduction

• 2050: 80% reduction

• Set annually by business unit

• SAP CI

• Monthly data submission

• GHG Protocol

• Verification

• Presented to senior management committee and Executive board periodically

National Grid carbon reporting in Annual Report and Accounts

•  Context of climate change

•  Changing energy mix

•  Energy policy and national targets

•  Innovation and technology

•  High level implications for National grid�s operations

Operating environment

National Grid carbon reporting in Annual Report and Accounts

•  Climate Change sub-section

•  Annual emissions volumes

•  Progress against targets

•  Emissions measurement methodology: GHG Protocol

•  Emissions verification statement

•  Pursuit of opportunities such as CCS

What did we achieve?

National Grid carbon reporting in Annual Report and Accounts

•  Regulatory requirements

•  Contribution to decarbonisation of energy system

•  Reduction in National Grid emissions

•  Adaptation to impacts of climate change to ensure reliability of energy system

•  Risk Factors

•  Failure to meet carbon targets

•  Impacts of extreme weather

Additional Information

© 2013 Grant Thornton International. All rights reserved © 2013 Grant Thornton International. All rights reserved

Practicalities of Carbon Reporting •  the reporting process •  accounting issues •  risk management •  stakeholder engagement

8 August 2013

© 2013 Grant Thornton International. All rights reserved

Practicalities of Reporting – the process

15

Obligations Investor Needs Executive Overview Business Model review

Reporting Period and Boundary Standard and Policies

Materiality Timescales

link risk and prospects comparability

segmented information KPI comparison

Review against 1,2 & 3 Internal review External stakeholder review

REPORTING PROCESS REVIEW

PRESENTATION

PREPARATION

DETERMINATION

© 2013 Grant Thornton International. All rights reserved

CDP Workshop - Key Findings

16

!  Data quality

!  Reputational risk

!  Verification

!  International variation

!  Suppliers

!  Internal buy-in

!  Leadership

!  External interest

!  Data gathering

!  Boundary

!  Added value?

!  Responsibility

Accounting Issues Risk Management Stakeholder Engagement

© 2013 Grant Thornton International. All rights reserved 17

Thank you

Mike Reid

Associate Director

Grant Thornton mike.reid@uk.gt.com

©Radley Yeldar Ltd 1

Making it relevant Engaging techniques for climate change reporting Ben Richards, Radley Yeldar 8 August 2013 Say hello via Twitter @radleyyeldar

©Radley Yeldar Ltd 2

We help the world’s bravest, brightest and best organisations to find and tell their story, in one clear voice, by whichever means works best.

A bit about RY

©Radley Yeldar Ltd 3

Relevance and relationships BIS’ vision for the future of narrative reporting

Value chain

Strategy

KPIs

Risk

Performance

©Radley Yeldar Ltd 4

The value of a clear story

Working out your organisation’s story about climate change will help to make you consistent, credible and distinctive

©Radley Yeldar Ltd 5

The value of a clear story

Working out your organisation’s story about climate change will help to make you consistent, credible and distinctive

...in turn making it easier for

stakeholders to trust you and to become advocates for your

approach

©Radley Yeldar Ltd 6

The value of a clear story

Working out your organisation’s story about climate change will help to make you consistent, credible and distinctive

...in turn making it easier for

stakeholders to trust you and to become advocates for your

approach

...which helps drive performance

©Radley Yeldar Ltd 7

Who’s doing a good job? Unilever – joined-up and clear

©Radley Yeldar Ltd 8

Who’s doing a good job? British Land – clear and user-driven

©Radley Yeldar Ltd 9

Who’s doing a good job? GSK – transparency across the value chain

©Radley Yeldar Ltd 10

Who’s doing a good job? Siemens – material, focused, relevant

©Radley Yeldar Ltd 11

1. Join it up Show how climate change is relevant to your corporate story

2. Collaborate Work with other teams to increase relevance for all stakeholders

3. Prioritise Tell the story throughout – and offer the detail only where relevant

Top tips If you only do three things...

©Radley Yeldar Ltd 12

For more information

How does it stack up? Best practice research into UK and European reporting Visit ry.com for publications or event registration.

©Radley Yeldar Ltd 13

Stay in touch

Contact details: Ben Richards b.richards@ry.com Radley Yeldar Ltd 24 Charlotte Road London EC2A 3PB T 020 7033 0700 F 020 7033 0800 www.ry.com

@CDSBGlobal

Freddie'Woolfe'Engagement'Manager'Hermes'EOS'

Investor'perspec,ve'

@CDSBGlobal @CDSBGlobal

Patrick'Crawford'Corporate'Engagement'patrick.crawford@cdsb.net'Tel:'+44'(0)'7770'382256'Skype:'patrickcrawford'

www.cdsb.net'

@CDSBGlobal'

Climate'Disclosure'Standards'Board'

facebook.com/CDSBGlobal'

Subscribe'to'our'newsleler'by'emailing'info@cdsb.net'

Thank'you'