Corporate Responsibility Managing our impact Analyst roadshow 24 October 2005
Introductions Kieran McKinney, Investor Relations Manager, Centrica Steve Mancey, Director of Procurement Strategy, Centrica Energy Jill Harrison, Head of Consumer Affairs, British Gas Diana Montgomery, Head of Environment…
Defining our approach We seek to proactively manage the social, ethical and environmental impact of our business activities, engaging a wide range of stakeholders to minimise risk, create sustainable value for our shareholders and…
Centrica Corporate Responsibility Strategy Maximise shareholder value Underpin our values and business principles Identify key impact areas Consult with stakeholders Monitor and benchmark our activities Report and communicate…
Corporate governance & risk management Processes to identify, manage & mitigate business risk Centrica Board set risk tolerance levels in line with strategy Risk management is embedded within all business units Integration of…
Key impacts Managing our impact on climate change Addressing fuel poverty and energy efficiency Questions and discussion 6
Steve Mancey Director of Procurement Strategy Centrica Energy
Issues and opportunities Climate change = global issue + business as usual It has created investment opportunities It has created new markets to trade in It influences the way we run our power stations 8
Climate Change and upstream operations Renewables Obligation - on our supply business EU Emissions Trading Scheme - on generation, gas production and trading 9
Renewables Obligation Market based mechanism Supply obligation - 5.5 % (2005/6) rising to 15.4% (2015) Recycled buyout money increases value if shortfall grows Current ROC price is around 41 Centrica is meeting its supply…
EU ETS Phase 1: 2005 - 2007 6 sectors including power and oil and gas across EU25 Impacts Centrica gas and power assets Cap and trade CO2 allowance market mechanism Free allowances issued to all installations for almost BAU Market…
EU ETS Created new trading market - over 1M tonnes CO2/day Centrica one of largest traders - 20% of volume Operational despatch decisions take account of CO2 Emissions purchase contract signed with Fiji hydro project Cost impact…
Summary Managing climate change is integral to our strategy Market mechanisms will change and evolve Skills to manage risks and protect our customers AND Identify opportunities to create value for investors 13
Jill Harrison Head of Consumer Affairs British Gas
Our Environment Programmes Obligations Delivering our Going beyond our obligations obligations EEC products Think Energy EEC EE Advice Line Green products EE Advice Here to HELP CO Awareness Energy Labelling Energy Labelling…
The Energy Efficiency Commitment a brief history Energy efficiency obligations were first introduced in 1994 for electricity suppliers (EESoP) Key driver for programme is Government policy to reduce carbon emissions, assisting low…
Significant growth in both the size of our obligation and the scale of our programme EESOP EEC1 EEC2 EEC3 2000 - 2002 20032 - 2005 2005 - 2008 2008 - 2011 Target 5 TWhs 27 TWhs 49TWhs Developing our positioning/ lobbying…
Delivering commercial and brand opportunities from EEC INNOVATION & DIFFERENTIATION BRAND LEADERSHIP Meeting Social Adding Value Obligations Here to HELP* Boiler Manufacturer Programme* Engaging Achieving Cost Customers…
By the end of 2004, 3m homes had benefited from EEC CUSTOMER EXPERIENCE MIDAS EE Audit Price Promise Condensing Currys Boilers Energy Services Motability Warm 3 million PARTNERS Zones Council INNOVATION Tax homes Lighting…
Supporting vulnerable customers means addressing a complex mix of issues getting this right strengthens our brand reputation, and will enable us to address some of our wider commercial issues - Hard to reach people - Socio-demographic…
With our recent price increase we announced a programme to protect our most vulnerable customers through this coming winter 250k of our existing most in need vulnerable customers offered a rebate of up to 60 (40 gas, 20 elec)…
One of the key components of EEC is the requirement to support vulnerable (priority) customers 50% of the EEC target has to be delivered to the priority customer group this is driven by the desire to achieve social equity Meeting…
So our challenge was to turn the priority customer element of the EEC obligation into an opportunity Opportunity Challenge Build Brand Solution Regulatory obligation to improve energy Innovate and differentiate efficiency in fuel…
here to HELP award-winning, flagship, fuel poverty programme Unique collaboration of the private, public and voluntary sectors tackling fuel poverty Social Housing Providers 283m nationwide programme: commenced late 2002 ambition…
here to HELP continues to make real progress towards our ambition of 1m homes Results .. Into Year 3 860 here to HELP communities 433,000 homes covered 139,000 home assessments completed, giving: 33,500 charity partner…
Diana Montgomery Corporate Responsibility Manager British Gas
Energy Labelling 27
Extending our green product portfolio In September 2005 British Gas launched 3 new green products: Climate Aware Customers can make their home more energy efficient and offset their homes CO2 emissions for as little as 20 Renewable…
Think Energy Education Programme Launched in 2000/2001 to provide national curricula resources for key stages 2 and 3. Extended in 2002/3 to include GCSE students, and to A Level students in 2004 Think Energy website includes all…
Carbon Monoxide Awareness - NAG YOUR LANDLORD Carbon Monoxide (CO) kills up to 50 people each year. As the UKs largest energy supplier British Gas is committed to raising awareness and ensuring gas safety within the home The…
British Gas Business Supplies green energy to major customer such as Vodafone and BT Runs innovative Business Energy Efficiency Programme to improve energy use by industrial commercial and local authority customers Provides…
Business Energy Efficiency Programme 32
Investment in new technology New technology can fulfil part of our commitment to deliver renewable energy and provide superior service to deepen customer relationships British Gas is pursuing opportunities across a range of…
Broadening our green product portfolio A range of innovative renewable technologies will be launched from 2006 to complement existing energy efficiency products Domestic Wind Micro CHP Solar Thermal Fuel Cells 34
Conclusions Managing key impacts Integral to delivery of strategy Governance structure in place Stakeholder engagement is key Turning obligations into opportunities 35
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