PowerPoint Presentation

Building for the Future: Learning Approachesin Preparing for Uncertainty and TurbulenceResilience Workshop 1

MBI GP Strategies Company Confidential

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ProgrammeKeynote Speaker 1: Dr Geoff KendallInteractive Q&A SessionKeynote Speaker 2: Lucy CandlinCloseKeynote Speaker 3: Dr Tony RookeJoin us for a coffee on 40th Floor

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Mark MillerBusiness Unit DirectorWelcome

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Dr Geoff KendallCo-Founder & CEO, Future-Fit Foundation

Future FitBusiness Benchmark

All companies will report their non-financial performance in a credible, concise, comparable and compelling way to start shifting investor and consumer behaviour in pursuit of a prosperous future for allOur Long-term Vision

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Our Mission is to Answer Two QuestionsHow would we know a truly sustainable company if we saw one?How can we tell how far away a company is now from where it needs to be?

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We Need to Answer these Questions Fast

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Because Best-practice Metrics Dont WorkDow-Jones Sustainability Index, 20155% difference?!

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We Need a New Kind of Benchmark

4123We must measure progress toward (and beyond) required practiceProgress relative to a baseline year does not tell us enoughProgress relative to best practice or peers does not tell us enoughProgress toward short-term goals does not tell us enoughrequiredstatebaselineyearshorttermgoalsCompany todaycurrentstateFuture-Fit CompanyPastFuture

othercompanyothercompany

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The Future-Fit Business BenchmarkOpen & Free

Science-Based

Future-Focused

Co-Created

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From Survey Hell to a Critical ToolIndependent Assuranceby accredited third parties67%Future-Fit

Publish ScoresThird party scoring doesnt workDisclosure of sensitive dataSurvey fatigueResults arentactionable...but third party assurance does work

OptionalSensitive datastays insidethe company

Identify key performance gapsPrioritiseCorrectiveactionsExecute to closegapsCalculate Future-FitmetricsOptional

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Anatomy of the Benchmark

Future-Fit ScorecardBrief summary of commitments and progress (with indicators)toward meeting future-fit goalsGlobal ChallengesSocial and environmental issues we must address if we are to transition to a sustainable futureSystem PrinciplesWhat a sustainable society would look like according to best- available scienceBusiness PrinciplesHow companies must operate if they are to be part of such a truly sustainable societyBusiness BenefitsBenefits to the business beyond protecting the social and natural infrastructure it depends upon

Future-Fit GoalsPerformance thresholds that every company must reach to help (and not hinder) societys transition

Stakeholder Supportconfidence among shareholders, employees and others that a company will thrive in the future

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The Starting Point:System Principles

In a sustainable society, nature is not subject to systemically increasing concentrations of substances extracted from the Earths crust

In a sustainable society, nature is not subject to systemically increasing degradation by physical meansIn a sustainable society, people are not subject to systemic barriers to health, influence, impartiality competenceand meaningIn a sustainable society, nature is not subject to systemically increasing concentrations of substances produced by society

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Scorecard Captures Progress and CommitmentRestorative: requiredperformance threshold is exceeded5.Exceed Goal

Future-Fit: required performance threshold is achieved4.Reach Goal

Progress ismonitored and changes to plan are explained3.Monitor & Report

Current gap is explained and a plan to close it is published2.Commit to Goal

Public recognition of the need to reach the future-fit goal1.RecogniseGoal

Commitment indicatorNo public recognition that the goal is a required destination0.No Public PositionA measure of the gap between current and required levels of performanceFitness indicatorA summary of progress against (and changes to) plan to put performance in contextFitness narrative

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Q1 2016 Release: Do No Harm

Energy is from renewable sourcesWater is used in an environmentally responsible and socially equitable wayProducts emit no substanceswhich cause harmFuture-Fit GoalNet Negative

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Q4 2016 Release: Create System Value

Products meet a basic needof underserved customers

Energy is from renewable sourcesWater is used in an environmentally responsible and socially equitable wayProducts emit no substances which cause harmInterventions improve peoples healthFuture-Fit GoalNet PositiveNet Negative

These aresample restorative metrics TBC

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Align everyone on what matters and test core business model for weaknessesCreate a credible leadership platformPrioritise actions to close future-fit performance gapsSimplify reporting: focus on the gapsand what youredoing to close them

For Companies...

For OthersRaters can measure required practice, not best practiceConsultants canpush clients to bemore ambitiousPolicy makers can design more effective regulations

For Investors...Incorporatefuture-fit metricsinto decision-making processes - 3D InvestingSteer capital more effectively toward those companiesmost likely to thrivein an uncertain futureDesign investment products to maximise future-fit alpha or target specificinvestor groups

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THANK YOU

Dr Geoff KendallCo-Founder & CEO,Future-Fit Foundation

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Resilience Executive Breakfast SeriesWorkshop 1

Lucy CandlinDirector, Planet & Prosperity

Riding the Wavesof the Perfect Storm

Director, Planet & Prosperity

Lucy CandlinIndependent Sustainability AdvisorChartered Environmentalist and IEMA FellowIEMA Professional Standards CommitteeBoard Director UK Emissions Trading GroupCo-chair Working Group on Monitoring, Reporting, Verification and Accreditation

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Storm WarningSource - The Guardian 26/2/16

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Global mega trends are driving a pressure front on the global economyIncluding:What is the Perfect StormPopulation growthDemand for natural resourcesCosts and availability of energyClimate changeWater shortagesEco-system degradationStrife/climate basemass migration

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ThrivingDoom and gloom?

DOOMGLOOMA new way?

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Key for Surviving and Thriving

Opportunism & opportunityAnd Effective resourcemanagementSkills to competeLeadershipFundingStrategyRevans Law states:

For an organisationto survive, its rate of learning must be at least equal to the rate of change of its external environment.

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Skills FrameworkIn the 21st Century business world, environment and sustainability can no longer be a bolt on it; it needs to be part of the business DNA. Good quality people and their skills are the change makers - which is why it is vital that sustainability skills become pivotal to the operations of organisations. IEMAs skills framework includes Skills for LeadersSkills for ProfessionalsSkills for the wider workforce

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Tools and Support

IEMA, 2011Training Course SyllabusGuidance & InformationHorizon Scanning, Strategic risk evaluation, Stakeholder Engagement, etc

Conferences, Events & Webinars

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Storm Warning Are You Ready?Source - The Guardian 26/2/16

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THANK YOU

Lucy CandlinDirector, Planet & Prosperity

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Resilience Executive Breakfast SeriesWorkshop 1

Dr Tony RookeDirector Reporting, CDP

Reporting to CDP

A global economic system thatoperates within sustainableenvironmental boundaries and prevents dangerous climate change

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Our vision at CDP is.A global economic system that operates within sustainable environmental boundaries and prevents dangerous climate change, unsustainable water extraction & pollution, and reduces deforestation.

PAUSE

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Only Global Environmental Disclosure Platform

5,533Companies in more than 91 countries reporting - over half the worlds market cap314Cities sharing best practices - 390 million people,61 leading megacities75Global corporate supply chains - US$ 2 trillion in annual procurement822Institutional investors requesting information - a third of the worlds investable capital

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The main way we are contributing to this is running a global system to collect and share environmental information. This is all based on the questionnaires youve received in February.

Obviously the data from just one company wouldnt have much value. But if we have data from a very large number of companies or even, all companies, we really can make an impact.

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Responding Companies, 2003-2015

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We started small, just over 200 companies reporting back in 2003. But now we have over 5533 companies reporting on climate change, in more than 91 countries.

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As a proxy for good corporate governance practiceAs a proxy for good climate change managementCompany Engagement (including Aiming for A and the AMNTs Red Line voting) Specific engagement purposes (Governance/Strategy/Emission Performance/Verification and Stakeholder Engagement) - sub scores available toCDP investor membersHow Investors Use CDP Climate Scores

Investment decision ideas(best in class, exclusioncriteria, weightings, etc,)In conjunction with otherESG metrics/rankingsAs part of a climate risk assessment of portfoliosCreate financial products(ETF/low carbon index)

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- Please note these are only for climate scores, although the presentation mentions accessing water scores, we dont currently have examples of how investors are using the scores in these slides.

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Investor Scorecard

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Only available to investor members and only with CC dataMost of the information you can see here is based on the scoring information (for example risk management in place: poor/medium/good are evaluations based on the scoring data evaluating the frequency and level of risk assessment, and whether CC risks are reviewed at all.) Provides an overview of a companys current and historic performance and disclosure scores, score breakdown, governance and strategy, and emission trendsCurrently in the final stages of development by CDP

Reminder: This is an example for 2015 and CC company scores will be presented as bands from 2016 onwards (Investors will not see a separate disclosure score).

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German Stock Exchange & CDP Reports

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CDP climate scoresReminder: This is an example for 2015 and CC company scores will be presented as bands from 2016 onwards (NO disclosure score)

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Google Finance & Bloomberg

Google Finance

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CDPs climate change data is made available to investors within the Bloomberg terminal. This is accessible using the FA function, and going to the ESG tab.

Reminder: This is an example for 2015 and CC company scores will be presented as bands from 2016 onwards (NO disclosure score)

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How Does Responding Work?Climate changeForestsSupply chainWaterInvestors & supply chain membersCorporations

InformationInformationAuthority

Authority

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We will start off with how responding works and who is asking for this information.

As you can see in the diagram on the left hand side, CDP collects environmental information on behalf of Investors and supply chain members.

Investors may request that you respond to Climate change, water and/or Forests. They are taking action to protect their long term investments and are interested in gaining evidence and insight into companies greenhouse gas emissions, water usage and strategies for managing climate change, water and deforestation risks.

We also issue this request on behalf of global corporations under our supply chain program who wish to understand the impacts of climate change and water scarcity across their supply chain. Supply Chain members may ask suppliers to fill out the Climate Change and/or Water questionnaires.

Please note that you only need to respond once to each program, so if for example.

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CDP, whilst acting broadly and globally in the interests of the climate and sustainable use of natural capital, does so in partnership with and in the interests of you, the business community.We wanted to take a moment to clearly define and articulate just some of the benefits that you and your fellow disclosing businesses are enjoying as a direct result of their disclosure efforts.Put simply: Climatedisclosure makes sound business sense, with strong ROI and clear business opportunities accruing.We will be publishing a more detailed look at business benefit in the next couple of weeks and will be sharing in print and/or digital formats with you all. (If the printed booklet is available at your workshop)

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Science Based Targets Initiative

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CDP has partnered with the United Nations Global Compact, World Resources Institute and World Wide Fund for Nature to form the Science Based Targets initiative. More information on the initiative as well as all the other tools and resources described in this presentation can be found on the initiatives website at www.sciencebasedtargets.org.

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Aligning Targets with Climate ScienceScience-based targets

20102050Global EmissionsYearBusiness as usual (BAU)2C emissions trajectory2C CarbonBudgethttp://www.sciencebasedtargets.org

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The widely accepted global goal is to stay well below a 2C increase above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 C, recognizing that this would significantly reduce the risks and impacts of climate change. Currently, most company targets are not aggressive enough to account for their share of global GHG emissions reductions. Business as usual is leading us to 4C temperature increase, which will have disastrous effects on the planet.

Science-based targets can help us close the gap left by country commitments and keep global temperatures well under under 2C pathway by disaggregating the world's remaining carbon budget and quantifying the emissions companies are responsible for.

Numbers (I usually dont mention these unless someone asks):Business as usual scenario emissions increased by 2.2% on average every yearreach 3.7 to 4.8C of global warming by the end of the century2C scenarioEmissions need to be 49% to 72% lower in 2010 than 20502C carbon budget for the period 2011-2050 is in the range of ~500 1500 GtCO2

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THANK YOU

Dr Tony RookeDirector Reporting, CDP

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Resilience Executive Breakfast SeriesWorkshop 1

Interactive Q&A Session

Were at our best when helpingour clients achieve their best.

Together making a meaningfulimpact on the world.gpstrategiesltd.com

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Together making a meaningfulimpact on the world.gpstrategiesltd.com

Finishing Slide

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