The document discusses the business case for low carbon companies in Asia. It finds that becoming a low carbon company can result in cost savings from energy efficiency improvements, appeal to customers concerned about supply chain emissions, and prepare companies for upcoming carbon regulations. A case study shows one supermarket chain saved over $17 million annually through a 40% carbon reduction target, while its competitor without carbon targets missed out on these savings.

1. The Business Case for Low
Carbon Companies in Asia
SASIN CENTRE FOR SUSTAINABILITY MANAGEMENT
Liam Salter, CEO, RESET Carbon
September 2016

2. Agenda
 Climate change update and introduction to a Low Carbon Company.
 Cost savings
 Customers
 Regulation
 Case study and conclusions
© 2016 RESET Carbon Ltd.
2

3. RESET – Your One-Stop Service Provider
3
2 offices and 20
staff in Hong Kong
and Bangkok. We
have customers
from 14
countries in Asia
and trusted
partners across
the region.
Conducted
environmental
strategy and
carbon
footprinting
projects for over
20 international
corporations
Implemented 10
energy and
environmental
assessment or
improvement
projects in 11
Asian countries in
commercial
property, retail
and light industrial
facilities.
Conducted
implementation
projects saving
clients between
125,000
and
1,000,000
USD/year.

4. Current and Previous Clients
4

5. Climate change and
low carbon companies
5
© 2016 RESET Carbon Ltd.

6. We can already see impacts from climate
change today
6
© 2016 RESET Carbon Ltd.
Sources: IPCC, NASA/GISS, EM-DAT International Disaster Database, UN, WWF
Global warming
 2015: warmest year on record
 10 warmest years occurred since 1998
 April 2016: 12th consecutive warmest
month on record
Rising sea level
 Average annual rise roughly
doubledfrom 1993 to 2010
vs. 1901 to 2010
Natural disasters
 Occurrences tripled from
2000 to 2009 vs. 1980 to 1989
Water scarcity
 More than 1.2 billion people lack
access to clean drinking water
 ~20% of world population
Coral reef damage
~25% of coral reefs worldwide considered damaged beyond repair
66% under serious threat
Climate
change is
happening
now

7. Four potential global warming scenarios
7
© 2016 RESET Carbon Ltd.
Source: Intergovernmental Panel on Climate Change (IPCC)
Note: The four Representative Concentration Pathways (RCPs) are named after a possible range of radiative
forcing values in the year 2100 relative to pre-industrial values (+2.6, +4.5, +6.0, and +8.5 W/m2, respectively).
RPC 8.5
RPC 6.0
RPC 4.5
RPC 2.6
Goal of science-based targets
Estimated 2.7-3.7 °C with INDCs

8. Countries who submitted INDCs during COP21
account for 98.8% of global carbon emissions
8
© 2016 RESET Carbon Ltd.
Source: World Resource Institute
No INDC submitted
INDC submitted
NDC submitted
China
Peak CO2 emissions by
2030
60-65% intensity reduction
by 2030 vs. 2005
United States
26-28% GHG emissions
reduction by 2020 vs. 2005
European Union
At least 40% GHG emissions
reduction by 2030 vs. 1990
India
33-35% intensity reduction
by 2030 vs. 2005
Japan
26% GHG emissions
reduction by 2030 vs. 2013
Hong Kong
50-60% intensity
reduction by 2020 vs. 2005
Upcoming carbon target
Vietnam
20% intensity
reduction by 2030 vs.
2010
Cambodia
 27% GHG emissions
reduction by 2030 vs. BAU
Bangladesh
 5% GHG emissions
reduction by 2030 vs. BAU
Thailand
 20% GHG emissions
reduction by 2030 vs. BAU

9. What is a low carbon company?
For the purpose of our analysis and discussion today:
Low carbon companies aim to contribute to societal carbon goals
by measuring and reducing carbon emissions
Annual carbon emissions footprint report
Carbon reduction target
Often integrated into a broader environmental/social
sustainability program
9
© 2016 RESET Carbon Ltd.

10. Low Carbon Companies
The Business Case
10
Cost savings
Customers and reputation
Regulation

11. Cost savings
11
© 2016 RESET Carbon Ltd.

12. Cost savings – energy efficiency
Business Annual spend (USD) Savings Typical ROI
Hypermarket 1m 20% 4 – 5 years
Hotel 500 000 to 1.2m 20% 3 – 5 years
Dye mill 3m to 10m 15% 1 – 2 years
Electrical products 2m 15% 2 – 4 years
Food and beverage 10m 10% 3 – 5 years
Large airport 30m+ 15% 4 – 6 years
Large university 20m+ 20% 4 – 7 years
Commercial building 1m 15% 3 – 5 years
Large Office 20 000 15% 2 – 3 years
12
© 2016 RESET Carbon Ltd.

13. Turning savings into cashflow
Large city hotel – energy savings cashflow model
• Energy efficiency projects in 3
sub-systems
• Net savings of nearly 10m THB
over 5 years in single site
• Break even < 3 years

14. Consider impact at portfolio level
Hotel portfolio – energy saving program projection
14
© 2016 RESET Carbon Ltd.
-1500000
-1000000
-500000
0
500000
1000000
1500000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59
Cashflow(USD)
Months
Hotel 1 Hotel 2 Hotel 3 Hotel 4 Hotel 5 Hotel 6 Hotel 7
• Projections based on results of single site
extrapolated to portfolio of 7 hotels (mixed portfolio)
• Net savings of over 1m USD in 5 years

15. Renewable energy: PV Rooftop 15
-
0.05
0.10
0.15
0.20
0.25
0.30
0 5 10 15
ElectricityPrice(US$/kWh)
Payback Period (years)
Thailand
Cambodia

16. Customers
16
© 2016 RESET Carbon Ltd.

17. Supply chain carbon targets 17
Company Supply Chain Carbon Reduction Targets
Wal-Mart Stores, Inc Supply Chain reduction target of 20 MMT CO2e
Hewlett-Packard Supply chain reduction target of 20% by 2020
Kellogg Company
Engage with suppliers to reduce emissions 20% by 2030 and 50% by 2050 from
2015.
GlaxoSmithKline
25% reduction in value chain footprint by 2020, compared to 2010, carbon neutral
value chain by 2050.
Coca Cola Enterprises
Reduce the GHG emissions from drinks by 33% by 2020. This will deliver carbon
reductions throughout their value chain (upstream supply chain ingredients and
packaging as well as core business operations).
Tesco
Reduce the emissions of products in their supply chain by 30% by 2020 compared to
2008.
SABMiller Achieve a 25% reduction in packaging CO2e by 2020 from a 2010 baseline.
Sodexo
Reduce carbon emissions by 34% from operations and supply chain between 2011
and 2020.
Diageo
Reduce its own carbon emissions by 50 per cent and those from across its supply
chain by 30 per cent by 2020.
Toyota
Completely eliminating all CO2 emissions, including materials, parts and
manufacturing, from the vehicle lifecycle by 2050.

18. Regulation
18
© 2016 RESET Carbon Ltd.

19. Asian governments have made commitments
that must inevitably result in regulation
19
© 2016 RESET Carbon Ltd.
Source: World Resource Institute
No INDC submitted
INDC submitted
NDC submitted
China
Peak CO2 emissions by
2030
60-65% intensity reduction
by 2030 vs. 2005
United States
26-28% GHG emissions
reduction by 2020 vs. 2005
European Union
At least 40% GHG emissions
reduction by 2030 vs. 1990
India
33-35% intensity reduction
by 2030 vs. 2005
Japan
26% GHG emissions
reduction by 2030 vs. 2013
Hong Kong
50-60% intensity
reduction by 2020 vs. 2005
Upcoming carbon target
Vietnam
20% intensity
reduction by 2030 vs.
2010
Cambodia
 27% GHG emissions
reduction by 2030 vs. BAU
Bangladesh
 5% GHG emissions
reduction by 2030 vs. BAU
Thailand
 20% GHG emissions
reduction by 2030 vs. BAU

20. Markets are already moving 20
https://www.iea.org/newsroomandevents/pressreleases/2016/march/decoupling-of-global-emissions-and-economic-growth-
confirmed.html

21. Conclusions:
The Business Case for Low
Carbon Companies
21
© 2016 RESET Carbon Ltd.

22. Worked case study
Tale of two supermarkets
 Note this case study is derived from publically available information only using RESET’s
assumed energy spend of USD 1m per hypermarket per year
22
Tesco Lotus Big C
#hypermarkets 87 105
Estimated hypermarket energy
spend @ US1m per store
$87m/yr $105m/yr
Carbon reductions - 40% 0
Annual energy savings Assume 50% of target = 20% x $87m
= $17m
±570m THB per year
0
Missed savings opportunity - THB 690m per year
Savings as % of annual pre-tax profit - 690m/9b THB = 7.5%
Customer engagement First carbon neutral store in Asia -
https://en.wikipedia.org/wiki/Big_C
http://bigc.listedcompany.com/financials.html
"At the end of 2014/15, our emissions per sq. ft. of our stores and distribution centres were 40.9% lower than in
our 2006/7 baseline.” TESCO, CDP report.

23. Conclusions
 Business case is stronger for some companies than others – particularly in Asia.
 Carbon targets drive reductions in energy spend which can make a material difference
to profitability and cashflow
 Reducing carbon emissions provide tangible ‘green’ credentials and is becoming a
customer requirement in some supply chains
 Low carbon regulation will increase for example increased costs due to introduction of
carbon pricing
 Therefore a low carbon strategy makes sense for companies with:
 Valuable brands
 High energy costs
 High brand-value B2B customers
 Planned investments in long lived energy consuming capital stock such buildings or
manufacturing facilities
23
© 2016 RESET Carbon Ltd.

24. And finally ….. 24
© 2016 RESET Carbon Ltd.
https://www.msci.com/msci-low-carbon-indexes

25. For more information:
Liam Salter
CEO
e: liam.salter@resetcarbon.com
RESET Carbon Ltd.
www.resetcarbon.com
25

26. Turning savings potential to cashflow
Dye mill - generic energy savings model
26
-600000
-400000
-200000
0
200000
400000
600000
800000
1000000
1200000
1400000
1 2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960
C
a
s
h
f
l
o
w
(
U
S
D
)
Months
Phase II
Phase I
Program
Outcomes:
Savings per year USD 375 000
Capex of approx. USD 590 000
Real world payback = 26 months
5 year simple NPV = 1.2m USD

27. We Mean Business Coalition
Focused on driving and rewarding corporate leadership
27
© 2016 RESET Carbon Ltd.

28. 28
© 2016 RESET Carbon Ltd.
Leading low carbon companies

29. Regulation – carbon pricing in China 29
© 2016 RESET Carbon Ltd.

30. Carbon pricing in China (2/2) 30
© 2016 RESET Carbon Ltd.