Green’s Competitive Edge

Green’s Competitive Edge Political & Economic Implications & Key Risks FPPA 12th Annual Convention Tucson, AZ March 3, 2009

Provide Insights & Info… • How sustainability fits into the changing landscape • Who’s driving sustainability • What’s important now • The risks associated with sustainability • Where your business can focus for success

Sustainability Today… • More defined and more important than 1 year ago • Being leveraged as the neutral and galvanizing cause that people, parties, governments and nations can agree on. • Strongly coupled with the economy & economic recovery Sustainability is bigger than you and me and it’s surrounded with very powerful players.

Sustainability Importance – Where it Started Wanting to move faster and push farther than anyone else and knowing that nations, regions, municipalities and states would never move quickly enough, Wal-Mart created THE SCORECARD. • Establishes 7R’s • Launches Sustainability Summits • Establishes Sustainability Value Network • Pushes China to “go green”

Hardening Their Resolve… Even in Uncertain Times “With all that is going on in the global economy, should being a socially and environmentally responsible company still be a priority? You’re darned right sustainability should be a priority.” “This global economy will turn around. But the social and environmental challenges we are addressing today will be with us for decades.” Outgoing Walmart CEO, Lee Scott – Fall 2008 Incoming Walmart CEO, Mike Duke – 2/2009 New Wal-Mart Boss Wants to "Accelerate" Green Efforts …the company will continue to work toward meeting its various green targets, such as its goal to become a zero waste operation and source all its energy from renewable sources, while stepping up pressure on suppliers to improve their environmental performance. www.businessgreen.com, accessed 2/23/09

Wal-Mart Is Not Alone.. Increasing Focus on Sustainable Packaging CPGC’s focus their sustainability efforts: • Reduce packaging weight – package to product rations • Reduced greenhouse gas emissions • Reduced water usage • Biodegradable alternatives to plastic • Maximizing the use of recycled materials • LCA results to understand how to reduce environmental burdens • Standardized eco-labeling • Reduce waste and improve handling

Research Organizations Consultants 3PL, 4PL, 5PL Non-Gov’t Organizations Academia Trade Associations CPG’s & RetailersMoving Beyond Packaging Materials • Beginning to consider the “whole value chain’s” sustainability  • Moving toward “greening the supply chain” • Developing new relationships & learning The Collaborative Supply Chain “We want to look at innovation to reduce not just packaging materials, but also energy, water, transportation and replacing the use of non-renewable energy materials with renewables.” Tony Burns P&G

The Collaborative Packaging Value Chain • New collaboration opportunities across the value chain • Don’t forget about non-traditional collaboration Google Wants Big Piece Of Home Energy Management Biz Google has unveiled Google PowerMeter, a prototype Web application that displays home energy consumption broken down by appliance. The software requires “smart” meters, which provide real-time information to both the utility and the customer, ...

The Collaborative Packaging Value Chain • New collaboration opportunities across the value chain • Don’t forget about non-traditional collaboration • Competition: value chain vs. value chain • Raw materials suppliers working with Brand Owners • Opportunities to “close the loop” on packaging waste • Waste to Value • Partnering with NGOs • Retailers creating packaging departments • Looking to differentiate their packaging Net: Linear relationships of the past are not a viable means for future growth

SUSTAINABLE PACKAGING COALITION The Sustainable Packaging Leaders • Linkages to retail &consumer products companies strengthening • Cooperation and collaboration platforms expanding • Focused on energy, emissions & natural resources • High levels of visibility & influence

What are the Leaders Saying:Ann Johnson/SPC on Innovation • We need to value materials more than we currently do • The cost of something doesn't reflect the environmental impact. There isn't a price/cost associated with emissions (yet). GHG Protocols & GHG Productivity SPC Sustainable Metrics Project Project’s primary purpose is to develop guidelines for measuring the sustainability of packaging and packaging systems. Source: Excerpts, CMM Online, “Sustainable Packaging: What Does It Really Mean For Converters? [part 2]”, May 2008

Gwen Ruta, VP Corporate Partnerships Excerpts:“Waste Less, Earn More” December 2008 • Potential in the US and the existence elsewhere of regulatory schemes related to carbon emissions • Increasing transparency of corporate actions • Needed shift from companies viewing the environment as a cost center to seeing it as a proactive & strategic revenue-enhancer • Pollution is waste, waste costs money – reduce pollution, reduce costs • Pay to burn fuel, create emissions – reduce burning, reduce emissions, reduce costs • Creation of new markets through sustainability leadership Source: MIT Sloan Management Review, Waste Less, Earn More (What a Partnership Insider Has Learned), Interview with Gwen Ruta, 12/09/08

McKinsey Energy Study Focused on Carbon Abatement & Economic Growth • Calculate the amount of output produced by metric tonne of CO2e emitted • Today: $740 of GDP/tonne of emissions • To reach goals set by the IPCC (International Panel on Climate Change) must increase 10 fold or $7,330 GDP/tonne • Calls for efficiency standards to overcome the “market imperfections” that prevent energy efficiency opportunities with net economic benefits from being realized • Calls for governments to create stable and long-term incentives to promote low-carbon energy sources and discourage emissions of CO2 • Calls for incentives to preserve forests Source: http://www.mckinsey.com/clientservice/ccsi/economic_opportunities.asp

Government, NGO’s & Business Agreeing • Next 3 – 5 years • Climate change will drive the sustainability agenda • 3 – 5 years after that… • Water: if we don’t stop climate change there will be less of it to go around • On Climate Change: National & International programs that will raise the cost of doing business for companies that aren’t paying attention to climate change are on their way. The near-term plan & stimulus dollars were set in place at the National Clean Energy Summit last week.

The Powerhouse Behind “The Plan” • The National Clean Energy Project: Building the New Economy • Focus on modernizing and expanding the electricity grid • Smart Grid component capable of capturing and distributing renewable energy from where it’s plentiful to where it’s needed. • Integrating energy efficiency and distributed generation into operation and regulation • Rapidly increasing transmission capacity for renewable energy • Reducing our nation’s dependence on foreign oil by: • Examining short- and long-term solutions to replace foreign oil with domestic resources to fuel vehicles and trucks, including natural gas. S. Chu K. Salazar Sen. H. Reid C. Browner T. Boone Pickens B. Clinton & J. Podesta DOE Awarded $38.7B

Sustainability Defined… Summary: what’s important now, why, who’s driving it & the risks Energy (NR-e) Reasons: Climate Change National Security Drivers: Government Biz Risks: Supply Disruptions Price Volatility Profit Losses Natural Resources Reasons: Globalization Resource Scarcity Drivers: Retailers States NGO’s Communities Biz Risks: Additional Costs Corporate Image Emissions (CO2e) Reasons: Climate Change & Health Drivers: Government (energy) NGO’s States Biz Risks: Additional Costs Corporate Image

De-Risking… Eliminate & Reduce • E/R Risks, E/R Costs • Reduce Energy Consumption Along with Related Emissions (GHGs) ahead of regulations • Move Toward Renewables – Costs of Non-renewable energy likely to be increased to stimulate renewable adoption • De-materialize your processes – take out what you can - embrace alternatives & innovation • Establish value for your waste • “Green your supply chain” • Be Transparent & Require Transparency • Align with sustainable player & collaborate • Seek Certifications

Thank You… Questions debbra-a.k.johnson@usa.dupont.com Learn more at www.cyrel/sustainability.com “We do not inherit the Earth from our Ancestors, we borrow it from our Children.”

Sources: Environmental Data & Guidance • Environmental Protection Agency: www.epa.gov • Sustainable Packaging Coalition: http://www.sustainablepackaging.org • World Business Council for Sustainable Development http://www.wbcsd.org • World Resources Institute: http://archive.wri.org • World Packaging Organization: http://worldpackaging.org Emission factors to convert energy usage to carbon emissions available at: Department of Energy http://www.eia.doe.gov/oiaf/1605/coefficients.html World Resources Institute http://www.ghgprotocol.org/calculation-tools Others: Carbon Fund: http://www.carbonfund.org/ U.S. Printing Sustainable Green Printing Partnership: http://www.sgppartnership.org Read “Economic Opportunity in a Carbon Neutral World” at: http://www.mckinsey.com/clientservice/ccsi/economic_opportunities.asp

Green’s Competitive Edge