1. Environmental Management & Sustainability ALEX HETHERINGTON - Benefits Beyond Compliance Libstar Manufacturing Forum May 24 2012 Irene Country Club

2. ALEX HETHERINGTON - Benefits Beyond Compliance Agenda 1.Environmental legislation and policy 2.Increasing consumer demand 3.Best practice 4.Steps to implementing sustainability

3. Sustainable Development … ability to meet the needs of the present without compromising the ability of future generations to meet their own needs - Brundtland Commission on Sustainable Development Our Common Future ALEX HETHERINGTON - Benefits Beyond Compliance

4. Policy & legislationm- primary

5. ALEX HETHERINGTON - Benefits Beyond Compliance Policy & legislation - specifics

6. ALEX HETHERINGTON - Benefits Beyond Compliance Other policy & legislation

7. 2.King Code of Governance Principles for South Africa 2009 (King III) – best practice ALEX HETHERINGTON - Benefits Beyond Compliance Other legislative drivers 1.Companies Act (2008) – to act in the best interests of the company. 3.Integrated Report – form of communication with all stakeholders

8. ALEX HETHERINGTON - Benefits Beyond Compliance Future policy/legislation 1. National greenhouse gas targets 34% by 2020 42% by 2025 2. Carbon tax Second paper for public discussion due Proposes: R120/tonne (10% pa thereafter) 2013/14-2020 3. Price hikes Electricity – 15,33%; 13,5%; 16,09% Water

9. ALEX HETHERINGTON - Benefits Beyond Compliance Consumer perspectives Consumer Protection Act 2011 Information on environmental impact of goods/services Purchasing preference Carbon Trust: April 2012 – Generation Y (18-25 yrs) 82% believe recent disasters are a result of climate change 64% consider the environmental impact of the products they buy 80% - companies should be obliged to reduce carbon footprints 86% - want favourite brands to reduce carbon footprint 30% - currently look for carbon information on products they buy 76% - would be more loyal to a brand if it was demonstrating carbon reduction

10. ALEX HETHERINGTON - Benefits Beyond Compliance

11. Measuring environmental impact and sustainability 1.Define boundaries - organisational - operational ALEX HETHERINGTON - Benefits Beyond Compliance Carbon Energy Water Waste 2.Data intensive - management 3.Appoint responsibility 4.Report and analyse 5.Explain trends Link environmental savings to financial savings!

12. Best practice Strategy – why and how ALEX HETHERINGTON - Benefits Beyond Compliance Define boundaries Establish team & determine responsibility Measure Set targets Report to stakeholders

13. Leading lights ALEX HETHERINGTON - Benefits Beyond Compliance Target: Reduce emissions 12%/FTE; 2007-15 Achieved: 13% energy reduction/FTE; Carbon neutrality Interventions: Motion sensors, heat pumps, building retrofitting; offsetting Financial investment: R6,6 million (excl. offsetting) Financial savings: R36 million

14. ALEX HETHERINGTON - Benefits Beyond Compliance Target: Reduce absolute emissions 10% by 2009-12 Achieved: 29% energy efficiency at Medupi expansion; 60% reduction in eco- friendly housing; 17% savings from co-generation at Namakwa Sands Interventions: wind & solar; co-generation; carbon credit trading Financial savings: R21 million per year

15. ALEX HETHERINGTON - Benefits Beyond Compliance Target: Reduce emissions 30%/m 2 2006-12 Achieved: 10% reduction in relative energy use from 2004; 35% reduction in refrigerant energy in select stores; Midrand distribution centre savings 9 370km per week. Interventions: Energy efficiencies; reduced product miles Financial savings: R10 million

16. ALEX HETHERINGTON - Benefits Beyond Compliance The ecological journey Type of business Organisational boundary & Operational boundary Identify key areas of impact SA-n competitors/activities Int. best practice Opportunities (value-add) Int. & local initiativesComms. & marketing Sustainability reports Opportunities (environmental) Direct Resource consumption Decrease consumption Education Cost savings Target setting Financial bottom line Indirect Procurement Clients New products Monitoring & improvement Sustainable & leading org (Not CSR)

17. ALEX HETHERINGTON - Benefits Beyond Compliance Whats in an audit Evaluation of current performance Benchmark against peers - intensity Review of legislation Recommendation of environmental initiatives Analysis of business case of initiatives

18. Thank you Alex Hetherington Tel: 021-671-9883 alex@ahmedia.co.za www.ahmedia.co.za/alexhetherington www.alexhetheringtonsustainabilityblog.com