1. © EIRIS The role of Consumers and Corporates in tackling Climate Change ～ How do companies and consumers interact on the issue of climate change? ～ Stephen Hine, 15 June 2009

2. © EIRIS 2 EIRIS Experts in Responsible Investment Solutions Over 25 years experience (founded 1983) Leading global provider of ESG research Non-profit organisation & independent Global coverage (3,000 companies) - FTSE All-World Developed, MSCI EPM software 100 clients including pension funds and institutional investors

3. © EIRIS 3 Factors in consumer engagement (1)Regulations & Standards (2)Communication and engagement – Company-led initiatives and consumer-led initiatives (3)Labelling Schemes – energy efficiency, eco- labels and climate change labels (4)Independent assurance and verification – for increasing transparency, credibility and recovering consumer trust (5)Product innovation and marketing strategies – for attracting consumers

4. © EIRIS 4 Key findings: Consumer trends Only a minority of consumers are prepared to pay a premium for products with lower carbon emission impact. Financial incentives (reduced tax, discounted insurance and cost saving) are the strongest drivers A wide range of comparison tools are available for consumers, however, assurance or verification systems are not yet sufficiently developed.

5. © EIRIS 5 Key findings: Company responses Consumer-facing sectors: Supermarkets (27 companies), automobile manufacturers (31), residential building (24) and electricity sector (68) listed in the FTSE All World Developed Index

6. © EIRIS 6 Key findings: Company responses cont. Electricity companies: leaders among the four sectors, strong performance on disclosure A large proportion of supermarkets and residential building companies: not yet started public reporting The residential building sector lags behind significantly with many companies without a basic commitment to address climate risks.

7. © EIRIS 7 Sector findings: Supermarkets A wide range of carbon labelling schemes However, a need for a more internationally consistent system for greater comparability and transparency Consumer groups are becoming more active This has yet to be translated in consumer purchasing decisions More proactive consumer involvement in influencing companies is required

8. © EIRIS 8 Sector findings: Automobile A limited level of consumer groups’ involvement – stakeholder engagement is a key area for improvement Governments have a key role to play in setting ambitious targets for reducing carbon footprint Fuel efficiency targets VS carbon tax? Support for developing alternative technology and infrastructure

9. © EIRIS 9 Sector findings: Residential buildings The complexity of efficiency rating systems seems to be a source of confusion to consumers Priority should be given to the simplification of rating systems and providing the right incentives There is ample room for companies to improve overall commitment and disclosure levels

10. © EIRIS 10 Sector findings: Electricity A high level of commitment by governments, companies and consumer groups However, there is an urgent need to establish a clear definition of ‘green electricity’ which should be internationally consistent and comparable

11. © EIRIS 11 Sector findings: Electricity cont. Climate change overall response Commitment by electricity companies

12. © EIRIS 12 Opportunities for further development Government: provision of a clear framework to support consumer action on climate change by establishing targets, incentives and transparent regulations and standards and consider internationally consistent and comparable rating/ labelling standards Companies: Direct engagement with consumers and public reporting including product emissions data Consumer groups: Provision of unbiased information and influencing companies by campaigning and engaging with them

13. © EIRIS 13 Contact details Stephen Hine Head of Responsible Investment Development +44 (0) 20 7840 5716 (direct) EIRIS, 80 - 84 Bondway, London, SW8 1SF www.eiris.org