Optimizing Energy Efficiency, an Imperative for the Process Industry Christopher Smith Global Practice Leader, Energy Efficiency PMA March 2011

2 External drivers  Whilst resource costs have decreased since highs of 2008, volatility of prices is still a driver for resource efficiency  Regulatory and fiscal measures are intensifying – creating new market and operational constraints  Companies are now unlocking value from disclosure by strengthening engagements with key stakeholders  Sustainability has become a fiercely competitive issue 1. Volatility of resource costs 2. Public policy 4. Public accountability 5. Competition  The investment community is now making material decisions based on the social and environmental performance of a company’s investment portfolio Sources: 1 Generation IM (2007), 2 Freshfields Bruckhaus Deringer (2005). 3 EU Eurobarometer Survey (2008). 4 Salterbaxter (2007) 3. Access to capital A maturing set of external drivers are pressuring companies for more sustainability

3 Internal Conditions A set of internal conditions may also exist  A gap exists between needed progress and publicly- stated sustainability goals (Board or Public) 1. Leadership 2. Organizational complexity 4. Public accountability 5. Transformational change 3. Resource constraints  A visionary leader is stretching the organization  There’s a desire to evolve the organizational culture for sustainability through a practical transformation  There is considerable competition for resources across multiple competing priorities  Multi-Tier complex organization (Corporate, business unit, and site levels) struggling with standardization vs consistency.

4 Competitive Advantage Through a Proactive Approach to Sustainability Risk Mitigation Cost Reduction Competitive advantage Revenue generation Operational efficiency (inside out approach prevailing) Product innovation (outside in approach prevailing) Influence on Society and the competitive landscape Awareness and Compliance Operational excellence Leading innovation Source: M. E. Porter and M. R. Kramer - ‘Strategy & Society - The Link Between Competitive Advantage and Corporate Social Responsibility’, Harvard Business Review, 12/2006 Until recently, corporate sustainability efforts focused on building awareness, mitigating risks and reducing company’s social/environmental impacts but leaders have emerged from the pack looking at top line sustainability benefits.

5 Creating a Vision Sustainable Growth: The creation of shareholder and societal value while we reduce the environmental footprint* along the value chains in which we operate. * DuPont defines “footprint’ as all injuries, illnesses, incidents, waste, emissions, use of water and deplete-able forms of raw materials and energy. It is paramount for companies to not only adopt, but espouse a concrete vision for sustainable growth DuPont Vision: To be the world’s most dynamic science company, creating sustainable solutions essential to a better, safer, healthier life for people everywhere.

6 ValueValue Business Integration Renewable Energy, Energy Use Flat Corporate Environmental Planning Announced 2015 Market facing Goals Announced 2010 footprint reduction Goals Compliance Corporate Environmentalism Sustainable Growth Sustainable Growth Market Facing Goals SHE Commitment DuPont travelled a sustainable growth path…

7 Common Approach to Sustainability Issues Recognize strategic value & drive from the top Line accountability Appropriate support resources Integrated Management System Consistent implementation approach across entire operations portfolio Rigorous performance management Prioritize no-capital & low-capital improvement

8 Change requires a rigorous systems approach Effective Management Systems  Visible, demonstrated commitment  Clear, meaningful policies and principles  High standards of performance  Challenging goals and plans  Supportive staff  Line management accountability  Integrated committee structure  Performance measurement and progressive motivation  Effective communication processes  Training & Development  Rich content, Proven Best Practices  Effective audits and re-evaluation Strong Leadership The principles, and the system for realizing them, form the best practice reference model against which we implement change Appropriate Organizational Structure Focused Processes and Actions

9  Achieved gains in energy efficiency, productivity from manufacturing processes and lower environmental costs despite a 19% increase in production of goods.*  Gained industry recognition from “Laggard” to “Leader.”  With this knowledge and know- how, we have been able to accelerate progress and continue to raise the bar.  We can now help others do the same. Results Other Sustainability Results since 1990: Safety & HealthWorld-Class Major Incidents 90% ↓ Air Toxics 75% ↓ Air Carcinogens 92% ↓ Hazardous Waste (Dry) 42% ↓ U.S. TRI “Releases” 77% ↓ * Indicates absolute values * * * * DuPont Sustainability Results * Sustainability accomplishments from 1990 through 2009 (per data available and used for the 2010 DuPont Global Reporting Initiative Report)

10 The DuPont Bold Energy Plan Energy costs saved > $3.0 billion Total environmental costs reduced >$250 million per year Renewable energy saves more than $10 million per year Waste reduced = product sold Capitalizing on hidden capactiy saves millions in reduced and deferred investment Greenhouse gas credits can be sold in carbon markets DuPont corporate reputation has transformed

11 DuPont Titanium Technologies reduced the energy needed to produce 1 pound of TiO 2 by 40%

12 Operational Excellence Improvement Plan 7/1/08 1/1/10 7/1/09 Leadership Alignment on Operational Risk 1/1/09 PSM Assessment & Corporate Alignment Corporate PSM System & Standards Design Unit Assessments Unit Implementations Environmental Excellence: CEP Design CEP Execution 7/1/10 Energy Management System Assessments Employee Safety Operations Risk Assessment & Planning Process Safety Management transformation Environmental Strategy Energy Management System & improvement Implementation

13 Critical Steps for Success  Understanding key drivers for sustainability in sector and current performance  Integrating sustainability into business vision, strategy and objectives  Using sustainability to manage risks, reduce costs, create options and build stakeholder’s preference  Measuring and communicating performances  Developing competencies and supporting behavioural and cultural change Success will depend on your ability to create and execute the business case for sustainability improvement

14 Christopher Smith Global Practice Leader