How green is your valley? How much impact could it have?

1. How green is your valley?How much impact could it have? Extract from McKinsey & Company independent analysis for the Climate Group SMART 2020 report July 2008 CONFIDENTIAL This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion.

2. The global ICT footprint* GtCO2e • Embedded carbon • Footprint from use • 0.53 • 2002 • 0.53 2% of total footprint • 2007 • 0.83 • 2020 • 1.43 • CAGR†+6% *ICT includes PCs, telecoms networks and devices, printers and data centers. †Compounded Annual Growth Rate

3. The global ICT footprint by geography Percent of GtCO2e • RoW† • Other industrialized countries • China • OECD Europe • EiT* • U.S. and Canada • 2002 % of 0.53 17 18 11 13 16 25 • 2007 % of 0.83 23 23 12 10 14 20 • 2020 % of 1.43 27 29 10 7 12 14 • CAGR • Percent 9 9 6 3 4 3 * EiT = Economies in transition. (includes Russia and non-OECD Eastern European countries) † RoW = Rest of the World. (includes India, Brazil, South Africa, Indonesia and Egypt)

4. The global ICT footprint by subsector Percent of GtCO2e • Telecoms, infrastructureand devices • Data centers • PCs, peripherals and printers* • 2002 28 14 57 % of 0.53 • 2007 37 14 49 % of 0.83 • 2020 25 18 57 % of 1.43 • CAGR • Percent 5 7 5 *Printers were 11% of the total ICT footprint in 2002, 8% in 2007 and will be 12% in 2020

5. ICT footprint and impact of ICT-enabled abatements GtCO2e • Emissions • ICT footprint • Other abatements† • Selected ICT-enabled abatements • 40.0 • ICT 0.5 • 2002 • 51.9 • ICT 1.4 • 2020 BAU • Abatements • -14.1* • -7.8 • 2020 with abatements • 30† 5 times ICT’s direct footprint * For example, avoided deforestation, wind power or biofuels † 21.9 GtCO2e abatements were identified in the McKinsey abatement cost curve and from estimates in this study. Source: Enkvist P., T.Naucler and J. Rosander (2007), ‘A Cost Curve for Greenhouse Gas Reduction’, The McKinsey Quarterly, Number 1

6. ICT-enabled abatements * Dematerialisation breaks down into all sectors except power. See detailed assumptions in Appendix 3. † Reduces warehousing space needed through reduction in inventory. See Appendix 3. ‡ Reduces energy used in the home through behaviour change. See Appendix 3.

7. Research details This presentation is extracted from research conducted by McKinsey & Company as independent analysis for The Climate Group on behalf of the Global eSustainability Initiative (GeSI). Full report: http://www.smart2020.org/ McKinsey & Company Contacts: Markus Löffler <Markus_Loeffler@mckinsey.com> James Manyika <James_Manyika@mckinsey.com> Jeremy Oppenheim <Jeremy_Oppenheim@mckinsey.com> Supporting organizations: GeSI and member companies: Bell Canada, British Telecommunications plc, Cisco Systems, Deutsche Telekom AG, Ericsson, France Telecom, Hewlett-Packard, Intel, Microsoft, Nokia, Nokia Siemens Networks, Sun Microsystems, T-Mobile, Telefónica S.A., Telenor, Verizon, Vodaphone plc. Additional support: Dell, LG