1. ASSESSING THE CARBON FOOTPRINT OF COMPANIES IN AFRICA Presented by Natacha ANDRE Regional Product Manager (Africa) 29th August 2013 @ Laico, Nairobi

2. Agenda SGS Environmental services WHY to report your emissions as a cement company –Situation in Europe –Situation in Africa WHAT is Carbon footprint HOW to assess Carbon footprint and main challenges

3. ASIA PACIFIC 25 100 Employees  World’s leading inspection, verification, testing and certification company  Founded in Rouen in 1878, as a grain inspection company  Over 70 000 employees  Over 1350 offices and laboratories operating in 140 countries EUROPE 15 900 Employees NORTH AMERICA 6 800 Employees AFRICA & MIDDLE EAST 14 600 Employees SOUTH AMERICA 7 100 Employees ABOUT SGS

4. Agricultural Services Environmental Services Industrial Services GISOil, Gas & Chemicals Services Systems and Services Certification Minerals Services Automotive Services Life Science Services Consumer Testing Services SGS BUSINESS LINES

5. Field Services Sample Preparation Analysis Data Management Data interpretation & consulting Environmental Services

6. Why to report your emissions as a cement company In EUROPE: Mandatory Kyoto Protocol : Countries have emissions reduction targets Reductions in different sectors: –Tertiary sector –Transport sector –Industrial sector Emission Trading Scheme

7. European Directive EU ETS Industry sector European Union Emission Trading Scheme (EU ETS Directive): –Allowances for each company/site are pre-determined for each year (NAP) –Mandatory system: companies must have a GHG emissions permit & monitor and report their emissions –Emissions have to be verified each year –More than 12000 sites in Europe concerned

8. Obligations and penalties –The verified emissions must be covered by allowances 6.750.000 EUR 9.000.000 USD EXAMPLE: Cement  2.000.000 tons CO2/y  If 50.000 tCO2 (2,5%) missing.. European Directives EU ETS Industry sector Penalties: 135 EUR/ton in 2008-2012!! 180 USD/ton

9. Emissions Trading & Carbon Market Seller Buyer

10. Why to report your emissions as a cement company In AFRICA: Mainly Voluntary Customer, Investor, Competitor, Internal, Sector association’s initiatives  Carbon Tax in South Africa starting 1st January 2015 Phase 1 : 2015–2019 : –R120 per tonne of CO2e (12 USD/tCO2e) from 1 January 2015 –tax rate will increase annually by 10% –tax will only apply above certain specified thresholds, with these ‘tax free thresholds’ varying per sector –E.g Cement sector : basic tax free threshold of 60% + 20% max if justified (process emissions, competitiveness) - use of 5% offset max –If 2.000.000 tCO2e/y > 20% at 12 USD > 4.800.000 USD

11. Measure and report your GHG Emissions Allows you to KNOW where you are & REDUCE your impact on the environment Opportunities to create INNOVATIVE products Strong MARKETING argument Improve the REPUTATION of your company Be seen as a Market LEADER Have access to NEW markets Important EXTERNAL communication tool : demonstrate you’re addressing CC risks Competitive ADVANTAGE Opportunities to CUT fuel and utility COSTS Improve brand VALUE of your products Improve your investor’s RELATIONS Important INTERNAL communication tool will help to get support from the Board What are the advantages?

12. WHAT is Carbon footprint? Carbon footprint refers to the total set of greenhouse gas (GHG) emissions caused by an organization, event, product or person and is reported in tonnes of carbon dioxide equivalent (CO2e) 1- Product Carbon footprint 2- Corporate Carbon footprint

13. 1- Product Carbon Footprint CF of the lifecycle of a product. t CO2e/t Cement

14. 2- Organisational Carbon footprint CF of the company t CO2e/year

15. What are the objectives of my organisation? 1 - Define business goals 2- Determine the boundaries 3- Collect the data 4- Calculate GHG emissions and determine CF 5- Report organisation CF How to determine your Carbon footprint Process WHY?

16. Which sources and GHG do I want to include/exclude? 1 - Define business goals 2- Determine the boundaries 3- Collect the data 4- Calculate GHG emissions and determine CF 5- Report organisation CF Carbon footprint Process Clinker production Generators Electricity consumption Air conditioning Fuel consumption (stationary) Owned & leased Vehicles WTPEmployees travel Waste management

17. 1 - Define business goals 2- Determine the boundaries 3- Collect the data 4- Calculate GHG emissions and determine CF What information should I collect from the activities to calculate my GHG emissions? Collect Activity Data (e.g. Electricity use from bills) 5- Report organisation CF Carbon footprint Process - Bills missing - Errors in figures/Units - Meters not accurate (maintenance/calibration)

18. Which quantification method should I use to calculate my emissions? 1 - Define business goals 2- Determine the boundaries 3- Collect the data 4- Calculate GHG emissions and determine CF Calculations or Measurement? Most common approach = Activity Data x Emission Factor 5- Report organisation CF Carbon footprint Process

19. What do I need to report? 1 - Define business goals 2- Determine the boundaries 3- Collect the data 4- Calculate GHG emissions and determine CF Refer to standard 5- Report organisation CF How do I want to communicate internally and externally? Should I set emissions reduction targets? Carbon footprint Process

20. To conclude –No mandatory CF assessment in Africa yet –It’s the right time to start reporting your GHG emissions –Climate Change brings challenges to Africa –Don’t miss the opportunities !

21. Questions? Please contact : Natacha.Andre@sgs.com