1 The Power of Transparency Amanda Haworth Wiklund Global Compact Nordic Network Reykjavik, May 8th 2008

2 What is the Carbon Disclosure Project? How CDP moved from Investors to Supply Chain Supply Chain Leadership Collaboration The Story so far Why companies are engaging with their suppliers in a collaborative way What is it all about? How companies are using the process What’s next Q + A Carbon Disclosure in the Supply Chain

3  A global NGO with a mission to facilitate a rational response to climate change  A secretariat for 385 investors with assets of $57 trillion  Information requested from over 3000 companies (GHG protocol plus)  1,300 companies answered the questions in 2007  largest registry of corporate GHGs in the world  2007 expansions in US, Japan, UK, France, Germany, Canada, Brazil, India, Australia, Asia, South Africa, Scandinavia  Global launches with high profile speakers  CDP is now an established annual process  CDP is where the corporate world reports GHG emissions The Carbon Disclosure Project (CDP)

4 CDP – Collaboration and Co-ordination CDP 3000 Companies 385 Investors $57 trillion

5  Highest response rate ever – 77% answered questionnaire  North America leads growth in emissions disclosure  Improved carbon accounting; more robust responses - 79% disclosed GHG data  Dramatic rise in Scope 3 reporting  80% see risks from climate change  82% see opportunities  76% implemented emissions reductions programs  46% strategies for emissions trading Wide variations in risk exposure – between and within sectors CDP5 Key Findings 2007 (FT500 Companies)

6 Wal-Mart approached CDP in 2006 with the idea of using CDP process to engage with suppliers CDP and Wal-Mart carried out pilot project in product groups 43 suppliers Lots of learning! CDP5 results showed Big increase in scope 3 reporting Collective realisation that many risks and opportunities lay in the supply chain CDP launched Supply Chain Leadership Collaboration in October 2007 Standard questionnaire to suppliers from CDP Will become annual process like investor CDP Massively extends scope of CDP From 2000 to companies in 3 years? From investors to supply chain

7 CDP – Collaboration and Co-ordination CDP Suppliers SCLC Members

8 Launched in October 2007 at the London launch event 12 members at the start of the pilot project in December  Including Tesco, Unilever, Nestle, P+G, Dell, HP, Cadbury Schweppes 335 suppliers involved, many with more than one customer among the members Only 35 of the suppliers had responded to CDP in the past – 90% first- timers Pilot closed end Feb, report in April Early lessons  Asking the questions prompts new thinking and leads to change directly  First timers struggle, capacity building needed  Response rate expected to be similar to investor CDP, first time usually about 40% but grows with each iteration  Quality of supplier engagement from procuring organisation makes a big difference SCLC – The story so far

9 To accelerate understanding of waste in supply chains Get the benefits faster To accelerate suppliers‘ understanding of the risks/opportunities Suppliers start to change as soon as they know the questions Innovate faster To demonstrate thought-leadership to stakeholders Investors value forward thinking (supply chain engagement as element of future leadership indices) Consumers value pioneer companies To identify risks/opportunities outside corporate boundaries Better strategy formulation Earlier action on risks Earlier action on opportunities SCLC – why companies become members?

10 The same questionnaire as CDP6, with an additional section, exploring supplier capabilities and splitting emissions Members choose which suppliers are involved (up to 2000) Members provide CDP with supplier contact data CDP sends request for disclosure to suppliers Suppliers register and enter on line 3 levels of disclosure – public, members, customers Members can see status of all suppliers on-line Members cannot see who each others‘ suppliers are CDP sends reminders Members receive searchable database at end of disclosure CDP commissions report What is involved in SCLC

11 Letting suppliers know that this is a business issue Getting suppliers onto the learning journey NOW Identifying which suppliers are engaged on climate change Incorporating into vendor rating Targeting known hot-spots or key product lines Verifying product-footprinting projects Supporting scope 3 assessments Extending understanding of risks and opportunities Operationalising climate change management From investor relations to procurement! SCLC – how companies are using the data (early view)

12 CDP currently inviting all respondents to become SCLC members 27 members so far. Recent new members Carrefour, Johnson Controls, UK National Grid, Juniper Networks, Merrill Lynch, IBM, Kellogg’s, Johnson and Johnson, Colgate-Palmolive Extend success of CDP from investor community to supply chain Integrating disclosure into procurement will massively accelerate business action on climate change Private companies, SMEs, emerging markets One standardised disclosure process avoids duplication and therefore cost Recognise the learning journey – don‘t overwhelm suppliers SCLC to become annual process, in line with investor request SCLC right now and the future

13 Thank you Carbon Disclosure Project Amanda Haworth Wiklund