Ahead on Sustainability

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#11. Discussions on COP 21

25 September 2015

Road to Paris 2015

Hosted in association with PwC, BusinessGreen launched the Road to Paris Hub that aims to help businesses navigate the global efforts to tackle climate change. The Hub is a space to facilitate a Solutions Agenda between business, financiers and governments that will complement the United Nations Framework Convention on Climate Change conference (COP 21) in Paris at the end of the year. To achieve this Agenda, the Hub will focus on the economic and business implications that will occur as a result of the Paris agreement, and will feature:

  • The latest news on negotiations
  • In-depth analysis of what it means for businesses
  • Exclusive interviews with senior business leaders, ministers and diplomats

Please follow the Road to Paris Hub here

For more information, please visit our website here

What is the COP 21?

The COP 21 will occur from 30 November to 11 December this year, and 196 UNFCCC member countries will meet to sign a new climate change agreement in an effort to make a significant difference to the ability of individual countries to tackle climate change. The agreements should provide a clear target for businesses and guide investment toward low carbon outcomes.

Pre-conference discussions are in full-swing, and most recently, governments met in Bonn, Germany for the latest round of climate talks. The co-chairs agreed to develop a new document which will reflect the feedback given by countries and provide a better basis for actual negotiation and compromise. Additionally, the co-chairs will also establish a new drafting committee a the next session, starting on the 19th of October, which should accelerate the development of the Paris agreement.

How we can help

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.

#10. The UN Climate Summit and China's Climate Plan

17 July 2015

China's latest climate plan

Earlier this week, China published its climate targets (or Intended Nationally Determined Contribution) following Monday the recent UN climate summit with the EU. The 20-page INDC includes targets for carbon intensity, energy, and forest carbon, details on the policies needed to achieve these targets, and its point of view on the different sections of the draft Paris agreement. PwC's analysis shows that China's Paris target for 2030 is roughly on the same track as its Copenhagen target to 2020.

Jonathan Grant, Director for PwC UK's Sustainability & Climate Change practice, and his team reviewed China's INDC and prepared a full analysis, attached below. Here are some key highlights of what you will find in this review:

  • A summary of China's main climate targets announced in the INDC, including a 60-65% reduction in carbon intensity compared to 2005 levels, and a roughly 20% increase in the share of primary energy consumption from non-fossil fuels

  • A review of how these new targets compare to the 2020 targets previously voiced in Copenhagen, and the regulatory and business implications for China, which may include more stringent climate laws, the incorporation of climate-related goals into the national development plan, and lower coal consumption

  • A global viewpoint to place China's decarbonisation objectives into the global context, compared to the EU and US target. China's targets will require faster decarbonisation than its global peers, with an expected peak around 2030 or earlier

  • Insights based on PwC's Low Carbon Economy Index model to determine the level of ambition of China's targets, and 2030 projections for China's emissions and carbon intensity levels based on different action scenarios. Depending on assumptions regarding China's economic growth rate over the next 15 years, PwC's model suggests the emissions peak may occur as early as 2020

For more insights

Please refer to the analysis of China's INDC by Jonathan Grant and his team.

To view all PwC's analyses of the G20 targets, please visit our Paris2015 page, linked below:


How we can help

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.

#9. Climate negotiations update - frustration in Bonn

3 July 2015

UN climate negotiations - Bonn

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:

  • Insights on how the meeting went and discussions that took place
  • Insights from G7 leaders' discussion on climate change further down the road, literally and metaphorically. Among key outcomes is a call for an ambitious and inclusive Paris agreement which tracks progress towards targets and promotes increased ambition over time. Carbon markets got a welcome nod of approval as did the role of the private sector in mobilizing climate finance. The G7 also pledged to increase support for vulnerable countries and committed to eliminate fossil fuel subsidies
  • Status of decarbonisation of the global economy over the course of this century to meet with Paris targets equivalent to annual reductions of 3.1% for Japan, 3.9% for Canada and the EU and 4.1% for the US (against 1-2% per year currently)
  • Insights on what will be agreed in Paris, and discussions on critical component of the agreement which covers the process for reporting and reviewing national progress on emissions with the aim of ratcheting up the ambition
  • Concerns regarding the negotiating text that needs to catch up with the progress that is being made in bilateral discussions between countries and in other fora. The concern is that governments plan to agree a legal document in Paris and need time to get the language right
  • Outcome of the meeting and next steps before the next Bonn session starting on the 31st August

For more insights

Refer to the report that presents Jonathan Grant’s review on the UN climate negotiations in Bonn last week.

How we can help

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.

#8. Cross-sector partnership framework for access to energy

21 July 2014

De-central energy access through cross sector partnership

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

For more insights

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.

How we can help

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.

Look out for more from us

We’ll be using "Ahead on Sustainability” as the platform to share developments and "nice to know" matters on the sustainability & climate change agenda. We hope you’ll find this useful and interesting and we look forward to your feedback or questions.

#7. Pulse check on Climate Change

20 August 2013

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.

For more insights

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:

  • Most companies see energy and carbon related risks as one of the main sustainability drivers in the next 5 years
  • Less than 50% of companies measure and monitor their greenhouse gas (GHG) emissions
  • Nearly 30% of companies set target to reduce GHG emissions
  • Only 26% of companies disclose GHG emission externally

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.

#6. Sustainability Assurance – To make the good become better

27 May 2013

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:

  • Externally, it helps build credibility and reputation in the market place as well as provides a sense of transparency of the report
  • Internally, application of globally recognized assurance standard provides comfort to senior management that existing management systems, controls and external disclosures are functioning

Reporting Standards

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.

For more insights

  • Global Reporting Initiative (GRI) guideline version version G3.1. Note that the version G4 is scheduled to be released in May 2013. Download it here
  • ISAE3000 - Download it here
  • AA1000 - Download it here

#5. Global Green Policy Insights – highlights from the COP 18 summit

20 August 2013

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:

  • China's 'green growth' priorities under new leadership
  • New carbon markets of California, Quebec and Kazakhstan
  • Vietnam's planned carbon market
  • UK's draft Finance bill including details of carbon price support scheme
  • Japan’s bilateral carbon offset scheme with Mongolia
  • France's 'doubled' target for solar energy
  • Italy's new renewable heat incentive scheme

...and a whole lot more!

For more insights

Click here to access the February edition of GGPI.

#4. Measuring and managing carbon

6 February 2013

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:

  • Enables identification of cost saving opportunities through improving energy efficiency of operations by reducing emissions and driving technological innovations
  • Enables reporting and dialogue around emissions and risks with stakeholders
  • Improves brand reputation and meets customer demands who in current times are increasingly more aware of issues related to climate change and carbon emissions
  • Drives competitive advantage in the market place and future-proofs business against new markets and regulations that may be adopted

For more insights

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:

#3. Embedding sustainability into your corporate strategy

30 November 2012

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”

Going forward

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:

  • Laying a strong foundation for the Board and its committees to carry out their roles effectively
  • Promoting timely and balance disclosure
  • Safeguarding the integrity of financial reporting
  • Emphasising the importance of risk management and internal controls
  • Encouraging shareholder participation in general meetings

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.

For more insights

An overview of MCCG 2012 and our point of view on the key issues highlighted in the code is available here.

#2. Stakeholder engagement – business success, reputation innovation

29 October 2012

There are many reasons why businesses should establish and nurture relationships with their stakeholders today. The following is just a few of them:

Companies are no longer answerable only to their shareholders

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.

Stakeholders are becoming more empowered

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.

Intangible assets are increasing in importance

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.

Conversations with stakeholders may be a source of innovation

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.

For more insights

Here are a few additional materials to help you get started on your stakeholder engagements:

#1. Sustainability as a Strategic Advantage

3 September 2012

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.

For more insights

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).