Beyond regulation – opportunities for businesses Conference “Ökologische Steuerreform und Emissionshandel”

Winterthur, 25.10.2013

Andrea Rumiz – Director Sales, South Pole Group

This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from South

Pole Carbon Asset Management Ltd. This material was used by South Pole Carbon Asset Management Ltd during an oral presentation; it is not a complete record of the discussion.

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South Pole Group – developing solutions worldwide

Johannesburg

Zurich

Jakarta

Bangkok

Taipei

Beijing

Mexico City

• 2006: Incorporation in

Zurich / Switzerland

• >76% employee owned

• No debt; profitable; very

healthy balance sheet

• Present on all continents

• 2011, 2012 & 2013: Best

Project Developer*

• Swiss Social Entrepreneur

of the

Year**

• >90 carbon pros from 22

countries

• Carbon management for

>250 emission reduction

projects worldwide

Stockholm

Local presence

as of May 2013

Hanoi New Delhi

Medellin

Satellite office

Head office

* Environmental Finance’s Voluntary Carbon Market Survey 2011, 2012 and again 2013

** Schwab Foundation/WEF

Kampala

Melbourne

London

Sydney

Kuala Lumpur

Source: South Pole Group

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Beyond offsetting – South Pole as solution provider

Climate

Neutrality

Source: South Pole Carbon

•VERs

•GS CERs

•GoldPower

•Emission

reduction

project

development

•Portfolio

Management

•Consulting for

development

banks

•PoA

development

on own account

or as consulting

•Development

of forestry

projects on

own account

or as

consulting

Projects Forestry

• Insetting

•CH projects

•Off4Firms

• Investment

portfolio

footprints

•Webshops

•Credit card

Climate

Solutions

New Carbon

Market

Consulting

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• EU ETS as huge uncertainty for businesses

• Voluntary action in light of lack of political

commitment for climate change

• Opportunities for businesses

Contents

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Historically low EUA prices due to 1) lack of ambition, 2)

competing EU policy measures and 3) economic downturn

«need for coordination between various climate and energy policies»

(Caisse des Depôts climate research)

* E.g. the “Energy Efficiency Directive” was adopted on 25.10.2012 when the EU ETS targets until 2020 were since long defined

Source: EUA/CER Prices: Thomson Reuters Point Carbon 22.03.2013; Caisse des Depôts climate research Nr. 18, September 2012

CER price

EUA and CER prices

in EUR/t

1.65

2.50

5.00

-0.15

Required

emission

reduction

by EU

ETS

Economic

downturn

!!!

1.00

Com-

peting EU

policy

measures

!!!*

Kyoto

credits

ERUs &

CERs

(planned)

Emission

reduction

from EU

ETS

(planned)

Emission reduction from EU ETS sectors

in Gt 2008-2020

EUA prices

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Climate goals can only be reached with carbon costs of USD 60

per ton globally from 2030 onwards

Source: McKinsey Global Energy Perspective

Where polluters pay …

Where polluters pay …

Where polluters pay …

Where polluters pay …

Where polluters pay …

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• EU ETS as huge uncertainty for businesses

• Voluntary action in light of lack of political

commitment for climate change

• Opportunities for businesses

Contents

13

«Voluntary» action required by investors

Carbon Disclosure Project

• Signatories: 655 institutional investors

managing USD 80 trillion (sic!) in assets

• Content: Yearly survey on 4000

companies globally on emission levels,

emission reduction targets, opportunities,

threats, responsibilities

• Output: reports by region and industry

Source: Carbon Disclosure Project

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Voluntary action in light of lack of political

commitment for climate change

Source: Ecosystem Marketplace „State of the Voluntary Carbon Markets 2013”; South Pole Carbon

Flow of transacted VERs by offset

supplier and buyer region 2012

in million tons

South Pole connects Europe and

Australia with developing

countries through its offices in

Zurich, Bangkok, Beijing, Hanoi,

Jakarta, Johannesburg, Kampala,

Kuala Lumpur, London, Medellin,

Melbourne, Mexico City, New

Delhi, Stockholm, Sydney, Taipei

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Prices in the voluntary market are rather stable

* Based on 1142 reported transactions with a volume of 74 million tons

Source: Ecosystem Marketplace „State of the Voluntary Carbon Markets 2013”, South Pole Carbon

Transacted volume by average price 2011/12

in millon tons of CO2 equivalent

While EUA prices fell

by about 50% from 2011 to 2012,

VER prices only went down by 5%

from USD 6.2 to 5.9 per ton

Includes 8.3 million

tons of „worthless“ Chicago

Climate Exchange credits to

North American buyers at

USD 0.1 per ton

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In the voluntary players support “nice” emission

reduction projects

Source: Ecosystem Marketplace

„State of the Voluntary

Carbon Markets 2013”

Market share by project types 2012

in %

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• EU ETS as huge uncertainty for businesses

• Voluntary action in light of lack of political

commitment for climate change

• Opportunities for businesses

Contents

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Reduce own emissions, assign price on the remaining emissions

by compensating them and build-up of own customized projects

over time

Source: South Pole Group

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Compensate company emissions while helping people on

the ground

VCS

Biomass Thailand (Video) Sport tournmanents and school support

Wind India (Video) Scholarships, econom family support

Cookstove & Water Filter Kenya Worldwide first and only project of its kind,

save water, clean indoor air for cooks (women

and children), school

GS VERs

VCS

GS VERs Wind New Caledonia Sport events organized, health-care and

medical support

VCS + SC

Hydro Indonesia (Video) Donation of sport equipments to high

schools,sport lessions, free medical treat.

Source: South Pole Group

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Insetting is the world’s most innovative carbon offset initiative. It combines all of

the advantages of classic offsetting with all advantages of running your own

project!

Features &Benefits

• Own project in the corporates operations

• And/or related to the corporate

• High social and environmental co-benefits

• Additional income

• Additionally and permanence according to the rules of the best international

recognized carbon standards

• 3rd party verified: All emission reductions are verified by an accredited third

party (e.g. TÜV, SGS, etc.)

Insetting: Your own carbon offset project

Source: South Pole Group

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Coop has WWF support for their own offset project in Kenya

Source: http://www.wwf.ch/de/projekte/zusammenarbeit/klimapartner/kompensation/

«Ist Kompensation nur

Ablasshandel? Keineswegs,

denn dahinter steckt eine klare

Strategie zur Reduktion der

klimabelastenden CO2-

Emissionen.»

Water Purification projects also bring a host of co-benefits

besides emission reductions

Enabling schooling &

avoiding abuse

Against child death &

water related diseases:

120 million DALY per year (1)

Indoor air quality:

40 million DALY per year (2)

Sources:

1) Pacific Institute (2010). World Water Quality Facts and Statistics. World Water Day 2010, 22nd March.

2) Torres-Duque C (2008). Biomass Fuels and Respiratory Diseases. The Proceedings of the American Thoracic Society 5:577-590.

Avoiding desertification

Reduce GHG emissions.

Protecting biodiversity

& water resources

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Climate Credit Card – A no-cost/ high-impact CSR tool

1. All credit card transactions will be automatically climate-neutral

2. South Pole Carbon establishes the value of the CO2 emissions created through the card transactions

3. Covers balancing of the emissions to 100%

4. South Pole Carbon guarantees that all emissions are fully offset with high quality Gold Standard projects

– this could be a dedicated offsetting project

Source: South Pole Group

How does it work

Climate Credit Card business makes a difference for your business

1. No additional expense or effort for companies

2. Reduces the size of your carbon footprint

3. Brings valuable social benefits to developing countries

4. Increases company’s public profile

5. Allows to elegantly communicate sustainability commitment

6. Allows to internally measure and benchmark your carbon emissions

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Carbon footprinting of investment portfolios with South Pole live on Bloomberg – helps to manage risk and positions sustainability leaders

Source: https://www.southpolecarbon.com/solutions/finance_solutions/carbon_screener

Know the Greenhouse Gas Emissions of your Portfolio

• report portfolio’s greenhouse gas emissions to stakeholders

• benchmark your portfolio’s emissions against an index

• manage carbon risk in your portfolio • perform a carbon optimization on your

portfolio • quantify the external costs of your

portfolio

Trust South Pole Carbon‘s tested tool • The world‘s largest database for

company CO2 emissions • Most transparent and cost-effective in

the market • Developed by ETH researchers • Trusted by leading financial institutions

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South Pole‘s webshop for small customers

• Developed in-house to fully reflect

our needs and requirements

• Footprint calculations based on

widely shared assumptions from

trustworthy sources (GHG

Protocol, etc.)

• Transparent, actual projects with

third-party verified, issued credits

only

• New projects added on a regular

basis to offer our clients the

offsetting of their choice

Source: South Pole Group

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Andrea Rumiz

Director of Sales

South Pole Group - Zurich office

Tel. +41 43 501 3550

Email: a.rumiz@southpolecarbon.com

Contact

Source: South Pole Group

South Pole Holding Ltd.