1. How? Strategies to Green the Supply Chain

3. A VERY (very) LARGE PENSION FUND SAYS RETROFIT INDUSTRIAL ENERGY EFFICIENCY IS THE BEST ASSET CLASS ON THE PLANET WHY?

4. AN INVESTIGATION WITH THE ENVIRONMENTAL DEFENSE FUND AND WAL-MART GLOBAL SOURCING IN CHINA VISITING OVER 600 FACTORIES IN WAL-MART’S SUPPLY CHAIN FOUND…

5. 30-50% reductions in energy intensity in plastics fabrication possible Some factories doing more than 60% --on total energy

6. With throughput and quality improvements

8. ALL HAVE POTENTIAL FOR 30-40% REDUCTIONS IN TOTAL ENERGY INTENSITY Less than 2 years simple paybacks JUST ON ENERGY SAVINGS

9. 4 big conclusions

10. Target-rich but data poor Data Target

11. The people with the answers have poor business models

12. Someone has to LOOK WRONG NO ONE WANTS TO TAKE THE HIT

13. Raw material extraction Factories Use Disposal The Merchant Supply Chain Product life cycle

14. Raw material extraction Factories Use Disposal Negative environmental impact The Merchant Supply Chain

15. Raw material extraction Factories Use Disposal Negative environmental impact Merchants’ ability to reduce impact The Merchant Supply Chain Where we need to go

20. Project Typology Type 1: The Straight Shot Description : Low-cost (to implement) simple project with minimal production risk and very low technology risk Distribution: 10% of 1 st 1000 factories; 5% after that. Ratio will repeat in other consumer products supply chains, but also other types of supply chains. Concentration increases to 20% in supply chains with higher value-added (e.g., electronics assembly). Scope: Usually one relatively simple EE opportunity, requiring minimal data collection and project development EE Scale: One discrete energy use consumes 60% or more of total energy, and has EE opportunity exceeding 40% energy intensity reduction Example: Plastic fabrication, toys, dolls. Installing servomotors and electromagnetic induction heaters reduces electricity use by 50+%

22. Project Typology Type 3: Bigfoot Description: One big complex project with 2-3 critical and related sub-projects; some production risk and low technology risk Distribution: 5% of 1 st 1000 factories; 0% after that. Ratio will repeat in other consumer products supply chains, but also other types of supply chains. Concentration increases to 25% in supply chains with higher value-added (e.g., electronics production; major appliances). Scope: A mix of base load and process load EE opportunities, requiring extensive data collection and project development EE Scale: Total energy use of main project and all sub-projects exceeds 75% or more of total energy, and has EE opportunity exceeding 40% Example: Production of television sets. Revamping HVAC, process controls and base load to balance and optimize thermal loads across entire building envelope reduces electricity use by 40%

24. Scope and Scale and Distribution of EE Projects Wal-mart GS China Supply Chain Straight Shot 10% of total factories Rolling Thunder 60% of total factories Bigfoot 5% of total factories Slow and Steady 25% of total factories Capex $(US)500,000 $100,000 to $2 million $2 million $(US)250,000 to $1,000,000 Energy spend/yr $960,000 $40,000 to $3.2 million $3.0 million $250,000 to $1 million EE value $230,400 $16,000 to $1.28 million $1.2 million $125,000 to $500,000 Approach Cluster by EE opportunity Cluster by product type and process; nested One-by-one Cluster by EE opportunity; portfolio