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Green Filter Initiatives: Growth Through Sustainability,
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THE CARBON MARKET:
Managing the Risks&
Capturing the Opportunities
Measurements that Matter™
Green Filter Initiatives: Growth Through Sustainability,
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Presentation Overview
To review the Carbon Market, Offsets, and Credits
Address Regulatory and Reporting Issues
The Jomini Response: Measurements that Matter™
• Develop the Strategy: Risk or Reward
• Eliminate the “GreenWash”
• Marketing Advantage, Economic and Positional Value: The ROGI™
• Strategies in Action: Case Study (MotorSilk™, IIG, Canadian Tire, AAF)
Questions
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Green Filter Initiatives: Growth Through Sustainability,
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Key Principles
Green Demand Continues to Grow• Increasing consumer demand for green products and greener operations
creates significant market opportunities- strong economic drivers
• The pursuit of profits and the aversion to the cost of energy and volatility of fuel prices
Going Green Requires Collaboration• Greener product creation affects everything
• R&D processes to manufacturing, supply chains, packaging, marketing and infrastructure—as well as relationships with customers, partners and shareholders
Proactive and Progressive Steps are Key• Avert legislation, regulation and consumer backlash and promote a green
image
Corporate “Peer-to-Peer” Pressure
Productivity and Efficiency = Cost Benefit
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Green Filter Initiatives: Growth Through Sustainability,
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Carbon Market Review
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Green Filter Initiatives: Growth Through Sustainability,
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Kyoto Protocol: Greenhouse Gases Targeted
These are groups of gases Used as alternative to ozone- depleting CFCs in refrigeration systems
Hydroflurocarbons(HFCs) and
Perfluorocarbons (PFCs)
Used in the electrical insulator, freezing agent, heat conductor.
Sulfur hexafluoride (SF6)
Emitted from the use of nitrogen fertilizers, from burning fossil fuels and from some industrial and waste management
processes
Nitrous oxide (N20)
Comes from landfills, coal mines, oil and natural gas operations, and agriculture.
Methane (CH4)
By far the most important GHG. Generated from burning fossil fuels and
deforestation.
Over 80% of US GHG emissions comes from CO2 generated from burning fossil fuels
Carbon Dioxide (CO2)
Description Green House Gas (GHG)
These are groups of gases Used as alternative to ozone- depleting CFCs in refrigeration systems
Hydroflurocarbons(HFCs) and
Perfluorocarbons (PFCs)
Used in the electrical insulator, freezing agent, heat conductor.
Sulfur hexafluoride (SF6)
Emitted from the use of nitrogen fertilizers, from burning fossil fuels and from some industrial and waste management
processes
Nitrous oxide (N20)
Comes from landfills, coal mines, oil and natural gas operations, and agriculture.
Methane (CH4)
By far the most important GHG. Generated from burning fossil fuels and
deforestation.
Over 80% of US GHG emissions comes from CO2 generated from burning fossil fuels
Carbon Dioxide (CO2)
Description Green House Gas (GHG)
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Carbon Market ReviewDiscussion from Earth Summit (1992)
Kyoto Protocol (1997)• Gov’t of Canada responsibility: GHG Quantification and Reporting of
GHG Emissions and Removals Standard
• Adoption of ISO 14064 Standard at COP/MOP 2005
• Process ‘sold’ to CSA: accepted by International bodies, i.e. GHG Protocol, ASTM, trading platforms etc.
Clean Development Mechanism (CDM): International Trading
EU ETS: 2005: Growing pains to 68% world market
World market (2009): €136 Billion (€ 11.40 weighted average)
Chicago Climate Exchange/RGGI/CAR; Alberta*, BC
Pending Legislation/Copenhagen Accord
Voluntary Reporting: Carbon Disclosure Project (CDP)6
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Carbon Offsets
2008
There are 2 fundamental types of carbon instruments :• Allowances• Project-based credits
Allowances are generally used for compliance with government schemes
An allowance is a permit to emit a quantity of CO2e (normally 1 tonne)
Project-based credits can be used for both compliance and voluntary activities
A project-based credit represents an emission reduction below a baseline (‘business as usual’)
Most credits / allowances are NOT interchangeable with each other for regulatory purposes
Prices vary widely between instruments
2012 2012 2008
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Trading and Use Of Offsets
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National Trends: Legislation vs Regulation
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The Perfect Storm: Congress, EPA, Corporations
and the Consumer
Increased Scrutiny – Regulatory/Public concern on emissions
07/12/09: Massachusetts vs. EPA formally declares CO2 a “Dangerous Pollutant” • Mandatory reporting requirements at 25K tonnes (4,500 passenger vehicles)
• Annual emission reports starting in 2011 for the calendar year 2010 (13k facilities)
02/23/10: EPA announces Phased Approach to Regulation• Targeting large facilities in early 2011; medium-sized emitters Q3 2011; smaller
emitters 2016
• Consideration now to raising the emissions thresholds in its proposed “tailoring” rule to exempt more facilities
02/12/10: U.S. Securities and Exchange Commission’s issues new climate change disclosure guidance• Business must now report on how climate change will impact their businesses
and how it poses new challenges for them
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Converging Forces: Canada and the United States
06/10/09: Canada issues rules for claiming GHG emissions or
“offsets” that will form the basis for a national carbon market
• Federal System is to complement and not duplicate Provincial Market
• Based on Provincial methodologies, ISO, and CDM Standards
07/20/09: Canada sets deadline for emissions reporting:
• Emitters to report 2009 emissions by June 2010
• Facilities in excess of 50,000 tonnes GHG emissions to report
• Alberta moved to same threshold reporting target
31/01/10: Announced Copenhagen Accord Targets
• “Harmonized” approach with the US
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Green Filter Initiatives: Growth Through Sustainability,
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North American Regional Initiatives
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Regional Cap & TradePrograms
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Pre-Compliance “Offsets”
Project-type Pre-Compliance Protocol
Afforestation Creation of a forest where none has existed since at least 1990
Landfill Gas Capture and Combustion
Capture and destruction of methane from sites
Reduced or no-tillage Reduction in the amount of tillage on farmland (soil management)
Wind Generation of Electricity from Wind Energy
Forest Management Quantification of the net benefits of activities that sequester carbon on forestland
Wastewater Management Capture and destruction of methane produced from anaerobic wastewater treatment processes and to prevent the venting of biogas to the atmosphere
Anaerobic Biodigestors Decomposition of Agricultural Materials
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Potential Carbon Liability by Sector
0%
10%
2%
12%
6%
4%
8%
Source: Investor Responsibility Research Centre Institute
Carbon costs at $28.24* per tonne of CO2e would equate to at least 1% of revenue for 109 companies.
For the five most Carbon Intensive sectors costs would average between 1% and 12% of revenue
For 32 companies, carbon costs would equate to over 5% of revenue.
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Wal-Mart
Wal-Mart Taps CDP for Emissions Reporting in Sustainability Index
News Release
(Little Rock, ARK, July 16, 2009) Wal-Mart's top executive said Thursday that the world's largest retailer hope a new effort to develop eco-ratings for products the company sells can result in international sustainability standards that all retailers can apply to all suppliers.
Highlights:
Wal-Mart exec foresees eco-ratings for all
As Wal-Mart goes, so goes the world. When it comes to carbon emissions reporting, the $406 billion retailer appears to be suggesting that suppliers go through the Carbon Disclosure Project.
Additionally, Wal-Mart sees its new sustainability index leading to a universal standard that can be applied across “all retailers, all suppliers,” said Wal-Mart chairman and CEO Mike Duke.
“We see this as universal — this is not a U.S. standard,” Duke said during a July 16 meeting to unveil the firm’s new sustainability index.
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Jomini at a Glance
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Green Filter Initiatives: Growth Through Sustainability,
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Technology company involved in commercialization of new technologies
Government and Private Research & Development
Established “Jomini Network™” as a result of partnerships from interaction seeking or providing unique technology applications/services and products
Provide Solution Sets resulting in Sustainability Opportunities based on ISO 14064 Conformance and Jomini Green Filter™ Review
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Integrated Solutions
ISO 14064 Project Leadership through Jomini Green Filter™
Development of ISO 14064 Process Conformance Green Plans and Programmes
Deliver economic and marketing benefits
From ROI to ROGI™
International Projects: CDM in Asia, Africa
North American Regulated (Alta, BC, RGGI)
North American Voluntary (VCS, ISO)
Federal Offsets for Compliance
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Overview: The Jomini Network &
Technology Deployments
Manufacturing
Automotive Parts: Magna International Inc., Martinrea International Inc.
Automotive OEMs: Japan and Europe
Process Engineering
Vehicle Performance
• Irving Oil/ Canadian Tire
Transportation
Rail: Bombardier/ CN Rail/ CPR/ Amtrack
Shipping/Intermodal/Rail Operations
Trucking and Transport
• Large Canadian/US Fleets
Retail
Canadian Tire/Walmart/Mars
Other SegmentsEnergy Efficiency Bundles and Solutions: ISO, VCS
Wind, Solar and Roofing Technologies: ISO, CAR
Waste to Energy: CDM, JI, ISO, VCS, RGGI, CAR
Forests Protection:
• 4 National Government REDD Projects
Equipment Recycling
High Heat Insulation: Oil and Steel: ISO, VCS
HVAC and Lighting Systems: ISO
Hydrogen OEMs
Run-Of River Hydro: CDM, ISO, VCS, ACR
Waste Oil Recovery
Transportation Solutions/Technology: ISO, ACR
Power Supply Solutions
Diversion and Landfill Quantification
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The “Jomini Difference™”: A Leading Advisor
Partner Management
Corporate Market Leader
ExpertiseUnique GHG Qualifications
Proven ability to work with CDM, VCS, CAR, ACR, EU ETS, REDD Standards
Corporate Sustainability Programmes
Strategic Marketing for Competitive Distinction
Accelerated ROI Models & Carbon Trading Execution
Bennett Jones, LLP: ISO Standard ‘Framers’
International Scope & Broad environmental Reach
Environment Compliance
Technology Commercialization
Access to World Markets
Establishment of the Jomini Sustainability Network
Driving force in Industry Standards and Protocols: IPOG, US Government*
Expertise in Offset Projects and Key Verticals [Renewable Energy, Forestation, Waste, Air Quality, Transportation]
Significant R&D investment
IP Asset Management
Verdecon Capital Inc.
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Areas of Focus
Offset Programmes
Corporate Facilities Plan Purchasing and Acquisitions
R&D ActivitiesUnique GHG Confirmation
Assess Value of Solution from GHG Quantification of Reductions
Meet OEM and Consumer Needs
Accelerated ROI Models
Renewable Energy Projects and Sources
Quantify to Maximize Value from ‘Day to Day’ activities
Replicate Best Practices as Green-Print for Facilities/Operations
Infrastructure Projects
Deploy Clean-Tech/e²-Bundles
Better Cost Management and Operational Savings
Employee Programmes to Assist in Corporate Objectives
Positive Economic and Marketing Returns from Off-Setting Carbon Footprint
Deployment of Quantified and Proven Solutions to Meet Sustainability Initiatives
ROI of Proposals include Carbon Market Returns
Due Diligence to Include Environmental Risks
Assess all Energy Sources
Intelligence with Environmental Regulation
Understand Supply Chain Procedures*, Transport etc.
Products that have Achieved ISO Process Conformance
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58.0
32.0
-
10
20
30
40
50
60
Emissions GtCO2e/year
BAU (Forecast) New Solutions(Objective)
Life Cycle Assessment to Deliver Maximum Value
} 26
Emission Reduction Quantification
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Proprietary Process & Programmes
Business Strategy
& PlanningValidation
Project Plan &
Assertion
Project Plan Registration
Monitor, Report & Register
Verification Aggregation Trading
Trading Phase: Making of a VERR
GHG Process ConformanceJomini
Environmental Inc.
Jomini Environmental
Inc.
Independent Third Party
Canadian Standards Associatio
n
Jomini Environmental
Inc.
Independent Third Party
Jomini Environmental
Inc.
GHG Credit Exchange
Project Phase: Making of an ERR
GreenPrintAssessment™
(GPA)
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Opportunity vs Risk
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Climate Risk & Opportunity: Selected Industries
Electric Power
Manufac-turing
Auto & Transpor-
tation
Oil & Gas
Mining Forestry Agricul- ture
Fisheries Health-care
Real Estate
Tourism Water
Regulatory Risk
Physical Risk (dependent on location)
Competitive, Reputational Risk
◆ ◆ ◆ ◆ ◆ ◆ ◆
Regulatory Opportunity
◆ ◆ ◆ ◆
Technological Opportunity
◆ ◆ ◆ ◆ ◆
Competitive, Reptuational Opportunity
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Strategic Opportunities:
Offset Aggregation Verifer
Energy from
Waste/Tailings
Reduced or
No Tillage
Waste WaterManagement
Low Carbon Fuel
Production
Transportation
Reforestation
Regulated Entity
Cre
dit
Cre
dit
Energy Efficiency &Renewables
(Wind)
Credit
Credit Credit
Credit
Cred
it Credit
26
Green Filter Initiatives: Growth Through Sustainability,
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Source: 2008 World Economic Forum
Supply Chain “Decarbonization”
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Green Filter Initiatives: Growth Through Sustainability,
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“Greenwashing” Runs Rampant
98% of Products’ Green Claims are Misleading
ONLY 2% of products claiming in some way to be “green” actually measure up
The number of big box store products making green claims has grown 79% since 2007
“Greenwashing” has become an international challenge
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Source: TerraChoice April, 2009
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Spin
Phony constituents (hidden trade-off)
Who Says? (No Proof) Clarity of Message (Vagueness) Why Should I care? (Irrelevance) Risk in the Market (Fibbing) Relativism (Less of Two Evils)
Green.wash (green’wash’, -wosh’) – verb: the act of misleading consumers regarding environmental practices of a company or the environmental benefits of a product or service.
SubstanceJEI ISO 14064, Green Filter Initiatives™
Substantiate the claims and eliminate the GreenWash
Meet ISO 14021 Guidelines
Internationally recognized for Economic and Marketing Success
Leadership
“GreenWash” or Green
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Strengthen Competitive Position
Define/re-define Market Position Internationally
• Competitive Differentiation
• Meet Consumer/Client Requirements
• Establish Leadership Position
• Review Pricing Strategy
Establish clear leadership through increased Market-Share
Make use of “ISO 14064 Process Conformance” moniker, or other statement depending on Standard and Registry
Ability to Register in multiple markets for Environmental market Conformance
Marketing Value
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MotorSilk™ - A Case Study
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Case Study
A Jomini Sales Corporation Solution
Technology developed for NASA at Argonne National Laboratory (US Department of Energy Research Facility)
The Boron CLS Bond™, a patentedSelf-renewingHigh-performanceBiodegradableAnti-corrosiveBottom line impactingLubricant and surface coating
friction reduction technology
Winner:Environmental Technology Partnership AwardR&D 100 Award
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MotorSilk™ Engine Treatment
One-time use; passivates the metallic surface
Crystal Lattice Structure creates Boundary Layer with Co-efficient of friction: 0.01
Delivers 8% improvement in fuel efficiency for in-use vehicles
Decreases emissions through reduction in engine wear (elimination of wear metals)
4-8 hour drive-time to form boundary layer
Biostat/Anti-corrosive/Anti-oxidant
Displaces varnish, carbon and sludge in used equipment
Prevents deposit formation in new equipment
Solution is 100% Biodegradable
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MotorSilk™ CO2e Results
Project Assertion: High Level of Assurance: ISO Process Conformance
Calculated Results for 200,000 Kms:
• OEM First Fill (10 years @ 20k Kms): 3.67 tonnes CO2e
• Same for Automobiles and Fleet Vehicles (Driven Kms Dependant)
• Trucks Short Haul: 120,000 Kms 16.76 Tonnes per annum
• Trucks Long Haul: 240,000 Kms 33.52 Tonnes per annum
CarQuest: 6110 vehicles: 14.5% improvement in fuel efficiency• Currently Trading in New York: 32,000 Tonnes
• Now aggregating for Nestlé Waters (USA), Inter-State Trucking etc.
Currently Being Deployed at Kraft (USA): • 2500 Trucks to be treated (Class 6, and Class 8)
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Within the next 12 months many companies will change how they engage with their suppliers
Source: A.T. Kearney & Institute for Supply Management
52%
74%
48%
70%
39%
65%
22%
44%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Usage of Supplier Management Processes (% of respondents)
Reward Supplier Practices
Joint Process Improvement
Require 3rd Party Certification for Major Suppliers
Track a Set of Sustainability Metrics for
Major Suppliers
Do This Today
Will Do This in 12 Months
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QUESTIONS
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Green Filter Initiatives: Growth Through Sustainability,
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Sources: Bloomberg, AT Kearny Analysis
“Green” Winners
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ISO 14064 OverviewAccepted as the Standard
ISO 14064-1: Specification for Quantification and Reporting of GHG Inventories and Carbon Footprint
• Organization Level
ISO 14064-2: Specification for Quantification, Monitoring and Reporting of GHG Emission Reduction and Removal Enhancements
• Projects
ISO 14064-3: Specification for Validation and Verification of GHG Assertions
These principles are successfully employed by Jomini to Technologies, Products, and Energy Efficiency Applications
Across the Globe … able to meet CDM/VCS requirements
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GHG Inventories
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In The News
Three-quarters of Canadians take into account the environmental impact of their actions when buying a product
The same proportion (75%) also believes that most environmental claims are just marketing ploys
More than 85% want standards enforced and support labelling regulations
Far more consumers would buy green products if they were priced the same as standard items (40%)
Most consumers are not convinced that it actually costs more to produce green products
Survey showed significant opportunity for companies that can prove their products are eco-friendly - ISO 14064, backed by Jomini
Going Green
Source: Gandalf Group for Bensimon Byrne, Globe and Mail, July 2008
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Areas of Interest
Strategic Implications: GHG Reporting companies that complete with more carbon efficient peers could lose market share, or risk investor concern
Measuring Direct impacts• Understand “hot spots” in operations
• Financial exposure to carbon and other environmental costs
• Performance relative to competitors
Measuring Indirect impacts from suppliers• Minimize supply chain exposure
• Risks of carbon costs due to inefficiency
Benchmark Performance• Carbon Footprint
Partnership and Jomini Network • Access to technology
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Areas of Interest
General Operations• Facilities/IT Management
• Process Activities: Furnaces, Kilns, Milling, Grinding
Energy• Source/Usage
Waste• Tailings/Re-use- W2E
Water• Re-Use
Transportation• On-Site/Truck/Rail/Stand-BY
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