Page | 1 MIND THE GAP Page | 2 CARBON CHALLENGE UK CO2 & Other GHG Emissions 775 2050 Target Other GHGs Agriculture & Land use Residential Public MtCO2 Equivalent 77 5. 183 3 Transport 8 80 14 123 125 Business & Industrial Process 573 93 2 77 10 70% cut (=80% vs. 1990) 122 83 Energy supply 243 1990 186 155 2009 2030 Year Excluding Aviation, shipping and imports Page | 3 2050 POPULATION CHALLENGE Page | 4 ENERGY CHALLENGE Page | 5 INVESTMENT CHALLENGE Page | 6 COMMODITIES CHALLENGE Page | 7 WATER CHALLENGE Page | 8 BUSINESS IN A VUCA WORLD Page | 9 LEARNING FROM ICE HOCKEY Wayne Grezky – nicknamed the ‘Great one’ Page | 10 SUSTAINABILITY AND VALUE CREATION Value Creation Levers Impacts of Sustainability Strategy • Brand • Pricing Power • Operational and Resource Efficiency • Supply Chain Optimisation • Lower costs and taxes Pricing Power Cost Savings • Enhanced ability to attract, retain and motivate employees • Customer advocacy and loyalty • Enhanced ability to enter new markets • Lower churn rate • More potential sources of revenue • Employee productivity Employee recruitment & engagement Market Share New Market Entry MARGIN IMPROVEMENT REVENUE GROWTH Profits Free Cash Flow TOTAL SHAREHOLDER VALUE Page | 11 MIT Sloan Management Review – courtesy of Nike • Lower market, balance sheet and operational risk Risk Premiums • Lower cost of capital • Greater access to capital, financing and insurance Cost of Capital Valuation Multiple LOOKING BEYOND BUSINESS AS USUAL Resource efficiency Operational efficiency and cost savings Engaging Employee recruitment, retention and engagement colleagues Developing new business New business opportunities and deepening customer relationships Upgraded Managing existing and emerging operational and business risks risk platforms Collaboration Strategic partnerships and cross industry collaboration Engaging Customers, suppliers, investors, NGOs and investors Brand Page | 12 customers Cost People Customer Markets Risk Investors RESOURCE EFFICIENCY Committed to reducing our environmental impact by 20% by 2020 This is central to our strategy of being the best bank for customers Delivery of this will be through SMART & RESPONSIBLE, our environmental action plan buildings Page | 13 ONE BITE AT A TIME Agree Disagree Page | 14 “It is important to me that the company I work for is actively engaged in combating climate change and other environment related issues” IT ALL STARTS WITH URGENCY AND LEADERSHIP I have to say, I find it virtually impossible to identify a single sector or, for that matter, a single customer that won’t feel the impact of the changes that reducing climate change and environmental impacts will have on our economy and our society.“ (Truett Tate, Group Executive Director, Lloyds Banking Group) Page | 15 KNOW YOUR AUDIENCE Page | 16 BUILDING CAPACITY CONFIDENCE AND UNDERSTANDING Page | 17 CULTURE AND NETWORKS Personal action Network Encourage others Page | 18 EXCELLENT COMMUNICATION Page | 19 DEVELOPING NEW BUSINESS OPPORTUNITIES Page | 20 SUPPORTING THE GREEN ECONOMY Page | 21 UPGRADED RISK PLATFORMS Page | 22 COLLABORATION Page | 23 ENGAGING CUSTOMERS Page | 24 THOUGHT LEADERSHIP = COMPETITIVE DIFFERENTION c F Page | 25 + c I = c R Value Creation Levers SUSTAINABILITY AND VALUE CREATION Pricing Power Cost Savings Employee recruitment & engagement Market Share New Market Entry MARGIN IMPROVEMENT REVENUE GROWTH Profits Free Cash Flow TOTAL SHAREHOLDER VALUE Page | 26 MIT Sloan Management Review – courtesy of Nike Risk Premiums Cost of Capital Valuation Multiple Page | 27