Linking Sustainability Data To ValueChair: Eszter Vitorino Füleky, Network Relations Manager, Global Reporting Initiative

Dr Maria Balabat, Senior Lecturer, University of New South WalesAnnabelle Bennett, Account Director, TrucostDr Lara Jefferson, Manager, Environment and Approvals, CrosslandsResources Limited co-presenting withKylie Ashenbrenner, Principal Consultant Strategic Projects at ERM

Natural Capital Assessment

Puma Environmental Profit & Loss Account

GRI Conference AustraliaAnnabelle Bennett annabelle.bennett@trucost.com

March 27th 2012

Trucost helps organisations understand the true cost of business in order to use resources more efficiently, today

and tomorrow.

Trucost data

The world’s most comprehensive data on corporate environmental impacts

Greenhouse Gases

Water

Waste

Air Pollutants

Land and Water Pollutants

Natural Resource Usage

Trucost

Trucost has analysed the environmental performance of >5,000 suppliers, representing $100billion expenditure.

Trucost has conducted environmental footprint analysis of funds worth $2.7trillion.

Trucost data is used by 15 academic institutions (including Harvard, Yale & Oxford University) and is supported by an International Academic Advisory Panel.

Trucost data drives $582million AUM in environmentally optimised funds.

Trucost has been researching, standardising and validating the world’s most comprehensive data on corporate environmental impacts for +10 yrs.

Trucost clients

Natural Capital Assessment

What is an Externality?

An externality is a side effect or consequence of an industrial or commercial activity that affects other parties without this being

reflected in the cost of the goods or services

Example: Air pollution

$2.2tnEnvironmental damage caused by world’s largest 3,000 companies

>50%Proportion of company earnings that could be

at risk from environmental costs

What is an Ecosystem Service?

Ecosystem services are the benefits that people and economies obtain from

ecosystems e.g. Fresh water, timber and fisheries, climate

regulation, erosion control and recreation

Water Scarcity

Future Costs of Water in Asia

Future Costs of Water in Asia

PUMA CASE STUDY:ENVIRONMENTAL PROFIT & LOSS ACCOUNT

Puma’s Supply Chain

Manufacturing: Apparel, shoes and accessories

Tier 1

Tier 3

Tier 2

Outsourcing: Embroiderers, printers, outsole producers

Processing: Tanneries, chemical companies, oil refiners

Raw materials: Cotton farming, oil drilling

E P&L approach

• Engaged strategic suppliers

• Collected supplier specific data

• Established locations of raw material flows

Quantification of E KPIs

Engagement and data collection

Refine E KPIs

Valuation E P&L

• Calculated supply chain impacts back to raw materials

• Over €1bn expenditure analysed

• Refined calculations of supply chain impacts

• PUMA operational

E KPI data added

• GHG and water consumption valuation co-efficients derived

• GHG emissions and water use valued in economic terms

(E KPIs) x (GHG & Water Valuation) = E P&LBest available techniques used: Spend Analysis, Hybrid Environmental Input-Output Modelling, Life Cycle Assessment, Production Flow Analysis, environmental economics - valuation of alternative cost models

Water and GHG dependency

PUMA water usage (2010): 77,493,100 m3PUMA GHG usage (2010): 716.6 ktCO2e

Tier 2Tier 4 Tier 3 Tier 1 Operations

€ 145m

€ 8m

€ 83m

€ 137m

EP&L Results

EP&L results

We are still responsible

“Once we know and are aware, we are responsible for our action and our inaction. We can do something about it or ignore it. Either way, we are still responsible.”

Jean Paul Sartre