The Agenda on Sustainability is our platform for sharing developments on sustainability and the climate change agenda.
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Leaders are coming together at the end of this year at Conference of Parties (COP) 21 in Paris to agree a deal on climate change.
The latest round of UN climate negotiations, before COP 21 took place in Bonn between 1-11 June 2015. Governments spent two weeks trying to slim down an 80-plus page negotiating document. There was little progress with the basic editing and even less on substance. But officials suggested that more progress was made with the political negotiations and building trust than is reflected on paper. The meeting concluded with an agreement that the co-chairs should edit the text down to a more workable length before the next negotiating session at the end of August.
PwC’s Jonathan Grant who is Director of Sustainability & Climate Change in UK reviewed the climate change negotiations that took place last week. A full report on the outcome of the discussion is attached below. Some key highlights of what you will find in this report are as follow:
Refer to the report that presents Jonathan Grant’s review on the UN climate negotiations in Bonn last week.
Our Sustainability & Climate Change team can help you integrate sustainability into your organisation's long term strategic and operational plans to create lasting value, enhance reputation and build public trust. Our team offers you support in strategic sustainability, carbon management, supply chain operations, assurance and reporting, governance, risk and compliance, policy and economics and tax and the regulatory environment.
Globally, some 1.3 billion people in developing countries (20% of the world’s population) do not have access to electricity and lighting, 84% of them live in rural areas. Southeast Asia is the region besides sub-Saharan Africa, with most need for access to energy.
According tandrewo the International Energy Agency (IEA) in Indonesia 63 million (27% of population), in Myanmar 26 million (51%), in Philippines 16 million (17%) and in Cambodia 10 million (69%) people do not have access to reliable and affordable cooking facilities and a first access to electricity. Without energy access and clean cooking appliances, more than two million premature global deaths occur annually as a result of indoor air pollution.
Access to affordable modern forms of energy is not only a prerequisite for economic prosperity, but it is also a necessity for local growth and sustainable development. Despite low incomes, US$ 37 billion/year is already being spent on meeting basic energy needs with US$ 18 billion spent on electricity and lighting services alone.
The market opportunity for business is substantial. This view is supported by experts who state that innovative, market based, financially viable and long-term sustainable business models are critical for scaling energy access, even where the necessary financing and policies are in place.
The World Economic Forum, in collaboration with PwC, has been developing a cross-industry framework that can help the energy access ecosystem grow. Contributions from more than 40 experts from the private, public and civil sector have helped to identify the barriers preventing private sector investment at scale.
The partnership framework that has been developed brings together energy providers (utilities, technology providers, energy service providers) with other industries that would benefit from having access to energy. This includes for example the telecom industry, consumer electronics industries, agriculture and local small and medium sized enterprises working together to provide off-grid energy access. The framework is particularly designed to help private sector co-investment, scaling up of working solutions and replication at global level.
The provision of access to energy has direct and indirect impact in the economic, social and environmental dimension. Real life examples show an increase in commercial activity by 17%, growth of sales related to access to electricity of 70% for television sets, 50% for fridges and also 10% for increased use of mobile phones.
Other impacts are the reduction of greenhouse gas emissions, reduced dependency on fossil fuels, or increase in indoor air quality, safety through street lighting and improvement of school work. Pilot projects testing the implementation of parts of the framework are currently underway.
Source: World Economic Forum, “Scaling up energy access through cross-sector partnerships”, August 2013
To find out more about how the cross sector partnership framework can help to scale up decentralised energy access, read Scaling up Energy Access through Cross-sector Partnerships.
You may get in touch with Philipp Gaggl, Associate Director in PwC's South East Asian Consulting services' Sustainability & Climate Change practice, who helped develop the framework together with the World Economic Forum's energy team.
Additionally, our practice offers you support in strategic sustainability, carbon management, supply chain operations, assurance and reporting, governance, risk and compliance, policy and economics and tax and the regulatory environment. For more details on our service offering, feel free to contact any one of our team members. Alternatively you may visit our website for more information.
The ASEAN region is home to some of the world’s more diverse landscapes and ecosystems, making it particularly vulnerable to the impact of climate change. Concerned companies are therefore starting to incorporate climate change mitigation strategies into their business plans.
Companies within the region are starting to realise that there are risks to alleviate and opportunities to be seized by addressing climate change. Preparing for the future will not only help companies enhance their brand and reputation, but also create opportunities along the value chain.
In July 2013, PwC Malaysia's Sustainability and Climate Change team launched a report entitled, Pulse Check on Climate Change. The report highlights some interesting perspectives on the maturity of climate change management and reporting in the region.
Read our report on the how companies are responding to the call to adopt low-carbon strategies at a time when regulatory requirements are still growing within the region.
The report presents finding from an online survey conducted among prominent companies across different industries in Malaysia, Thailand, Indonesia, Philippines and Vietnam. The survey was conducted between August and September 2012 primarily to explore how companies embed sustainability into their business practices. Part of the survey specifically focused on climate change management and reporting practices.
With more than 200 companies responding to the survey, here are some interesting insights on how companies are approaching climate change management within the region:
Regionally companies are acknowledging the risks and opportunities of climate change. Although currently there is a lack of regulatory requirement, companies are moving beyond compliance, agreeing that in the near future, energy and carbon related cost will be the number one sustainability driver within the region.
This report also highlights a case study on how PwC assisted a global conglomerate measure their carbon footprint and identify reduction initiatives. In doing so the company discovered many other benefits to managing and reporting on climate change.
Here at PwC, we are interested in how companies have started realising the importance of assuring their sustainability reports. Globally, with the increase of sustainability reporting, there has also been an increase in sustainability assurance.
The Global Reporting Initiative (GRI), a non-profit organization that promotes sustainability and provides a globally accepted Sustainability Reporting Framework reported that organizational transparency is improving and the practice of sustainability reporting is growing fast. The GRI recommends that sustainability reports be externally assured.
A PwC survey, covering 50 companies, representing 12 different industries across 18 different countries identified that more than 75% of companies seek assurance on their CR reports to increase its credibility. Here are some benefits that companies gain from assuring their sustainability reports:
Currently there are two main reporting standards which are the International Standard on Assurance Engagements (“ISAE”) 3000 and the AA1000 Assurance Standard (“AS”). Each assurance standard provides different types and levels of assurance and can be suited to the different industries.
Assurance provider that possess relevant industry and sustainability experience and expertise will be able to provide valuable recommendations to improve reporting processes and systems.
PwC is pleased to share our February 2013 edition of Global Green Policy Insights (GGPI). In this edition you'll find articles reporting on the latest developments in environmental taxes, regulations and other green policies around the world.
The report presents PwC’s analysis on the recent COP 18 which was held in Doha to assess the development of climate change post-Kyoto. The success of the COP18 summit was more of a milestone than a landmark event in its own right. Key outcomes and accomplishments from the 2012 summit are available on pages 29 and 30 of the report.
Other interesting articles that you can browse through covers topics related to:
...and a whole lot more!
Click here to access the February edition of GGPI.
We understand that in today’s market, businesses need to be prepared for unpredictability. Whether that’s policy, climate or consumer change. And that these businesses need tools to help analyse the impact of significant policy or market uncertainty on a decision. Extreme weather events look set to become more common, and business continuity will be a key challenge in future.
Yang Amat Berhormat Datuk Seri Najib Tun Razak, Prime Minister of Malaysia has committed to a 40% reduction in carbon intensity of GDP by 2020 based on 2005 emissions levels.
A practical first step towards carbon management is measuring carbon emissions followed by identifying operational improvement and carbon reduction opportunities.
Many businesses have found that once they start measuring their emissions they are able to identify ways to do things differently that not only reduce carbon emission but save them money.
Here are some of the benefits of managing carbon in businesses:
Here are a few additional materials to help you familiarise yourself with carbon measurement and management and how to incorporate it into your corporate strategy:
Here at PwC, we understand the importance of incorporating sustainability into the business decision making process to manage new risks and grow business opportunities.
Developing and integrating sustainability into a company’s overall corporate strategy is becoming increasingly imperative to enhance a company’s long term performance. Companies that have inculcated sustainable solutions into their supply chains and business processes are ahead of their peers and are building public trusts.
Bursa Malaysia in its publication “Sustainable Guide for Directors” highlights that “companies are seeing increasing benefits from sustainability, i.e. cost reduction, better risk asset management, attracting and retaining talent. Sustainability has been identified as one of the three pillars in the New Economic Model and is the key to support the nation’s transition to a high income economy”
On 29 March 2012, the Securities Commission (SC) released the Malaysian Code on Corporate Governance 2012 (MCCG 2012). It sets specific recommendations which companies should adopt in making good corporate governance an integral part of their business dealings and culture, effective 31 December 2012.
The MCCG sets out 8 broad principles followed by 26 corresponding recommendations which focus on:
Interestingly, the code’s first principle, “establishing clear roles and responsibilities” recommends that the Board ensures that the company’s strategy promotes sustainability. In view of this, companies should make an early transition to the principles and recommendations elaborated in this new code.
An overview of MCCG 2012 and our point of view on the key issues highlighted in the code is available here.
There are many reasons why businesses should establish and nurture relationships with their stakeholders today. The following is just a few of them:
We inhabit a pluralistic society consisting of people with a variety of interests, expectations and demands as to what businesses ought to provide to accommodate people’s lives and lifestyles. Only by responding to their expectations can businesses create the conditions needed for continuing business success.
This is true now more than ever with the growth of social media. Online platforms of self-expression such as Facebook, Youtube and Twitter are freely accessible to millions and are able to make or break a firm’s reputation in an instant. Stakeholder engagement becomes a necessary tool in corporate communications and reputational risk mitigation.
The shift towards a more globalised and knowledge-based economy has also shifted the emphasis on tangible assets, such as property and equipment, to intangible assets, such as human and social capital, as sources of value creation.
Meaningful and transparent conversations with stakeholders may yield insights and intelligence that help businesses serve their communities more efficiently and effectively. They are also opportunities for companies to solicit feedback and innovation on their products and/or services and foster co-creation. In this way, value is created and everybody wins.
Indeed, many leading global corporations have taken steps towards building a dialogue with their stakeholders.
Some examples are as follow:
Air France-KLM includes stakeholder engagement tables in their sustainability report that detail their diverse stakeholder groups, the various initiatives taken to engage them, along with the outcomes of those engagements. For details, please refer to the 2011 Air France-KLM Sustainability Report (p. 68).
Big consumer brands such as Nike and Puma have turned to using social networking websites such as Facebook and twitter to allow interaction with its stakeholders to build relationships and continuously seek feedback to be more sustainable.
Find a second case study example of innovative stakeholder engagement. Perhaps one of the big consumer brands has used twitter or facebook to innovate products e.g. Nike, Puma etc.
Here are a few additional materials to help you get started on your stakeholder engagements:
Here at PwC, we are interested in how companies have used the sustainability agenda as a strategic advantage to move beyond short-term profitability towards long term sustainability. Ever wondered what it would cost for a company to be sustainable? Here are some interesting testimonies of how doing business in a sustainable way pay off:
In 2011, IBM estimated that its environmental savings and cost avoidance worldwide totalled US$139.1 million. Marc Bolland, CEO of Marks and Spencer was quoted saying “our environmental and ethical plan not only makes us a more efficient business, it contributed a net benefit of £105m.”
Nestlé Malaysia, winner of ACCA Malaysia Sustainability Reporting Awards 2011 (ACCA MaSRA), for best sustainability report, registered a turnover of RM4.7 billion in 2011, 16.8% higher than the same period last year.
These are just a few examples of companies which have successfully used the sustainability agenda to move beyond short-term profitability towards long term sustainability. In line with this, there is growing interest from investors on what companies are doing to be sustainable.
Find out what is expected of companies from an investor’s perspective. Read the report“Translating environmental, social and governance factors into sustainable business value” , jointly published by the World Business Council for Sustainable Development (WBCSD) and United Nations Environment Programme Finance Initiative (UNEP FI).