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Respondent CDP 2006: AstraZeneca

1 General does climate change represent commercial risks and/or opportunities company
believe AZ relatively small impact climate change large organisation working hard make sure impact minimised sure making positive contribution sustainable future opportunities represented potential reduce operating costs environmental impacts enhance stakeholder acceptability organisation responding greenhouse gas obligations placed organisation result EU Emissions Trading Directive anticipate national commitments Protocol emerging include expansion coverage EU ETS second subsequent phases taxation financial instruments emissions trading appearing Annex B territories anticipate continuing upward pressure energy utility prices carbon costs internalised power supply industries Potential direct effects climate change easily foreseeable include increased risk company assets flood disruption supply chain capabilities mechanisms water energy supply failures disruption transport systems resulting increased frequency severity extreme weather events analysts postulating changes disease patterns result climate change AstraZeneca developer innovative pharmaceuticals meet world health needs need react changes emerge

2 Regulation financial strategic impacts company existing regulation GHG emissions estimate impact proposed future regulation
Seven AstraZeneca facilities hold CO2 emission permits EU Emissions Trading Scheme (ETS) total sites received allocations 226 thousand tons years phase EU ETS result internal abatement efforts position trade allocation surplus predicted emissions phase approach â ‚ ¬ 2 5 million revenue company intended reinvested energy efficiency inside AZ preparing anticipated lower allocations second phase EU ETS 2008 2012 financial impact mitigated existing planned emission abatement activities foresee existing reasonably predictable regulatory frameworks having significant financial impact organization far greater importance maintaining reputation organization responsible proactive action mitigate climate change emissions role contributing societal response adaptation especially area healthcare provision changing disease patterns

3 Physical risks operations affected extreme weather events changes weather patterns rising temperatures sea level rise related phenomena future actions taking adapt risks associated financial implications
Currently AstraZeneca felt little actual impact climate disruption 65 000 employees operating 100 countries 11 research development centres seven countries 27 manufacturing sites 19 countries dedicated ensuring deliver secure high quality cost effective supply effective prescription medicines bring benefit patients add value shareholders wider society Climate induced changes disrupt ability operate effectively realise benefits include interruption energy transport infrastructures scarcity water resources disruption key supply chain products services combine global capabilities high quality relationships local markets enable focus responding quickly effectively changing business needs confident rise adaptive challenges presented climate change instance  · invested combined heat power plants manufacturing sites UK Puerto Rico delivering reduced operating costs CO2 emissions giving sites degree protection future energy supply instabilities  · increasingly encouraging uptake electronic communication technologies video conferencing netmeeting reduce reliance transport systems  · manufacturing sites located countries water resources classified â € ˜ highly stressedâ € ™ â € ˜ medium stressedâ € ™ UNEP (geodata grid unep ch) 11% total water use globally areas water scarcity recognise responsibility use water wisely protecting ability operate effectively areas China example active programme minimize water use place including efficient use cooling water Similarly India R& D site effluent treatment plant process water recycled 90% used purposes maintaining landscaped garden Australian manufacturing site joined national â € œ Drop Countsâ €  water minimization programme ready react potential changing world healthcare needs result climate change ceremony held Boston (US) July AstraZeneca receive 2006 Frost & Sullivan Global Excellence Philanthropy Pharmaceuticals & Biotechnology Award Frost & Sullivan particularly singled â € œ Access Medicinesâ €  programmes total $835m worth medicines (valued average wholesale price) available annually including $4m donated disaster relief efforts following recent Asian tsunami hurricane Katrina Pakistan earthquake extension corporate sponsorship Red Cross TB programme Kyrgyzstan Turkmenistan years

4 Innovation technologies products processes services company developed developing response climate change
manufacturing processes tightly controlled regulatory procedures registration medicines place â € œ Triggersâ €  process make sure new processes invent environmentally benign possible manufacture environmental aspects optimised life cycles monitor closely development new cleaner technologies providing operations energy transport delivering medicines patients instance 2004 signed year contract nPower UK supply sites Climate Change Levy exempt renewable power invested fuel efficient Combined Heat Power plants big manufacturing centres currently considering potential introducing low carbon energy technologies wind geothermal hydrogen fuel cell technology use renewable power site CHP provided 38 16 thousand tons CO2 reductions respectively 2005 sites operating hybrid fuel vehicles constantly looking ways extend deployment fuel efficient modes travel transport Brazil sales forceâ € ™ s fleet consists 400 vehicles 250 Flex Fuel vehicles powered ethanol petrol 2005 new cars purchased Brazil Flex Fuels ordered 20 hybrid cars form pilot scheme Sweden testing 10 SAAB Bio power cars engines adapted run E85 blend 85% ethanol 15% petrol field inhalation medicines leader finding bringing market therapies avoid use propellant gases large Global Warming Potentials dry powder Turbuhaler technology remain patients dry powder technology unsuitable meet medical needs process gaining regulatory approval pressurised metered dose delivery systems employ HFCs propellant gas HFCs ozone depleting potential reduced global warming potential compared CFC propellants replace

5 Responsibility board level specific responsibility climate change related issues manages company's climate change strategies communicate risks opportunities GHG emissions climate change annual report communications channels
Climate change issues assessed controlled approach Corporate Responsibility AstraZeneca Board approves strategic direction CR non executive Board Member responsibility overseeing issues Management accountability climate change Safety Health Environmental (SHE) performance AstraZeneca Group lies Chief Executive Board AstraZeneca PLC Presidents National Operating Companies local managers addition structure Group places responsibilities functions meet AstraZeneca Policy Management Standards ensure compliance local regulations 2001 established corporate level targets controlling CO2 greenhouse gas emissions recent set targets approved Board September 2005 increase absolute greenhouse gas emissions company 2010 compared 2000 target effectively locks 40% reduction company achieved 1990 2000 despite predicted increasing demand pressurised metered dose inhalers treatment asthma Senior Executive Team members delivery companyâ € ™ s objectives accountabilities climate risks drivers affecting AstraZeneca strategy response targets performance presented printed annual CR Summary report discussed CR section AstraZeneca website http //www astrazeneca com/article/511606 aspx

6 Emissions quantity tonnes CO2e annual emissions main GHG's produced owned controlled facilities following areas listing data country Globally Annex B countries Kyoto Protocol EU Emissions Trading Scheme To assist comparing responses state methodology using calculating emissions boundaries selected emissions reporting standardise response data consistent accounting approach employed GHG Protocol (www ghgprotocol org) list GHG Protocol scope 1 2 3 emissions equivalent showing details sources data audited and/or externally verified
AstraZeneca uses GhG Protocol guide analysis reporting greenhouse gas emissions figures independently assured Bureau Veritas figures presented answer question 7 relate calendar year 2005 Previous responses CDP contain data past years happy provide data required 2005 total direct CO2e emissions use energy 270 kte gaseous releases facilities 18 kte CO2e including releases solvents air HFC use refrigerant raw material manufacture inhalation medicine devices defined GhG Protocol Scope emissions Indirect (Scope II) emissions use energy products grid electricity district heating cooling amounted 289 kte figures include CO2 HFC (non Kyoto) CFC gases CH4 N2O PFC SF6 emissions company trivial CO2e emissions use energy 483 kte (86%) arise facilities sited Kyoto Protocol Annex B countries 160 kte (29%) included EU ETS installation permits (see response question 9 compliance position EU ETS)

7 Products services estimated emissions tonnes CO2e associated following areas explain calculation methodology employed Use disposal products services supply chain
Scope III emissions travel & transport activities waste incineration 354 kte remaining 496 kte CO2e emissions total inventory 1426 kte arose patients using inhalation medicine products essential CFC driven pressurised metered dose inhaler releases parties manufacture key intermediates products behalf 2005 ran exercise gauge extent waste production CO2 emissions use energy external organisations supply materials established pharmaceutical brands involved 32 party suppliers 60 key materials Energy used party premises manufacture products amounted 79 MWh resulting 35 4 thousand tons CO2 emissions 10% AZâ € ™ s manufacturing sites approx 2% total greenhouse gas inventory believe captured data greater 90% established brands outsourced manufacture working improve completeness transparency relevance data

8 Emissions reduction firm's current emissions reduction strategy investment committed implementation costs/profits emissions reduction targets time frames achieve For Electric Utilities question 11
identified areas business opportunities exist reduce emissions global warming gases include  · Implementation energy conservation programmes particularly related fume cupboards laboratories  · Implementation green technology principles process design  · investment greener energy supply external power suppliers  · Installation additional combined heat power plants  · Investment cleaner vehicles primary challenge advantage opportunities help offset increases associated facets growing business Accordingly 2005 Board AstraZeneca approved ambitious target achieving 2010 absolute reduction 11% global warming emissions sources pMDIs goal 2010 absolute emissions sources including pMDIs greater 2000 40% 1990

9 Emissions trading firm's strategy expected cost/profit trading EU Emissions Trading Scheme CDM/JI projects trading systems relevant
Seven AstraZeneca facilities (four UK France Sweden) hold CO2 emission permits EU Emissions Trading Scheme (ETS) total sites received allocations 226 thousand tons years phase EU ETS result internal abatement efforts position trade allocation surplus predicted emissions phase excess Euro 1 5 million revenue company intended reinvested energy efficiency inside AZ 2005 verified emissions indicative annual allocations seven sites listed Site 2005 verified Indicative annual Surplus/ (Shortfall) Value surplus/ emissions (tons) NAP allocation (tons) (tons) (shortfall) (Euros Euro27 ton) Avlon UK 9 214 11 206 1 992 53 780 Alderley Park UK 29 987 26 311 (3 676) (99 250) Charnwood UK 20 317 18 039 (2 278) (61 510) Macclesfield UK 82 131 134 857 52 726 1 423 600 Sà ¶ dertà ¤ lje Sweden 5 970 19 123 13 153 355 130 Dunkirk France 9 780 11 708 1 928 52 060 Monts France 3 028 4 710 1 682 45 410 Total 160 427 226 448 36 446 1 769 230 11% group wide revenue generated EU countries hold permits EU ETS direct relationship output sites involved global nature supply chain received penalties needed buy credits compliance EU ETS anticipate need process developing position regard investment CDM JI projects investments foreseeable case necessary compliance mandatory voluntary reduction obligations AstraZeneca desire make positive contribution development lower carbon economics developed Worlds

10 Energy costs total costs energy consumption e g fossil fuels electric power quantify potential impact profitability changes energy prices consumption
Total energy costs 2005 represented $115M half percentage point $24b sales achieved small proportion revenue compared industry groups believe significant changes level expenditure marginal impact profitability

11 NB question electric utilities Explain extent current future emissions reductions involve change use existing assets (i e fuel switching existing facilities) need new investment percentage revenue derived renewable generation government sponsored price support mechanism

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