Business Perspective on Sustainable Growth Preparing for Rio+20

CLIMATE CHANGE AND SUSTAINABILITY Business Perspective on Sustainable Growth Preparing for Rio+20 – Summit Recap

www.kpmg.com/sustainability

KPMG International b | Business Perspective on Sustainable Growth © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. n 14–16 February 2012 in New York City, KPMG International hosted over 600 executives from 40 countries around the world at a Summit Othat addressed one of the fundamental challenges of our time: driving sustainable business growth in a resource-constrained world. The event – Business Perspective on Sustainable Growth: Preparing for Rio+20 – was organized in cooperation with the United Nations Environment Programme, United Nations Global Compact and the World Business Council for Sustainable Development. It provided an important forum to identify the sustainability risks and opportunities facing business leaders and policymakers and to explore collaborative strategies for action. We are pleased to present this summary which gives a flavor of the various discussions that took place. It also includes a set of 15 recommendations, endorsed by Summit attendees, which will be presented to the upcoming UN Rio+20 Conference in June 2012, where world leaders will gather to address the global sustainability challenge. Our Summit also saw the launch of a major KPMG study that presents the 10 sustainability megaforces set to impact each and every business over the next 20 years, and analyzes potential responses. You may download a copy of the study, Expect the Unexpected: Building business value in a changing world, by visiting our website: www.kpmg.com/sustainability.

Michael Andrew Yvo de Boer Chairman, KPMG International Special Global Advisor KPMG Climate Change & Sustainability

Preparing for Rio+20 – Summit Recap | 1 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 14 February Tuesday

February 14 Tuesday Plenary Session Global Sustainability Trends: Preparing for the future

Anthony Kuczinski President & CEO, Munich Reinsurance America, Inc. Michel Liès Group CEO, Swiss Reinsurance Company Ltd Jorma Ollila Chairman, Royal Dutch Shell Paul Polman Chief Executive, Unilever Ron Insana Senior Analyst, CNBC (Moderator)

The panelists in this discussion recognized that global sustainability trends, including population growth, climate change, resource and water scarcity and food security, are interconnected and have significant impacts on business, the environment and society. Foreseeing the unforeseeable is becoming a business imperative requiring a change in the business approach, they said.

© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. “The unprecedented pace of technological for running the business more change gives opportunities to business to sustainably and driving innovation. Many create wealth and well-being,” said Jorma examples were discussed of leading ollila of Shell. companies embracing the concepts of linked prosperity and shared value. Paul Polman of Unilever issued a call for business leaders to be more courageous The panelists stressed however that in setting long-term strategies focused business needs long-term transparency, on satisfying consumer needs rather than continuity and stable policy frameworks short-term financial performance. He that create incentives for investment, said that CEos should seek shareholders such as a global price on carbon. whose values are aligned with those of Global stability is critically important to the business. business, they said, and businesses and Both Michel Liès of Swiss reinsurance governments need to take a partnership and Anthony Kuczinski of Munich approach. Since different regions are at reinsurance highlighted the role of the various phases of development and have insurance industry as an enabler for different risks and opportunities to face, sustainable business. Understanding global companies need to engage with sustainability risks and ensuring that the governments around the world. pricing of those risks is clear and visible To view a replay of the videocast of can help to foster innovation. this plenary session, please visit Panelists agreed that the business www.kpmg.com/sustainability. case for sustainable development is strong and many companies are already moving ahead. It was noted that building sustainability aspects into the business model is imperative for competitiveness in the long-run. Speaking from their personal experience of running large global businesses, the panelists noted that CEos have the power to act ahead of the regulators and do things differently, taking responsibility

Preparing for Rio+20 – Summit Recap | 3 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 14 February Tuesday

Plenary Session Policy Imperatives: Driving green growth

Long-term stable policy and global cannot continue and that existing cooperation were key themes of this patterns of operation need to change. Andrew Ferrier discussion panel, with panelists issuing Managing Director, It was recognized that most countries a clear call for long-term targets to Canz Capital Ltd cannot effect global change through enable business to invest. There was individual actions but also that if a Philippe Joubert general agreement that fossil fuel country wants to hold a position of Advisor to the Chairman & CEO, subsidies should be withdrawn but leadership in the world then it also Alstom a recognition that this would need needs to demonstrate leadership on the to happen gradually, and that any Rintaro Tamaki issue of sustainability. Sectoral action significant change to the energy sector Deputy Secretary-General, OECD by industry was also seen as a key would inevitably be opposed by those opportunity for change. Connie Hedegaard whose interests were threatened. European Commissioner for Taxation was highlighted as a key tool Finally, panelists agreed that Climate Action, European to provide the necessary incentives to environmental regulations should not be Commission business. seen as costs but as investments for the future and as business opportunities. Ron Insana When asked about the key outcomes Senior Analyst, CNBC (Moderator) they would like to see from rio+20, To view a replay of the videocast of panelists cited an international this plenary session, please visit understanding that business-as-usual www.kpmg.com/sustainability.

4 | Business Perspective on Sustainable Growth © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Break-out Session 1 ensuring an energy Secure Future

The key theme emerging from this session was that achieving an energy secure future is a difficult balancing act, where the varying needs of people, the environment, governments, shareholders and others must be taken into account and addressed. “We are standing at a triple crossroads,” said Arturo

Gonzalo of Repsol, “where we must limit CO2 while also satisfying rapidly growing demands for energy and providing access to energy for the 1.3 billion people who currently lack it.” Access to energy must be considered a universal right, the panel agreed. The challenge now is to deliver that right while minimizing environmental impacts and leap- frogging carbon intensive technologies. Getting our cities right will be core to this ambition, especially in the context of rapid urbanization around the world. New strategies for developing cities are needed, utilizing technology such as smart grids and electric vehicles, much of which already exists today. Communication is crucial, especially communication by policymakers to help create Kersten-Karl Barth, Director, Siemens, AG the incentives and policy Steve Corneli, Senior Vice President, Sustainability, Policy & Strategy, NRG Energy, Inc. frameworks needed to develop and deploy new technology Arturo Gonzalo, Director of Institutional Relations and Corporate Reputation, Repsol at the scale and speed it is Jeanne Ng, Director – Group Environmental Affairs, CLP Holdings Ltd required. Samuel Tumiwa, Deputy Regional Director, Asian Development Bank Harry Verhaar, Head of Global Public & Government Affairs at Philips Lighting John Gimigliano, Principal, KPMG in the US (Moderator)

Preparing for Rio+20 – Summit Recap | 5 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 14 February Tuesday

Break-out Session 2 Transportation: Critical success factors for sustainable mobility

This session saw broad consensus technological development, suggested on key issues despite the different Jigar Shah of the Carbon War room. Suzana Kahn Ribiero backgrounds of the panelists. Green Economy Sub Secretary, When the panelists were asked what Rio de Janeiro State Secretariat of Much of the discussion focused on would define success at rio+20, two Environment what business needs to communicate messages came across loud and clear: to policymakers in order to make Chris Schroeder • The importance of genuine mobility more sustainable. A common Head of Corporate Social partnerships between businesses view was that patchwork regulations Responsibility, Environment & Fuel and policymakers. Trust, honesty, across borders can be challenging for Projects at Qatar Airways Group transparency, commitment and companies. Since business is global, deep engagement were all words Jigar Shah there is an increasing need for unified mentioned in this context. CEO, Carbon War Room policies and reporting standards that enable global comparison. • The need for a clear roadmap David Tulauskas and targets, with metrics-based Director – Sustainability, David Tulauskas of General Motors said commitments that businesses can General Motors Company that regulation can struggle to keep work towards with confidence. pace with technology development Scott Wicker and that this is an opportunity for Chief Sustainability Officer, UPS business and policymakers to work F. Blair Wimbush collaboratively. Easing regulatory Vice President Real Estate and requirements in some cases could help Corporate Sustainability Officer, to foster innovation and cut the cost of Norfolk Southern Corporation Vincent Neate Partner, KPMG in the UK (Moderator)

6 | Business Perspective on Sustainable Growth © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Break-out Session 3 Financial Services: How does the financial services sector need to change to drive sustainable growth?

The panel acknowledged that assessing important area where the need for sustainability performance is a challenge financial structures is strong. Michael Baldinger for analysts because different companies CEO, SAM Sustainable Asset The panel also discussed the negative present the picture in different ways. Management AG effects of taking a short-term financial Analysts want 10 years of history, view, although it was noted that the Michel Liès full sector coverage and maximum management of pension funds is a long- Group CEO, Swiss Reinsurance disclosure, said Curtis ravenel of term undertaking. It was acknowledged Company Ltd Bloomberg LP. The sustainability data that more work needs to be done on that is available is often not easy to use Kenneth Mehlman developing sophisticated sustainable and therefore the tension continues. Head of Global Public Affairs, pension plans. Despite this, there was a view on the Kohlberg Kravis Roberts & Co LLP panel that investors are increasingly In the final question of the session, Stephanie Miller taking sustainability issues into account panelists were asked what was more Director, Climate Business Group, when making investment decisions. important for getting business to International Finance Corporation “Investors are at the stage of getting it,” operate more sustainably: vision and said Michael Baldinger of SAM. leadership, or regulation? The panelists Curtis Ravenel agreed that both are essential although Global Head of Sustainability, Discussion continued on the Michel Liès of Swiss reinsurance Bloomberg LP theme of how finance can move Company noted that, “You need to markets and shift the focus towards Jeremy Anderson check that the vision of leadership is the sustainability without over-regulation Chairman, Global Financial right one.” by governments. The panel also noted Services, KPMG in the UK that many corporations are ahead of Kenneth Mehlman of KKr gave (Moderator) the investment community – there are the example of acid rain that was a examples where companies did not big problem 20 years ago but was need regulation and policy to forge eliminated through a combination ahead. of leadership, a clear regulatory framework, targets and data. Inequality and lack of financial inclusion for much of the world’s population “You need a top-down approach to were raised as issues that the financial create the right culture. Data integration services sector needs to address. is the key,” said Michael Baldinger. Finance for rural communities in developing countries was seen as an

Preparing for Rio+20 – Summit Recap | 7 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. 14 February Tuesday

Break-out Session 4 Industrials: Sustainable value creation: From risk to opportunity across the industrial enterprise

Panelists agreed that the effects of global sustainability megaforces are developing quickly and companies need to change to keep pace. risks from energy volatility Kevin Anton and water and resource scarcity are high and one of the main challenges for the Vice President & Chief sector is to decouple energy use and environmental footprints from business Sustainability Officer, Alcoa Inc. growth. regulation and policy are changing at warp speed, increasing complexity Katherine Blue for businesses. Hyper-efficiency and energy innovation are becoming central to Managing Director, responding to these megaforces. KPMG in the US Simply reacting is not enough. “Leadership means proactively managing these Thomas Jostmann challenges,” said Thomas Jostmann of Evonik Industries. Senior Vice President Corporate But the megaforces also bring substantial opportunities, panel members argued. Environment & Responsibility, These include enhancing brand and reputation, improving innovation and learning (for Evonik Industries AG example, technological innovation and employee training) and delivering cost savings. Clay Nesler It was noted that sustainability must be aligned to the business model through Vice President, Global Energy & corporate policy, strategy, governance, innovation and a focus on reporting. Sustainability, Johnson Controls The speakers noted that leading practices for companies investing in sustainability Puvan Selvanathan entail: setting goals and making them public; analyzing data frequently; applying Global Sustainability Advisor, resources (both internal and external) and financing. “Driving change internally Sime Darby starts with the CEo and works down into the organization from there,” said Kevin David Tulauskas Anton from Alcoa. Director – Sustainability, Clay Nesler of Johnson Controls raised the issue of human rights in the supply chain General Motors Company and noted that processes are maturing around this issue. Jeff Dobbs A growing interest in innovation partnerships with the venture capital community was Global Head of Diversified highlighted. “Another growing area for public-private partnerships is the treatment of Industrials, KPMG in the waste water and hazardous materials,” said David Tulauskas of General Motors. US (Moderator) Looking towards rio+20, the speakers noted the importance of producing a policy toolkit that will drive investment, developing a common framework of sustainability standards and pricing in externalities.

8 | Business Perspective on Sustainable Growth © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Preparing for Rio+20 – Summit Recap | 9 © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. February 15 Wednesday Plenary Session Climate Action: Developing the business case

Discussion began on the topic of people who currently lack it will provide Panelists also said that they expect whether the world is moving closer to business with a huge opportunity not environmental regulations to get a binding international agreement on only to make money but also to learn tougher in the future. Lars Thunell of IFC climate change action. The panelists and develop new technologies. pointed to the example of China moving agreed that while there was encouraging ahead on innovation to tackle problems “It means thinking differently from the progress at the Durban climate associated with dust, smog and public established system,” said James rogers conference in 2011, business is moving health. of Duke Energy. forward independently of politicians and Stable, clear and consistent policy must continue to do so. “Success depends on the two key frameworks were seen as crucial to parameters of policy and technology,” on the subject of the energy supply progress in both developed nations and said Tulsi Tanti of Suzlon. “These two mix, all panelists supported the case for emerging economies. factors can solve all the issues,” he said. a diverse portfolio of energy sources, To view a replay of the videocast of acknowledging that no single source can The need for long-term thinking in this plenary session, please visit serve any country’s entire energy needs. energy planning was discussed, as was www.kpmg.com/sustainability. They agreed that universal access to the importance of a level playing field energy is an important leading principle. for energy sources without distorting Providing electricity to the 1.3 billion subsidies.

James Rogers Chairman, President & CEO, Duke Energy Corporation Tulsi Tanti Chairman & Managing Director, Suzlon Energy Limited Lars H. Thunell Executive Vice President and CEO, International Finance Corporation (IFC) Ron Insana Senior Analyst, CNBC (Moderator)

10 | Business Perspective on Sustainable Growth

driving Sustainable Value Creation: Peter Bakker Grasping the opportunities President, World Business Council for Sustainable Development This session opened with discussion of need to provide information that enables Dennis Jönsson how global sustainability megaforces consumers to make the choice. Labelling President & CEO impact business. Panelists said that of products was seen as essential and Tetra Pak International SA population growth and the rise of the panelists predicted that carbon and global middle class create immense water footprints will soon be included in Steen Riisgaard opportunities for business but that new product labels. President & CEO, Novozymes models, technology and infrastructure Business can do a lot ahead of the Gregory Sebasky are needed. Water scarcity and climate regulators to improve efficiency, innovate CEO North America, Philips change, as well as the relationship and educate consumers, but certainty, Electronics between food and water, were also noted longevity and predictability in regulation as important. “Water scarcity could be Ron Insana are needed. To that end, business an even bigger problem than carbon Senior Analyst, CNBC (Moderator) must collaborate with policy, using a emissions,” said Peter Bakker of WBCSD. differentiated approach to engage each Panelists saw sustainable value creation country and government. as being about making more with less, “It is important that governments and driving innovation by collaborating support the right initiatives, such as with stakeholders. They also highlighted certified timber, that will drive change a role for small and medium-sized more quickly,” said Dennis Jönsson of enterprises. Gregory Sebasky of Philips Tetra Pak. noted that smaller companies often look at things differently and are prepared to To view a replay of the videocast of take more risks. this plenary session, please visit www.kpmg.com/sustainability. Customer preference was identified as a key driver: many business-to-business consumers, especially larger firms, are demanding more sustainable products. But, said Steen riisgaard, consumers won’t pay a premium or accept inferior quality for green options. The challenge is to deliver sustainable products at the same price and quality level as conventional products, and businesses

Preparing for Rio+20 – Summit Recap | 11

Break-out Session 5 Sustainable Issues and Strategies for Consumer Companies

Discussion opened with panelists other panelists suggested that “We need a new way of working exploring the 10 sustainability collaboration between businesses is together, with businesses taking megaforces highlighted in KPMG’s often the quickest and most effective action and governments providing the report Expect the Unexpected, and approach to improve sustainability within frameworks and incentives,” said Sabine identifying those with the greatest consumer markets sectors. Sustainable ritter of The Consumer Goods Forum. impact on their own businesses. Water refrigeration was highlighted as an area Tony van Kralingen of SABMiller scarcity, material resource scarcity and in which coordinated industry action can concluded, “We should go to rio with deforestation – among others – were have dramatic positive impacts. a spirit of optimism and challenge, to acknowledged as major challenges and While the panel acknowledged brand liberate innovations and great ideas. it was recognized that these are being enhancement as a key sustainability We need actions, not hesitant words.” driven by other megaforces including driver for consumer markets companies, population growth and wealth. several panel members noted that A recurring theme throughout this sustainability challenges are also session was the role of government opportunities for growth. Companies, Patrick Firmenich in driving sustainability; it was they said, are no longer viewing CEO, Firmenich SA widely accepted by the panel that sustainability purely as a means to Stephanus Kranendijk governments cannot do the job alone. enhance or protect reputation, but are CEO, Desso The sourcing of sustainable palm oil finding opportunities to reduce costs, was noted as an initiative on which engage the supply chain and develop Kees Kruythoff governments, businesses and NGos innovative growth strategies. recycled Unilever CEO, Brazil must work together. products and low-water products were Sabine Ritter noted as particular opportunities, as “But, government is not the answer to Strategy, Industry Initiatives & were ethically-sourced products. everything,” said Patrick Firmenich. “You Strategic Alliances, The Consumer do not need government to intervene “It starts and ends with leadership,” said Goods Forum everywhere.” As an example, he pointed Kees Kruythoff of Unilever as he called Tony van Kralingen to the success of NGo certification for companies to make sustainability Director Supply Chain and HR, schemes for food and timber products in their business growth model rather than SABMiller plc driving new business models. developing stand-alone sustainability strategies. Willy Kruh “Companies are much faster than Global Chairman, Consumer governments,” added Stephanus Looking towards rio+20, the panelists Markets, KPMG in Canada Kranendijk of Desso. “If you are the called for participants at rio to take full (Moderator) fastest, you will succeed.” advantage of the opportunity the event provides for creating new partnerships.

12 | Business Perspective on Sustainable Growth

© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Break-out Session 6 Mining: Succeeding in a resource-constrained world

Carbon emissions, access to water and At the same time there is a need to energy, regulation, price impositions improve the sustainability of operations Felicidad Cristobal and access to natural resources are all in the mining sector by drawing on CEO of the ArcelorMittal challenges facing the mining sector technological developments. Stiaan Foundation at the moment. regulatory forces are Wandrag noted that sustainability Liu Daojing changing the competitive landscape targets must be set, and reliable data Assistant President, and demand for products is increasing. gathered, analyzed and reported China Minmetals Corporation At the same time, there are challenges in order to improve processes and around where to mine which, in some efficiencies. reporting must be used as Madhu Vuppuluri cases, require companies to operate in a management tool to drive efficiencies. President & CEO, difficult and unstable areas. Increasing There is also a need to build an Essar Steel Minnesota LLC pressure from governments and incentive scheme around indicators of Stiaan Wandrag communities makes it harder to operate. performance, including bonus system Senior Manager, Sustainable evaluation, ensuring that targets are set, Discussing the implications of these Development, Sasol measured and rewarded. challenges, the panelists concluded that Yvo de Boer partnerships with local communities Looking towards rio+20, the panelists Special Global Advisor, Climate and governments are vital for the noted the need for progress in Change & Sustainability, KPMG success of mining companies. Without addressing resource scarcity, financing (Moderator) communication, trust, agreements with of greenfield projects, responding to and participation in local communities, community needs and dealing with mining development and operations resource constraints. Liu Daojing of cannot take place. China Minmetals Corporation noted the need to participate in international Felicidad Cristobal of the ArcelorMittal dialogue to achieve agreements between Foundation noted that governments corporations, the financial industry, in developing countries are communities and governments. concerned about companies taking their natural resources and want to ensure that companies create value for communities in return. In this context mining companies should look to schools and hospitals, and infrastructure for local communities. Madhu Vuppuluri of Essar Steel Minnesota emphasized that different countries have very different challenges and therefore each approach to working with communities needs to be individual. Stiaan Wandrag of Sasol also argued that companies need to be careful to understand local culture, as social requirements are as important as environmental requirements for achieving sustainable growth.

Preparing for Rio+20 – Summit Recap | 13

Break-out Session 7 Sustainable Cities Infrastructure

Discussing challenges that cities face in revenue to finance sustainable choices. light of global sustainability megatrends, However, rachel Kyte observed that Dr. Anne Kerr the panel agreed that conventional cities are increasingly finding creative Director, Mott MacDonald approaches to infrastructure planning ways to use finance, including funds Hong Kong Limited can no longer be relied upon in our coming from municipalities, national changing world. In this context Dr. Anne governments and blended finance. Andreas Klugescheid Kerr of Mott MacDonald Hong Kong Governmental Affairs, BMW The speakers agreed that Limited called for the complete revision decentralized decision processes Rachel Kyte of approaches to city planning and water, and partnerships with governments Sustainable Development, food and energy strategies and for are vital for successful infrastructure World Bank increased integration of these strategies. development. Andreas Klugescheid of Marcelo Moacyr rachel Kyte of the World Bank noted BMW emphasized that industries have Director, Foz do Brasil S.A. that solutions are needed to make to work with cities to find solutions infrastructure resilient to climate to city problems. rachel Kyte noted Dr. Tim Stone change, to increase access to energy, new opportunities to use data and Global Special Advisor, KPMG in to address the transport needs of a technology. The panel noted that the UK (Moderator) growing population and to deal with municipalities may be more effective water stress. However, Marcelo Moacyr than national governments in making of Foz do Brasil noted that there is no changes and seeing successful magic blueprint solution and each case infrastructure development through is unique. to fruition. Governments must also collaborate with each other for success one of the key challenges outlined by through initiatives such as the C40 the panel was revenue generation and Cities Climate Leadership Group. financing. Since water and electricity prices are generally state-driven, the challenge is to generate sufficient

14 | Business Perspective on Sustainable Growth

© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Break-out Session 8 The Challenge of Sustainable Growth for Pharmaceuticals, Life Science and Healthcare Organizations

The panel acknowledged that most of healthcare organizations to create the global sustainability megaforces sustainable growth opportunities and Sir Neil McKay identified by KPMG directly impact this opportunity should be leveraged. CEO, National Health Service pharmaceutical and health sectors. Susanne Stormer of Novo Nordisk (NHS) Midlands and East, UK The sectors are responding to a wide noted particular opportunities in waste range of sustainability drivers, they reduction, energy efficiency and Susanne Stormer said, including population growth, renewable energy. Vice President, Corporate urbanization, demographic change, Sustainability, However, speakers noted that incentives climate change, increasing energy costs Novo Nordisk are required for the whole value chain, and pressure for resource optimization. not just parts of it. Pat Tiernan of TPG Pat Tiernan Sir Neil McKay of the NHS noted that highlighted supply chain programs as a Chief Sustainability these global drivers create strong route to affect change. Officer – Field Operations, incentives to run and use the healthcare TPG Capital Future priorities for the sectors were system more sustainably. In the UK, the seen to be: illness prevention strategies, Dr. Mark Britnell main driver for sustainability in healthcare better demand management, less Chairman, Global Healthcare is productivity gain. institutionalized care for people with Practice, KPMG in the UK Several speakers stressed the potential long-term conditions, fewer centers (Moderator) for technology to drive efficiency, providing complex care in order to service improvements, diagnostics enhance safety, and greater use of and cost reduction. They emphasized technology (such as tele-health). that these technological opportunities Panelists also noted the need for policies can be mobilized in conjunction with that create incentives for sustainable sustainability ambitions. healthcare and highlighted public-private partnership as a key vehicle for driving The pharmaceutical industry has change. shown a readiness to work with

Preparing for Rio+20 – Summit Recap | 15

on the final day of the Summit, attendees voted on a set of 11) Provide strong price signals on resource scarcity and 15 recommendations to be in the run-up to rio+20. The environmental impacts in order to drive investment in majority of the recommendations received more than sustainable growth. 90 percent support from the audience: 12) Deliver new platforms for public-private collaboration at 1) Global sustainability megaforces are having serious the international and national levels. impacts on all businesses, and addressing them is Businesses and governments should collaborate to: essential for future business success. 13) Adopt ambitious and measurable global sustainable 2) Strong and renewed leadership is urgently required from development goals for poverty eradication, food security, businesses and policymakers to achieve sustainable and water management and universal access to energy. equitable growth. 14) Establish standards for reporting sustainability 3) There is a clear economic case for doing business more performance. sustainably. 15) Develop a global framework requiring all listed and large Business leaders should: private companies to report on sustainability performance. 4) reduce their focus on short-term performance in favor of In concluding the Summit, Yvo de Boer, KPMG’s Special longer-term sustainable growth. Advisor, Climate Change & Sustainability Services, noted, 5) Use their power to act quickly and decisively to drive “Today’s leaders are struggling with complexity. Until now, change where policymakers can’t. we found global trends on energy, water security and food scarcity complex enough. The convergence of other forces 6) Adopt sustainable business models to ensure long-term such as population growth, deforestation and a surging middle competitiveness. class is impacting business and the world around us. Leaders 7) Work with customers, consumers and suppliers to drive are overwhelmed by the sheer scale of these problems and change. struggling to act. There are ways to solve these problems, and that includes harnessing the capacity of business.” 8) Proactively engage with governments to define solutions for sustainable growth. “I am encouraged by the exchange of ideas at this Summit from business leaders who are not going to wait. In fact, they 9) Adopt stretching sustainability targets (for example to are already moving ahead with sustainable solutions. That said, reduce water, energy and material use) in order to drive even active leaders with sustainable business practices will innovation. run into problems if the policy framework does not create the Governments need to: right investment conditions,”concluded Yvo de Boer. 10) Provide long-term, stable and transparent policy frameworks and incentives to scale-up investment in sustainable development.

16 | Business Perspective on Sustainable Growth

As sustainability and climate change issues move to the top of and national boundaries. our experienced teams assist corporate agendas, KPMG member firms advise organizations organizations in the following areas: to better understand the complex and evolving environment, • Sustainability risk and opportunity analysis helping them optimize their sustainability strategies. • Corporate responsibility strategy assistance KPMG’s Climate Change and Sustainability Services (CC&S) professionals provide sustainability and climate change • Corporate Social Responsibility/Sustainability/GHG Assurance, Tax and Advisory services to organizations information systems design and implementation to help them apply sustainability as a strategic lens to • Regulatory framework assessment and optimization, their business operations. We have more than 25 years of including tax and carbon emission regimes experience working with leading businesses and public sector organizations, which has enabled us to develop • Tax incentives and credits extensive relationships with the world’s leading companies • Sustainable supply chain enhancements and to contribute to shaping the sustainability agenda. • Corporate responsibility reporting and assurance, The expanding CC&S network, across more than 50 countries, including pre-audit assessments and emissions enables us to apply a consistent, global approach to service verification. delivery and respond to multinational organizations’ complex business challenges with services that span industry sectors For more information, please visit our website, www.kpmg.com/sustainability

Preparing for Rio+20 – Summit Recap | 17

© 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. All rights reserved. Contacts Argentina Czech Republic Luxemburg South Africa Martín Mendivelsúa eva Rackova Jane Wilkinson Neil Morris e: [email protected] e: [email protected] e: [email protected] e: [email protected] Armenia denmark Malaysia South Korea Andrew Coxshall Christian Honoré Lamsang Hewlee Sungwoo Kim e: [email protected] e: [email protected] e: [email protected] e: [email protected] Australia Finland Malta Spain Adrian V. King Nathalie Clément Josianne Briffa Jose Luis Blasco Vazquez e: [email protected] e: [email protected] e: [email protected] e: [email protected] Austria France Mexico Sri Lanka Peter ertl Philippe Arnaud Jesus Gonzalez Ranjani Joseph e: [email protected] e: [email protected] e: [email protected]. e: [email protected] Azerbaijan Georgia mx Sweden Vugar Aliyev Andrew Coxshall Netherlands Åse Bäckström e: [email protected] e: [email protected] Bernd Hendriksen e: [email protected] Baltics Germany e: [email protected] Switzerland Gregory Rubinchik Jochen Pampel New Zealand Hans-ulrich Pfyffer e: [email protected] e: [email protected] Jamie Sinclair e: [email protected] Belgium Greece e: [email protected] Taiwan Steven Callaars Konstantina Passalari Nigeria Charles Chen e: [email protected] e: [email protected] dimeji Salaudeen e: [email protected] Brazil Hungary e: [email protected]. Thailand Sidney Ito Gabor Cserhati com Paul Flipse e: [email protected] e: [email protected] Norway e: [email protected] Bulgaria India Jan-erik Martinsen u.A.e. emmanuel Totev Arvind Sharma e: [email protected] Sudhir Arvind e: [email protected] e: [email protected] Philippines e: [email protected] Cambodia Indonesia Henry d. Antonio u.A.e. and Oman Jonathan Levitt Iwan Atmawidjaja e: [email protected] (Lower Gulf) e: [email protected] e: [email protected] Poland Andrew Robinson Canada Ireland Krzysztof Radziwon e: [email protected] Bill J. Murphy eoin O’Lideadha e: [email protected] uK e: [email protected] e: [email protected] Portugal Vincent Neate Chile Israel Cristina Tomé e: [email protected] Alejandro Cerda Oren Grupi e: [email protected] ukraine e: [email protected] e: [email protected] Romania Olena Makarenko China/Hong Kong Italy Gheorghita diaconu e: [email protected] Leah Jin PierMario Barzaghi e: [email protected] uS e: [email protected] e: [email protected] Russia John R Hickox Colombia Japan Igor Korotetskiy e: [email protected] Orlando delgadillo A. Yoshitake Funakoshi e: [email protected] Venezuela e: [email protected] e: yoshitake.funakoshi@ Singapore Jose O. Rodrigues Cyprus jp.kpmg.com Sharad Somani e: [email protected] Iacovos Ghalanos Kazuhiko Saito e: [email protected] Vietnam e: iacovos.ghalanos@kpmg. e: [email protected] Slovakia Jonathan Levitt com.cy Kazakhstan Quentin Crossley e: [email protected] Alun Bowen e: [email protected] e: [email protected]

kpmg.com

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2012 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: Business Perspective on Sustainable Growth – Preparing for rio+20 – Summit recap Publication number: 120397 Publication date: April 2012