The Benefits of “Going Green” for Business Monica Hale, Sustainability Director Energy Solutions Operation, SAIC Gasket Fabricators Association, September 2008

What is Sustainability? Outline What is Sustainability? Recent Sustainability Initiatives Global>Local Benefits of Sustainability Developing a Framework Opportunities to Practice & Promote Sustainability 2

What is Sustainability? "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." From “Our Common Future”, The Brundtland Commission, the World Commission on Environment and Development (WCED) 3

The Holistic View of Sustainability 4 Source: The Future 500: http://www.future500.org/custom/26/

Sustainability: Now a Mainstream Topic 5

Sustainability as a Mainstream Business Practice A recent Conference Board report noted: “corporate sustainable development practices can facilitate access to (financial) markets” “sustainable development offers an objective means to identify companies with superior quality of management that thinks long term.” “strong evidence to support the claim that sustainable development efforts have a positive impact on share price is growing.”

Gasket Fabrication Business Environment Objectives: Staying ahead of your competitors Increasing market share Increasing profitability, reducing costs Marketplace Trends: Increasingly finished goods companies want to portray their products as ‘green’ Customers have standards! (ISO 14000 series, SA 8000) Supply chain effects: purchasing companies are scrutinizing their suppliers for the environmental impact of their products – supplier questionnaires Life-cycle impact assessments – cradle to grave analysis New Administration will take action on GHG/Carbon 7

Benefits of Sustainability: Rationale Reduce in operating costs (e.g. resource savings) Improve identification and management of risks Retain, motivate and develop employees Attract students Increase learning and innovation Improve access to capital Enhance university/organization image Improve decision-making Company sustainability policies Integrate/mainstream sustainability into operating and capital programs Convey the vision and goals of the institution Position universities in the forefront sustainability practices 8

The Financial Benefits of Sustainability Evidence of financial benefits of sustainability Oekom Research: 2004 study of 602 companies - those with good corporate responsibility programs significantly out-performed those with less emphasis on sustainability. Morgan Stanley recently stated that companies with a best in class portfolio ranking performed 23.4% higher than companies in the MSCI World Index as a whole (which averaged 3.8%).

Sustainability Reporting KPMG study - Sustainability Reporting: Over half of Fortune 250 issue standalone Sustainability Reports Of the top 250 companies in the Fortune 500, the percentage rises to almost two thirds when including annual financial reports that address corporate responsibility. Global Reporting Initiative (GRI) is the standard to which many corporations follow

Areas of Focus (1) Environment Impact reduction (noise, pollution, vibration, etc.) Environmental management (review ISO 14000 achievements) Air quality (EPA regulation compliance) Environmental Campus initiatives (native planting, avoidance of agri-chemicals, etc.) Going “beyond compliance” Social Community service / impacts Sustainability Mobility Employees (H&S, working conditions) Consumables/Supply-chain Management Review green purchasing in MTA Develop supplier questionnaires, expected standards, impacts & assessment Identify target products/services (e.g. cleaning fluids, VOC’s, etc.) Facilities Greening facilities: buildings, sports arenas, 11

Areas of Focus (2) Resource Utilization Water Energy Land Use/Campus Fuel choice / fuel mix / feed stocks (diesel, low sulfur, bio-diesel, CNG) Renewables (EO 111 target adoption & compliance) Own generation (wind, PV) Energy efficiency measures Campus transportation (hybrid, bio-diesel) Service provision Waste Minimization (reduce, recycle, re-use) Management Waste stream analysis Resource efficiency Water Reduction Recycling/reuse Conservation Land Use/Campus Avoiding the use of chemicals Native planting ‘Nature’ Areas Ponds Compost GHG/Carbon Emissions GHG inventory Climate change applications Trading credits (CCX) 12

Making the Connections Improving Performance Reducing Ecological Footprint Energy & Conservation System Energy Energy for Buildings Non-revenue Uses Waste Water Resource Consumption Facilities Management Transport Operations Demographics Strategies CO2 emissions reductions Methane gas cuts Alternative fuels, solar, wind, fuel cells Distributed generation CO2 credits, CO2 taxes CO2 Measurement & Verification Conservation, ‘Negawatts’ Continuous Commissioning Sustainable Design Network Enhancement Storm water management Health & Epidemiology IT/Smart Systems Greening 13

Sustainability: Taking Action Planning Framework and Process Developing an action plan to promote energy/resource efficiency, pollution reduction, & sustainable mobility into design, construction, operations, & maintenance Main elements: Priorities areas for action / phasing Time scales (long term and short term initiatives) Budget Monitoring and measurement Benchmarks Engagement across whole organization at every level Communications Plan Reporting 14

Sustainability Assessment Framework 15

Energy Managers and Sustainability Source: Levin, H. Systematic Evaluation and Assessment of Building Environmental Performance (SEABEP), presentation to "Buildings & Environment“ Conference 16

Buildings: LEED Standard USGBC Leadership in Energy and Environmental Design A nationally recognized standard Green Building Rating System, known as LEED (Leadership in Energy and Environmental Design), for design, construction, & operation of high performance green buildings. LEED promotes a whole-building approach by recognizing performance in five key areas of human and environmental health: Sustainable site development Water efficiency Energy efficiency and Atmosphere Materials and Resources Indoor environmental quality LEED Standards – Platinum, Gold, Silver, Bronze LEED categories: EB, ND, etc. Focus on a subset of key LEED factors that have the greatest immediate impact on approximately a company’s total space.

LEED Self-Assessment Check List Facilities-related actions based on LEED-EB (existing buildings) program Legend: C = Currently Implemented W = Working - = Future Implementation 9

LEED Self-Assessment Check List Facilities-related LEED-EB actions (continued) Legend: C = Currently Implemented W = Working - = Future Implementation 10

Sustainability Cost-Benefit Example Cost-benefit analysis of Actions from UCSB Campus Sustainability Plan, 2006 20

Costs: rising (gasoline, natural gas, electricity) Energy Issues Costs: rising (gasoline, natural gas, electricity) Consumption: energy efficiency – using less pays off Renewables – wind, biofuel, geothermal, hydro, photovoltaics/solar: benefits: Costs decreasing Potential to sell into the grid energy independence Low/no carbon/GHG emissions Market for renewables products increasing (e.g. wind turbines)

Carbon and Energy Questions How, & over what time period, can organizations become wholly sustainable? How much of the strategy for operations and the capital budget needs to be devoted to sustainability & carbon reduction projects? What are organizations opportunities to reduce GHGs and create green energy from alternative fuels (solar, wind, fuel cells, wave and tidal power, anaerobic digesters)? Which distributed generation projects should generate green power for organizations and which green projects might provide green energy for organizations in the region? What kinds of goals and technology should the organization pursue to create a comprehensive ‘negawatts’ program, other conservation strategies and continuous commissioning? 22

O Wedges Seven “wedges” Billion of Tons of Carbon Emitted per Year 14 Billion of Tons of Carbon Emitted per Year 14 GtC/y Currently projected path Seven “wedges” O 7 Historical emissions 7 GtC/y Flat path 1.9  1955 2005 2055 2105 Source: Stephen Pacala and Robert Socolow, Science, 305 (5686), pp. 968-972, and its Supporting Online Material, available at www.princeton.edu/~cmi

Fill the Stabilization Triangle with Seven Wedges Methane Management Energy Efficiency Forests & Soils 14 GtC/y Fuel Displacement by Low-Carbon Electricity Stabilization Decarbonized Electricity Triangle 7 GtC/y 2004 2054 Decarbonized Fuels

Developing a Strategy Appendix 2