Responsible Investment Cape Town Energy Efficiency Forum Jon Duncan – 31

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Responsible Investment

Cape Town

Energy Efficiency Forum

Jon Duncan – 31 st August 2012

2

Agenda

1.

Sustainability Context

− Climate change as one aspect

2.

Responsible Investment

− Unpacking the Jargon

− What issues do we look at?

3.

Understanding climate impacts

− Policy

− Impacts

− Technology

4.

Example of Technology impact

1.Sustainability context

World population from 1800 to 2100

(UN 2004 projections & US Census Bureau historical estimates)

9 to 11 bn by

2050

6.93 bn - 2010

Implications:

• Consumption growth

• Urban densification

• Aging populations

• Poverty /inequality

• Conflict /unrest

• Disease /malnutrition

2.6 bn - 1945

1. Sustainability context

Climate change

Chemical pollution

Not yet quantified

Ocean acidification

Atmospheric aerosol loading

Not yet quantified

Stratospheric ozone depletion

4

Rate of biodiversity loss

Phosphorus cycle

(biogeochemical flow boundary )

Land system change Global freshwater use

Source: 2010 Stockholm Environment Institute - System limits to Growth

Nitrogen cycle

(biogeochemical flow boundary)

1

. Sustainability context

Declining resources and ecosystem service

“Living off the earths interest not its capital”

5

The Natural Step

Increasing demand for resources and ecosystem service

Time

6

2. Drivers of responsible Investment in SA

• Key drivers:

• United Nations

Principles for

Responsible

Investment (UN PRI)

• Regulation 28 of the

Pension Funds Act

(Reg 28)

• Code for Responsible

Investing SA (CRISA)

• Emerging business case

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2. ESG Factors

3. Three Aspect to Climate impacts

• Policy impacts

– Pricing of externalities

– Changing of building codes

– Product specification

– Lease requirements

• Physical impacts

– Threat of flood

– Adverse weather

– Fire

– Drought

– (all of the above could occur up and down stream in the supply chain)

• Technology

– Greater levels of efficiency

– Short obsolesce cycles

– Threat of substitution

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4. Case study – Energy Efficiency

Building Overview

This shopping centre is located in Claremont, Cape Town

The GLA is 43,654m2

It consists of three levels of retail & four levels of parking

HVAC equipment consists of the following:

• 8 x Water cooled chillers

• 6 Cooling towers

• Primary chilled water pumps

• Secondary chilled water pumps

• Condenser water pumps

• Air handling units

• Return air fans

• Parking ventilation fans

• Extract & Fresh air fans

4. Case study – Energy Efficiency

Scope of Intervention

• Improve HVAC performance to allow chilled water temperature to drift to reduce chiller load by 400KW in summer and 620KW in winter

• Install Variable Speed Drives to Secondary Chilled Water Pumps

• Install Variable Speed Drives on Cooling Tower Fans

• Automate Fresh Air Dampers with ext air temperature as reference

• Introduce Precooling

4. Case study – Energy Efficiency

Average Monthly Savings (KW) 616,200 kWh

Annual Savings (KW) 7,394,400 kWh

Annual Savings (R)

Project Cost (R)

Payback Period

R2,246,418.00

R398,788.00

Funded by ESKOM DSM

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Q & A

13

Regulatory Information

Old Mutual Investment Group (South Africa) (Pty) Limited

Physical Address: Mutualpark, Jan Smuts Drive, Pinelands, 7405

Telephone number: +27 21 509 5022

Old Mutual Investment Group (South Africa) (Pty) Limited is a licensed financial services provider, FSP 604, approved by the

Registrar of Financial Services Providers (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial

Advisory and Intermediary Services Act 37 of 2002. Old Mutual Investment Group is a wholly owned subsidiary of Old Mutual

(South Africa) Limited. Reg No 1993/003023/07.

The investment portfolios may be market-linked or policy based. Investors’ rights and obligations are set out in the relevant contracts. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance.

Personal trading by staff is restricted to ensure that there is no conflict of interest. All directors and those staff who are likely to have access to price sensitive and unpublished information in relation to the Old Mutual Group are further restricted in their dealings in Old Mutual shares.

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In respect of pooled, life wrapped products, the underlying assets are owned by Old Mutual Life Assurance Company (South

Africa) Limited who may elect to exercise any votes on these underlying assets independently of Old Mutual Investment Group.

In respect of these products, no fees or charges will be deducted if the policy is terminated within the first 30 days. Returns on these products depend on the performance of the underlying assets.

Old Mutual Investment Group has comprehensive crime and professional indemnity insurance. For more detail, as well as for information on how to contact us and on how to access information please visit www.omigsa.com.

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