Edward Butt and Sally Vivian

7/31/2019 Edward Butt and Sally Vivian

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IEMA Conference5th June 2008

Corporate Climate Change Strategy

Copyright Reckitt Benckiser & URS Corporation, 2008

Edward Butt

VP SustainabilityReckitt Benckiser

Sally Vivian

Associate DirectorURS Corporation


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Agenda Introduction

Climate Change Strategy Why, What & How

RBs Climate Change Strategy CASE STUDY


Climate Change Impact / Carbon Footprinting

RBs Carbon 20, Total Carbon Footprint CASE STUDY

10 key elements of Climate Change Strategy

Q&A


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World leader in household cleaning, health and personal care

>75% of net revenues from No. 1 or No. 2 brands

Global company

operations in > 60 countries, sales in circa 180 countries


42 manufacturing facilities in 29 countries 23,400 employees

FTSE 25, 2007 net revenue > 5bn and operating profit > 1bn

Recent acquisitions

2006, Boots Healthcare International (e.g. Neurofen & Strepsils) c. 1.9bn

2008, Adams Respiratory Therapeutics Inc. c. 1.1bn


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Surface Care Personal Antiseptics Fabric Treatment Depilatories Automatic

Dishwashing

World No. 1 in Sore Throat Disinfectant

Cleaning Water Softeners Lavatory Care


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World leading engineering & environmental consultancy*

2,000 professionals in Europe 55,000 globallyUS $4.24 billion turnover in 2006


Add value to new projects, transactions and operation of facilities /infrastructure as well as environmental, economic and social returns

Broadest technical expertise in the industry

Strong track record (provider to Fortune 500 & FTSE 100 companies) Global Resources - Local Solutions

*URS ranked No. 1 Design Firm by Engineering News-Record for 6th consecutive year


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Agenda Introduction







Q&A


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Legislative Requirements EU ETS, Business

Review, Climate Change Bill

WHY - Climate Change Strategy ?


a - ar , esco,

Consumer Expectations (B2C) an increasing issue

Stakeholder Expectations shareholders, NGOs

Brand / Reputation close link to financial value

Business Risks / Opportunities resource availability / cost,

USP, barriers to entry


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e.g. Customer ExpectationsTESCO"I am determined that Tesco should be a

leader in helping create a low-carboneconomy.. For Tesco this demands thatwe transform our business model so thatthe reduction of our carbon footprintbecomes a central business driver.

Sir Terry Leahy, 18 January 2007,


WAL-MARTWe believe working families should not

have to choose between a product they canafford and a sustainable product. We wantour merchandise to be both affordable and

sustainable. Because when it is, weempower our customers to make the right

decisions.H. Lee Scott, Jr., February 1, 2007

Cambridge Programme for Industry Lecture


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Climate Change

e.g. Consumer Expectations


has jumped from8th to 4th biggestconcern in a year,

more thandoubling its %

score

Source: c. 47 countries; AC Nielsen / University of Oxford, 2007


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e.g. Stakeholder Expectations

Carbon Disclosure Project

CDP5 (2007) Signatory Investors $41 trillion under management

CDP5 Response Rate FTSE350 70% (49%)


FTSE250 61% (36%)

FTSE100 92% (80%)

CDP5 Quantitative Disclosure 46% (27%)

GHG Protocol Scope 1 38% (10%)

Best Reporting Companies 45 of 245 FTSE (18%)

Scope 1, 2 & estimates re. 3 incl. Reckitt Benckiser


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WHAT IS Strategy ?

the directionand scope over thelon -term:which achieves advantage


through configuration of resources to meet theneeds of marketsand to fulfil stakeholderexpectations

Johnson & Scholes, Exploring Corporate Strategy


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WHAT IS - Climate Change Strategy ?

Identifies material climate change aspects / impacts of:a) your businessb) your products / servicesc) your supply chain


Identifies financial & non-financial risks / opportunities

Understands issues / stakeholders and theirdrivers / strategy

Drives: Measurement, Objectives, Targets & KPIs

Defines, Demonstrates & Communicates CC Commitment

Must be Action-orientated


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HOW TO DO - Climate Change Strategy ?

Copyright Reckitt Benckiser & URS Corporation, 2008SOURCE: Johnson & Scholes, Exploring Corporate Strategy


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Map CO2e aspects / impacts

HOW TO DO - Climate Change Strategy ?


Measure & Report / Communicate

Understand the Business Case


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RBs - Climate Change Strategy 1 There is potential for our competitiveness to be both positively and

negatively influenced at sector, company and product levels by climatechange, policy / businesses responses to climate change and / oradaptation / attitudes to climate change (climate change issues).

Reckitt Benckisers industrial sector (personal care and householdproducts) is generally acknowledged as not being high-risk for climatechan e issues and the o erations of the Com an itself are not


generally energy- or emissions-intensive. Therefore, although thereare potential business risks / opportunities relevant to ReckittBenckiser arising from climate change issues, these are not currentlydeemed to be material to the short or long term value of the Company.

We have previously established and shall maintain:

Strategic awareness of our impact, risks and opportunities

Senior Management Accountability / Responsibility

CO2e Emissions Management and Reporting

Emissions Trading Regime Strategy (Monitoring + Early Engagement)

Programmes in Place

Formal Objectives, KPIs & Targets


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RBs - Climate Change Strategy 2

There is a close connection between maintaining sustainable, long-term shareholder value and making continuous improvement in the(environmental) sustainability of our business.

Cradle-to-grave, Life Cycle Management Approach to the climate


We shall take real action - achieving measurable, reported results- to mitigate our direct andindirect climate change aspects /impact, incl. supply chain andconsumer use of our products

We shall under-promise and over-perform on our climate changeachievements

We shall not be PR-driven and shall avoid green wash


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Agenda Introduction







Q&A


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Carbon Footprint: A measure of the IMPACTthat a person / organisation / product has onthe environment in terms of CO2-equivalentgreenhouse gases emissions.

WHAT IS A Carbon Footprint ?


Primary Footprint: A measure of the DIRECT CO2e emissionsgenerated through process emissions and the combustion of fossilfuels for energy & transportation.

Secondary / Life Cycle Footprint: A measure which includes theDIRECT & INDIRECT CO2e emissions from the entire lifecycle of aproduct or service, including those associated with raw materials,use and disposal / recycling.


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a 20% reduction per unit in our products

Total Carbon Foot rint b 2020


The first major FMCG* company to set a Total

Carbon Footprint target

* Fast Moving Consumer Goods


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What is RBs Total Carbon Footprint ?

Raw &PackagingMaterials

ProductManufacturing

ProductDistribution

Product &Packaging

Disposal /Recycling

RetailOperations

Consumers


The total contribution in terms of climate change emissionsacross our products lifecycle

Our direct business impact The impact from our business partners in creating raw and packaging materials,

in distribution and retail sale

Consumers impact in purchasing, using and disposing of our products


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How does our methodology compare?Raw & Packaging

MaterialsProduct

ManufacturingProduct

Distribution

Retail Operations Product &PackagingDisposal

Consumers


Carbon Trust(initial)

Carbon Label

Methodology

Draft PAS

2050:2008

(& revisedCarbon Trust)

ReckittBenckiser

Total CarbonFootprint


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How are we measuring it ?TRIAL (2006 data)

Question: can we measure our Total Carbon Footprint; cradleto grave; across 100s products / 1,000s SKUs globally?


Developed and trialled with URS (a true team effort) during 2007 built on 6 years experience of measuring RBs direct carbon footprint mapped energy / carbon aspects and information needs explored data availability within organisation, supply chain and externally developed calculation methods / approaches

in line with Draft PAS 2050 and GHG Protocol

Conclusion: Yes; we can measure it to a reasonable degree ofaccuracy, correct shape and to enable focus / informed action


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How are we measuring it ?BASELINE (2007 data)

2007 = baseline year

Objectives and aspirations clear, robust, transparent and auditable measurement system


ongoing opportunities for improving the measurement system reduction in size and number of assumptions

Continuous improvement continuing to explore organisational knowledge and data availability

(incl. marketing, market research, human resources, procurement ) focusing effort to improve accuracy for significant contributions targeting robust & credible external sources


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How are we measuring it ?FINAL STAGES (OF BASELINE)

Final stages ongoing challenge and review of Scope and Coverage assured data sources, assumptions, references testing robustness of scope, data & assumptions via in-company

knowled e centres and sensitivit anal sis


third-party, external assurance of methodology & process

Reporting findings will be reported in annual Sustainability Reports baseline year in 2007 report to be published July 2008

external assurance statement in report case studies of improvement programs / projects across life cycle

(its a journey not a destination!)


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What are we measuring?Raw & Packaging

MaterialsProduct


Distribution


Consumers


materials andcomponents

Packagingmaterials

Transport tofactories

3rd-partyFactories

RB Offices &R&D Centres

BusinessTravel

Centres

ProductDistribution

- LogisticsCentres

- Distribution

- Stores

journeys

Product use:

e.g.

- ADW

- Laundry- Air Care

- Surface Care

- Hand washing

PackagingDisposal /Recycling


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HOW BIG is our Total Carbon Footprint ?Outcomes of Trial

Raw &Packaging

Materials


Product

Distribution

Product &PackagingDisposal /Recycling

RetailOperations

Consumers


Total Footprint c.15m tonnes of CO2 equivalents / year

= emissions from 2.7 million average UK households / year

= emissions from 4.3 million UK medium sized family cars / year A 20% reduction (c. 3m tonnes CO2e) equates to:

= emissions from > 0.5 million average UK households / year

= emissions from almost 1 million UK medium sized family cars / year


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WHERE is our Total Carbon Footprint ?

Raw &PackagingMaterials


ProductDistribution

Product &PackagingDisposal /Recycling

RetailOperations

Consumers


Largest portion in Consumer use (e.g. in dishwashers / washing machines)

can be influenced

Second largest portion in Raw and Packaging Materialscan be influenced

Direct impact of our operations is relatively small, but in our direct control

30-40% 2-6% 1-5% 2-6% 50-70% 3-7%


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Key Areas for ActionRaw & Packaging

MaterialsProduct


Distribution


Consumers


Reduction /Efficiency

OptimisedMaterials

RecycledPackaging

Lower CarbonMaterials &Packaging

Reduction /Efficiency

Renewable &Highly EfficientEnergy Sources

Lower CarbonProduct Design

Optimisation:

- combining Lessthan a Truck Load(LTL) shipments

- avoiding EmptyRunning

- Inter-Modaltransport

optimisedpackaging

Mutuallyoptimisedlogistics

consumerbehaviour toachieve energyreduction /efficiency inusing ReckittBenckiser

products

Product /PackagingWaste

PackagingDesigned forRecycling


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10 key elements of a CC strategy

Commitment from the top Identify material CC aspects / impacts from a clean slate

Borrow with pride

Recognise business Risks andOpportunities


Define SMART objectives with KPIs

Focus Resources and define Boundaries

Reporting, Communication and Engagement

Independent opinion, comments & assurance

TAKE ACTION

Avoid green wash, over-claiming & being PR-driven


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Thank You


Q&A

Documents

Edward Butt and Sally Vivian