Sustainability - Acting for the Long Term Future - NEIA

Sustainability within SPONEIA, St. John's 31 Jul 2013

Sustainability within SPO• Who?• Why do we do it?• What are we doing?NEIA, St. John's 31 Jul 2013

Sustainability within SPONEIA, St. John's 31 Jul 2013

Sustainability within SPOHuman Rights,Resolving Grievances,Discriminationand Vulnerable GroupsPrevention of Pollution,Sustainable Resource Use,Climate ChangeMitigation,Protection of theEnvironment & BiodiversityEmployment andEmploymentRelationships,H&S at work,Human Developmentand TrainingAnti-corruption,Fair competitionNEIA, St. John's 31 Jul 2013

Sustainability within SPOFair marketing,Consumer Protection,SustainableConsumptionCommunityInvolvement,EmploymentCreation, SkillsDevelopment,Income creationNEIA, St. John's 31 Jul 2013

Sustainability within SPOGovernance, Ethics, Profitability.The Long Term ViewThe Chairman of Swire Pacific Ltd., in a circular in Jan 2008, stated:• The Swire Group has always tried to adopt “best practice” on environmental issues;• All companies in which Swire Pacific has a controlling interest will adopt this policy,& develop action plans for applying it in a way relevant to their business;• Identify high profile SD issues and steps for handling them;• Review the impact of the need to reduce carbon emissions;• Board papers supporting new investments must estimate carbon emissionsassociated with these investments and consider the potential impact of payingfor such emissions;• Companies should continue to work on the aspiration to be “best in class” onclimate change issues.NEIA, St. John's 31 Jul 2013

Sustainability within SPOThe Long Term ViewFrom Chairman SPAC, rec’d in Aug 11:“As a group we should always seek tobe ahead of legislation rather thanreacting to it: that even if theenvironmentally “clean” way of doingsomething is more expensive andtherefore on the face of it uneconomic,we should always, regardless ofmandatory legislation, have a close lookat the overall feasibility of adopting sucha practice both from the point of view ofgeneral public good and enlightenedself-interest”.NEIA, St. John's 31 Jul 2013

Sustainability within SPOWhy do we do SD?A boat…...Profitability:The Business Caseis a boat..….is a boat..….NEIA, St. John's 31 Jul 2013

Return on Net Asset Employed 2010Sustainability within SPO10.0%TidewaterSPO8.0%Farstad6.0%GulfmarkSolstad4.0%Bourbon2.0%5.0% 10.0% 15.0% 20.0%Net Assets CAGR 2005 - 2010NEIA, St. John's 31 Jul 2013

Sustainability within SPO50.0%45.0%40.0%35.0%30.0%25.0%20.0%15.0%10.0%5.0%0.0%2004A 2005A 2006A 2007A 2008A 2009A 2010FEBITDATidewater Seacor GulfmarkSolstad Farstad SPOBourbon offshore EzraNEIA, St. John's 31 Jul 2013

Sustainability within SPONEIA, St. John's 31 Jul 2013

Sustainability within SPOProfitability: The Business CaseThe chart below from a Harvard Business School study, shows theperformance of 180 companies over 18 years. The 90 firms thatadopted environmentally and socially responsible policies significantlyoutperformed their peers.Investing $1 in1993 in a portfolio of:High Sustainability firms wouldhave grown to $22.6 in 2010Low Sustainability firms wouldhave grown to $15.4 in 2010NEIA, St. John's 31 Jul 2013

Sustainability within SPO• What is Sustainability?• Why do we do it?• What are we doing?NEIA, St. John's 31 Jul 2013

Sustainability within SPOThe EnvironmentSPO is determined to be a good steward of the natural resourcesand the biodiversity under our influence by such as:• The Office Environmental Re-Audit done in 2012 so that thevisible face of SPO remains “best in class”;• Swire Pacific Green Guidelines followed:• using FSC Certified paper and double sided printing• less air-con / heating in offices• Video-conferencing facilities to minimise travel;• TBT-free anti-fouling paint;• Offices use low emissions vehicles where possible.NEIA, St. John's 31 Jul 2013

Sustainability within SPOThe Environment• Continually review the feasibility of using LNG fuel and/or bio-fuelon SPO vsls;• IMO “Hong Kong Ship Recycling Convention” (MEPC #962):the “Green Passports” initiative;• The “Green Zone” FEMS is being used on BDE, RVR and all new“P Class”, and will be progressively fitted in the fleet SEEMPs nowon all vessels (prior to, and in excess of regulatory requirements);SPO bears the incremental costs for using such “better”, moreenvironmentally-sustainable, but possibly more expensive productsSPB is the Environmental Management Rep under ISO 14001NEIA, St. John's 31 Jul 2013

Sustainability within SPOThe EnvironmentSPO is a member of the World Ocean Council (WOC)The WOC is the only international, cross-sectoral alliance forprivate sector leadership and collaboration in “Corporate OceanResponsibility”. Companies and associations worldwide aredistinguishing themselves as leaders in ocean sustainability andstewardship by joining the WOC.The Responsible Global Community is actively seekingways to protect the oceans. By being a member of WOC,SPO is be able to make both its voice, and the voice ofthe offshore sector, heard more clearly.NEIA, St. John's 31 Jul 2013

Sustainability within SPOEnvironmental Involvement and Support• Biosphere Foundation – 3 year grant to support IWCresearch on cetaceans and marine mammals off thecoast of Sri Lanka.Pigmy Blue Whale, ship-strike.Sri Lanka Sunday Times, 2010NEIA, St. John's 31 Jul 2013

Sustainability within SPOEnvironmental Involvement and Support• Partnership with Endangered Species International inCotabato, South Mindanao to enhance the environmentto help protect IUCN critically endangered PhilippineForest turtles.NEIA, St. John's 31 Jul 2013

Sustainability within SPOSPO’s Journey towards “Net Zero Env Impact”ENVIRONMENTALIMPACT AREAS:Supply Chain‣ Emissions (CO 2and Pollutants)reducedEmissionsNetZeroWater‣ Energy efficiencyincreasedEnergy / CarbonWasteNEIA, St. John's 31 Jul 2013

Sustainability within SPO/SPACOverview – Net Zero• Aspirational and achievable;• Through business plans and boardlevel focus in the operating companies;• Targets, KPIs, Measurement• Enabling engagement at all levels;• Accountability, innovation• Identifying and addressing financialimpacts of non-financial areas;• Risk Management;• Financial, social and environmental viability.NEIA, St. John's 31 Jul 2013

Sustainability within SPO/SPACNet Zero – key actionsSustainable Development Fund• Relevant to current business, clear sustainability criteria.• Biofuel – CO 2mitigation / positive biodiversity impact• Sustainable biomass;• Scalability;• Supply chain integration.• Investment control• Partners – compatible values• Strategic value of the Swire brand• Energy efficiency projects to benefit from lower returnon capital criteriaNEIA, St. John's 31 Jul 2013

Sustainability within SPO/SPACNet Zero – key actions (continued)• Energy Committee – using existing technical expertisewithin the Group to share knowledge, technology,experience, to push cooperation and realise the benefits(i.e. energy savings, carbon credits);• ‘Closed Loop’ waste focus; potential value of wastestreams• CX’s uniform recycling; recycled yarn - Groupopportunity.• Swire Beverages zero waste water.• Future Scenario Planning (resource impact)• Structured Stakeholder engagement;• Reporting and valuation.NEIA, St. John's 31 Jul 2013

Sustainability within SPO/SPACNEIA, St. John's 31 Jul 2013

Sustainability within SPOThe Environment• SPO’s 2010 - 2012 CO 2 average directly attributableclimate footprint (iaw ISO 14064) was 56,164 tCO 2 e, from:• flights for staff• emissions from off-hire FO and LO consumption• office electricity usage• shore based vehicular usage• freon consumption• It is forecast to avg 48,966 tCO 2 e p.a. over next 20 yrs,or a total of 979,324 tCO 2 e• Reducing this footprint significantly is not feasible (shipsburn FO even at anchor/offhire, seafarers must fly to ships)NEIA, St. John's 31 Jul 2013

Sustainability within SPOThe EnvironmentSPO has committed to generate enough“REDD-plus” carbon credit offsets for itsdirectly-attributable footprint to be climateneutral wef 01 Jan 11 – TOWARDS NET ZEROOur REDD+ credits meet both the Voluntary Carbon StandardAssociation and Climate Community and Biodiversity Standards andare (rigorously!) independently auditedNEIA, St. John's 31 Jul 2013

Sustainability within SPOREDD+ Carbon Offset Credits -through investment in threatenedvirgin forests in Paraguay

Sustainability within SPOThe EnvironmentSPO has donated to a localNGO to fund purchase of6,500ha (~25 sq miles) of thelargest remaining areas ofUpper Paraná AtlanticRainforest in the transitionalChaco-Pantanal area in NE ofParaguay, through the WorldLand Trust(patron: Sir David Attenborough)NEIA, St. John's 31 Jul 2013

Sustainability within SPONEIA, St. John's 31 Jul 2013

Sustainability within SPODry Chaco (L) andPantanal Wetlands Transitional Forest (R)an area rich in bio-diversityNEIA, St. John's 31 Jul 2013

Sustainability within SPOWithout REDD initiativesthe PARF carbon sink(and bio-diversity)is lost forever toranching (above) andsoy production (left)NEIA, St. John's 31 Jul 2013

Sustainability within SPOThe Environment• This is a designated 'biodiversityhotspot' and will be set aside as areserve of “avoided deforestation”,assisted natural regeneration andplantation with native species• This has sufficient biomass togenerate just under 1m tCO 2 esequesterable carbon credits, orthe 49,000 tCO 2 e offsets per yearthat SPO needs for the next 20years to be climate neutralNEIA, St. John's 31 Jul 2013

Sustainability within SPOThe EnvironmentButterflies at the San RafaelNational Park, ParaguayBirds in Chaco PantanalIBA, ParaguayIt can be argued that it would be better toavoid GHG production in the first place,rather than to seek to mitigate its effects,but increasingly, and certainly as wemove to a world post the Kyoto Protocol,after 2012, environmental activists arenow accepting that whilst desirable, it israrely practically achievable, and thatfiscalization throughout the businessprocess will ultimately be more efficient.SPO could seek to trade any surplus carbon credits each year, eitherinternally within the group, or on the open market, but this is not intended.NEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and Development• Education and Culture• Employment Development• Social Investment• Technology DevelopmentNEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and Development• Supporting local charities, working with, raising theprofile on environmental, underwriting the start-upCapex for recycling schemes etc., and especiallytargeting assistance in time or money or resourcesto our key stakeholder / employees’ communities• Swire group Charitable Trust(SPO contributing ~CAD 0.8 million to the Swiregroup Charitable Trust annually)NEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and DevelopmentSwireGroupCharitableTrustEducationArts andcultureLEPROSY PROJECTTAIKOO PRIMARY SCHOOL, COMMUNITY ENGLISHLANGUAGE LABTEACH FOR CHINALEAP (LIFESTYLE EDUCATION ACTIVITY PROGRAMMESUSTAINABLE TARGET EDUCATION PROGRAMME (WWF)HK PHILHARMONIC ORCHESTRASWIRE SYMPHONY UNDER THE STARSARTS WITH THE DISABLED ASSOCIATIONEnvironmentSWIRE INSTITUTE OF MARINE SCIENCESWIRE MARINE CENTRE (XIAMEN UNIVERSITY)CARBON DISCLOSURE PROJECTGUANGXI FOREST PROJECTOTHER: SWIRE PROFESSORSHIP OF AEROSPACEENGINEERING (HKUST)NEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and DevelopmentSPO’s Corporate Philanthropy Committee iscurrently supporting the following projects:• Propeller Club: sponsoring 5 groups to date, each of25 disadvantaged scholars from around the Philippinesto gain a trade skill at the Don Bosco TechnicalInstitute in Manila.4 th group: Ship Mechanic course and 5 th group:STCW Culinary & Kitchen Management course(male & female) are happening in 2013.Upon successful completion we seek to offermaximum employment at sea with SPO.• SPO University Scholarship: for a child of a SPO company employeeto undertake a 3 year first degree each year at a world Top 500 rankeduniversity. Open to all, irrespective of country of residence.NEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and Development• SMTC Partnership with RMU: sponsoring cadets from Regional MaritimeUniversity (RMU) in Accra, Ghana. This provides a flow of Junior Officerswhilst SPO gains a local “License to Operate”;• SPO Bursary at NTU: SPO has sponsored a bursary in perpetuity,at NTU in Singapore for Engineering/Marine PWD Undergraduates;• Sponsoring Singaporean undergraduate management traineesunder Singapore Maritime Foundation (SMF) ONE (Outreach Network).Two already working in HOF, two more starting in Aug 2013, and 4 in 2014;• Sailors Society Asian Challenge (Mt Kinabalu): SPOSPO made “$ for $” matching donation to the 5 (of 42)teams climbing Mt Kinabalu on the weekend beforeSingapore Maritime Week. All the money raised(CAD 120,000 by SPO, of CAD 770,000 total in 2013)goes to support seafarers worldwide.NEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and DevelopmentSPO’s Corporate Philanthropy aims as far as possible to:• Involve Business Critical Community Engagement (“BCCE”);• Be Strategic;• Involve a Long-Term Partnership;• Be Responsive to Community Needs;• Normally avoid “One-Offs”;• Involve fewer but larger sums, rather than many small donations,as these have an impact multiplier.NEIA, St. John's 31 Jul 2013

Sustainability within SPOCommunity Involvement and DevelopmentAnd in complying with these guidelines, we corporatelywould generally direct our CP towards:• Provision of Educational and / or Health Opportunities for Youth;• Enhancing SPO’s Presence in our Stakeholder Communities;• Environmentally Sustainable issues;whilst as best possible simultaneously;• Demonstrating a strategic fit with SPO’s business;and• Fostering or enhancing a Corporate Partnership with SPO (ratherthan being disconnected philanthropy).NEIA, St. John's 31 Jul 2013

Sustainability within SPOSPO 2010 SDReport was wellreceived, andstill sets SPOapart from itspeer group.NEIA, St. John's 31 Jul 2013

Sustainability within SPOThank youWhen all the trees have been cut down,When all the animals have been hunted,When all the waters are polluted,When all the air is unsafe to breathe,Only then will you discover you cannot eat money.Cree Indian ProphecyAny questions?NEIA, St. John's 31 Jul 2013