Overcoming barriers and seizing opportunities in climate change UNGC Nordic Network Meeting, May 2015 Let’s talk about cars... Value of DK carpool: 650 bn DKK Waste: 550bn DKK CO2 footprint: 23m tons CO2. Waste: 20m tons CO2 Copyright © 2015 Accenture All rights reserved. Car Sharing CAGR 18,5% Denmark’s reduction target for 2020 is 2,3m tons of CO2 2 Despite much talk we have not been able to buck the trend in CO2 emissions Annual anthropogenic greenhouse gas emissions 1950-2100 Copyright © 2015 Accenture All rights reserved. Source: UNFCCC Climate Change 2014, Synthesis Report; Climate Change 2014 3 Private initiatives are lacking the commitments to make an impact Time bound commitments? Measurable commitments? 50% 20% Copyright © 2015 Accenture All rights reserved. Summable commitments? 5% Follow up on commitments? 20% 4 However, three drivers enable companies overcome barriers and seize on opportunities in climate change PARTNERSHIPS & COLLABORATION VALUE & PERFORMANCE INNOVATION & TECHNOLOGY Copyright © 2015 Accenture All rights reserved. Sharing transportation cut its costs by 15%, and reduce CO2 e by 55%. Increased 6sales by DKK 596 mio and decreased transport related CO2 e 13 times. New business brought $3bn in turnover, 4000+ employees, 50% lower price and 60% less CO2e. Source: on the following slides 5 Going it alone no longer cuts it: Leading companies collaborate – even with competitors… Collaboration: The convergence economy Copyright © 2015 Accenture All rights reserved. Source: The Convergence Continuum Towards a “4th sector” in global development? by G.Bulloch and L.James, 2014 6 Sustainability must go from ‘license to operate’ to ‘license to grow’ Valuation: What get’s measured get’s done ⇒ Only 26% are able to quantify the value from Sustainability initiatives Copyright © 2015 Accenture All rights reserved. Source: CEO Study 2014; Blueprint for Change: Changing diabetes in China. 2011 Report 7 The modelling phase enables assessment of how sustainability impacts key value levers Illustrative Examples INTANGIBLES INCREASE Portfolio Development Employer attractiveness 2014 7% 2011 INCREASE POSITIVE REVENUE INCREASE 26% TOTAL REV TOTAL REV 61 Bn. 79 Bn. 74% 93% Sustainable portfolio BU 1 12% 9% BU 2 Sustainable portfolio #2 2017 Building up sustainability portfolio, trust & good brand SUSTAINABILITY-DRIVEN BUSINESS VALUE CREATION 10% 13% BU 3 23% 17% BU 4 Standard portfolio Portfolio margins compared COST REDUCTION REDUCE NEGATIVE 18% COMPANY RANKING Standard portfolio MORE TANGIBLE / SHORTER TERM 23% #9 2014 LESS TANGIBLE / LONGER TERM Business as usual t Sustainable Risk Management t Sust.-related incident Time span between incident occurrence RISK REDUCTION Source: Accenture Copyright © 2015 Accenture All rights reserved. 8 3 types of technologies are disrupting industries and reshaping the way of doing business Technology: Three types of technologies Copyright © 2015 Accenture All rights reserved. Source: Accenture research, 2013-2015 9 Get started – How do you collaborate, valuate and use technology in your climate change approach? Tough questions to propel you forward Collaborate • Are you collaborating with suppliers, NGOs, customers, investors and/or competitors to solve your fundamental business challenges? Valuate • What is the ROI of all of your investment in social and environmental performance? • What is the overall Profit and Loss contribution of your sustainability program? Make it smarter • How are you using data to serve you customers better? • How are you using M2M to reduce costs of service? Copyright © 2015 Accenture All rights reserved. 10 Climate change risks are significant in countries like India and China but opportunity is significant too Risk and exposure • Opportunity Suppliers in China, India, Italy and the United States are identified as vulnerable, due to an imbalance between the climate risk exposures they face and steps the suppliers have taken to make their supply chains more resilient. Copyright © 2015 Accenture All rights reserved. 11