towards business sustainability...corporate responsibility seminar series 29 november 2011 date...

Towards BusinessSustainabilityCompanies Commission of MalaysiaCorporate Responsibility Seminar Series29 November 2011

www.pwc.com

Date (move higher if title is only one line)

Agenda

1. Overview of Sustainability

2. Case Studies

3. Sustainability Management Overview

PwCSSM - CR Seminar Series

2November 2011

What Sustainability means…

Sustainable development is described as “Development that meets the needsof the present without compromising the ability of futuregenerations to meet their own needs”.

The Bruntland Commission

Sustainability refers to the adoption and application of environmentallyresponsible practices, sound social policies and exceptional governance

Overview of Sustainability

PwC 3November 2011SSM - CR Seminar Series

responsible practices, sound social policies and exceptional governancestructures in order to minimise risks and volatility and to enhance the long-term development impact of corporate activities.

Sustainable Stock Exchanges, “Real Obstacles, Real Opportunities”

Sustainability in business means managing a company in a way that takesinto account social, economic and environmental aspects, also referredto as the “triple bottom line”.

Bursa Malaysia, “Powering Business Sustainability”

… or, in short

PeoplePlanet


PwC 4SSM - CR Seminar Series

PlanetProfit

November 2011

Why bother?

It will cost memoney.

So difficult toimplement!

I need a sustainabilityexpert to advise me.



5November 2011

expert to advise me.

It’ll just attractmore unwanted

attention…It’s just a PR-

exercise.

Why bother? 49% of CEOs whose primary source ofrevenue is consumers are planning tochange strategies in the next 3 yearsbecause customers are factoringenvironmental and corporateresponsibility practices into

purchasing decisions1

86% of MalaysianGen-Ys would seek

employers with socialresponsibility

values that reflect

64% of CEOs agreethat an important part

of their innovation

It will cost memoney.

So difficult toimplement!

I need a sustainabilityexpert to advise me.



6November 2011

values that reflecttheir own2

of their innovationstrategy is to develop

environmentallyfriendly products and

services1 83% feel that trustand transparency are“extremely important”

to a company’sreputation3

Sources: 1. PwC 14th Annual Global CEO Survey; 2. PwC’s Malaysia’s Gen Y Unplugged, 2009; 3. Edelman Trust Barometer 2010, survey covered almost 5,000 respondentsfrom the public

expert to advise me.

It’ll just attractmore unwanted

attention…It’s just a PR-

exercise.

Embracing sustainability is no longer an if, but a how

Sustainability is an increasingly important area offocus in Malaysia



Source: The Star Online, PwC’s Malaysia’s Gen Y Unplugged, 2009

November 2011

Malaysia’s manufacturers are susceptible to globalbuyer pressure…

89% of the Carbon Disclosure Project members say theyhave plans to follow the likes of Wal-Mart, Dell and others inrequiring suppliers to calculate their carbon footprints



Source: Carbon Disclosure Project: Supply Chain Report 2009

requiring suppliers to calculate their carbon footprintsand spell out strategies for reducing them.

56% of members tell the project that they are evenprepared to go so far as dropping companies from their listof suppliers in the future.

November 2011

… there is an increase in supplier expectation

Volvo Supply

GRI, UNGCReportingFrameworks

Walmart

Scope 3Standard &CDP SupplyChain Survey

Bro

ader

sust

ain

abili

tyas

sess

men

t



9November 2011

Starting Early Established Mature Advanced

Volvo SupplyChainEvaluation;FordSupplierPrograms

Sin

gle

issu

efo

cus

Volvo Grey& BlackLists Toyota Green

PurchasingGuidelines

Walmart

Maturity

DaimlerSustainabilityGuidelinesfor Suppliers

ToyotaSubstances ofConcern List

We are seeing a shift away from just philanthropy


Operations/

Communityinvestments

Not linked to corebusiness

Driven by

CorporatePhilanthropy

Board

Executive/Senior Management

CEO


10November 2011

Marketingand CRM

Humanresources

Operations/Supplychain

FinanceInvestorrelations

Shareholder value

CommunityAffairs

Customers

Currentworkforce/potentialrecruits

NGOs/civilsociety

Suppliers

Shareholders/investors Governments

/Public sector

Media

Regulators

Communitypartners

Driven bycommunity affairsdepartment

Limited impact onsociety

Weak link toshareholder valuecreation

Builds reputation

HSE

Stakeholder interactions

We are seeing a shift away from just philanthropy


Operations/

CorporateSustainability

Long-term shareholdervalue

Embedded in allbusiness activities

Affects all employees

Communityinvestments

Not linked to corebusiness

Driven by

CorporatePhilanthropy

Board

Executive/Senior Management

CEO


11November 2011

Marketingand CRM

Humanresources

Operations/Supplychain

FinanceInvestorrelations

Shareholder value

CommunityAffairs

Customers

Currentworkforce/potentialrecruits

NGOs/civilsociety

Suppliers

Shareholders/investors Governments

/Public sector

Media

Regulators

Communitypartners

Affects all employees Engage and respond to

stakeholders Maximise positive

impact on society Accountability &

transparency

Driven bycommunity affairsdepartment

Limited impact onsociety

Weak link toshareholder valuecreation

Builds reputation

HSE

Stakeholder interactions

Illustrative benefits of Sustainability to businessesover time

Valuecreation

Risk management Operational improvement Strategic advantage

Increase cost savings

Improve access tocapital


PwC 12SSM - CR Seminar Series November 2011

Valueerosion

Enhance riskmanagement & brandprotection

Time

Source: PwC

Value Drivers:-Reputation management-Cost of capital-Risks to production-License to operate

Value Drivers:-Eco-efficiency- Sustainable supply chains- Secured sourcing- Employee attraction & retention

Value Drivers:- Premium price- Access new markets- Higher market share- New revenue stream

Sample sustainability focus areas

Community:• Stakeholder engagement• Social value added• Privacy protection• IT security• Digital inclusion

Environment:• Environmental policy/

Management system• Operational environmental

footprint• Environmental governance• Climate strategy


PwC 13November 2011

• Rural development • Climate strategy• Operational eco-efficiency• Packaging• Raw material sourcing• Product stewardship

SSM - CR Seminar Series

Sample sustainability focus areas

Marketplace:• Customer relationship

management• Brand management• Anti-crime policy/ measures• Standards for suppliers

Workplace:• Occupational health & safety• Product quality and recall

management• Employee development• Anti – discrimination



• Standards for suppliers• Innovation management• Strategy for emerging markets

• Anti – discrimination• Union management

November 2011

In Malaysia, we are more focused on communityinitiatives


Environment

MarketplaceWorkplace

25%

36%

20% 24%

Legend:

SAM30

Bursa30


15November 2011

Note: Aggregate of the key sustainability initiativesunder each dimension by % is reflected above tohighlight the global companies’, Malaysian PLCs andGlobal MNCs' sustainability portfolio

Source: 1. Analysis performed on KLSE Top 30companies weighted by market capitalisation as atSeptember 2010. 2. Analysis based on 30 multinationalcompanies based on their 2009 sustainability reports

Marketplace

Community

Workplace

30%

15%

25%20% 24%

Many Malaysian companies do not have a structured approach in place to get shareholder value fromsustainability

Capitaland has been listed on the DJSI for three yearsin a row

Case Studies

• 9.0% reduction in energy consumption and 6.6%reduction in water consumption per square metre (m3/m2) respectively – “Such encouraging trendshelp mitigate against rising utility costsworldwide”

• Average training hours per employee of 51.3 hours per

Our achievements ofthe past 10 years andthe sustainability ofour business depend onour people, our care forthe community and theenvironment.

PwC 16SSM - CR Seminar Series November 2011

Source: Capitaland Sustainability Report, 2010

• Average training hours per employee of 51.3 hours perannum, well above the recommended industry guide of 40hours

• Properties which outperform the 3% target savings in bothelectricity and water consumption were given cash awards

• Paper usage reduction of 14.1% per employee

“The target forSingapore projects to aminimum Green MarkGoldPLUS for projectsinitiated in 2011 andbeyond”

Marks & Spencer’s Plan A sustainability programmehas contributed £70 million in savings in 2010

Case Studies

• Energy efficiency in stores improved by 23% and distributioncentres by 24% against 2006/07 reducing energy bills by £13.5million

• Initiatives to reduce packaging saw savings of£11 million


17November 2011

Source: M&S How We Do Business Report, 2011

• Reducing fuel usage and recycling or reusing hangarssaved M&S £2 million and £1 million respectively

• Total carbon emissions have been reduced by 13%

• 94% of all the waste generated from stores, offices andwarehouses are recycled

GE has generated more than $ 85 billion fromecomagination products and services through 2010

Case Studies


18November 2011

Source: Ecomagination 2010 Annual Report

Sustainability management overview

Reportsustainability

initiatives

Monitorsustainability

initiatives

Refine &prioritise key

initiatives

Set budget &annual plan

Develop / refinesustainability

strategy

Sustainability Management Overview


19November 2011



initiatives


initiatives


initiatives



strategy

Align to corporate strategy

Engage stakeholders

Obtain Board endorsement



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Obtain Board endorsement

Communicate sustainability strategy



initiatives


initiatives


initiatives

Agree sustainability budget

Assign budget to respective business units

Identify resource needs



strategy



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Identify resource needs



initiatives


initiatives

Assess sustainability initiatives againststrategic priorities

Set targets and measures


initiatives



strategy



22November 2011

Set targets and measures

Prioritize initiatives



initiatives

Determine governance structure

Establish monitoring mechanisms

Link initiative targets to KPIs, performance


initiatives


initiatives



strategy



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Link initiative targets to KPIs, performancemanagement or reward structure

Monitor periodically to ensure objectives aremet


Determine reporting structure

Determine target audience

Report progress regularly


initiatives


initiatives


initiatives



strategy



24November 2011

Report progress regularly

Seek verification of external sustainabilityreports

About PwC

Global market leader in sustainabilityadvisory:40+ territories800 staff and partnersServing more than 50% of Fortune100corporationsPartnering with WBCSD, GRI, SAM, UN GlobalCompact, WEF

When it comes to sustainability, companieshave very specific concerns and the needsvary widely, depending on location , businessand industry. At PricewaterhouseCoopers(PwC), clients look to us both for oursustainability knowledge and insights, as wellas the credibility we bring in establishingtrust with stakeholders.

Our global sustainability network comprisesover 800 practitioners around the world. Thenetwork functions effectively within andbetween territories and continents to help


25November 2011

Our sustainability network

between territories and continents to helpsolve cross-border issues of concern to ournational and multi-national clients, bothgovernment bodies and public and privatecompanies.

Our services include:• Climate and carbon• Sustainability & international development• Sustainability strategy and frameworks• Measuring, managing, reporting &

assurance• Supply chain & sustainable procurement• Financing the future• Tax and incentives

Thank You

Contact details for more information:

Andrew WK Chan

PwC, Sustainability & Climate Change

Senior Executive Director

[email protected]

+603 2173 1282

PwC

pwc.com/my/sustainability

Rashyid Anwarudin

PwC, Sustainability & Climate Change

Associate Director

[email protected]

+603 2173 0956

towards business sustainability...corporate responsibility seminar series 29 november 2011 date...

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