Mark McElroy, Founder and Executive Director, Center for Sustainable Organizations Mike Bellemente, Director, Climate Counts Gretchen Hancock, Project Manager, Corporate Environmental Programs, GE Jed Richardson, Global Energy Director, Johnson & Johnson Now that many important stakeholders, including a growing number of brands, have understood and appreciated the implications of sustainability context, what tools are best suited to assist in benchmarking against actual natural thresholds? How does the Climate Counts assessment work and why are brands getting engaged?

1. Getting a Grip on Context: Initial Findings of World’s
First Science-Based Approach to Corporate
Sustainability Ratings
The New Metrics of Sustainable Business 2013
Mark McElroy, Center for Sustainable Organizations
Mike Bellemante, Climate Counts
Gretchen Hancock, GE
Jed Richardson, Johnson & Johnson

2. Getting a Grip on Context:
Initial Findings of World's First
Science-Based Approach to
Corporate Sustainability Ratings
New Metrics of Sustainable Business Conference
September 24, 2013

3. For Climate Counts – Why Context?
4 Pillars:
Measure
Reduce
Report
Policy Stance
0 100

4. Great progress – but is it enough?
81% of the world’s 500 largest public companies listed on the
Global 500 engage with CDP to enable effective measurement
of their carbon footprint and climate change action.
Company scores have improved 60% from 2007 on
the Climate Counts scorecard.

6. Are we sustainable?

7. Enter Context-Based Metrics
• In late 2012, CC was
approached by Center for
Sustainable Organizations
(CSO) with a proposal to
enhance CC’s methodology
• Agreed to pilot a new form of
ranking that would be context-
based (i.e., that would rate
corporate emissions against
science-based standards)
• World’s first context-based
sustainability ranking in the
capital markets!

8. Brief Introduction to Context-
Based Carbon Metrics
Mark W. McElroy, Ph.D.
Center for Sustainable Organizations

9. Context-Based Carbon Metrics
• One of a new class of metrics
called context-based metrics
• Not like conventional relative or
absolute metrics
• Impacts measured against
norms, standards, or
thresholds (science-based) for
what they would have to be in
order to be sustainable
• Thresholds for carbon
expressed as concentration
limits in the atmosphere (e.g.,
350 ppm)

10. Context-Based Carbon Metrics (cont.)
• How we build context-based
carbon metrics:
1. Choose a science-based
mitigation scenario (PoleStar)
2. Measure company emissions in
baseline year (2005) and express
as emissions per dollar of
contribution to GDP ($CGDP)
3. Then set reduction targets per
$CGDP for all downstream years
based on science-based scenario
4. Then compare actual company
emissions each year to reduction
targets per $CGDP
5. Adjust for changes in size of GDP
and inflation; and further adjust to
ensure maximum allowable global
emissions, if applied to all GDP-
related sources on Earth, will not
exceed maximum allowable
global emissions per the science-
based scenario
Actual Emissions
Per $CGDP
Normative Emissions
Per $CGDP
< 1.0 = Sustainable
> 1.0 = Unsustainable

11. Initial Results – World’s First
Context-Based Carbon Ranking
Mike Bellamente
Climate Counts, Inc.

12. Initial Results
• Survey Sample
– 100 public companies in multiple sectors
– Range of analysis: 2005-2012
– Data gathered with assistance of South Pole
Carbon in Zurich (Bloomberg) and CDP
• Top-line Highlights
– 51 of 100 scored sustainably, 49 unsustainably
– 4 of the sustainably scoring companies are
known for their histories of using context-based
carbon metrics, including the top three scorers:
• Autodesk, Ford, and Unilever

13. Initial Results (cont.)
• Top 10 Scorers (Sustainable)
1. Autodesk (0.449)
2. Ford (0.575)
3. Unilever (0.600)
4. Eli Lilly (0.601)
5. Canon (0.611)
6. L’Oreal (0.679)
7. GE (0.685)
8. Reckitt Benckiser (0.699)
9. Abbott Labs (0.708)
10. Hyundai (0.730)

14. Initial Results (cont.)
• Bottom 10 Scorers (Unsustainable)
91. P&G (1.560)
92. Cisco Systems (1.566)
93. GM (1.650)
94. Wells Fargo (1.670)
95. Dow Chemical (1.887)
96. Conagra Foods (1.889)
97. Royal Bank of Scotland (2.009)
98. UPS (2.083)
99. Molson Coors (2.721)
100. Weyerhaeuser (3.144)

15. Initial Results (cont.)
• Other interesting results
– We also measured emissions intensity (per $
of sales) and found no positive correlation
between context-based and intensity scores:
• #1 Autodesk ranked 6th on intensity
• #2 Ford ranked 98th on intensity
• #3 Unilever ranked 52nd on intensity
• Worst intensity performer (Cemex) scored
sustainably in the context-based ranking (27th)
– 19 of the 51 companies that scored sustainably
actually had higher absolute emissions in 2012
than they did in 2005 (decoupling is possible!)

16. Q&A with Representatives of
GE and J&J
Gretchen Hancock, GE
Jed Richardson, J&J