Introduction CDP Reporting Workshop Istanbul 27 February 2010

Introduction CDP Reporting Workshop Istanbul, 27 February 2010 Presentation by: Alicia Ayars

Introduction – Who is CDP? – CDP Programmes and deadlines – Structure of the information request for CDP 2010 – New question areas for CDP 2010 – Detail regarding specific questions – Ratings methodology – Tips for responding – CDP offerings – Questions

CDP The Growth of Institutional Support: CDP 1, 35 signatory investors, $4. 5 trillion CDP 2, 95 signatory investors, $10. 3 trillion CDP 3, 155 signatory investors, $21 trillion CDP 4, 255 signatory investors, $31 trillion CDP 5, 315 signatory investors, $41 trillion CDP 6, 385 signatory investors, $57 trillion CDP 2009, 475 signatory investors, $55 trillion CDP 2010, 534 signatory investors, $64 trillion “There will be a large creation and re-distribution of shareholder value in the transition to a low carbon economy – there will be winners and losers at sector level and within sectors at company level. The winners are more likely to be those businesses that take the time to understand address this complex area. ” Tom Delay, Chief Executive, The Carbon Trust Climate Change and Shareholder Value March, 2006

CDP provides a global intersection between government, investors and companies 534 INSTITUTIONAL INVESTORS CDP COMBINED ASSETS OF US $64 TRILLION COORDINATING SECRETARIAT DATA MADE PUBLICLY AVAILABLE VIA CDP USED BY NON-INVESTORS 3, 700 OF THE WORLD’S LARGEST CORPORATIONS

CDP Programmes Programme: Core Modules: Additional Modules: Investor CDP Core Module (Q 1 -22)* Electric Utility Auto & Auto Component Manufacturing Oil & Gas CDP Supply Chain Core Module (Q 1 -22)* Supplier Module CDP Public Procurement Core Module (Q 1 -22)* Supplier Module Investor CDP AND CDP Supply Chain/CDP Public Procurement Core Module (Q 1 -22)* Electric Utility Supplier Module Auto & Auto Component Manufacturing Oil & Gas Please note the *

CDP Process From 1 February: Companies participating in the Investor programme are asked to respond to the Core Module and Additional Modules Responses due: 31 May With results posted from late September though December From 1 April: Companies participating in CDP Supply Chain/Public Procurement programme are asked to respond to the Core Module and Supplier Module Responses due: 31 July With results discussed from January

Structure of the Information Request CDP 2010: – Governance – Accountability and performance incentives – Risks & Opportunities – Regulatory, physical and other – including financial implications; identification process – Strategy – Linkage with business strategy, reduction targets (including forecasting) and actions – Emissions reporting – Scopes 1, 2, 3 reporting, methodologies and emission factors used, reporting boundaries, data verification – Energy use reporting – Cost of utilities and/or of fuel purchased – Emissions trading – Cap and trade, strategies – Communications – External reporting (e. g. , CSR)

Structure New question areas for CDP 2010 Overall the questionnaire is shorter than in 2009 with a number of sub-questions having been removed. Significant changes from CDP 2009: – Risk identification process - Describe your company’s process for identifying significant risks and/or opportunities from climate change and the process for assessing the degree to which they could affect your business, including the financial implications. – Link between climate change and strategy - Please describe how your overall group business strategy links with actions taken on risks and opportunities identified, targets and reporting. – More granularity – Data accuracy and assurance questions broken down by emissions scope. – A new specific sector supplement for Oil and Gas companies.

Turkish Expansion From the Core Module you will be asked to respond to: Governance Risks and opportunities Strategy A subset of the emissions accounting questions: • Gross global Scope 1 • Gross global Scope 2 Emissions history Emissions intensity Communications You will NOT be asked to provide answers to: Emissions trading questions Detailed breakdown of your Scope 1 and Scope 2 questions If you wish to complete the full request, that is possible.

Governance First question, highlighting how important Governance is to investors. Very simple, asking how climate change is managed within your company

Governance First question in the Online Response System (ORS) Link to Guidance document Onscreen Guidance

Risk and Opportunity 6 Questions cover 3 areas: Regulatory Physical “Other” Previous responses include: € 0. 01 increase per KWh results in € 58 million costs for some industrial sites EUETS will put estimated additional € 6 per ton on steel Disruption to supply caused by storms cost one company $227 million in 2008

Risk and Opportunity

Risk and Opportunity When yes is selected:

Title of presentation Strategy Importance of Developing a Strategy: – Developed strategies aid in maintaining cohesive response to shareholder interest/ requests – Help companies to understand their position in terms of regulation – Enable companies to take part in international and national regulatory discussions – Enables companies to make better expansion/ investment decisions

Strategy Pfizer: Three separate targets: 1. Reduce CO 2 emissions by 35% per $ million of revenue by 2007 from the baseline year 2000; 2. To reduce worldwide CO 2 emissions on an absolute basis by 20% from 2008 to 2012 (baseline year 2007); 3. Meet 35% of Pfizer’s electricity needs by 2010 through the use of "clean" energy technologies. VS. Johnson & Johnson: One absolute target: 7% absolute reduction target by 2010 against a 1990 baseline.

Emissions Accounting Traditional emissions reporting for S 1 and S 2 Changed wording surrounding disclosure of S 2 What I own or Control Scope 1 What I Purchase What I Influence Scope 2 (Purchased Electricity) Scope 3

Emissions Accounting CO 2, SF 6, CH 4, N 20, HFCs, PFCs Scope 2 Scope 1 Scope 3

Emissions Accounting

2010 Ratings Methodology How response quality is assessed Answer the question Complete all applicable questions Provide answers which are specific to the business of your organization Provide detail, examples and case studies where possible Provide figures where applicable – emissions, costs, investments, savings Where unable or unwilling to answer a question, explain the reason why and any activities in place that will enable you to answer it in the future

2010 Ratings Methodology

Assessment How response quality is assessed Q) What activities are you undertaking or planning to undertake to reduce your emissions/energy use? Indicative answer: Energy efficiency Many companies implement initiatives to save energy in the use of refrigeration, thus reducing energy use and corresponding carbon emissions. The activity is named and described – one point Since CDP 2008 this initiative has been implemented at 10 of its sites (4 in Europe, 3 in Australia and 3 in China). Each year this is expected to save xxx Mt CO 2 e. The response is specific to the company – two points For example, in the Sydney site the initiative was implemented in December 2008 by replacing the existing refrigeration with xxxxx. This is estimated to have saved xx MWh of energy at the Sydney site over the four month period since its implementation. Detail, values and a case study are given where appropriate –three points Note: Some companies indicated that based on advice of general counsel, they knowingly did not provide a more detailed response.

Helpful Tips for responding Don’t leave questions blank – always provide a full response, even if an area is not applicable or if a question is seemingly redundant Leverage the supplemental Guidance Provide answers that are specific with as much relevant detail as requested Don’t cross–reference your responses from another question Use the main text fields provided for your responses and not the Further Information field Be careful to address all points listed in the questions Response deadline May 31 st

Helpful Tips for responding - resources Carbon Disclosure Project Information Request – contains the latest questions posed by Institutional Stakeholders • Released December 2009 Carbon Disclosure Leaders Index 2010 – describes the detailed scoring methodology to be used to assess the companies’ responses • Released late-February Guidance Document – addresses FAQs and provides further clarification/guidance on what is expected in the responses as well as leading examples of disclosure • Released mid-February

Helpful Tips for responding - resources CDP website: - FAQs - Reports - Peer submissions - CDP contacts - Guidance - Case studies - Information on the Online Reporting System

CDSB Climate Disclosure Standards Board: CDSB works to develop a globally accepted framework, based on existing standards, for corporate reporting on climate change. Seeks to: • • Elicit information of value to reporting organisations in devising and implementing their business strategies and to users of climate change-related disclosures made in mainstream reports. Enhance the efficiency of capital allocation by investors, enabling them to integrate climate change-related costs into their analyses. Provide corporations with greater certainty on disclosure requirements and encourage the consistency. Provide conceptual and practical input into deliberations by regulatory agencies.

Carbon Calculators CDP Carbon Calculation Partners

CDP Supply Chain 2009 Members

Tiered Services Reporters have asked CDP for help building actionable insights from our database The global sustainability journey creates business risk Multiple stakeholder reporting Changing Demand Supply chain upheaval Investor re-evaluation The CDP database captures and quantifies the issues Effective responses require knowledge and insight …energy scarcity. The gap in demand-supply can result in high operational costs with a resultant impact on profitability… Wipro … impact how potential investors view Air Canada and the aviation industry… Air Canada CDP Reporter membership …decrease in sales and profits owing to elevation of production costs and difficult procurement of materials… Sanyo Electric Company Ltd

Tiered Services CDP provides knowledge and insight to respond to business risk Meet obligations Information Gathering: The largest global database of primary corporate emissions information Reduce risk Reporting & Analysis: Powerful Analytics to identify performance improvements Seize opportunities Communication & Networking: Dialogue with peers, industry experts, Governments and regulators

Tiered Services CDP Reporter members have identified significant value to their organisations “The new analytical tools will allow us to benchmark our improving emissions performance against thousands of other businesses and seek out further opportunities to drive down our carbon footprint. E. ON UK will continue to invest in the coming years in reducing carbon in our business, and new and improved CDP systems will help guide this important work. ” Richard Scott, Head of Consultancy, E. ON Sustainable Energy “CDP has recognised the value of the data disclosing companies provide, which has not been readily available in the past. That's why we decided to become a founding member of the new Reporter Services initiative. We see benefits for investors too - providing disclosing companies with easy access to benchmarking data will drive further improvement in climate change disclosures and data provided to inform investment decisions. ” Mark Joiner, Executive Director Finance, National Australia Bank Limited “CDP networking events and forums will have two real benefits for RBS Group. Firstly we get to meet other companies and learn how they have addressed similar challenges to our own. Secondly it provides a chance to discuss how we can support potential clients in achieving their low-carbon objectives. “ Sefton Laing, Environmental Programme Coordinator, RBS Group

Many thanks For further contact: CDP London +44 (0)20 7970 5660