1 a greener tomorrow How Caring for Climate Signatories are Leading the Way to a Low-Carbon Economy 2 A Greener Tomorrow A report by the UN Global Compact and Dalberg Global Development Advisors UN Global Compact contacts: Lila Karbassi Adrienne Gardaz Jayoung Park Tel. +1 917 367 3648 Email: globalcompact@un.org www.unglobalcompact.org Dalberg Global Development Advisors contacts: Sonila Cook Yana Watson Ted Lim Tel. + 1 212 867 4447 Email: info@dalberg.com www.dalberg.com Disclaimer The information contained herein is based on data collected by Dalberg Global Development Advisors as well as information provided by the featured organizations in the course of the analysis. While Dalberg has taken due care in compiling, analyzing, and using the information, it does not assume any liability, express or implied, with respect to the statements made herein. The views expressed in this publication are not necessarily those of the United Nations. The inclusion of company examples in this publication is intended strictly for learning purposes and does not constitute an endorsement of the individual companies by the United Nations. The material in this publication may be quoted and used provided there is proper attribution. Authors: Sonila Cook, Yana Watson, Ted Lim, Daniel Altman Designer: Megan Larson 1 Contents Executive Summary  3 The State of Play  5 Assess the Status Quo and Define Goals  11 Achieve Meaningful Progress and Innovate To Go Further  13 Lead in All Three Spheres of Influence  17 The Way Forward  20 2 A Greener Tomorrow “Climate change is the defining challenge of our time. I also believe it is the most potent game-changer for business over the next century. The Caring for Climate initiative is helping blaze the trail to a greener future. I urge you to further your efforts and widen the circle of corporate involvement. Together, you can lead by example and demonstrate that a sustainable, clean energy economy is the ticket to long-term prosperity for all.” –H.E. Ban Ki-moon, UN Secretary-General 3 Executive Summary Three years ago, a broad coalition of companies spanning the global economy united to confront the shared risks presented by climate change. By doing so, they rendered obsolete the old storyline of environmental campaigners battling big business. Today, managers at com- panies of all sizes know that they must find greener ways of working, both for their immediate profitability and for the long-term sustainability of their operations. Moreover, executives have realized that leading their companies – and even their industries – toward a greener future can address the interests of shareholders and society at large. The setting for this collaboration is Caring for Climate, an initiative of the United Nations Global Compact. Since July 2007, it has provided a platform for executives from the private sector to exchange ideas and monitor their companies’ progress toward better stewardship of the environment. Caring for Climate’s strategic focus is three-pronged, with equal emphases on hands-on change at the corporate level, innovation in best practices at the industrial level, and public leadership at the national and global levels. In just a few years, progress has been remarkable. More than 4 in 5 of the 256 large companies among Caring for Climate’s signatories and roughly 1 in 3 of its 113 small and medium-sized enterprises (SMEs) already have easily identifiable and publicly available strategies for manag- ing their impact on the environment. During the first year of Caring for Climate’s existence, the platform’s signatories lowered their emissions by a total of 3 percent even as their turnover grew by 14 percent, proving that green growth is possible. By comparison, emis- sions in major economies such as the United States and Canada fell by only about 2 percent in that same time period, while national GDP grew less than 1 percent for both countries.1 Leaders among Caring for Climate’s signatories have pursued comprehensive long-term strategies, radically changing their ways of doing business to combat the causes of climate change and deal with its current and potential effects. They have engaged not only their own employees but also supply chain partners, industry peers, regulators, and civil society to find solutions that are in the long-term interests of all their stakeholders and the broader environment in which they operate. Rather than attempting solely to mitigate risks, they have seized the emerging opportunities generated by a global economy eager to go green. This report provides a summary of progress made by the corporate signatories of Caring for Climate and outlines areas that are ripe for improvement. The early years of an effort like this one bring organizational challenges but also quick wins; ensuring further progress will require innovative thinking and enhanced cooperation. Along the way, Caring for Climate will continue to support the efforts of its signatories as an advocate, advisor, and authority on the climate change agenda. We hope the findings and framework outlined herein will inspire and equip companies to build on the progress they have already achieved as they contribute to a greener future. 1 Source: Energy Information Administration; UNFCCC; U.S. Bureau of Economic Analysis 4 A Greener Tomorrow 5 The State of Play The Overall Landscape Caring for Climate’s signatories are spread the signatories are actively pursuing these We found that across a wide variety of industries and locations, strategies – a strong indication of their com- more than 4 in 5 of with the highest numbers in Europe and Asia. mitment to the goals set out by Caring for Since the Caring for Climate platform was Climate and the Global Compact. Caring for Climate’s launched in July 2007, the signatories have To find out more, we selected a diverse 256 large companies made some remarkable steps toward cleaner sample of 65 companies for a more in-depth and 1 in 3 of its 113 – and leaner – ways of doing business. In study. In 2008, these companies produced small and medium- reviewing their progress, we have developed 1.4 billion metric tons of direct Scope 13 GHG a framework for action that will help them to emissions and 160 million metric tons of sized enterprises have move further ahead. We hope that the frame- indirect Scope 24 GHG emissions, or roughly easily identifiable and work will also aid other companies seeking to 5 percent of the global total of greenhouse publicly available develop practical and meaningful strategies gases emitted from fossil fuel usage that strategies for manag- for dealing with climate change. In our initial research, we found that more 2 Since the platform’s inception, 7 corporate signatories and 8 ing their impact on the than 4 in 5 of Caring for Climate’s 256 large SME signatories have been delisted from this group due to environment. Overall, non-participation. companies and roughly 1 in 3 of its 113 small 3 Scope 1 emissions are those directly occurring from “sources almost two-thirds and medium-sized enterprises (SMEs) already that are owned or controlled by the institution,” as defined by the have easily identifiable and publicly available Greenhouse Gas Protocol of the signatories Scope 2 emissions are those “generated in the protduction of are actively pursuing 4 strategies for managing their impact on the electricity consumed by the institution,” as defined by the Green- environment.2 Overall, almost two-thirds of house Gas Protocol these strategies. Caring for Climate signatories are a diverse group, comprising 256 large and 113 small and medium sized (SME) companies Number of C4C signatories by Number of C4C signatories by company size and sector company size and region 256 113 256 113 Health Care 11 4 Oceania 6 5 16 Transportation 9 12 Middle East 29 9 Media 27 7 Africa 21 Food and Beverage 12 Americas 26 69 Financial Services Asia 8 Energy/Infrastructure 32 Europe 21 Other consumer/retail 18 Industrials 44 Technology 17 145 49 56 35 42 Large company SME Large company SME Sources: UN Global Compact website; CDP CORE database; Dalberg analysis 6 A Greener Tomorrow The majority of signatories have clear and readily accessible strategies for addressing climate change Easily identifiable = 1. Included in CDP or CDP database 256 2. If not in CDP, submitted COPs with climate-related information 3. If neither in CDP nor has relevant Easily COP, has indicated climate change Identifiable activities on website or report Strategies 80% 113 33% Unknown 67% 20% Companies SMEs CDP+ Carbon Disclosure Project; COP Sources: UN Global Compact website; CDP CORE database; Dalberg analysis Note: Data was compiled based on readily available and accessible data; therefore, some data may be under-representative year.5 They also accounted for 4 percent of ducted in this report provides a general sense of global GDP.6 The biggest emitters of Scope direction of progress. Additionally, carbon diox- 1 emissions were energy and infrastructure ide emissions are only one metric for assessing firms, with 1,332 metric tons of emissions environmental impact. We, therefore, incorpo- per million dollars of revenue. They were rate other metrics – for example, the number followed by industrials (1,043) and transport of companies participating in product redesign companies (590).7 processes – to proximate the overall progress of In our selection of sample companies, we companies in climate change activities. have made every effort to reflect the overall Our sample of 65 companies does not signatory pool’s geographic and industry include SMEs as comprehensive data were not spread, while optimizing for availability of available for the majority of them. Understand- data through sources such as UN Global Com- ably, SMEs cannot dedicate the same resources pact Communications of Progress (COPs), the as large companies to developing strategies or Carbon Disclosure Project (CDP), and annual reporting their actions. Therefore, although sustainability reports. left out of the numerical analysis, SMEs are Most of the companies sampled appear in introduced anecdotally throughout the report the Carbon Disclosure Project’s database, a valu- to highlight demonstrated examples of success able source of information about their activities. within this unique group of signatories. For the purposes of this document, we have primarily used data from 2007 and 2008, as 5 Source: US Environmental Protection Agency 2009 data has not yet been collected for many 6 Source: World Bank of these signatories. While it is difficult to make 7 Scope 3 emissions (all other emissions such as those emitted from employee travel, etc.) were excluded from analysis due to lack of robust concrete conclusions based on data from one data for all signatories; many greenhouse gas protocols consider report- year (2007 to 2008), we believe the analysis con- ing of Scope 3 emissions optional 7 A Framework for Moving Forward Even before climate change gained currency then sets long term goals. In other words, an During the course of as a global issue, dialogues about the issue executive needs to know where her company our analysis, a more regularly focused on two themes: mitiga- is and where she wants it to be before she can tion and adaptation. Solutions that could decide how to get there; and a more nuanced nuanced framework be classified as mitigation consisted mainly framework is helpful in this regard. emerged that reflects of incremental changes intended to reduce Drawing on the results of our research, we a spectrum of emissions in existing business processes, have developed a conceptual framework that corporate climate such as installing scrubbers on smokestacks seeks to incorporate long-term planning. Its or using low-energy fluorescent lighting in guiding principles are designed to mesh well change activity. facilities. Adaptation solutions, on the other with the decision-making processes that cor- hand, typically sought altogether new ways porate executives already manage every day. of doing business - such as an agriculture The framework begins by encouraging execu- company developing drought-resistant crops tives to first assess the status quo and define or a vehicle manufacturer redesigning cars to their goals for the future. Then it maps the generate less pollution during their manufac- options for moving from the status quo to ture and usage. the future underpinned by those goals: to Undoubtedly, this was and continues to be achieve measurable progress given available a useful dichotomy for analyzing a com- tools; to innovate and raise the bar for green pany’s choices to address its environmental products and ways of doing business; and to footprint. But a forward-looking strategy for lead other public and private companies and dealing with climate change encompasses constituents as they pursue their own climate a lengthy series of choices that cannot be change strategies in parallel. The figure below simply understood as either mitigating or provides an overview of the framework. adaptive. To create a coherent strategy, it helps to have a conceptual framework that as- sesses current risks and opportunities, puts in context what has already been achieved, and Conceptual Framework for Long-Term Planning ■ Diagnose the expected impact of climate change on one’s Assess business and operating environment ■ I dentify potential opportunities ■ Measure and report emissions and other environmental data Commit and Communicate ■ Set goals for addressing climate change, such as setting Define Goals emissions reductions targets, increasing energy efficiency, and defining a corporate environmental activism strategy ■ Alter company behavior so as to attain the environmental Achieve goals established ■ Implement strategy and monitor results continuously Innovate ■ Adopt new approaches to addressing climate change, such as developing new technologies and forging new partnerships Lead ■ A  ssume a position of leadership among industry peers by demonstrating high levels of progress in climate change activities, and inspire others to further progress 8 A Greener Tomorrow The most successful The most successful companies in our technical changes that required substan- companies engaged sample – those that demonstrated the most tial upfront investments, such as replacing significant progress in combating climate traditional energy sources en masse with willingly with change – engaged in all five of these hydrogen fuel cells. These are courageous stakeholders from all processes as members of Caring for Cli- moves that will be rewarded with many sectors of society in an mate. They began by assessing the potential years of benefits for shareholders and for effort to find common impact of climate change on their busi- society as a whole. ness and examining how their operations The most successful companies did not ground between and products contributed to the problem; stop there, however. They also took up the the interests of their for example, by using comprehensive and mantel of leadership among their peers, investors and those proprietary risk-assessment tools to calcu- convening forums to share innovative ideas late potential emissions across all their lines and representing their industries before the of a world facing of business and across their supply chains. authorities that would determine the scope of unprecedented risks. Next, they set targets for themselves by new regulation. They acted at both the local defining specific goals, such as cutting cor- and global levels, supporting green activities porate travel by 50 percent over three years. in their own communities as well as interna- These two steps supplied the start and finish tional initiatives like the UN Global Compact. lines for the strategy. They also reached out to their shareholders to The third step was to take action, imple- gain the trust and support needed to robustly menting company-wide changes in behavior engage in these activities. In short, they and processes, and monitoring the results engaged willingly with stakeholders from all to track progress toward their goals. At sectors of society in an effort to find com- first glance, taking these steps appeared to mon ground between the interests of their be enough for a successful climate change investors and those of a world facing unprec- strategy, and indeed noticeable progress edented risks. could be achieved versus the status quo Throughout these processes, the most with just these three. But our research sug- successful companies ensured open com- gested strongly that companies could do munication with the outside world and even more by going further through innova- within their own management structures. tion and leadership. Such efforts were reinforced by strong com- The companies that asked, “How can mitment from each company’s executive we do more?” found that the answers were leaders; CEOs, chairmen, and board mem- myriad and worthwhile. As we will see in bers of these signatories all demonstrated greater detail in chapter 5, these companies high levels of involvement and dedication sought out new technologies and partner- to their corporate climate change strate- ships that could fundamentally alter their gies. In addition, these leaders generated ways of doing business without reducing a positive culture in which all employees their competitiveness, gaining in profit- shared a strong commitment to the firm’s ability and sustainability along the way. sustainability goals. With this uniform com- They made radical and sometimes extremely mitment and feedback flowing between all levels of the company, progress was rapid and significant. It is important to note that these com- panies did not confine their activities to internal processes. They reached beyond their walls to two other spheres of influence: their industries and the external environ- ment – both regulatory authorities and civil Note that the internal steps of the framework are in alignment with the UN Global Compact Sustainability Management Model, which will also be launched at the June Summit. 9 society. As leaders, these companies demon- more than $20 million in investment to im- Our research suggests strated competency to influence outcomes prove efficiency and sustainability in its own strongly that com- in all three spheres, from their own business energy use. These activities were overseen by processes, to industry norms, to national and an executive “EcoBoard” and resulted in $3 panies could do even international policy-making. The figure be- million in annual cost savings for Cisco, and more by going further low provides examples of activities that can many millions more for its clients. Cisco is through innovation and occur within each sphere of influence. now recognized around the world as a leader leadership. A prime example is Cisco Systems, the in the innovation-based agenda for dealing American networking and telecommunica- with climate change. tions firm, which has been a member of The examples set by Cisco and others send the Global Compact since 2001. Cisco has a clear message: caring for the climate is good The examples set by turned the effects of climate change into an business. In the following chapters, we will Cisco and others send opportunity for company-wide innovation, discuss how individual and collective action a clear message: fine-tuning its internal operations and finding by the Caring for Climate signatories can new ways to serve clients seeking to make make this business even better. caring for the climate their own businesses greener. The company The following three chapters provide fur- is good business. launched a series of virtual meeting tools to ther detail on progress made by signatories in substitute for business travel and targeted each of the steps outlined above. Leading companies effectively engage all sectors of society SPHERES OF Assess Define Goals Achieve Innovate Lead INFLUENCE 1. Reduce environmental footprint by cutting greenhouse gases and energy usage Company 2. Lower costs by reducing utilities spending and developing green-friendly supply chains 3. Redesign and launch new products that help customers reduce their own footprint 1. Influence policy and regulation that pertains to the industry Industry 2. Reach out to the general public as a collective industry forum 3. Generate R&D activity for technologies that may apply to the industry as a whole 1. Partner with the regulatory community to guide legislation and directly advise External governments in adaptation activities environmental (e.g. governments, 2. Promote green activities in local communities in support of UN development goals UNGC, UNEP) 3. Continue broad support of UN initiatives such as the Global Compact and UNEP Commit and Communicate 10 A Greener Tomorrow 11 Assess the Status Quo and Define Goals ■ Assess ■ Define Goals Over 85 percent of the companies in our Virtually all the signatories that have assessed The first companies to representative sample consider themselves at the risks and opportunities generated by climate conduct these assess- risk from the effects of climate change, rang- change have gone on to define goals for the future, ing from the direct physical consequences of often in the form of specific targets for emissions ments in a given indus- a warmer and drier climate to the introduc- reductions, use of green suppliers, investments try will have a strong tion of new regulations.8 This recognition of in clean-energy technology, or profits from new advantage going for- risk is the first step in assessing the status quo, climate-related lines of business. In 2008, over 90 ward, not just because but it is not the only one. In fact, the onset of percent of the sampled signatories had, in fact, climate change also creates significant oppor- set an emissions reductions target or plan.9 of their immediate tunities for companies in a variety of indus- Because of the differences among companies ability to cut costs or tries. Some may seize the chance to offer new and industries, the specific goals set by the sig- raise revenue, but also products, like carbon-capture technologies, for natories have varied widely in their content and because of their ability a rapidly changing world. Others, using climate timeframes. Some signatories have opted to target change as an impetus to scrutinize their busi- outputs like emissions directly, whereas others to plan for a sustain- ness processes more closely, may discover ways have aimed at inputs like electricity and fossil able long-term future. to save money of which they were previously fuels. For example, Novartis, a Swiss pharmaceu- unaware – for example, using electric vehicles tical maker, decided to cut company-wide Scope 1 for short trips. All of them will use a combina- emissions by 5 percent by 2010 as its initial goal. tion of tools to make their assessments: measur- Sasol, an energy and chemical company based in ing their own emissions, enlisting independent South Africa, opted to seek a 10 percent cut in the Other examples auditors, and monitoring compliance with emissions generated in each of its manufacturing of target-setting environmental standards, where applicable. processes by 2015. And PepsiCo, the American include the The first companies to conduct these assess- food and beverage company, chose to target a 20 following: ments in a given industry will have a strong percent cut in electricity usage and a 25 percent advantage going forward, not just because of overall decrease in its use of fossil fuels by 2015. ■ L’Oreal (Year-by- their immediate ability to cut costs or raise rev- Other signatories have implemented different year emissions target): enue, but also because of their ability to plan initiatives, targeting cost-savings, changes in 2 percent reduction in for a sustainable long-term future. The most employee behavior, and increases in energy ef- Scope 1 and Scope 2 advanced of the Caring for Climate signatories ficiency. The list of possible goals could certainly emissions from 2007 have implemented diagnostic tools to identify expand as signatories innovate in their planning to 2008 risks and opportunities on a company-wide as well as in their actions. Ultimately, companies basis. These include ISO 14001 management should develop these targets based on what is ■ WestPac (Short- systems, membership in data-sharing organiza- appropriate for their operations at any given mo- term and long-term tions such as the Chicago Climate Exchange, ment in time. A company that has more experi- targets): 5 percent and participation in intergovernmental ence with green activities may set more aggres- reduction in overall programs such as the climate-related activities sive, long-term targets, whereas a company that emissions by Year 1 of of the United Nations Environment Program’s is only beginning to address climate change may climate change strategy Finance Initiative. One of the most notable consider shorter-term targets measuring simple and 30 percent ways companies assessed their environmen- emissions reductions. reduction by Year 5 tal footprint was by measuring their energy Regardless of a company’s specific aims, the efficiency, which is a key enabler in reducing most effective goal-setting generally involves a ■ Deutsche Telekom overall carbon dioxide emissions. long-term strategy with challenging but achiev- (Flexible target): 20 As a collective body, however, Caring for able early milestones that later lead to more percent reduction in Climate still lacks uniform metrics for assessing ambitious overall targets. The early milestones overall emissions up progress across its entire membership. This is an serve to ingrain a culture of adaptation and also to but before 2020 area for improvement; once Caring for Climate build confidence on the way to greater achieve- can make news by reporting its results as a ments. Despite the difficult business environ- ■ Repsol (Absolute group, more companies will have an incentive ment of the past few years, several of the Caring target): 2.5 million to emulate its example and take action. for Climate signatories are well on their way to tonnes reduced between achieving some very impressive goals, as the next 2005 and 2013 Source: Carbon Disclosure Project; company sustainability reports and COPs 8-9 chapter details. 12 A Greener Tomorrow 13 Achieve Meaningful Progress and Innovate To Go Further ■ Achieve operations can show up as dramatic changes Our representative In dealing with climate change as with most in emissions, though gauging emissions in sample of 65 other challenges, the best strategic planning terms of revenue can clarify some of these companies saw its and target-setting mean little in the absence situations. Nonetheless, the data indicate a of concrete action. In a short period of time, favorable trend towards an overall reduction collective total the companies in our sample have managed in greenhouse gas emissions concurrent with revenue rise by about totductions in emissions, as well as other overall business growth. $320 billion, or 14 major improvements in the environmental As with the goals that the signatories friendliness of their operations. defined for themselves, their actions to deal percent, between Our representative sample of 65 compa- with the challenge of climate change have 2007 and 2008. nies saw its collective total revenue rise by displayed a great degree of variety. In the Over the same period, about $320 billion, or 14 percent, between transportation sector, for example, companies total emissions fell by 2007 and 2008. Over the same period, total have retrofitted lighting in their facilities and emissions fell by 3 percent, proving that their frontline equipment to reduce energy 3 percent, proving green growth is possible. These aggregate consumption. Technology companies have that green growth figures mask a fair amount of heterogene- switched their factories from direct power is possible. ity within the sample, but it goes without generation using fossil fuels to renewable en- saying that many companies are themselves ergy sources; they have also installed energy- heterogeneous, with their various divisions efficient fans to cool their manufacturing involved in very different lines of business. centers. Among large companies, these two It is also worth noting that exogenous factors sectors have led the way. Anecdotal evidence can make an enormous difference to emis- from SMEs outside our sample also confirms sions, especially during short time periods; some clear successes. For example, Avon Met- mergers and acquisitions, plant closings, als, a 60-person company in the United King- outsourcing, and other changes to physical dom, reduced energy usage by 5 percent and Estimated Scope 1 and Scope 2 GHG emissions from 2007 to 2008 (millions of metric tons) 2007 2008 % change Total 1627 1584 -3% Energy and Infrastructure 824 807 -2% Industrials 703 683 -3% Transportation 63 57 -9% Food & Beverage 14.2 13.9 -2% Technology 13.4 12.9 -4% Health Care 7.3 8.4 15%* Financial Services 1.7 1.7 -4% Consumer / Retail 0.3 0.3 -1% Notes on methodology: ■ For signatories in CDP database, used 2008 data as baseline and calculated back into 2007 based on signatory’s indication of percentage change (increase or decrease) in emissions ■ For non-CDP signatories, used data from sustainability reports and COPs ■ 4 companies excluded from analysis due to lack of robust emissions data ■ May include some Scope 3 emissions data due to lack of segmentation *Driven by one company’s annual increase. Sources: UN Global Compact website; CDP CORE database; Dalberg analysis. 14 A Greener Tomorrow Meeting early its total emissions of greenhouse gases by a Some Caring for Climate signatories are al- milestones creates a stunning 93 percent between 2006 and 2008. ready taking this fourth step in our five-step Not every company can achieve such framework. They are seeking out materials different kind of room dramatic results within so short a time period. for manufactured products that would never to maneuver: the But all companies can and should accom- have been considered just a few years ago, breathing room needed pany their internal changes with activities in like RICOH’s new printer components; the to think more broadly other spheres of influence, by participating in Japanese electronics maker found a substi- industry-wide forums to share knowledge and tute for plastic that is 70 percent biomass. about the problem by engaging with regulators and legislators as They are completely restructuring their and come up with they consider new climate-related policies. The energy supplies like Deutsche Post, which innovative new ways exchange of information is particularly im- now receives two-thirds of the electricity in portant in the external setting; the drafting of its German facilities from renewable sources. to tackle the climate- policies that reward positive steps to protect the And they are finding profitable opportunities change question. environment can only happen if the drafters in new areas like carbon capture, a line of understand the opportunities and constraints business that would have seemed anathema facing the companies in a given sector. to a mining company like Rio Tinto – their Achieving initial targets for reducing job was extracting fuel, not burying emis- environmental impact, changing behavior, sions – not long ago. and finding new sources of profit engenders Our analysis assessed three example confidence and builds momentum not just approaches to innovation: 1) redesigning within companies but also in the external products to “go green” (i.e. use a low-carbon setting. Politicians and stakeholders in civil manufacturing process or enable users to re- society are more willing to work with leaders of duce their own carbon footprint): 2) investing companies who can already cite a strong record in renewable energy sources; and 3) investing of achievement and commitment. Meeting in carbon capture and storage or sequestra- early milestones also creates a different kind of tion technologies. While there is room for room to maneuver: the breathing room needed improvement, many of the sampled signato- to think more broadly about the problem and ries are applying these innovative schemes to come up with innovative new ways to tackle their businesses. the climate-change question. From a financial These companies have benefited from perspective, the potential cost savings associ- decisive leadership at the top and high levels ated with energy efficiency and a lower carbon of commitment all the way down through the footprint can enable additional investments ranks of their employees. Such leadership, in processes and technologies that further while important across the entire framework improve a company’s environmental configu- of signatory activity, is an important enabler ration. In sum, green strategies should not be in innovation. These executives are devoted seen as an investment-heavy commitment but to fostering research and development, and rather an operational approach with significant they are also forward-looking; at each stage of upside, both financially and reputationally. their climate-related activities, their focus is on finding new sources of revenue as much as ■ Innovate cost reduction and security guarantees. Innovation is not a luxury in pushing forward As in the earlier stages of achievement, the Caring for Climate agenda; it is a neces- innovation can occur in the spheres of influ- sity. Companies can often achieve their early ence outside the company as well. Nokia, the milestones by picking the low-hanging fruit, Finnish mobile phone manufacturer, has pub- like low-priced investments in energy effi- lished a white paper that outlines ways for ciency technologies, boilerplate products that companies across the information industries are greener versions of existing designs, and to reduce the size of their carbon footprints. small behavioral changes among employees Veolia Environnement, a French waste man- that, when aggregated across the company, agement firm, conducted carbon assessments can generate big cost savings. Once these for the entire city of Poznan, Poland through fruit have been picked, the task of greening a a unique partnership with the local govern- company becomes more difficult; the com- ment and civil society. And Saint-Gobain, a pany has to innovate, contemplating bigger French construction company whose origins changes that may amount to reconceptualiz- date to the reign of Louis XIV, helped to create ing its entire business. regulatory regimes in France and Germany 15 for energy-efficient buildings by introducing quality of life for more than 140 million citi- Leading companies a new diagnostic system capable of measuring zens in the heart of Europe. Innovation may have benefited from their performance. be more difficult than picking low-hanging All of these examples of innovation fruit, but the payoffs can be tremendous. decisive leadership at reaching outside the corporate sphere are The signatories sampled above have dem- the top and high win-win. By publicly helping its peers and onstrated innovation across the range of their levels of commitment other companies in related industries, Nokia company operations, their respective indus- all the way down consolidated its position in the vanguard of tries, and their external environment. Having green thinking. Veolia helped Poznan to gain assessed and reported their environmental through the ranks valuable knowledge about its own environ- footprint, defined goals to approach the cli- of their employees. mental impact by launching an unprecedent- mate change issue, achieved these targets, and ed public-private venture. In the case of Saint- begun innovation, they have worked across Gobain, the invention of a new product led to the spectrum of activity to prepare for their profits for shareholders and promised a better roles as true leaders in the climate effort. Approaches to Innovation Signatories that have Signatories with Signatories interested redesigned products to stated investments in carbon capture and “go green” in renewable energy storage / sequestration 65 65 65 22% Yes 60% 75% 76% No or 40% Unknown 25% # of companies # of companies # of companies companies that have innovated along these same dimensions include: Products going green: Renewable energy Carbon capture and storage/ Kikkoman “Eco-Cap” can be investments: sequestration: easily removed when recycling ■ Diageo Bioenergy plant that ■ ENI partnering with Italian bottles diverts wastewater to make site Minister of Environment on GHG ■ AVIVA Special “green” self-sufficient sequestration project insurance package for drivers ■ Dow Chemical Methane gas ■ ESKOM Developing national who ride their bicycles to work used in manufacturing plants carbon storage atlas for South Africa Sources: UN Global Compact website; CDP CORE database; Dalberg analysis Note: Data was compiled based on readily available and accessible data; therefore, some data may underestimate true company count 16 A Greener Tomorrow 17 Lead in All Three Spheres of Influence It is no small feat to take all five steps in the credit is due and to inspire other companies framework for climate change strategy and, to follow their examples, we profile seven moreover, to make progress in those efforts more outstanding leaders here. in the corporate, industrial, and external spheres. Yet several of Caring for Climate’s signatories have already established them- A.P. Møller-Mærsk Improving selves as unquestioned leaders in the climate the efficiency of sea transport and change agenda, demonstrating their compe- designing the next generation of ships tence in all aspects of their business. Their As one of the world’s biggest shipping com- top-level executives have shown a lasting panies, A.P. Møller-Mærsk is a major user of commitment to the agenda and have adopted fossil fuels and a major emitter of greenhouse a pro-active, positive mindset oriented gases. Thousands of companies around the toward opportunities rather than risks. They world rely on its services; its subsequent scale have also taken a holistic approach to their and size can lead to significant greenhouse operations, considering every part of the emissions if left unabated. Thus, it is commit- lifecycle of their products as they seek ways ted to reducing its carbon footprint as much to moderate their environmental impact: the as possible. So far, it has engineered a waste sourcing of raw materials, the production heat recovery system that can reduce fuel process, marketing, distribution, consump- consumption by as much as 10 percent; it has tion, and disposal. created a “slow steaming” protocol that enacts The leaders include large companies and small reductions in its ships’ average speed in SMEs from a host of different sectors, but order to reduce overall emissions from these they all have one thing in common: their vehicles; and it is working with the Danish leadership is evident in all three spheres Technical University and the IT University of – company, industry, and external setting. Copenhagen to develop new algorithms for Earlier in this report, we identified Cisco fuel usage to reduce energy consumption and Systems as one of them. To give credit where emissions across the shipping industry. Leadership means both successfully working across the framework of activity and operating in all three spheres of influence. Assess Define Goals Achieve Innovate Lead Company LEARNER ACHIEVER Industry External LEADER environment Commit and Communicate 18 A Greener Tomorrow Together, these efforts helped A.P. Broad Air Conditioning Møller-Mærsk to reduce its emissions of Offering energy-efficient alternatives carbon dioxide per dollar of turnover by 20 to products with traditionally large percent between 2007 and 2008. But the carbon footprints company is also thinking much further into the Broad is an innovator and a leader by its very future. It is part of a multi-industry partnership nature. The Chinese company originated, with the Danish government that is working and now mass-produces, non-electric air to design new cargo ships that will reduce the conditioners that use half the energy of emissions of greenhouse gases by as much as conventional air conditioners and generate 90 percent compared to current models. a quarter of their emissions. It continues to innovate in this market and has extended its ASN Bank Making green technology to other products, such as air puri- investing available to consumers and fiers and vacuum boilers. its own operations carbon-neutral In 2008, Broad became one of the first ASN Bank has a decades-long history of Chinese companies to join The Climate Group, investing in socially responsible projects, and a non-profit organization devoted to finding new its approach to climate change fits neatly into solutions to the problems of climate change that heritage. Even as a Dutch SME with just 60 through research and policy. This year, it is the employees, it gained international recognition exclusive supplier of air conditioning, ventila- in 2007 by becoming the first bank to publish tion, and air purification products for the World the carbon dioxide emissions of the compa- Expo in Shanghai, where it is the only private nies in its investment funds. It also offered Chinese company among its global partners. the world’s first green pensions fund, which invests retirement funds only in companies that Cemex Creating a flagship contribute to environmental sustainability. low-emissions product and retooling In its own operations, ASN Bank has striven an energy-intensive production process to reduce its carbon footprint by using wind tur- to use renewable energy and biomass bines and hydroelectric power, adopting strict Can a company affect its customers’ carbon environmental guidelines for company cars, footprint simply by reformulating one of its and offsetting its emissions of carbon dioxide most popular products? Cemex, the Mexican through activities like planting trees. Its invest- cement maker, decided that the answer should ing and lending are heavily focused on climate be yes. Its Rizal Green masonry cement considerations, and it has backed innovative accelerates and simplifies the construc- ventures ranging from a wind farm at an indus- tion process so that work is finished more trial park to the construction of a commercial quickly, machines run for fewer hours, and building from renewable materials. emissions of greenhouse gases are reduced. Blueprint for Corporate Sustainability Leader­ship in the 21st Century Overall, these leaders also embody the characteristics diffusion of these principles across their business model. of the “Blueprint for Corporate Sustainability Leader­ Second, they actively engage with the UN Global Compact ship in the 21st Century” as outlined by the UN Global itself through local networks, issue working groups, Com- Compact. The UN Global Compact defines corporate munications of Progress, and branded initiatives such as sustainability leaders as companies exhibiting three Caring for Climate. key attributes: Finally, they express an overall commitment to the UN’s First, they successfully implement the UN Global Com- global sustainability priorities, such as Peace & Security, pact principles across all aspects of the company, from Human Rights, Poverty, Climate Change, Food & Water, comprehensive reporting to partnership development to and Education. 19 Cemex has paid attention to its own carbon als distributed to sales outlets, the press, and footprint, too, in what is a very energy-intensive the public are printed on recycled paper. L’Oréal industry. In its manufacturing facilities around has also launched an annual program of Safety, the world, the company has begun to replace Health and Environment awards to encourage traditional sources of energy with biomass employees to find other green ways of doing and renewables, sometimes going so far as business that save the company money. The to construct the power generation sites itself. company has also been a leader in civic society Its Eurus wind farm in Oaxaca generates as outreach, leveraging the strength of its brand to much power as a good-sized hydroelectric dam launch public awareness campaigns for “green” and could supply 25 percent of the electricity consumer activity and participating in consum- needed by its Mexican plants. er-related eco-organizations. Infosys Adopting overseas rules Unilever Pioneering lifecycle for emissions while its own country assessments of greenhouse gas catches up with global norms emissions associated with its products Although India has no explicit regulatory limits and revolutionizing product delivery on emissions, Infosys has taken the initiative A British-Dutch company with products rang- to distinguish itself as a leader of the climate ing from hand soap to ice cream, Unilever has change agenda and a leading supplier of planet- shaped its decisions based on intense examina- friendly technology services. The company’s tion of its own operations; the company studied climate change strategy is managed by a all its product lines to find out which ones Sustainability Executive Council, which generated the most emissions during their oversees audits of environmental impact at manufacture and which ones had the biggest existing operating sites and the construc- carbon footprint over their entire useful lives. tion of energy-efficient new sites. Using the data generated by these efforts, As a technology company, Infosys has lev- Unilever identified the areas where the biggest eraged its in-house brainpower and computing reductions in its environmental impact could be power to devise optimal power management achieved. Among these achievements has been systems for its many terminals and servers. the replacement of 430,000 cold cabinets used Infosys also trains employees to reduce their for the retail sale of ice cream with energy-effi- own energy usage by following company-wide cient alternatives. As an innovator, Unilever has protocols for business travel and commuting. also developed concentrated detergents whose Between the 2007-08 and 2008-09 periods, the production emits fewer greenhouse gases and company’s emissions of greenhouse gases fell saves millions of liters of water, and whose 13 percent. packaging saves thousands of tons of plastic. As an industry leader, Unilever has been at L’Oréal Shifting its energy supply the forefront of “green partnerships”. It has and raw materials to renewable collaborated with its supply chain partners alternatives while promoting a to standardize carbon emissions reporting; green corporate culture it has commissioned research on consumer The French beauty products firm launched behavior and how consumer goods com- one of the most comprehensive climate panies can influence behavioral changes; change strategies in the personal care sector. and it has participated in the creation of Through its Green Chemistry development industry-wide eco-efficiency standards and program, it undertook the complex task of benchmarks methodologies. reformulating existing products in order to substitute petroleum-based inputs with raw materials from renewable sources. At the same time, it redesigned production processes to minimize energy usage and the generation of waste effluents. Of the remaining waste from L’Oréal’s manufacturing, 95 percent is recycled, re-used, or converted to fuel to energy generation. Branded bags containing its products are now biodegradable, and all communications materi- 20 A Greener Tomorrow The Way Forward Recommendations for Signatories In just three years, the signatories of Caring Caring for Climate, which provides access to for Climate have made the kind of prog- a comprehensive platform for companies to ress in their climate change strategies that learn from and share innovative approaches might have seemed impossible a decade ago. to addressing their environmental footprint Most have recognized and assessed the risks or the climate change issue as a whole. and opportunities associated with climate We outline below a series of recommenda- change. Over 90 percent of sampled signato- tions for signatories that emerged from our ries have set emissions targets or reductions analysis, organized by the various steps in the plans. These representative signatories have framework: achieved 3 percent net reduction in green- house gas emissions; many companies are ■ Assess entering the innovation playing field; and Signatories should set up consistent and several corporations are emerging as leaders standardized ways of collecting and report- setting examples for others to follow. ing data. Often, companies do this through That a number of companies of different annual sustainability or climate-related sizes and sectors have achieved double-digit reports. These should become regular pub- percentage reductions in their emissions and lications and should ideally utilize accepted energy usage in such a short time is simply reporting frameworks such as the Sustain- remarkable, given that national strategies aim ability Reporting Guidelines by the Global for similar reductions only over the course of Reporting Initiative or the Carbon Disclosure decades. The ability to innovate and lead does Project; they should also strive to report their not appear to depend on the size or type of environmental activity consistently through business, either; companies in sectors ranging their UN Global Compact Communications from transport, with its self-evident pollution of Progress. Additionally, companies should problems, to banking, where the opportuni- strive to gain a deeper understanding of ties to go green are less obvious, have made the potential impact of climate change on significant strides. their operations. They can do this through Still, there is much room for improve- increased R&D efforts or by establishing a ment. The majority of SMEs do not yet have a specific strategy & response unit devoted to comprehensive climate change strategy. Many the climate issue. large companies have not moved from the achievement of basic goals to the pursuit of ■ Define Goals innovation and leadership. Costly upfront in- In setting climate change targets, signatories vestments in adaptive technologies that could should aim to define expected reductions reap substantial benefits over the long term for their industry by benchmarking against are still a difficult sell for executives – as a corporate peers and understanding how to point of reference, investments in sustainable maximize energy efficiency across the entire energy by members of the Carbon Disclosure lifecycle of the company’s products. Project are still less than 1 percent of total as- sets under management by these companies. ■ Achieve And the Caring for Climate signatories still The first step to improving the achievements represent only a small, if non-negligible, frac- made by signatories is to define achievement tion of global emissions and economic output. beyond simple emissions reductions. A para- In these circumstances, global emissions digm shift that frames the climate change battle may still increase in the years to come, and across a broader landscape of efforts will encour- the full, long-term impact of climate change age signatories to aim for more aggressive and remains unknown. We hope that the pro- game-changing approaches. Examples of this posed framework for conceiving a climate shift include industry-wide efforts such as R&D change strategy will help companies do more. initiatives funded by multiple peers in the same For those not yet involved, an important sector or active civil engagements such as public first step is to join a global initiative such as awareness and consumer behavior campaigns. 21 “Quick-win” actions and long-term strategies Assess Define Goals Achieve Innovate Lead Examples of “quick-wins” ■ Create a con- ■ Commission ■ Set-up invest- ■ Retrofit ■ Encourage sistent template study to explore ment group to buildings with peers to join for publishing and benchmark evaluate green solar energy and Caring for emissions date expected technology consider LEED Climate emissions ratios investments certification Examples of “long-term goals” ■ Establish ■ Create unit to ■ Establish ■ Establish R&D ■ Become “ diagnostic tool assiss legislation green task force unit to redesign green champions” and share with changes and to implement and products as in communities industry pears to mobilize company monitor climate “green” ■ Launch action standardize data response change strategy campaigns to pro- capture mote green living ■ Innovate own company operations. One specific area The key to unlocking progress in innova- that signatories can demonstrate enhanced tion is to shift one’s thinking from down- leadership is the area of intellectual leader- side risk management to upside benefit ship – that is, devoting R&D resources to bet- maximization. Once signatories recognize ter understanding the science behind climate that green efforts are not only risk mitigat- change and how such knowledge can help ing but also good for business, there will be companies better combat the effects of this increased motivation to innovate and develop phenomenon. Another area of improvement solutions to take advantage of this newfound is gaining full C-suite engagement and board green market. adoption of climate change strategies; in other words, encouraging visionary leadership and ■ Lead communication from the top-down to best en- Current leaders should continue to set able progress in green activities. the tone for progress by inspiring others These recommendations should not be to action. Aspiring leaders can continue to undertaken in a vacuum but defined using evolve their position of leadership by continu- concrete goals. Below we have drafted some ing down the spectrum of activity and extend- examples of specific ways signatories can ing into spheres of influence beyond their continue progressing in this effort. 22 A Greener Tomorrow 23 Recommendations for Caring for Climate Caring for Climate will support these efforts by cross-country cooperative research). Second, taking on three important roles. First, it will be it can develop tools and intellectual property an advocate for its signatories, offering a for- for its signatories: setting global best practices mal liaison to the global climate policy agenda and providing benchmarks around value and a nexus for outreach to civil society. It chain management and low-carbon tech- will also serve as an advisor to the signatories, nologies; showcasing notable “green” supply helping them to share climate change strategies chains; and providing members with tools among themselves and pick the best options for lifecycle analyses. Third, it can reinforce for duplicating the leaders’ progress. Finally, as country-level activities, providing input to an authority on the climate change agenda, it local UN Global Compact networks. Fourth, will ensure transparency among its signatories, in the area of SMEs, it can showcase progress recognizing their achievements when appropri- made by these smaller entities, for whom ate, and provide a context for the disclosure of transaction costs are often higher and who re- data on emissions and energy usage. quire additional support to facilitate climate During an initial presentation of these change efforts. Fifth, it can convene members findings at the Second Meeting of Caring for to action by facilitating interactions among Climate Signatories on April 7-8, 2010, in low-carbon service providers, creating issue Geneva Switzerland, meeting participants working groups; developing industry-specific provided their perspective on ways Caring for initiatives; and facilitating industry-wide Climate can appropriately engage across these discussion and advisory forums. Finally, as an three dimensions. The following recommen- advisor to governments, it can provide recom- dations were brought forward. mendations to regulatory bodies on sound policies that would set the right incentives for ■ Advocacy businesses to accelerate the movement to a The Caring for Climate platform should proac- low-carbon economy. tively demonstrate that the private sector can be an instrumental part of the climate change ■ Authority solution; it can do this through global advoca- As a part of the United Nations Global Com- cy campaigns. Caring for Climate should also pact, Caring for Climate has the opportunity play an educational function by developing to solidify its authoritative capacity through high quality white papers on climate change the following efforts. First, it can rank com- for input into regulatory and policy pro- panies based on outstanding contributions cesses, and developing studies that quantify to the climate change effort, then develop a the benefits associated with climate change peer ranking tool to chart progress across in- actions. It should actively seek representation dustries; as a follow-up to these efforts, it can from emerging markets such as Africa, South actively assist companies in meeting their America, and the Middle East, where climate disclosure requirements and setting robust change efforts are still in their infant stage. Fi- climate change strategies. Second, the plat- nally, as part of a multilateral institution, the form can standardize reporting requirements Caring for Climate platform should organize across its signatories, creating a consistent collective action forums to facilitate innova- database that can be used to track emissions tive solutions and collaborate with investors to and other pertinent data. It can integrate its accelerate adoption of clean technologies. data pool with that of the Global Reporting Initiative and the Carbon Disclosure Project, ■ Advisory and in turn facilitate the building of a low- As an advisor to corporate signatories, Caring carbon best practice information repository. for Climate is uniquely positioned to conduct It can also strengthen its own platform by en- the following activities. First, it can develop gaging in public communication campaigns, a holistic, integrated approach to climate organizing national and regional workshops change efforts (e.g., facilitating inter-sectoral to foster partnerships, and facilitating col- collaboration, linking Caring for Climate with laboration amongst companies, governments, other environmentally-related initiatives such and civil society to encourage corporate as the CEO Water Mandate, and organizing climate change disclosure and action. 24 A Greener Tomorrow Moving forward, the Caring for Climate Caring for Climate is committed to re- platform expects to offer additional opportu- sponding to the needs of its signatories and nities for signatory engagement. For example, assisting them in a coordinated fashion in in a recent meeting in South Korea in April the effort against climate change. It hopes to 2010, the Caring for Climate team launched see full institutional engagement with the the Low-Carbon Leaders Project, an initiative climate change mandate and will continue to to develop 20 in-depth case stories of compa- establish itself as a leading authority on the nies that have developed transformative solu- green effort. Assessing the needs of its constit- tions for climate change. Caring for Climate uents through active surveys and interviews, plans to actively measure gains in emissions as it has done, is the first step. As the frame- reductions, energy efficiency, and other social work of activity set up for signatories sug- returns on investment, and hopes to use gests, Caring for Climate itself will establish initiatives such as this to pave the way to key a long-term plan that best shapes its strategy climate-related forums in 2012. to meet signatory needs moving forward. The next step will be to select, out of the proposed recommendations, which actions to take first, creating a sequenced timeline of priorities and key milestones, while constantly moni- toring and evaluating the platform’s progress as we have done in this report. We look forward to seeing how the signa- tories build on the progress they have already achieved as they contribute to a greener future. The leaders among these signatories have shown what is possible. For the rest, now is the time for action. 25 26 A Greener Tomorrow List of Caring for Climate Signatories (June 2010): Caring for Climate has the support of over 360 companies in 65 countries. Signatories are spread across a wide variety of sectors and regions — with strong support in developing and emerging markets. Large Companies • CEMEX • Esquel Group of Companies • Kromann Reumert • Central Warehousing • Essilor International • L’OREAL • A.P. Moller - Maersk Corporation • Esteve • La Prensa • AarhusKarlshamn AB • Centrica plc • Eulen,S.A. • La Seda de Barcelona • AB Electrolux • China International Marine • Euskaltel • Lafarge • ABB Ltd. Containers Ltd • Ferrocarrils de La • Landsbanki Islands • Abengoa • China Minmetals Corporation Generalitat de Catalunya • LEGO A/S • ABN AMRO Holding N.V. • China Mobile Communications • Fomento de Construcciones • Li & Fung Limited • AG2R LA MONDIALE Corporation y Contratas, S.A. • LG Electronics, Inc. • Agbar - Sociedad General de • China National Offshore Oil • France Telecom • Lindex Aguas de Barcelona, S.A. Corp. (CNOOC) • Fuji Xerox Company Ltd. • LM Ericsson • AIRBUS SAS • China Ocean Shipping Group • Gamesa Corporación • Loc Maria • Aitken Spence & Company Ltd - COSCO Tecnológica • LVMH • Aksa Akrilik Kimya Sanayi A.S. • Cisco Systems • Gas Natural Mexico • Mane • Aktiebolaget SKF • City Developments Limited • Gas Natural SDG, S.A. • Manpower • Akzo Nobel nv • Coca-Cola Hellenic • GDF Suez • Mansour Manufacturing & Dis- • Alcatel-Lucent • Coloplast • Groupe Bial tribution Group of Companies • Allergan • Congrex Group • Groupe La Poste • MAS Holdings (Pvt.) Ltd. • Allianz SE • Consort NT • Groupe ONET • MCI Group Holdings SA • Aluminum Corporation of • Coop • Grundfos • MediaCorp Pte Ltd. China • COWI A/S • Grupo Cementos Portland • Metito (Overseas) Ltd. • Anglo American plc • CPFL Energia SA Valderrivas • Metso Corporation • ARAMEX PJSC • Daegu Bank • Grupo Fidanque • Mitsubishi Chemical • ArcelorMittal • Danfoss Group • Grupo Sos Holdings Corporation • Areva • Danisco • Hilti Aktiengesellschaft • Mitsui Chemicals, Inc. • Arla Foods amba • Deloitte South Africa • Hinopak Motors Limited • Multibank • Asia Pacific Resources Inter- • Det Norske Veritas • Hiscox Ltd • Munich Re Group national Limited • Deutsche Post DHL • Holmen AB • Natura Cosmeticos S/A • Attock Refinery Limited • Deutsche Telekom AG • Homeplus Inc. • Nedbank Group • Auchan France • Development Bank of the • Iberdrola S.A. • New Zealand Post Group • Autostrade per Italia S.p.A. Philippines • ICA AB • Newmont Mining Corp • AVIVA plc • Diageo Plc • IKEA Group • Nippon Yusen Kabushiki • AvivaSA Emeklilik ve Hayat AS • DiGi Telecommunications • Industrial Bank of Korea Kaisha (NYK Line) • AXA Sdn Bhd • Infosys Technologies Ltd • Nokia Corporation • Bancaja • DONG Energy A/S • International Industries • Novartis International AG • Banco Do Brasil • Dudalina SA Limited • Novo Nordisk AS • Baosteel Group • DuPont • Japan Airlines Corporation • Novozymes • Banyan Tree Hotels & • E.ON AG • Johnson Controls Inc. • NTUC Healthcare Resorts Pte Ltd • EADS France • KB Kookmin Bank Co-operative Ltd • Bayer AG • EADS NV • Kelani Valley Plantations • OCBC Bank Ltd. • BBVA, S.A. • Ebro Puleva, S.A. Limited • Oil and Natural Gas Corporation • Bring Citymail Sweden AB • EDF • Kikkoman Corporation • Olympus Corporation • Broad Air Conditioning • Edita Sverige AB • Koninklijke Philips • OMV Aktiengesellschaft • Broedrene Hartmann A/S • El Corte Inglés, S.A. Electronics N.V. • Osram GmbH • BT Group plc • Empresa Nacional del • Korea East-West Power Co.,Ltd. • Pakistan Refinery Limited •C  able & Wireless Panama S.A. Petróleo • Korea Land Corporation • Pentland Group Plc • Cadbury • Empresas Bern S.A. • Korea National Housing • PepsiCo, Inc. • Caja de Ahorros y Pensiones • Endesa, S.A. Corporation • Perstorp Holding AB de Barcelona (La Caixa) • Energoinvest • Korea Railroad Corporation • Pfizer, Inc. • Capgemini • ENI • Korea South-East Power Co. • Piraeus Bank • Carlsberg Group • ESKOM • KPMG, Cardenas Dosal, S.C. • Pranda Jewelry Public 27 Company Ltd •T  hal Engineering Tolima - Enertolima S.A. ESP munications and Economics • Primex •T  hales • CompuMe • Noir.Illuminati II • PSA Peugeot Citroen •T  he Coca-Cola Company • Constructus Ltd. • NTUC Thrift and Loan • Publicis Groupe S.A. •T  he Dow Chemical Company • Cool House Cooperative Ltd • Pulmuone Holdings Co., Ltd. •T  he Linde Group • Copagaz Distribuidora de Gas • Origin Exterminators Pte Ltd • Pwani Oil Products Ltd •T  he Rezidor Hotel Group Ltda- Grupo Zahran • Paharpur Business Centre • Rahimafrooz Batteries Ltd. •T  itan Cement Company • Cre-en Inc. and Software Technology • Rastgar Engineering Com- •T  NT N.V. • Crescendas Group Incubator Park pany Private Limited •T  oms Gruppen A/S • Datum Internacional S.A. • Pancrop Commercial Co. Ltd. • Red Electrica Corporacion •U  nilever • Deans Beans Organic Coffee • PARTICIP GmbH • Redes Energeticas Nacionais, •U  nion de Cervecerias Perua- • Ecofact AG • Pasell s.r.I. SGPS, SA nas Backus y Johnston S.A.A. • Edita Bobergs AB • Phoenix Design Aid A/S • Reed Elsevier Group plc •U  nion Fenosa • Edita Vaestra Aros AB • Planetic • Repsol YPF •U  nited Company RUSAL • Enel Fortuna S.A. • Planson International • Richards Bay Coal Terminal •U  PM-Kymmene Corporation • Energy Management Services • PR Communications Pte Ltd Company Limited •V  & S Group • Fertilizantes de Centro • Rayess Kingdom Group • RICOH Company Ltd •V  asakronan AB America SA • Respect Europe • Rio Tinto plc •V  attenfall AB • Forsitec • Rio Uruguay Cooperativa de • RWE AG •V  eolia Environnement • Genctur Tourism and Travel Seguros Ltda. • Sabaf S.p.A. •V  iyellatex Group Agency Ltd. • Roslagens Sparbank • SAET Group •W  estpac Banking Corporation • Generation Investment Man- • Salterbaxter Design Limited • Saint-Gobain •W  oongjin Coway Co., Ltd. agement LLP • Sanga-Saby Kurs och • Samjong KPMG Inc. •W  oori Bank • GES Investment Services Konferens • SAP AG •Y  ara International ASA • Ghana Oil Company Limited • SEMCO Senior Management • SAS Group •Y  uhan-Kimberly • Global Synergetic Foundation Consultants • Sasol Ltd. • Global Tanitim • Sin Hwa Dee Foodstuf • Scott Wilson Holdings Ltd. • Grupo Abril - Abril S/A Industries Pte Ltd • Scottish & Newcastle plc Small and Medium-Sized • Grupo Via Delphi, SA de CV. • Solarig • Seiko Epson Corporation Enterprises • Hai Consult - Consulting Fund • SOMMAR • Sekem Group • Harineras Villamayor, S.A • Southern Trident Pty Ltd • Senoko Power Limited •A  .C.P. Confidenza • Hauska and Partner Interna- • Spona Communications • Seri Sugar Mills Ltd. •A  breu Advogados tional Communications • Storebrand ASA • Shinhan Bank •A  dviser Publicity S.A. • Hoo Bee Investment Limited • Straits Law Practice LLC • Shiseido Co., Ltd •A  frica Investment and Busi- • Icono Comercial, S.A. de C.V. • Superskill Graphics Pte Ltd • Sing Lun Holdings Ltd ness Advisers SARL - AFIBA • Impact International • Sustainable Living Fabrics • Singapore Health Services - •A  griauto Industries Limited • Ingenieria y Proyectos Pty Ltd. SingHealth •A  ldelia Ltd Graficos, S.L. • SVQ Comunicacion y • Singapore Telecommunica- •A  llied Soft • Inoxia Desarrollo Corporativo SL tions Ltd •A  lteco AB • IRH Environnement • Taiwo Adewole and • Singapore Zoological Gardens •A  mbiental Consultores • ITDistributors Associates Ltd • SK Telecom •A  RGE Consulting • ITT Water and Wastewater AB • Tarrerias Bonjean • Skanska AB •A  rticle 13 • IUT Global Pte Ltd • TC Centre Pte Ltd • SOMPO Japan Insurance Inc. •A  SN Bank • KanEnergi Sweden AB • The Consortium for Purchas- • Statoil •A  tacama S.A. de Publicidad • Kempartner ing and Distribution Ltd. • Store Steel •A  von Metals Ltd • Kjaer Group A/S • TIMA International GMBH • Sun Food International Co., Ltd. •B  anco Fonder • Liwal Limited • TNT Argentina S.A. • Sydsvenska Dagbladets AB •B  eraca Sabara Quimicos e • Longpan (Lopal) Petrochemi- • Total Project Management • Talal Abu-Ghazaleh & Co. Ingredientes Ltda. al Co., Ltd. • UDC - United Development International •B  ergendal Meetings • Macondo Consultants AB • Tata Chemicals •B  idGive International Inc. • Marc J. Lane & Company •V isão Sustentável - Dorpas As- • Tata International Limited •B  ull & Co Advokatfirma AS • Martha Tilaar Group sessoria Empresarial S/C Ltda. • Tata Steel •C arroll Properties Corporation • Mater A/S • VisitSweden AB • Teckwah Industrial Corpora- • Caz Creole • MDD Comercio e Represen- • Water Company tion Ltd • Celer Soluciones, S.L. tacoes de Papel Ltda. • XL Group • Telecom Italia • Cierra Total Recyciling • MittMedia Print AB • Yaseconsult Ltd. • Telefónica S.A. Solutions, Ltd. • MSM Group AG • YMF Arquitetura Financeira • Telvent • Compania Energetica del • Newports Institute of Com- de Negócios S.A. 28 A Greener Tomorrow Acknowledgements We wish to recognize the tremendous support, input, and assistance of many individuals and organizations whose contributions have made it possible to develop this report, “A Greener To- morrow: How Caring for Climate Signatories are Leading the Way to a Low-Carbon Economy.” First and foremost, we are grateful to the signatories of Caring for Climate for their efforts to address the climate change crisis. Through their leadership and commitment, they demon- strate to all sectors of society that change – and green growth – are possible.   Their achieve- ments in mitigating and adapting to climate change suggest a hopeful future as they lead us in the low-carbon economy. We would also like to thank The Carbon Disclosure Project for providing access to a wealth of data for Caring for Climate signatories, and Daniel Altman of North Yard Economics for com- municating the progress of signatories with masterful skill, in a way that inspires others to take on the challenge. The development of the report was much dependent on the hard work of Dalberg’s Ted Lim and Yana Watson, who went above and beyond the call of duty to bring a fresh lens of innova- tion to the analysis. This was complemented equally by the dedication and professionalism of the UN Global Compact’s team of Adrienne Gardaz and Jayoung Park. The design and format- ting were executed with precision and speed by Tannaz Fassihi and Megan Larson. The results of this endeavor are our responsibility but the work could not be completed without the help of so many. Any imbalances, insufficiencies, or unintended mistakes in the presentations, findings and comments expressed herein above should be ascribed to us. Lila Karbassi Sonila Cook Chief Coordinator, Caring for Climate Partner UN Global Compact Dalberg About the United Nations Global Compact Launched in 2000, the United Nations Global Compact is both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices. As a multi-stakeholder leadership initiative, it seeks to align business operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption and to catalyze actions in support of broader UN goals. It is the world’s largest voluntary corporate citizenship initiative, with over 6,500 signatories based in more than 130 countries. Visit www.unglobalcompact.org. PHOTO CREDITS: Cover © World Bank/Curt Carnemark Page 4 © Hard Rain Picture Library, Unep/Cheung Pak-Tan About Dalberg Global Development Advisors Page 10 © istockphoto/Pedro Castellano Dalberg Global Development Advisors is a strategy consulting firm specializing Page 12 © istockphoto/Torsten Stahlberg in international development and globalization. We advise a diverse set of CEOs, investors, and senior policy makers in all regions of the world, with a focus on Page 16 © UN Photo/Andrea Brizzi emerging markets. We bring business-oriented solutions to the world’s most Page 22 © istockphoto/Kevin Klöpper pressing challenges, and work across sectors to facilitate large-scale systemic Page 25 © istockphoto/Andreas Weber change. Visit www.dalberg.com. The Ten Principles of the United Nations Global Compact Human rights Principle 1 Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2 make sure that they are not complicit in human rights abuses. Labour Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4 the elimination of all forms of forced and compulsory labour; Principle 5 the effective abolition of child labour; and Principle 6 the elimination of discrimination in respect of employment and occupation. Environment Principle 7 Businesses are asked to support a precautionary approach to environmental challenges; Principle 8 undertake initiatives to promote greater environmental responsibility; and Principle 9 encourage the development and diffusion of environmentally friendly technologies. Anti-corruption Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. Published by the UN Global Compact Office and Dalberg Global Development Advisors Contact: unglobalcompact@un.org May 2010