Carbon Footprinting in the Context of Carbon Management

1. Carbon Footprinting in the Context of Carbon Management Workshop on „Measuring your Carbon Footprint“ Dr. Jochen GassnerDirector Climate Neutral at 3C

2. 3C Group - History • 3C was founded in autumn 2003 • in Frankfurt am Main / Germanyby Dr. Sascha Lafeld and Markus Hüwener • as independent spin-off from Dresdner Bank / Allianz Group • 3C currently employs 50 specialists • based in Frankfurt, Berlin, Santiago de Chileand Washington, D.C. • Significant growth expected for 2007 • Since 2006, 3C is structured as a holding organization and backed by a strategic investor • Merger with Factor announced

3. 3C Group merges with Factor AG!

4. 3C Group - Organisation Board PR & Communications Climate Neutral Products & Services CDM/JI/VER Origination Carbon InvestmentAdvisory Corporate Center 3C Markets Carbon Risk Management Legal Consultancy Germany International Procurement & Development Portfolio Management IT/ Design Consultancy Europe National Risk Assessment Back Office Accounting 3C Execution Desk Offices Controlling/HR Internal Processes Berlin Santiago de Chile Washington, D.C.

5. Carbon Footprint - Definition • A measure of an activity‘s aggregate emission of CO2 or greenhouse gases • Carbon footprints can be calculated for organizations, persons, products, events, etc. • Carbon footprints are measured in units of carbon dioxide (CO2) or carbon dioxide equivalent (CO2e)

6. The Business Case for Sustainability Management Risk Management License to operate/ Reputation Cost reduction/ Efficiency Employee motivation Market place innovation C A R B O N M A N A G E M E N T Health and Safety Corruption Privacy Ethical procurement Customer exclusion Pollution Discrimination Flexible working Diversity Community investment Charity support Resource efficiency Sustainability solutions Marketplace diversity Strategic relationships Bid support Source: SustainAbility

7. Greenhouse Gas Risks and Opportunities

8. An Increasing Management Concern (The Conference Board) • More than 95% report that they see the prospect of a carbon-concerned future as creating both business risk and opportunity. • Nearly 30% now consider the potential cost of carbon in planning for future projects, and an additional 39% are considering including such costs in future planning. • At the board level, the issue GHG emissions management is on the agenda at over 2/3 of the companies. • Because of the increasing public interest and concern about GHGs and carbon, about 50% of companies are currently reporting publicly. • Of those that do not, 60% plan to report on their GHG management in the near future. • 50% indicate they have a program in place to actively reduce or offset emissions. An additional 33% are developing such programs.

9. Carbon Management - Corporate Governance Framework • Board oversight • Board has oversight responsibility for carbon management • Board periodically reviews progress of carbon strategies • Public disclosure • GHG related risks and opportunities are identified • Public reports offer overview of company’s response to GHG risks and opportunities • Management execution • CEO commits to carbon strategy • Executives monitor carbon management strategies • Executives’ compensation is linked to carbon performance • Emissions management and strategic opportunities • Reduction targets for operations/products are set • Business strategies to mitigate GHG risks and leverage opportunities are implemented • Emissions accounting • GHG emissions, savings and offsets are registered • GHG inventories are conducted annually, results are reported • Emissions data is 3rd party verified Source: CERES

10. Carbon Management - Corporate Governance Framework

11. Carbon Management Implementation Plan Assessment of Risks and Opportunities Implement action plan for GHG risk and opportunities Disclose your findings and engage with stakeholders 1. Create a climate management team and develop a board oversight committee. 5. Develop corporate policies and procedures to reduce climate risk and increase value. 9. Publicly disclose assessments and implementation plans in annual financial reports and corporate responsibility reports. 2. Measure, benchmark and inventory greenhouse gas emissions from operations, electricity use, and products. 6. Create absolute GHG emission reduction goals and deadlines, and an action plan to achieve results. 10. Engage shareholders, analysts, staff and public interest groups to receive valuable feedback and develop proactive responses to climate change. 3. Compute physical, regulatory, and financial risk exposure in fixed assets, products and competitive positioning. 7. Set goals to increase energy efficiency, purchase or develop clean energy technologies, and offset GHG emissions. 4. Assess strategic, branding, and product opportunities related to climate change. 8. Engage in policy dialogues about reducing climate risk and enhancing opportunities.

12. Greenhouse Gas Inventory

13. Greenhouse Gas Reduction Targets

14. Business Strategy

15. Carbon Footprint Disclosure Source: SustainAbility

20. Labelling

21. Carbon Footprinting Business Goals • Managing GHG risks and identifying reduction opportunities • • Identifying risks associated with GHG constraints in the future • • Identifying cost effective reduction opportunities • • Setting GHG targets, measuring and reporting progress • Public reporting and participation in voluntary GHG programs • • Voluntary stakeholder reporting of GHG emissions and progress towards GHG targets • • Reporting to government and NGO reporting programs, including GHG registries • • Eco-labelling and GHG certification • Participating in mandatory reporting programs • • Participating in government reporting programs at the national, regional, or local level • Participating in GHG markets • • Supporting internal GHG trading programs • • Participating in external cap and trade allowance trading programs • • Calculating carbon/GHG taxes

22. 5 Practical questions • Which footprinting methodology • GHG protocol • Upcoming BSI standard • Carbon trust guide • ISO 14040/14064 • Which scope and system boundaries • Scope 1, 2, 3 • Cradle to gate, cradle to grave, cradle to cradle • Ownership vs control • How to gather data and account • Emissions factors • Checklists • Measure, calculate, estimate • Data management systems • Verification • 3rd party verified • Reporting and Disclosure • Internal Reporting • Sustainability reporting • Labelling

23. Kontakt • 3C Consulting GmbH • Dr. Jochen Gassner • Director Climate Neutral • Industriestr. 10 • 61118 Bad Vilbel / Frankfurt, Germany • Tel. +49 (0)6101 5 56 58-0 • Fax +49 (0)6101 5 56 58-77 • vorname.name@3c-company.com • www.3c-company.com

24. Example Innocent