PricewaterhouseCoopers and the Environment

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New Ventures Forum Lima Peru / 02 -03 June 2004
Marco Antonio Fujihara
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Agenda

• Sustainability in PwC
• Services offering
• Key numbers
• Key clients examples
• Sustainability and biodiversity

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Sustainable development Development that meets
the needs of the present without compromising the
ability of future generations to meet their own
needs (Brundtland Comission)
A sustainable business Enhances long-term
shareholders value by satisfying the needs of all
its stakeholders, adding economic, environmental
and social value through its core business
function (PwC definition)
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Issues

• TLCs
• Forestry issues
• Eurogap metrics
• Internal growth
• Social issues increase
• Sector conflicts
• Non corruption demonstration
• Transparency

Environmental social costs
Human capital social investment
Economic development
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Issues
Climate change is the single greatest challenge
facing the global business community at the start
of the 21st century World Economic Forum, Davos
2000 (going forward)
European leaders go forward for measures on
Global Warming New York Times - January 24, 2003
Invading wood native species inflict costly
damage in the sustainability in the Chilean
Forestry New York Times.com - March 7, 2003
Graininge to pay 25m for dumping chemical
waste Financial Times February 9,2003
Asia does not like an environmental
catastrophe Financial Times December 21, 2002
Spanish railways to pay 15m for environmental
noise impact ABC December 21, 2002
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Issues
Diversity
Free trade is nothing of the sort it enslaves a
relatively weak and powerless majority to world
markets that are controlled by a powerful
minority - fair trade shows that there are
alternatives New Internationalist
Equality
Human rights
Fair trade
Reputation
Working conditions
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Sustainability principles and initiatives
Sustainability is about capturing value from
environmental, social and economic factors
Economic Value Added
Sustainability is about responsiveness and
flexibility
Sustainability
Social Value Added
Environmental Value Added
Sustainability is about engaging stakeholders
Sustainability is about decision-making for the
long term
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What sorts of issues are included?
Social
Economic
Environment

• Processes and products
• Certification
• GMOs
• Climate change
• Ozone depletion
• Water pollution
• Resource efficiency
• Life cycle approach - closed loop
• Waste minimization
• Laboratory testing

• Health and safety
• Workplace conditions
• Employee well-being
• Employee satisfaction
• Wages and benefits
• Diversity, equality
• Learning training
• Human rights
• Ethics, bribery
• Sales marketing practices
• Supply chain management
• Local procurement
• Community involvement
• Philanthropy
• Stakeholder engagement

• Shareholder returns
• Investment in society
• Pricing strategies
• Socially responsible investment
• Internal and external reputation

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SOACAT Theatre
Dominican Republic
Guatemala
Nicaragua
SBS Key Centers (3 Countries, with 46
professionals)
PricewaterhouseCoopers
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Sustainable Business Solutions Core service
areas
We will assist our clients to improve their
Triple Bottom Line performance economic,
environmental, social and create long-term
business value through the following solutions
Corporate Governance and Business Ethics
Environmental Advisory
Social Responsibility
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Our SBS Global Strategy

• Grow our SBS business
• Build our SBS team and networks
• Create Sustainability awareness (internally and
  externally)

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Vision and Strategy (Global Soacat)

• To develop PwC as the preferred choice among
  Sustainability solutions providers globally and
  in Soacat
• To have PwC recognized as the global and Soacat
• thought leader in Sustainability
• To embed Sustainability principles into PwCs
  culture and provide value to our stakeholders

Vision

• 30 revenue growth in 2003/2004
• 1 thought leader in sustainability in 2003/2004
• 1 in reporting verification

Goals
Strategies
Performance Measures and Metrics
Targeted Alliances
Implementing products
Marketing and Communications
Knowledge Management Tools
Reporting/ Assurance
Key Initiatives
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Drivers for sustainable development
Technology
Stakeholders
Drivers
Society
Licence to Operate
Government/ regulators
Governance, capital costs
Politics
Shareholders
Cost of capital
Customers/ competitors
Sales, market share
Economics
Sustainable Value Creation
Environment
Suppliers
Supply chain
Reputation, Licence to Operate
Community
Cost of retention, productivity
Employees
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Defining and embedding strategy
Strategy needs to be meaningful and relevant at
each level of the organisation
Corporate Strategy Overarching principles,
strategic direction, business values, engagement
and disclosure strategy
BOARD
Business Strategy Risks, priorities, processes,
systems, monitoring, disclosure, stakeholder
engagement.
CORPORATE FUNCTIONS
Operational Strategy Business application,
business risks responses, resources,
implementation plans, monitoring.
BUSINESS UNITS
Task/Project Strategy Business practice
procedures, performance monitoring.
SITES/LOCATIONS
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Development of sustainability strategies
Best practice is to embed sustainability/CSR
principles throughout the organisation Sustainabil
ity/CSR would be integrated into governance
structures, supported by policies, objectives and
targets, measurement and reporting, and
ultimately verification Stakeholders would be
engaged at every stage
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Sustainability reporting blueprint for the future
Sustainabi- lity Policies
Performance Measures
Stakeholder Engagement
Management systems procedures
Internal Reporting
External Reporting
Internal Audit/ Control
Audit/Verification cycle
Policy and strategy scope and content
SD MS effectiveness review
Systems testing data sampling
Provide assurance

• Best practice regulation
• Company requirements
• Stakeholder expectations
• Risk assessment
• Benchmarking
• Commitments

• Roles responsibilities
• Systems procedures
• Internal controls
• Data gathering reporting systems
• Monitoring and audit procedures

• Completeness
• Materiality
• Accuracy
• Reliability
• Relevance
• Timeliness

• Systems
• Performance
• Targets
• Achievements

Rolling programme of independent assurance gives
full credit to existing internal controls
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What do we will do?
stakeholder engagement
ethics
management information systems
reputation
Tools
corporate social responsibility
Issues
decision support tools
environment
RA5
Implementation
reporting verification
climate change
community
impact and risk assessment
health safety
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SBS Key Lines of Services

• Environmental Audits
• (Compliance audit
• Due diligence
• Certification
• Climate Change
• GHG reduction study
• Baselines and MVPs
• Verification
• Trade support
• Funds raising

• Assurance verification of
• non-financial data
• Environmental reports
• Sustainability reports
• Social reports
• Corporate Responsibility
• Programme Development
• Social report advice
• Concepts design implementation
• Code of Ethics
• Training

• Supply Chain Integrity
• Contractors compliance
• Workplace conditions
• Health and safety
• Diversity, equality
• Ethics, bribery
• Stakeholders
• engagement

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PETROBRAS
(SBS Brazil Team)
4 years monitoring process of PEGASO (1 billion
US program for excellence in environmental,
health and safety management) 70,000 hours (50
sites)
SOACAT Theatre

• Comparison of PETROBRAS environmental controls
  with Global Best Practices (PwC US)
• Verification of implementation of PETROBRAS
  pipelines automation goals (8,500 km).
• Development of a model to calculate financial
  benefits of environmental improvements.

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CODELCO
(SBS Chile and Brazil Teams)
SOACAT Theatre
Support in the development of the Sustainability
Report using GRI as reference, and verification
of environmental KPIs in the copper extraction
areas.
PricewaterhouseCoopers
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CST - Arcelor Group
(SBS Brazil Team)
Verification of CSTs Environmental
Report Development of CDM strategy and
baseline Development of Stakeholders Engagement
Survey
SOACAT Theatre
PricewaterhouseCoopers
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SBS SOACAT Key Clients
Environmental, Health Safety Audits
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SBS SOACAT Key Clients
Verification of Sustainability Reports
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SBS SOACAT Key Clients
Supply Chain - Ethical Social Compliance
Verifications and Governance Reviews (Sarbox)
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SBS SOACAT Key Clients
Climate Change Services
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Climate Change with NGOs
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• And about
• Sustainability of Biodiversity

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Governance in Conservation and Sustainability of
Biodiversity

• Lessons
• Experience demonstrates the complexity of
  developing new markets
• Economic return much less than anticipated
• Economic return often not sufficient
  justification for conservation
• Partnership and education is the crucial product

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Key issues or questions that need to be developed
are

• Clear identification of the service
• The economic value of the service
• The cultural, legal and regulatory context
• The key stakeholders and their responsibilities
• Measurement and monitoring of the service
• Equitable distribution of the service
• Source M.Jenkins

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Markets alone will not address all the factors
behind forest biodiversity loss

• Effective market mechanisms need
• good governance
• sound land tenure
• equitable access to markets
• support of stakeholders, especially among local
  communities and consumers
• More effective use of biodiversity resources will
  also require improved science and technology