Sustainable Portfolio Management (SPM) Monetization of environmental impacts. Alain Wathelet

Transcription

1 Sustainable Portfolio Management (SPM) Monetization of environmental impacts Alain Wathelet

2 AGENDA Business Solutions Solvay s Ambition SPM steering portfolio toward Business Solutions Sustainable Portfolio Management SPM in a nutshell Key decisions-making tool Better Business because more Sustainable SPM Reference Guide Integrate sustainability in business strategy 2

3 4 Operations Vulnerability SPM is Solvay proprietary approach to assess business sustainability risks and opportunities Low Risk 1 revenue cannot be created at (too) high environmental expense. The lower the environmental footprint, the lower the risk of substitution by less impacting solutions Sustainable Portfolio Management (SPM) map One PAC - Product-Application Combination (e.g., 30 GF PA6.6 in Electric Protection Devices) High Risk Problems Market Alignment to sustainability Solutions From a sustainability standpoint and a consumer perspective, is our product used in selling propositions that are part of the solutions or part of the problems?

4 SPM methodology in a nutshell Solutions Environmental footprint vs Value The higher the environmental footprint, the higher the risk of substitution by less impacting solutions Neutral Challenges 5 From a sustainability standpoint and a consumer perspective, is our product used in selling propositions part of the solutions or part of the problems?

5 Operations Vulnerability formula is based on monetized Ecoprofiles Monetized Ecoprofile Ecoprofile Energy. Global warming Impact Σ Impact (kg (kg CO2eq) CO2eq) Environ. (kg CO2eq) Impact x Energy. Global Shadow warming cost Shadow Shadow ( / kg CO2eq) cost cost ( / kg CO2eq) ( / kg CO2eq) / Average sales price ( ) = Operations vulnerability (%) LCA bound to cradleto-gate ISO 14040/44 standard Produced by Solvay 3E experts Estimation of the cost for the planet, theoretical Science-based approach ( polluter pays principle) Defined by external authoritative bodies CO2 shadow cost, e.g. = 75 ( CO2 internal price) 5-year rolling average to smooth the impact of economic fluctuations Also used to consolidate / compare impacts 6

6 Step 1 : Impact Assessment Step 1: Impact Assessment Material & Emissions Inventory (kg) Impact Equivalent (Eq./kg) Impact (Equivalent) LCA «Cradle-to-Gate» - ISO indicators (Environmental and Energy) Mid-points CML and CED Quality assessment 7 GWP Biogenic Coal Energy Gaz Energy Water Land Use Human Tox Ecotox Acidification Etc

7 Step 2 : Impact Valuation Step 2: Impact Valuation Impact (Equivalent) Shadow Cost (EUR/eq.) Impact Value (EUR) Shadow Cost = «cost for the planet» (Polluter Pays), defined by external authoritative bodies To prevent environmental or human toxicity damage (avoidance cost route) To remediate the damage caused (repair cost route) Time Horizon >10 years For comparison of products / technologies 8

8 Step 3 : Operation vulnerability Step 3 : Operation Vulnerability Impact Value (EUR) Sales Value (EUR) Operation Vulnerability (%) Assess the financial risk of negative impacts (externalities) Comparison monetized environmental footprint VS value added by our product / activity (proxied by the sale price) Lower OV High opportunity to displace of less environmentally-friendly product (< 80 %) High OV High sustainability risk for the product (> 100 %) 9

9 Zoom on Operations Vulnerability components Operations Vulnerability by midpoints (or impacts) Illustrative product with projection on Heat map 10

10 MORE BUSINESS SOLUTIONS Launch of a simple & digitalized SPM Guide Executive summary for Business Leaders Detailed explanations for Practitioners Presentation of SPM Fast Track (simplification) 3 precise Business Cases Glossary and Q&A 11

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12 Operations vulnerability Objectives on Business Solutions Low Risk High Risk Problems % Group sales 43% 33% 8% Market alignment Solutions Neutral Challenges Solutions 50% Solvay Solutions Climate Change (28%) Resource Efficiency (17%) Safety & Prevention (14%) Very low environmental manufacturing footprint (13%) Human Toxicity (7%) Environment Toxicity (4%) Example: Composites Reducing the weight of a passenger car by 1 kg represents 10 kg CO2 eq. saved during its full life time (Climate Change benefits) 13