Regional Perspectives on Global Change:Regional Perspectives on Global Change:The Case of Energy & Climate ChangeThe Case of Energy & Climate Change
ISCN 2015 ConferenceISCN 2015 ConferenceAt University of Hong KongAt University of Hong Kong18 June 201518 June 2015
Dr Jeanne NgDr Jeanne NgDirector – Group SustainabilityDirector – Group SustainabilityCLP GroupCLP Group
Group Sustainability 22
Understanding the drivers of change…
Group Sustainability 3
The changing world…
Changes seem to be faster & sometimes bigger than before… Social expectations changing within generations as well as
across generations…
Group Sustainability 4
People are at the heart of all change…
People dictate what economic, environmental and social ‘norms’ are…
Our Environmental Performance
(e.g. new regulations, new impacts, how
much beyond compliance, etc.)
Our FinancialPerformance
(e.g. demand forour product,
how we supply & price
our product, etc.)
Expectations ofOur Stakeholders
(e.g.society,
customers,shareholders,
staff,etc.)
EnvironmentalEconomic Social
Impact on our operational costs and…
Impact upon the…
Influences the scope of our…
Impact upon the…
Impact Impact
Group Sustainability 5
Emerging challenges from increasing expectations…
Human Rights
Operational Eco-efficiency
Environmental Social Governance
Mat
ure
New
/Em
ergi
ng
Economic-environmental
efficiency Labour Practice
Indicators CorporateGovernance
Ethics & Integrity
Diversity(all forms)
Not new themselves but a new level of detail & complexity of transparency & info required plus the challenges of changing socio-political-economic context
Group Sustainability 6
Proposed Sustainable Development Goals (SDGs)1. End poverty in all its forms everywhere2. End hunger, achieve food security and improved
nutrition, and promote sustainable agriculture3. Ensure healthy lives and promote well-being for all at
all ages4. Ensure inclusive and equitable quality education and
promote life-long learning opportunities for all5. Achieve gender equality and empower all women and
girls6. Ensure availability and sustainable management of
water and sanitation for all7. Ensure access to affordable, reliable, sustainable, and
modern energy for all8. Promote sustained, inclusive and sustainable economic
growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its impacts
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalize the global partnership for sustainable development
Each proposed goal is accompanied by a set of targets (169 in total) intended to measure progress towards the achievement of these objectives.
Group Sustainability 7
Proposed Sustainable Development Goals (SDGs)7. Ensure access to affordable, reliable,
sustainable, and modern energy for all7.1 by 2030 ensure universal access to affordable,
reliable, and modern energy services7.2 increase substantially the share of renewable
energy in the global energy mix by 20307.3 double the global rate of improvement in
energy efficiency by 20307.a by 2030 enhance international cooperation to
facilitate access to clean energy research and technologies, including renewable energy, energy efficiency, and advanced and cleaner fossil fuel technologies, and promote investment in energy infrastructure and clean energy technologies
7.b by 2030 expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, particularly LDCs and SIDS
Each proposed goal is accompanied by a set of targets (169 in total) intended to measure progress towards the achievement of these objectives.
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Continue learning throughinternational engagements…
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By providing thought leadership
Build capacities & knowledge for smart decision making
By monitoring global issues and emerging trends
Identify emerging international & local risks and opportunities
By benchmarking & introducing international best practices
Build trust to advocate sound policies
Objectives of international engagements
Group Sustainability 10
Monitoring some drivers of change…
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External engagements
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COP20 in Lima Switch from ‘cap-and-trade’ to ‘voluntary contributions’…Makes it easier for striking an agreement but likely a weaker one than can meet the 2°limit…
Revisiting much needed but less developed technologies like carbon capture and storage…But it is important to try to scale up what is already viable today, such as energy efficiency and renewable energy…
Positive energy from US and China announcement in Nov…US to cut carbon emissions by 26-28% from 2005 levels by 2025 & China to peak its carbon emissions before 2030…
Adaptation continues to be a high priority for developing countries…And so is currently included in the INDC description…
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COP20 in Lima
Will the GCF hinder progress or the efficacy of international trading?With the availability of direct funding as well as national trading schemes wanting to strengthen their national focus in the short term, the timing of the post-Kyoto trading scheme being post 2020 may be appropriate…
There has been more discussion on possible new financing mechanisms…Green bonds for example seems like a valid mechanism, but from a shareholder’s perspective, if the risk of the green bond essentially rides on the risk of the parent company, then is the green bond really a good idea?
The call for a price on carbon intensifies…A number panels basically replicated this message, with representatives from both business and governments…
Group Sustainability 14
The energy & climate challenges…
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Energy and climate change
Power sector has the largest potential for carbon emission reductions...
Source: Redrawing the Energy-Climate Map, World Energy Outlook Special Report, International Energy Agency, Figure 3.15, Pg.114, 2013.
Source: CO2 Emissions From Fuel Combustion - Highlights, 2013 Edition, International Energy Agency, Figure 9, Pg.11, 2013.
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Equity constraints in carbon emissions intensity
A country’s carbon intensity is influenced by the energy/fuel mix portfolio of the country as well as economic and industrial activity
Source: Redrawing the Energy-Climate Map, World Energy Outlook Special Report, International Energy Agency, Figure 1.14, Pg.31, 2013.
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WBCSD Energy & Climate:Towards A Low Carbon Energy Mix
Balancing the drivers
The global energy mix is an aggregate of different regional mixes Change continues to be driven by the interaction among resource
availability, energy security, economic growth, policies, market forces, and technology.
Environmental constraints, access issues and affordability also influence the mix, as do existing and sometimes changing social, political and economic systems in place.
Different cultural values and priorities when balancing these drivers, e.g. the need to ensure social equity or stability versus some loss of economic efficiency in order to achieve this stability, may also impact the local mix.
EconomicEconomic
SocialSocialEnvironmentEnvironment
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Powering Asia Responsibly…
STRIKING THE BALANCE
How to provide the energy necessary for social and economic development, yet avoid serious environmental impacts…
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Our Climate Vision 2050
Investment decision reflects commitment to lower carbon intensity by 75% between 2007 and 2050…
2014Reached 14.1% renewable energy generation(CLP’s renewable energy generating capacity grew from less than 100 MW in 2004 to over 2,600 MW in 2014 and is currently the largest foreign investor in wind farms in India and China)
Carbon intensity back up to 0.84kg CO2/kWh…
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Latest science-based & industry projections…
Targets set based on science (IPCC limit to 2o to 3oC) and industry scenarios (of average carbon intensity) published in 2006…still valid…
Source: IEA, World Energy Outlook 2014Source: IEA, World Energy Outlook 2014
Group Sustainability 21
Experience Gained In Asia Pacific So Far…
Full commercialisation of impactful low-carbon power generation technologies are still years and billions of dollars away
Existing low-carbon technologies remain more expensive than conventional generation and are unable to provide the scale and reliability needed
Clear energy and climate change policies are essential to mobilizing the billions needed for clean energy investments
Different markets, different opportunities
Generation investment costs vary from country to country…and over time…different policies needed in different markets…
Tracking Clean Energy Progress 2013, IEA
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Our corporate sustainability journey…
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CLP Group’s Sustainability JourneyOverview: 2003 - 2015
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Group Sustainability Frameworks & Strategies
Value Framework
Group Renewable Energy Target (5% by 2010)
CLP Climate Vision 2050
Climate Vision 2050 updated
Group Sustainability Framework
Capacity Building From International Engagements
Already joined : WEC HK; WBCSD
Joined IETAJoined GRI TAC
Joined IIRC
Group Sustainability Reporting
2002 Social & Environmental Report (SER)
2006 SER & Online Sustainability Report (*refer to GRI G3)
2007 Online Sustainability Report & “In Essence” hard copy (*GRI G3 A+)
2011 Online Sustainability Report only (GRI G3 A+) & Integrated Annual Report
2012 Online SR (GRI G3.1 A+) &2012 ESG Webcast Briefing
Adopt GRI G4 Guidelines; Apply xbrl tagging to 2014 SR
Sustainability Rankings
Responded to Carbon Disclosure Project
On DJSI Asia Pacific & DJSI Asia Pacific 40
On Hang Seng Corporate Sustainability Index
Board Oversight
Social, Environmental & Ethics Committee (SEE)
Renamed as Sustainability Committee
Sustainability Committee Report included in Integrated Annual Report
Reporting progress on ESG data mgt. to SC & Audit Committees
Reviewed Sustainability Committee TOR
Organisational Capacity
Established CLP Group Environmental Affairs
Established: CLP Sustainability Forum; ESG Reporting Committee
Established CLP Group Sustainability
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Reinforce integration between sustainability performance & reporting
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Group Sustainability Department
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The academic institution’s sustainability journey…
Sustainability reporting to have a coordinated overall picture on
performance and values that can be shared across the institution by faculty, staff and students
Sustainability strategy (or long term continuity plan) Research – more applied, etc? Education – formats & channels; new
topical areas; more experiential learning, etc???
Funding – balancing financial needs versus outcome quality???
Sustainability capabilities Resource & process management and
improvement Analytics Innovation Communications
What will be potential disruptors of academia’s current business models?
What could be the new academic business models of the future?
What will be potential disruptors of academia’s current business models?
What could be the new academic business models of the future?
Thank You!
Group Sustainability 28
As growing number of people gain access to increasing amounts of information at close to real-time frequencies:
Increasing environmental & social awareness – more public expectations and thus more pressure
Increasing regulation – more stringent policies and regulations Increasing scope – e.g. additional pollutants and social-related
issues Increasing data quantity & quality – more data and
independent verification to decrease uncertainty New impacts – as we use new technologies, new or
unexpected impacts may come to the fore
Changing the risk & opportunity landscape
Innovation can help provide solutions to surviving in this changing environment & perhaps mitigate some of the rising costs associated with the internalisation of social and
environmental impacs…
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CLP Group Value Framework (updated 2011 – update in 2015)
30
Sustainability governance
31
Sustainability focus areas
Economic Sustainability
OurEnvironment
Our Community
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CLP Group Sustainability Framework (rolled-out in 2011 – update in 2015)Published in 2011 CLP Annual Report & online Sustainability Report
Link slide 15
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Sustainability ratings
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Group Function discussions on SF, b-
plan(Aug/Sep)
Interim SF progress reports (& discussions)
(Jun/Jul)
Annual SF progress reports (& discussions)
(Jan/Feb)
Group Function discussions on post-SR
review, indices & SF (Apr/May)
CLP Group Organisational Performance
(Feb)
Integrated Annual & Sustainability Reports
(Mar)
Sustainability Performance Management
Sustainability Reporting Schedule
Sustainability Committee & GEC Meeting Schedule
Internal Internal/External External
External Sustainability/ ESG Indices & Surveys
(Apr-Jun)
Business Unit discussions on SF goals
& SR/GRI (Sep/Oct)
Business planning cycle kick-off for BUs
(Aug/Sep)
Business Plan Submission & Approval
(Oct/Nov)
Integration into existing business processes
Audit Committee meeting
(Feb)
Sustainability Committee meeting
(Feb)
Group Executive Committee meeting (Apr/May)
Group Executive Committee
meeting (Feb)
CEO Report P1 (Apr/May)
CEO Report P5 (Jan/Feb)
CEO Report P3 (Sep/Oct)
CEO Report P2 (Jul/Aug)
CEO Report P4 (Nov-Dec)
Annual sustainability indices rankings
(Jan/Feb)
Perfo
rman
ce Feed
back L
oo
p
Sustainability Committee meeting
(Aug/Sep)
Sustainability Committee meeting
(Nov/Dec)
Group Executive Committee meeting (Jul/Aug)
Group Executive Committee meeting (Oct/Nov)
Group Function discussions on indices
& SF performance(Sep/Oct)
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CLP Group’s 2014 Sustainability Report
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CLP Group 2014 Integrated Annual Report
2014 Annual Report is our 4th Integrated Report
Following the <IR> Framework issued in Dec 2013
Utilise the <IR> Framework to organise our financial, environmental and social reporting
A CLP interpretation on the Prototype Framework will evolve over time
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Internal sustainability communications
Group Sustainability Forum Sustainability champions across BUs and GFs Quarterly calls (agenda & meeting notes available) Annual/Biennial Conference (starting 2014)
Regular CLP Sustainability Capacity Building seminars/sessions External speakers (international) Internal updates (starting 2014)
Group Sustainability Support intranet portal Launch in 2014
Group Function ESG Reporting Committee Launched in 2013
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Sustainability Reporting
• Transparent disclosure and reporting to stakeholders• Articulation of issues and engagement on expectations
Sustainability Report (SR)
GRI standards
Feedback for 2013 Sustainability
Report
Sustainability reporting
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Sustainability Perceptions & Ratings
• Measurement and rankings • Diverse and varying perspectives & expectations
• Rate the Raters
• Current scoring
• Where we are doing well
• Where we can do better
Dow Jones Sustainability IndexCarbon Disclosure Project
Bloomberg ESGHang Seng Corporate Sustainability
IndexAsian Sustainability Ratings
Sustainability perception and ratings
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Sustainability Performance
• Embedding sustainability in business • Managing risks • Realising our potential & maximising opportunities
SustainabilityFramework
Interim Review of Sustainability
Framework Performance
Sustainability performance
Group Sustainability 41
New business models for a new future…
Different models may dominate in different regions...
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Technology Science
Industry Policy
Innovation
© CLP Research Institute 2011
IEA
MITJoint Program
IERE
WEC
BloombergNEF
CleantechGroup
CIGRE
TheClimateGroup
Local / Inter’luniversities
Current international engagements (2014-16)
Membership or subscription
By invitation
IIRC
GEI IETA
WBCSD
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The Rollercoaster Ride So Far… COP13 Bali – good progress (Bali Roadmap) COP14 Poznan – working progress COP15 Copenhagen – disaster (Copenhagen Accord with no
official agreement) COP16 Cancun – process saved, but change to pledge & review
(agreement on various elements of Copenhagen Accord, i.e. submission of reduction targets by Annex 1 countries, Nationally Appropriate Mitigation Actions (NAMAs) from some non-Annex 1 countries with some including voluntary reduction targets, fast track USD30 billion with ramp up to USD100 billion per year by 2020, REDD+)…but climate not…
COP17 Durban – Durban Platform for Enhanced Action to deliver a universal legal agreement by no later than 2015, to be implemented by 2020 (package includes the Green Climate Fund, an Adaptation Committee designed to improve the coordination of adaptation actions on a global scale, and a Technology Mechanism)…but commitments fall short of what is needed…
COP18 Doha – working progress (from only Annex 1 to all countries make obligations), extended Kyoto with 2nd commitment period from 2012 to 2020…
COP19 Warsaw – working progress (post 2020 reduction targets by Q1 2015, Warsaw Framework for REDD+ finance, Warsaw International Mechanism for Loss & Damage, GCF and COP institutional arrangements, ADP text finalised)…
COP20 Lima – working progress, although momentum seems better now that it has become a pledge & comply (INDCs by Mar 2015) rather than a technical cap & trade (GCF passed USD10B, Lima Call for Climate Action - decided on a draft text as basis for negotiations leading up to the December 2015 Paris summit)… but commitments likely to fall short of what is needed…
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The potential cost of mitigation
Need a carbon signal – some measures can pay for themselves but many for the larger reductions still not commercially viable today
Source: Version 2.1 of the Global Greenhouse Gas Abatement Cost Curve, McKinsey, 2010
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