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ISSUES FOR

RESPONSIBLE
INVESTORS

POWERING ASIA

JAN 2010

Responsible Research is a signatory to the


United Nations Principles for Responsible
Investment

Incorporating data from


TRUCOST

CONTENTS

POWERING ASIA
PLEASE CLICK TO ACCESS SECTIONS

Responsible Research is an independent provider of sectoral and thematic Asian environment, social
and governance (ESG) research, targeted at global institutional investors. Many of these fund managers
and asset owners now find that traditional investment banking reports, financial models and public
information sources can no longer be relied on to cover all risks to earnings and deliver superior
returns. Companies who do not monitor and report on this non-financial performance not only risk
financial penalties for non-compliance with stricter regulatory environments but are also denied access
to substantial pools of global capital which are managed according to sustainable principles.
Our approach is based on analysis of material ESG factors, which change according to sector and
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use or be offered for general distribution, as part of an general effort to promote ESG integration into
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with contributions from experts, companies and policy-makers.
Responsible Research was founded in 2008 by our Board who have been instrumental in promoting
Corporate Social Responsibility (CSR) and SRI practices in Asia for over 10 years and have significant
experience in the regions emerging investment markets. This team of five works in collaboration with
our full time Asian-based responsible investment analysts and the Responsible Research Alliance, a
group of consultants with subject matter expertise. Together they provide a valuable balance of market
and ESG knowledge, academic rigour, process management, data management, customer relationship
management and senior level contacts.

INTRODUCTION

COMPANY SCORING

15

RESULTS OF COMPANY SCORING

21

DISCUSSION

25

COUNTRY SUMMARIES

47

CONCLUSION

50

APPENDIX: COMPANY PROFILES

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www.responsibleresearch.com

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 2

112

China Power International Dev. Ltd. (Hong Kong)


China Resources Power Holdings Co. Ltd. (Hong Kong)
GCL-Poly Energy Holdings Limited (Hong Kong)
Hongkong Electric Holdings Limited (Hong Kong)
Datang International Power Generational Co Ltd. (China)
Huadian Power International Corp. Ltd. (China)
Huaneng Power International, Inc. (China)
GVK Power and Infrastructure Ltd. (India)
KSK Energy Ventures (India)
Lanco Infratec (India)
Neyveli Lignite Corporation Limited (India)
NTPC Limited (India)
Power Grid Corporation of India (India)
Reliance Infrastructure Ltd (India)
Reliance Power Ltd (India)
Tata Power (India)
Torrent Power (India)
Korea Electric Power Corporation (South-Korea)
MMAC Corporation Berhad (Malaysia)
Sarawak Energy Berhad (Malaysia)
Tanjong Public Limited Company (Malaysia)
Tenaga Nasional Berhad (Malaysia)
YTL Power International Berhad (Malaysia)
Aboitiz Power Corporation (Philippines)
Energy Development Corporation (Philippines)
Manila Electric (Philippines)
Electricity Generating Public Company (Thailand)
Glow Energy Public Company Limited (Thailand)
Ratchaburi Electricity Generating Hldg. (Thailand)

TERMS AND CONDITIONS

ISSUES FOR
RESPONSIBLE
INVESTORS

INTRODUCTION

Introduction
The development of Asias electricity generation industry will shape the future of
our climate. Global consumption of marketed energy is projected to increase by
44 percent from 2006 to 2030. The largest projected increase in demand is for
the emerging non-OECD economies on average 2.3 percent per year, compared
to 0.6 percent for OECD energy use. China and India are the fastest growing
non-OECD countries and are expected to make up 28 percent of world energy
consumption by 2030. In a business-as-usual scenario greenhouse gas (GHG)
emissions are expected to rise similar to the growth in energy use. Due to the
long life span of power plants, the technology choices on the fuel mix of Asias
growing electricity sector made in the next few years will effectively lock in
greenhouse gas emissions for the next 30 to 40 years.
Against this background, we report on the importance of non-renewable electricity
generation in fuelling Asias continued economic growth, but also note cases
where the development of a countrys renewable energy sources are encouraged
by a desire for energy security. We also look at how the provision of power can
be used as a political tool in certain countries
The World Business Council on Sustainable Development defines several specific
current sustainable development challenges for the electricity generation
sector that include diversifying and de-carbonizing the fuel mix and accelerating
research and development. They have also highlighted the need to focus on enduser efficiencies that can have impacts as great as changing productive capacity
and are less capital intensive.1 As transmission and distribution losses as well
as inefficient use of electricity is such big issue in many developing markets
there is also potentially great economic and environmental returns from simply
reinforcing and smartening the grid infrastructure.
Our research, complemented by Trucost data on emissions, has identified
some clear leaders in the areas of environmental performance, management
and in terms of CSR reporting and corporate governance. We have found large
companies that are excellent reporters but have a high-impact business model.
There are also examples of smaller companies with a large share of renewable
energy generation. Some of these are theoretically investable to those looking
to lower a portfolios carbon footprint, but have poor reporting or governance.
The companies under examination have varied business models; some are fully
integrated monopolistic national power companies, others are small Independent
power producers. They may focus just on transmission, distribution and/or
generation. Some rely solely on imported fossil fuels, while others have large
domestic reserves of clean burning natural gas.
Of the companies in our universe, the biggest CO2 emissions producers were
Kepco (Korea), Huaneng Power (China) and NTPC Ltd (India). These global
warmers are estimated to each produce a staggering 180 mtCO2 or more
annually. In terms of the intensity of emissions (measured against revenues),
China Resources was found to have the worst record at an estimated 28,845
tCO2/US$m revenue. Compared to HK Electric, which still burns 68% fossil fuel,
yet has an intensity of only 6,091 tCO2/US$m revenue, it is clear that there are
some fossil fuel burners who are more efficient than others. In China most of
the IPPs rely to a large extent on fossil fuels including Huadian Power and China
Resources Power.
The power generation companies with the largest contribution to earnings
from renewable energy include Aboitiz Power Corp and Energy Development
Corporation (Philippines). Tenaga Nasional (Malaysia) and Tata Power (India)
are also found to have relatively low emissions intensity despite having lower
contributions from renewables.
The clear leaders in terms of CSR reporting and management were found both
in developed markets with strong regulatory control (CLP Holdings (HK) and HK
Electric (HK)) and, unexpectedly, in emerging markets; (Tata (India), Datang
(China), Electricity Generating Corporation (Thailand)).
Responsible Research 2010 | Green Building: Issues for Responsible Investors | 6

Strong environmental management is important in this sector. Climate change


impacts should be recognised and managed at a company level. Potential
impacts of climate change could include flooding, brownouts and unplanned
outages. Access to cooling water supplies also remains a critical issue to consider.
Companies who remain on top of these issues will be able to identify opportunities
for new products and services, but may need to adapt internally and import the
new management skills they need to grow in this new lower carbon environment.
Generally, environmental management is poor within this sector. We scored the
sector on environmental and climate change management separately. No company
in our universe has yet achieved global best practices where environmental
impacts are strategically measured, managed, certified and targets are set. Over
60 percent of the companies covered reported zero relevant information or had
no identifiable management of the issues. Kepco (Korea) contributes the most
to GHG emissions amongst listed Asian power companies (total estimated CO2
emissions) but is one of the top two performers on environmental management.
Conversely, some IPPs with a high proportion of generation from renewables
showed no awareness of environmental management and therefore scored
poorly.
Corporate governance within the power sector varies greatly according to
regulatory environment, business model, stock market listing and reporting
requirements, peer group performance and shareholding structure. China
Resources (HK), CLP (HK) and Reliance Infrastructure (India) perform equally
well at the top of the league but the Malaysian operator, Tanjong, also deserves a
special mention for its Board committee structure and independence of directors.
YTL (Malaysia) also performs well but would be better placed if there were more
independence on the Board and if it were to have to have separate remuneration
and nomination committees.
The poorest performance on corporate governance indicators are also in India
NTPC Ltd, Torrent and Power Grid Corporation which appear to have extremely
poor disclosure and whose board structures do not seem to support the interests
of minority shareholders. They also have the same individual serving as CEO and
Chairman; this is typically seen as an indicator of poor corporate governance
by most governance observers. Kepco (Korea) has a history of poor corporate
governance which adds to the concerns for most responsible investors.
A final note on performance should be made regarding losses in transmission and
distribution. The highest disclosed T&D losses are, not surprisingly, reported in
India; NTPC Ltd (22%), Reliance Infrastructure (21%) and Tata Power (15%).

Chart showing Carbon Intensity of our universe

Responsible investors in Asia will need to remain aware of the complexity and
inter-linkages in the issues of power generation for sustainable development. If
we are to secure balanced global growth, eradicate poverty and minimize the
devastating impacts of climatic change there are bound to be trade offs and
disappointments. Investors should also be aware of the complicated long-term
ecosystem impacts of renewable energies. Hydroelectric plants, for example, have
been associated with extremely high methane emissions when the reservoirs are
at a low level, and we do not yet know the long-term social and economic costs
of resettlement from fertile river valleys and diversion of source rivers. Biomass
generation can have long reaching negative environmental impacts in terms of
reduction in overall biodiversity when primary forest is converted to intensively
farmed monoculture plantation.
There is also the inevitable question of who will end up paying the price for
our stewardship of radioactive uranium and plutonium. The World Nuclear
Organization itself admits that that there are no final disposal facilities (as
opposed to interim storage facilities) in operation in which used fuel can be
placed. Their website states that, There is currently no pressing technical need
to establish such facilities, as the total volume of such wastes is relatively small...
The general consensus favours its placement into deep geological repositories,
initially recoverable.2
We look to global responsible investors who participate in the Asian power
markets to add these issues to their decision-making criteria and collaborate and
engage with these companies to develop more sustainable growth horizons and
better disclosure. This process should enable long term capital flows to support
investment in cleaner generation and more efficient distribution with an aim of
reducing the carbon intensity of the sector over time.

Companies Covered by Market Capitalization (In US$ m)


ISSUES FOR
RESPONSIBLE
INVESTORS

Source: Bloombergs 19th Decemeber 2009


Responsible Research 2010 | Green Building: Issues for Responsible Investors | 8

COMPANY SCORING

Scoring categories:
We reviewed companies for sustainability according to their disclosure and
performance in these six main areas:

We scored 30 Asian electric utilities companies in 7 markets according to specific


environmental and social criteria and according to several corporate governance
metrics.
Companies were selected based on market capitalisation (we had a target of
US$500m free float and above) and location (we covered China, Hong Kong,
Korea, Malaysia, the Philippines, Thailand and India). There were no qualifying
companies in Indonesia, Singapore and Taiwan.
The scoring covers different aspects of the companies ESG performance. The
scoring was performed on the basis of publicly available information found on
company websites, annual reports and environmental, sustainability and CSR
reports. In some cases, it was difficult to locate precise information, for example
information on CO2 intensity measured in g CO2 / MWh.
Where possible, we took data from recent disclosures. However, not all the
desired information is available in one easily accessible location and in a
comparable format. Some companies do not report on all the issues of interest to
this research paper. We have collected information according to the parameters
of the report (publicly available information) on a best efforts basis but cannot
guarantee that it is factually correct. The scoring covers different aspects of the
companies ESG performance and is, itself subjective.
Responsible Research cannot guarantee completeness and accuracy as the
companies themselves have provided much of the information. Other risks
to accuracy include that we may have collected data on different dates and
therefore the most recent improvements in reporting may not be included. Lastly,
there may be omissions if information has been released outside the website or
published reports, for example expansion plans of utilities may only show partial
long term strategy. Where we note n/a the information does not seem to be
available publicly.
The emissions data and information on reported controversies was taken from
Trucost and RepRisk, both widely acknowledged as global leaders in their field.
Trucost, a specialist in assessing environmental impact, provided quantitative
data on CO2 emissions and environmental impact. Trucost measures emissions
of GHG from sources directly owned or controlled by a given company, adds
emissions that arise from purchased electricity consumed in owned or controlled
equipment or operations, and includes all GHG emissions from business travel
and supply chains. GHGs are measured either by recording emissions at source
by continuous emissions monitoring or by estimating the amount emitted using
activity data (such as the amount of fuel used) and applying conversion factor
We provide the following information (where relevant to the business model):

The country in which it is listed

The business model

The generation capacity in MW

The split of the companies generation capacity into fuel sources

Capacity expansion plans (where available)

Operational efficiency metrics, for example generation efficiency of
thermal plants or distribution losses for transmission and distribution
companies (when disclosed)

Quantitative estimates from Trucost on 2008 CO2 emissions:
o
CO2 emissions intensity (the cost associated with the CO2 emissions
assuming a carbon price of 32 USD/t CO2 equivalents)
o
the cost of total direct environmental impacts).

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 10

1.
2.
3.
4.
5.
6.

CSR Management and Reporting


Environmental management
Climate Change Management
Health and Safety Management
Corporate Governance
Controversies

The Asian Utilities Environment and Social Rating


We have selected the following weightings of our scores on the 30 companies to
deliver a ranking within the sector for sustainable investors.

Note on Asian Utilities Environment and Social Rating


It is not easy to make fine distinctions on sustainability issues based on
disclosure alone. The scoring and weighting system we have selected to
identify sustainable utility leaders in Asia is significantly impacted by a
companys climate change score, which in turn relates to its fuel mix, a
decision which is typically dictated by government policy, not the Board.
The scores are, of course, therefore partly a reflection of a companys fuel
and generation mix based on domestic resource availability and related
government policies. It may not be correlated to other material dynamic
variables or inform on whether a particular management team is doing
a good job with the cards they have been dealt. Further work needs to
be done in this sector over time to develop deeper strategic sustainability
ratings based on a blend of governance, active strategy implementation,
adaptation and mitigation.
CSR management & reporting:
Companies should be transparent about how they address environmental
and social issues to allow for informed decision-making by clients,
regulators, stakeholders and investors. A Corporate Social Responsibility
strategy is most effective if there is senior management and/or board level
commitment. Issues that should be addressed include among others CSR
reporting, stakeholder management, community relations, land acquisition
and resettlement for new projects and participation in Global Compact.
Scoring:
0: no relevant CSR disclosure (beyond philanthropy)
1: examples of CSR initiatives, no or very little quantitative information,
some management commitment
2: comprehensive reporting (i.e. companywide, including quantitative
data, possibly GRI compliant) clear management commitment to CSR

Scoring:
0:
no relevant information on climate change
1:
the company acknowledges that climate change is an issue, provides
some data on greenhouse gas emissions and undertakes some efforts
to increase efficiency / reduce emissions
2:
the company provides comprehensive data on greenhouse gas
emissions. It has set clear targets for improvements of efficiency or
reduction of emissions and achieved improvements.

Environmental management:
Considering the impact that power utility companies have on the environment,
Asian utilities should be prepared to measure and manage their environmental
risks. Environmental impacts differ between fuel types, for example the generation
of nuclear waste for nuclear power generators, biodiversity impacts in the case
of hydropower and air pollution from coal fired power plants.
Relevant questions include:





Does the company disclose local air pollutants, i.e. SOx, NOx and
particulates (absolute and per MWh)?
Does the company have an environmental management strategy or
guidelines in place?
Do companies perform comprehensive environmental impact assessments
before constructing new plants?
Does the company invest in emissions reduction technology? Does it
achieve emission reductions?
Does the company disclose water use? Are reductions in water consumption
achieved?
For nuclear power operators: How is nuclear waste handled? Are there
provisions for the decommissioning of used plants? How high are these
provisions?

Scoring:
0:
no indication of environmental management that goes beyond legal
compliance, no relevant information on climate change. No management
team in place.
1:
Environmental management system in place but few details given about
its scope. The company provides some data on environmental impacts
2:
A well-defined environmental management team is in place. The company
has environmental goals and targets but important data is missing,
for instance, information on water use or emissions. Some proactive
environmental initiatives, for example some emissions reductions
achieved.
Not yet applicable for Asia: A comprehensive and certified environmental
management system. The company is aware of its environmental impact and
addresses them in a structured way across the whole company..
Climate Change Management:
Greenhouse gas emissions represent the power utility sectors biggest influence
on the environment. Due to the potential for upcoming CO2 regulation in Asia,
GHG emissions have the potential of becoming a financial risk for companies.
Relevant questions include:






Is the company aware of the issue of climate change?


Does the company know its carbon footprint?
When requested to do so, did the company answer the Carbon Disclosure
Project (CDP) questionnaire?
Does the company undertake efforts to increase its energy efficiency?
Are there targets for reduction of CO2 emissions?
Have reductions been achieved (in absolute and relative terms)?
Are there programs for demand side management, for example smart
metering, peak load shaving and support of customers in energy efficiency
improvements.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 12

Not yet applicable for Asia: The company provides comprehensive


quantitative data on greenhouse gas emissions; it has a clear set of targets
for the improvement of efficiency or reduction of emissions, in addition to a
summary of achieved improvements.
Health & Safety Management:

Companies that take care of their employees tend to have higher staff
retention, higher productivity and higher employee motivation. Hence, there
is a sound economic rationale behind investing in a strong Health & Safety
program.
Relevant questions:
Do employees undergo Health & Safety training?
Does the company have a Health & Safety management system in place?
Does the company report on work related accidents, injuries and fatalities?
Does the company report on human rights issues?
Does the company comply with international Health & Safety standards?
Scoring:
0:
No mention of Health & Safety management at all.
1:
A Health & Safety management system is in place. The company
invests in training, but doesnt report on work related accidents or
fatalities, or human rights. The companys Health & Safety program
doesnt comply with international Health & Safety standards.
2:
The company has a Health & Safety team in place, provides training
to employees, reports on work related accidents and has received an
internationally recognized certification.
Corporate Governance:
We analyzed and scored the following corporate governance measures:
separation of Chairman and CEO, independency of board, independence of
Audit Committee, independence of Remuneration Committee, independence
of Nomination Committee and disclosure of remuneration.
Scoring:
0:
no separation of chairman / CEO
2:
Separation chairman / CEO:
Independency of board
0:
Between 0%-32% of the board is independent
1:
Between 33%-65% of the board is independent
2:
Between 66%-100% of the board is independent
Independence of Audit Committee
0:
Between 0%-32% of the Audit Committee is independent
1:
Between 33%-65% of the Audit Committee is independent
2:
Between 66%-100% the Audit Committee is independent

Independence of Remuneration Committee


0:
Between 0%-32% of the Remuneration Committee is independent
1:
Between 33%-65% of the Remuneration Committee is independent
2:
Between 66%-100% the Remuneration Committee is independent
Independence of Nomination Committee
0:
Between 0%-32% of the Nomination Committee is independent
1:
Between 33%-65% of the Nomination Committee is independent
2:
Between 66%-100% the Nomination Committee is independent
Disclosure of remuneration
0:
No disclosure what so ever
1:
Partial disclosure
2:
Full disclosure
Controversies and Reputational Risk:
We also provide data on some controversial issues in which the studied companies
are, or have been, involved and for which, as a result, they have received negative
publicity. The data on controversies was derived mostly from the internet-based
tool RepRisk that screens global media regarding negative press coverage of
companies, projects and organizations. This information was complemented by
information from other sources, such as the Business & Human Rights Resource
Centre.

ISSUES FOR
RESPONSIBLE
INVESTORS

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 14

RESULTS OF
COMPANY SCORING

The company scoring gives us insight into several different aspects of the
companies environmental impact and ESG performance.
Greenhouse gas impact
In the table below we present the GHG emissions of each company. There are wide
differences between the generation mixes and GHG intensities of the companies
we looked at. Only a few companies have a very high share of renewables in their
generation portfolio. These are Energy Development Corporation and Aboitiz
Power Corporation from the Philippines as well as the Indian company Tata
Power. The significant presence of renewable assets in the generation portfolios
of Philippine companies can be explained by the abundance of geothermal and
hydro electrical power generation sites in the Philippines.
The Chinese companies have a high share of coal in their generation portfolio.
We expect that the two companies that do not provide capacity splits, Datang
International and Huaneng Power, have a share of coal based generation in their
portfolios that is similar to their Chinese peers. Consequently these companies
have high carbon intensities. Neyveli Lignite Corporation also has very high
carbon intensity as its generation is based entirely on lignite coal. The three
utility companies with the highest absolute CO2 emissions are Korea Electric
Power Corporation, NTPC Limited and Huaneng Power International.
There are, quite logically, large differences in the carbon intensity of pure
generation companies and companies that are also or exclusively involved in
transmission and distribution. These two groups are not comparable in terms of
carbon intensity. Carbon intensity is influenced by each companys total business,
including business other than power generation. For example, Neyveli Lignite
has large mining operations, which are more carbon intensive than the property
development, gaming and leisure business that Tanjong Public does on the side.

Influence of greenhouse gas emissions on Asian electric utilities

The companies with the highest renewable contributions and lowest carbon intensity are marked in
green; the least favourable ones are marked in orange.
Responsible Research 2010 | Green Building: Issues for Responsible Investors | 16

Environmental and Social disclosure and performance


We found that disclosure on environmental and social issues is still very weak
among Asian utility companies (see table, below). Out of the 30 power utility
companies, ten provide no business related environmental or social information,
a third do not publish any CO2 emissions data or mention their impact on climate
change. About half of the companies we looked at (47 percent) do not disclose
detailed information on environmental management systems. Nine companies
received zero points on the Environmental or Social scoring.

Companies with scores of 60% and above, a total of six, could be considered
sustainability leaders in the Asian utilities sector. CLP Holdings Limited and
Electricity Generating Public Company both received over 80% for their
environmental and social performance and thereby outperformed all other
companies in our universe. Other leaders include Hong Kong Electric Holdings
Limited, Datang International, Reliance Infrastructure and Tata Power. There
seems to be a strong correlation between the size of Asian utilities and
environmental and social performance. Six of the top ten companies by market
capitalisation are recognized as leaders here.

System losses at Asian power utilities with a Transmission and Distribution


business

Many laggards in the environmental and social rating, such as Neyveli, Huadian,
Huaneng and China Resources, have high carbon intensity, defined as tonnes of
CO2 emitted per one million US Dollars of revenue.
National average environment and social scores ranged from 16.3% to 82%.
Chinese utilities had the lowest average score and Hong Kong the highest.
Malaysia (25.6%) and India (25.8%) were the poorest performers after China
but Thailand had a national average score of 54.3%,
Despite the low average rating of Chinese utilities, there are some notable
examples of companies improving their disclosure and performance. Datang, for
example, published quite an extensive sustainability report in 2008, in which the
company provided detailed data on emissions of SO2 and NOx and water and
waste treatment.
Efficiency metrics:
We also reviewed declared operational efficiency metrics, which give an indication
of how well a company runs its business given its line of business.
The new mandatory reporting on coal consumption per MWh of electricity
produced for Chinese utilities has led to much improved disclosure there (see
table below), although significant differences among companies is still seen.
China Resources Power and China Power International have lower efficiencies
than Huaneng, Huadian and Datang. In general, the newer and larger a coal-fired
power plant is, the more efficient it is. China Power International, for example,
has a large proportion of old plants.

Use of Coal by Chinese IPPs- Information from company websites

China Power International Dev. Ltd.


China Resources Power Holdings Co.
Datang Inter. Power Generational Co
Huadian Power International Corp. Ltd.
Huaneng Power International, Inc.
GCL-Poly Energy Holdings Limited.

Country Coal efficiency (g CO2 / MWh)

HKG
HKG
CHN
CHN
CHN
HKG

334.4
340.5
326.8
326.2
325.9
-

For distribution and transmission companies, system losses are the most relevant
metric, not only from an environmental point of view, but also from a profit
perspective: decreasing system losses directly affects a companys margin and
profits. We were unable to find information on system losses for four out of the 12
transmission and distribution (T&D) companies. Some of the companies reporting
on this metric have very low losses. Most notably Korea Electric Power, followed,
surprisingly by Torrent Power, which scores 0 points in our Environmental and
Social scoring. Some of the T&D systems in India and Malaysia show very high
systems losses: NTPC, Reliance Power, and Tenaga Nasional.
Responsible Research 2010 | Green Building: Issues for Responsible Investors | 18

Corporate Governance
The table below gives an overview of the six Corporate Governance metrics that
we looked at. The average corporate governance scoring was 7.2. The best
three utilities in terms of corporate governance are China Resources Power, CLP
Holdings and Reliance Infrastructure which all scored an 11. The worst corporate
governance performers, according to our metrics, are Kepco and Power Grid
Corporation of India which both scored a three out of 12. Compared to its peers
in Asia Kepcos Corporate Governance reporting is lacking in transparency
and minority shareholders rights may not be represented with this structure;
information on its board, remuneration committee and nomination committee
is lacking. It is the only company in our universe that doesnt report on these
issues.

Table showing Corporate Governance metrics of Asian power utilities

Many power projects are highly controversial in their planning and construction
phases and some continue to be controversial later on when they are perceived
to contribute to local environmental pollution. Larger utilities, especially, are
therefore regularly mentioned in relation to controversies on land rights and
resettlement, and receive complaints because of local pollution. The construction
of hydro dams tends to be particularly difficult, as dams require large areas of
land and mostly need to resettle local communities.
On top of this environmental and social controversy, some companies are
involved in activities that may constitute grounds for exclusion from a screened
investment portfolio. Some examples include Tanjong Public Ltd, which has a
gaming business as well as Power Grid Corporation of India and Kepco, which
have been implicated in activities in Burma, a country governed by a military
regime. Lastly we note that Tata Power manufactures tanks for the Indian military.
Case Study: CLP, a leader in CSR Management and Reporting
CLP has emerged as a clear leader in the sector in Asia. The company
recognised early on that the reality of climate change was going to bring risks
and opportunities to their business model and that they needed to respond
decisively and strategically. They participated in the first round of the Carbon
Disclosure project in 2002 and set internal renewable energy targets of 5% of
generated power in 2004. It reached this figure in 2007 and finalised its longterm CLP Group Climate strategy in the same year. By this time they already
had in operation a both a nuclear plant (since 1994) and an advanced coal plant
(2006) and were researching alternative energy sources for future investment.
CLP has continued to participate in global coalitions and reporting initiatives
such as the World Business Council on Sustainable Development and the
Greenhouse Gas Protocol. They use the GRI reporting guidelines and
have selected the EN16-18 criteria to report on total direct and indirect
greenhouse gas emissions by weight. They will also report on their initiatives
to reduce greenhouse gas emissions and define the reductions achieved.
Opportunities have come their way since they began their low carbon strategy: they
have been recognised by the DJ Sustainability Index and by the Innovest Climate
Leadership Index as Best in Class and, in fact, are the only HK based company to
make the DJSI Asia Pac 40 index. Since 2005 they have been managing CDM projects
under the Kyoto Protocol and, in 2003, they launched an Energy Innovation Fund.
Today CLP actively manages its emissions and has set long-term targets for
further reductions. Their aim is to reduce emissions from 0.84 kg CO2/
kWh to 0.2 by 2050 (their estimates), which is a 75% reduction to support
the 550ppm global emissions target. CLP aims to achieve the reductions
through changing their fuel mix to favour clean coal, nuclear and natural
gas, and to invest in renewable energy generation. They will also achieve
substantial reductions from their work on grid efficiencies and conservation.
The company recognises that they should also focus on improving disclosure
in order to improve performance, enhance their brand and reputation. CLP
has a strategically managed community outreach and investment programme
which enables it to engage more easily with its stakeholders. Despite its leading
position with respect to CSR reporting and performance, one has to note that
CLP has a high percentage of coal in its generation mix (including relatively old
and inefficient plants) and is continuing to expand its coal fired capacity

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 20

ISSUES FOR
RESPONSIBLE
INVESTORS

DISCUSSION

The company ranking according to indicators for greenhouse gas intensity, which
was presented earlier, may give the impression that companies are actively
making choices when it comes to using innovative or efficient technologies. For
the most part companies do not have this flexibility. Most fuel choices are still
dictated by governments or others for a variety of reasons:
The sector is still in the process of privatization. Governments still own a
controlling stakes, and take the decisions. In addition, due to the long life span
of power plants, todays generation mix is mostly a legacy of past decisions. In
many countries, fuel choice is partly dictated by natural conditions, namely local
availability of coal and gas, and natural potential for renewable energy.
Investments in certain fuel imports, for example natural gas via pipelines or
LNG terminals are expensive and are generally supported by governments for
reasons of energy diversification and security.
Therefore when investing in a company with a very low carbon intensity and
a high percentage of renewables, such as the Philippine Energy Development
Corporation, it does not necessarily correlate that it is an innovative, forward
looking company. Rather, it could be a company that happened to be in the
right geographic location and regulatory environment to take on a low-carbon
business profile. Expansion plans can give an insight into how forward-looking a
company is, especially if one goes into details to understand what type of coalfired technology or gas fired plant is being installed, and how efficient and clean
the proposed technologies are.
The efficiency metrics that we looked at give an insight into how well a company
operates its existing asset base. Unfortunately companies, generally, do not
all report the same metrics, and many dont address the efficiency of their
operations at all.
The scoring shows how, in general, the larger players have the most advanced
ESG reporting and management systems. This pattern of ESG performance can
be observed in most sectors. In our utilities universe, there are some notable
exceptions of relatively large companies such as Tenaga Nasional and Chinese
utilities Huaneng Power and China Resources Power being laggards. There are
also small companies such as Electricity Generating Public Company with leading
ESG performance scores. But overall large companies still tend to have the best
ESG performance.
These large companies tend to be large polluters, in absolute terms, and have
an insignificant percentage of renewable energy in their generation portfolios.
Still they may be best positioned to shift their fuel mix to non-traditional sources
using the latest technologies and profiting from transfer of cleaner technologies
from developed countries when governments get more serious about the issue
of climate change. The governmental backing NTPC receives from Japan and the
US when it comes to research and application of clean coal technologies clearly
illustrates this potential.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 22

Copenhagen Update:
Despite global frustrations at the lack of tangible progress at Copenhagen, we
feel that the debate has come a long way, especially as the countries in our
universe, notably China and India, have collaborated on responses and begun
to form a collective developing country action group which can engage with the
USA. The Copenhagen round resulted in US$30bn of climate change aid to
developing nations to be given next 3 years and a stated goal of US$100bn a
year to developing countries by 2020 to fund research, development, adaptation
and mitigation strategies. Still, we think that it would have been helpful for
business to get a clearer understanding of the direction of global climate policy
from the Copenhagen conference. The next steps to watch out for will be the
nationally appropriate mitigation actions that developing countries will submit to
the UNFCCC by January 31st, 2010, and a renewed attempt for a global climate
deal at the next UNFCCC climate conference in Mexico at the end of 2010.
Please note that there are no Annex 1 countries in our coverage and none are,
therefore, obliged to report on progress under the United Nations Framework
Convention on Climate Change. Some do, however, and we include reference to
those submissions here.

ISSUES FOR
RESPONSIBLE
INVESTORS

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 24

COUNTRY
SUMMARIES

CHINA
Total installed generation capacity (MW)
Energy mix (as % of total installed capacity)3
Total electricity generated 2008 (TW Hours)

NA
Thermal (80.95%), Hydro (16.41%),
Nuclear (1.99%), Renewable (0.65%)
3,433.4 billion
5.23% (2008), 3.75% (Expected
2009)

Electricity demand growth rate4


Price of electricity per kWH (USD cents Nov-09)5

7.14

CO2 intensity of coal-fired elect. generation


CO2 intensity of elect. generation7
CO2 emissions (from all sources, 2008)8 9
CO2 emissions per capita (from all sources, 2008)10

893
758
6,896.5 million metric tones
6.26 metric tones

The National Development and Reform Commission (NDRC), a central government


agency, regulates the Chinese electricity market. The market has been moving
towards privatisation for several years and Independent Power Producers have
been operational since the late 1990s. Today around 40% of the power generation
companies are privately owned with virtually all other parts of the industry being
state-owned. Provincial governments determine power-purchasing prices, but
any price adjustments need to be approved by the NDRC.
The Chinese government has taken significant steps to increase energy efficiency
and promote the deployment of renewable energy. Steps taken include:

The 11th five-year plan (2006 2010): China pledged to cut energy
consumption per unit of gross domestic product (GDP) by 20%, or 4%
each year.

In early 2009, China passed a national stimulus bill, allocating $147.6


billion to energy efficiency and R&D, and $50.9 billion to pollution control.
In June 2009, the government also announced US$ 87.8 million in
subsidies to promote the use of energy-saving lighting products11.

The National Development and Reform Commission (NDRC) have set


ambitious targets for alternative power generation. It is expected that
10% of consumption will be delivered form alternative sources in 2010
and up to 15% by 2020.

The Renewable Energy Law of 2006 and subsequent regulations provide


support measures for alternative energy projects including mandatory
off-take of all renewable energy-sourced power generation. Portfolio
standards require power producers with capacity above 5GW to have
attributable non-hydro renewable power capacity of at least 3% of total
installed capacity by 2010, and 8% by 2020.
In the summer of 2009 China announced a series of incentives for
renewables, including: a fixed feed-in tariff for wind power projects with
four differentiated tariffs for different classes of wind power; subsidies
to promote the use of energy-saving light bulbs; and subsidies to use
renewable energy in green building projects in pilot cities and rural areas.
The Chinese government also offers tax exemptions and a governmentbacked renewable energy fund. The government is expected to establish
a preferential feed-in tariff for solar by the end of 2009. The solar feed-in
tariff is expected to fall between $0.16 and $0.22 per kWh of electricity
produced at large-scale solar PV arrays.
On Nov 29th 2009 China pledged to cut the amount of carbon dioxide
produced for each unit of GNP by 40-45 percent by 2020, compared to
2005 levels.12

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 26

Chinas alternative energy outlook is promising. At the end of 2008, wind power
in China accounted for 12.2 GW of electricity generating capacity. The original
2010 target set by the Chinese government, in 2007, was 10 GW. However some
estimates suggest that by next year the total installed capacity will be closer to
20 GW. According to the newest NDRC plan China aims to have 30 GW of wind
generating capacity by 2020 (equivalent to 85 MT of CO2 abatement). In April
2009 a senior energy official13 reported that China is well on its way to having 100
GW of wind power capacity by 2020. As a result of the successful early uptake
the Vice Chairman of NDRC proposed revising the target to 100 GW wind by 2020
in June 2009.
In 2007 the government announced plans to expand Chinas installed solar
capacity to 1,800 MW by 2020. Central to the PRC Governments plans is the
Golden Sun stimulus program. Under this program the Ministry of Finance
subsidizes half of the construction costs of an on-grid solar power plant, including
transmission expenses. The Ministry of Finance will also pay subsidies of up to
70% to develop independent photovoltaic power generating systems in remote
regions. In May 2009, the Director of the NDRC Energy Research Institute
changed the 2007 goal and announced plans to increase Chinas solar power
capacity to 20GW by 202014 15 (equivalent to 55MT of CO2 abatement).
Recently China has underlined its renewable ambitions when the presidents of
the United States and China announced joint initiatives in mid November 2009.
These plans are aimed at boosting renewable energy, sharing data and best
practices on grid modernization, energy efficiency, the use of electric vehicles
and launching a U.S.- China clean energy research centre.
There is clear potential for cleaner energy in China. Wind resources are mainly
distributed in the North-Western provinces and coastal areas. The Chinese
Meteorology Research Institute estimates China has 253GW onshore and 750GW
offshore wind power potential. Researchers from Harvard and Beijing Tsinghua
University have found that China could meet all its electricity needs from wind
power through 203016.
Recent Events:
Chinas leaders are facing up to the challenge of how to maintain buoyant
economic growth while avoiding the catastrophic impacts of climate change.
China has therefore enacted significant carbon reduction measuresmainly in
energy efficiency and renewable energythat have economic co-benefits. The
potential for further reductions is great and China is on the path to successfully
limit its growth in CO2 emissions17.
The Chinese governments concerns about energy security and the effects of
climate change have catalyzed policies that are significantly lowering Chinas
energy intensity and rate of GHG growth. Chinese leaders announced multilateral
cooperation on climate change during Mr. Obamas visit to China in November
2009 but it seems they expressed valid concerns that the gap between developed
and developing countries on legally binding emission targets is too great to
overcome at the Copenhagen round.
China released its first National Communication on Climate Change in December
2004. The State Development Planning Commission and the National Coordination
Committee on Climate Change authored the report. It is available online at the
UNFCCC website. There has been no communication on agreements following
Copenhagen.

HONG KONG
10,664
Oil (63.7%), Coal (26.3%), Gas
(10%)

Total installed generation capacity (MW) 18


Energy mix (as % of total installed capacity)19
Total electricity generated 2008 (TW hours)

38

20

Electricity consumption per capita (forecast 2009)


Price of electricity per kWH (USD cents, Nov 09)

21

22

3%
11 (domestic HK Island),
15 (commercial HK Island),
11 (average price, Kowloon, N.T)

CO2 intensity of coal-fired elect. generation 23

890 g CO2/kWH

CO2 intensity of elect. generation 24

775 g CO2/kWH

CO2 emissions (from all sources, 2008)25

77.7 million metric tonnes

CO2 emissions per capita (from all sources, 2008)

11.09 metric tones

The Hong Kong energy market has been fully privatized and operates as a
regulated duopoly. Only two power utility companies generate, transmit and
distribute electricity in Hong Kong: China Light & Power and Hong Kong Electric.
Electricity prices differ between Hong Kong Island and Kowloon/ New Territories,
suggesting that the market is not fully deregulated. Hong Kong Electric and CLP
are also seemingly in collusion - each company has a well-defined territory in
which it operates with no competition. Hong Kongs two power utility providers
are now preparing to open the grid to renewable power from new IPPs, in Hong
Kong and Mainland China, and to provide necessary services.
Hong Kong is not a party to the UN Framework Convention on Climate Change.
However, it is the Hong Kong Special Administrative Regions voluntary policy
to contribute to international efforts to reduce GHG emissions The Hong Kong
SAR government has taken some steps to promote the use of renewable energy,
reduce CO2 emissions and increase energy efficiency. These steps are:

INDIA
Total installed generation capacity (31-10-0927)

153,694.09 MW

Energy mix (as % of total installed capacity)28

Coal (53%), gas (11%), oil (1%), hydro


(23%), nuclear (3%), renewable (9%)

Total amount of electricity generated 2008 (TWH)29

834.3

Electricity demand growth rate3031

average 3.6% for past 30 years,


7.8% from 1981- 2000

Price of electricity per kWH (USD cents)

8 domestic, 18 commercial

CO2 intensity of coal-fired elect. generation 32

1,252 g CO2/kWH

CO2 intensity of elect. generation 33

928 g CO2/kWH

CO2 emissions (from all sources, 2008)

34

CO2 emissions per capita (from all sources, 2008)

1,419.4 million metric tones


1.18 tonnes of CO2 per capita

Indias electricity sector is dominated by public sector undertakings (PSUs).


Major PSUs involved in the generation of electricity include: National Thermal
Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC)
and Nuclear Power Corporation of India (NPCI). Besides PSUs, several statelevel corporations, such as Maharashtra State Electricity Board (MSEB), are
also involved in the generation and intra-state distribution of electricity. The
PowerGrid Corporation of India is responsible for the inter-state transmission of
electricity and the development of a national grid.
The Indian electricity industry was restructured as a result of the 2003 Electricity
Act. This unbundled the vertically integrated electricity supply utilities in the
Indian states and set up State Regulatory Commissions (SERCs) to set electricity
tariffs. The Indian power utility sector remains strongly regulated.
Under the Electricity Act SERCs had to set Renewable Portfolio Standards. The
alternative energy mix ambitions that were formulated were quite conservative
given the current expansion rate. The following announcements have been made:

Setting a renewable energy target of 1-2% of total power generation by


2012.

2008: Goal of 10% of primary energy from renewable sources by 201235.

In July 2009, Hong Kong officials adopted a regulatory system that


provides financial incentives for electric utilities to reduce GHG emissions
to regulatory limits26. The long-term agreement, called the Scheme of
Control, between the Hong Kong government and electric generating
companies CLP and Hong Kong Electric ties future electricity rate levels
to GHG emission reductions.

2008: ambition to generate 4-5% of electricity from renewable sources


by 201236, a physical target of 15,000MW (excluding nuclear and small
hydro) by the end of the XI 5-Year Plan (2007-2012). Wind capacity is to
total 12,300MW, making India one of the largest markets for operating
wind turbines in the world.

2008: 15-17% of primary energy is expected to come from renewable/


alternative sources by 2025 (5% biofuels; 5% geothermal; 5% biomass,
solar, wind, nuclear & hydro; and 2% coal liquefaction)37.

November 2009: India issued solar power targets, with plans to boost
output from near zero to 20GW by 2022. The solar mission also outlines
a system of paying households for any surplus power generated from
domestic solar panels fed back into the grid.

India has 16 nuclear power plants although nuclear energy accounts for
only 3% of Indias energy consumption (3779MW). An additional seven
reactors are under construction with proposals for 24 more, generating
20,000MW of power by 2020.

There is limited potential for alternative energy due to limited land availability.
There is, however, considerable potential for solar energy. Other forms of power
are likely to be brought in from the Chinese mainland grid over time.
Recent Events:
Hong Kong has made no unilateral attempt to join the Copenhagen conference
and has issued no National Communication on Climate Change. Civil society
has been actively participating in the discussions on future renewable energy
sourcing.

India has several policies in place which aim to stimulate renewable generation
capacity additions:

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 28

As of 2008, 10 out of 29 Indian States have implemented quotas for


renewable electricity and have introduced preferential tariffs for
renewable electricity. Several others have implemented fiscal incentives
including an energy buy back, preferential grid connection, and electricity
tax exemptions.

At the federal level there are a number of measures that help drive
renewable electricity development, including fiscal incentives such as
income tax exemption for 10 years, 80% accelerated depreciation, sales
tax exemption and excise duty exemption.

In June 2008, the Ministry of New and Renewable Energy (MNRE)


announced a national generation-based scheme for grid-connected wind
power projects under 49 MW, providing an incentive of 0.7 cents per
kWh.

The Government of India has an ambitious mission of Power for all by 2012.
This mission would require that Indias installed generation capacity should be
at least 200,000 MW by 2012 from the present level of 147,402 MW. Power
requirements are expected to double by 2020 to 400,000 MW. Hence, there is
great potential for alternative energy.
Wind capacity is already at 7,600 MW, and expected to reach 10,500 MW by
2012. This implies capacity addition of only 600 MW per annum, while the
current annual run rate is greater than 1,000 MW. From 2002 to 2007 India
planned to construct 3,075 MW of renewable grid connected capacity, but the
actual capacity addition exceeded 6,000 MW by 2006 with a large share of this
coming from growth in the Indian wind market. Wind is expected to add more
than 10,000 MW of additional capacity by 2012.
The potential for wind power generation for grid interaction has been estimated
at 45,000 MW38. However, wind turbine manufacturers believe the potential is
higher, at 100,000 MW. Indias wind, small hydroelectric and biomass sources
have the potential to generate 80,000 MW. India is the eighth largest consumer
of hydroelectricity with the potential to produce 150,000 MW of energy.
India nuclear program is large: 17 units in operation (3.8 GWe), 6 under
construction,19 planned or proposed, with 5 additional research reactors. India
has achieved independence in its nuclear fuel cycle. Nuclear power currently
supplies less than 4% of electricity in India. The units under construction are
due for completion by 2010. A further 24 units are planned or proposed, to give
20 GWe by 202039.
Electricity losses in India during transmission and distribution are extremely high
and vary from 30% to 45%. Therefore dealing with energy efficiency is vital to
the Indian utility sector.

Indias eleventh 5-Year plan has pledged to increase energy efficiency


by 20% by 2016-17 through improving automobile efficiency, expanding
public transport, electrification of railways away from diesel and
encouraging bio-diesel and coal-to-liquid projects40.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 30

Recent Events:
Developing countries such as India are hesitant to accept binding targets that
would limit their growth in GHG emissions, as they still need to bring millions
of people out of poverty. About 56% of Indias 1.1-billion plus population has
no access to electricity. India is making a very strong case for international
support for its climate actions, but in the process it is also skirting its unilateral
obligations, said Siddharth Pathak, Greenpeaces main climate campaigner in
India41.
India has joined the BASIC country grouping (Brazil, South Africa and China)
which presented a counter-draft that will be presented by China in Denmark.
It is the first major India-China accord on international affairs and is likely to
impact not just the dimension of the talks on climate change but international
diplomacy as a whole. The draft includes a commitment to national appropriate
but voluntary actions. Most developing countries are not willing to accept the
concept of setting a peak year for emissions or international MRV on their
efforts. 42
India has valid concerns that developed countries will set up trade barriers and
resort to protectionism in the name of emissions reductions. They also believe
developed nations should fund the reversal of forest degradation. India has not
yet supplemented its last national communication on Climate Change, a 292page report which was submitted in June 2004 by the Ministry of Environment
and Forests.

INDONESIA
Total installed generation capacity (31-10-0943)

24.3GW

Energy mix (as % of total installed capacity)44

Renewable (32.4%), Hydro (0.5%), Gas


(18.60%), Oil (33%), Coal (15.5%)

Total amount of electricity generated 2008 (TWH)45

151.2

Electricity demand growth rate (Oct 2009)

7%

46

Price of electricity per kWH (USD cents, 2007)


CO2 intensity of coal-fired elect. generation
CO2 intensity of elect. generation

47

48

49

6.77
980 g CO2/kWH
692 g CO2/kWH

CO2 emissions (from all sources, 2008)50

376.3 million MT

CO2 emissions per capita (from all sources, 2008)

1.63 MT

The Government is seeking to unbundle the state-owned electricity utility, PLN,


and break it up into several competing limited liability corporations. It is also
planning to re-examine the pricing tariff structure. Energy sector reform has
long been geared towards increasing the role of private participation in the
sector. The 1985 Electricity Act gave the government the right and obligation to
supply power, and permitted the establishment of independent power producers.
Although regulations promoting the development of renewable energy are in
place, only a few renewable power generation assets have been connected to
the grid buys its electricity on independently negotiated contracts. The President
sets electricity tariffs jointly with the Minister of Mines and Energy.
The National Energy Policys Presidential Regulation No.5 /2006 aims to create
a sustainable energy system and reduce Indonesias dependence on oil. However
Indonesias business as usual projections for energy demand growth assume
that the share of power generated from coal will continue to increase from 37%
reaching 66% by 2016. Renewable targets to be achieved by 2025:

Energy price elasticity should be less than 1;

The share of oil should be less than 20%, coal to be at least 33%, natural
gas at least 30%, 15-17% of primary energy to come from renewable/
alternative sources by 2025 (5% biofuels; 5% geothermal; 5% biomass,
solar, wind, nuclear & hydro; and 2% coal liquefaction). The total
investment needed for this development through 2025 is estimated to be
US$13.2 bn.

The government aims to raise the use of new and renewable energy
sources in power generation from the current 0.2% to 4% by 2020.

Indonesias President Susilo Bambang Yudhoyono has promised cuts in


CO2 emissions from business as usual projections of up to 26% by 2020
and 41% by 2050, with funding and technological support from developed
countries.

To support the development of new and renewable energy and to stimulate


an increase of energy efficiency the Government has issued legislation51, and
developed incentive schemes52, such as:

The Energy Law (Law No. 30/2007) issued which states that local
governments should provide incentives for renewable energy developers.

Regulations on power purchasing tariff for small capacity (up to 1 MW) as


well as medium capacity (more than 1 MW up to 10 MW)53. Based on these
regulations, the utility is obliged to buy electricity from developers with

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 32

the tariff 60 % of the utilitys production cost if the electricity is connected


to the lower voltage grid, and 80 % of the utilitys production cost if
connecting to the medium voltage grid.The Biofuel Road Map creates a
role for biofuels as a source of energy in the household and commercial
sectors, as well as the transport and power sectors. From 2005-2010, the
use of biofuels is planned to contribute 2% of total energy mix and it will
increase to 3% from 2011-2015, and 5% from 2016-2025. To encourage
business activity in biofuels the government has issued Government
Regulation No.1/2007 to reduce income taxes on investment activities.
Despite massive potential, power plants using renewable energy sources
contribute only a small portion of the countrys total installed power capacity
of about 22,000 MW. Indonesia has a huge potential in biomass energy that
remains a controversial but promising potential solution. The current installed
capacity is 445 MW and the potential of biomass from forestry, agriculture and
plantations, is thought to be equivalent to 50,000 MW54. The emissions reduction
argument for biofuels production in Indonesia is complex. Unless using existing
waste materials from agribusiness, one has to factor in the potential reduction
of primary forest cover for conversion to plantations to produce the feedstock.
Current installed capacity of solar PV is estimated at only 0.5 MW and is mostly
used for rural electrification, small scale water pumping, and telecommunications.
The installed capacity of hydropower (mini and micro) plants is 54 MW.55 The
total potential is thought to be around 75,000 MW. The installed capacity of
geothermal energy is 800 MW, with total potential of 27,000 MW56.
Nuclear is under consideration in Indonesia with plans for two 1000 MWe units. A
decision is likely in 2010, with commercial operation from 2016 onwards.Tenders
for the next two units are planned for 2016, for operation from 2023. The
government has apparently reserved US$8 billion of spending for four nuclear
plants to produce a total of 6 GWe to be in operation by 2025. The current plan
is to meet 2% of power demand using nuclear by 201757.
Recent Events:
A World Bank study cited Indonesia as the worlds third-largest emitter of
greenhouse gases, a title the government has strongly denied, based on the
methodology used58. Indonesia is seen as a key player in forthcoming international
climate talks in Copenhagen because its greenhouse gas emissions from peat
bogs and deforestation are a major contributor to global warming.
Indonesia plans to reduce its GHG emissions by developing more geothermal
and waste energy sources, increasing power plant efficiency, reducing illegal
logging by 43% and restoring production forests by 35%. It is said to have an
internal target of a 20% cut in emissions by 2020, and says it could achieve a
41% reduction if developed nations provide financial assistance59.
Indonesia has not issued a National Communication to UNFCCC since its
ambitious and comprehensive 117-page report in 1999 by the State Ministry for
the Environment Office.

MALAYSIA
23,300 MW
Coal (34.2%), Oil (0.9%), Diesel (1.4%),
Gas (56.6%), Hydro (6.9%)

Total installed generation capacity (31-10-09)60


Energy mix (as % of total installed capacity)
Total amount of electricity generated 2008 (TWH)61

106.4

Electricity demand growth rate (2009)62

-2.6%

Price of electricity per kWH (USD cents, Jul 08)


CO2 intensity of coal-fired elect. generation
CO2 intensity of elect. generation

63

64

972 g CO2/kWH
619 g CO2/kWH

65

CO2 emissions (from all sources, 2008)

Average commercial price: 8

66

CO2 emissions per capita (from all sources, 2008)

151.8 million metric tonnes


5.46 metric tonnes

The Department of Electricity and Gas Supply acts as the market regulator with
the Ministry of Energy, Green Technology and Water, the Energy Commission
(Suruhanjaya Tenaga), and the Malaysia Energy Centre (Pusat Tenaga Malaysia)
also contributes to policy and tariff direction. Government-linked energy
companies Petronas and Tenaga Nasional Berhad are the dominant players.
The Malaysian energy policy is based on: 1974 Petroleum Development Act,
1975 National Petroleum Policy, 1980 National Depletion Policy, 1990 Electricity
Supply Act, 1993 Gas Supply Acts, 1994 Electricity Regulations, 1997 Gas Supply
Regulation and the 2001 Energy Commission Act.
According to the Malaysian Energy Commission, an estimated total investment
of RM 30 bn (approx US$8.8 bn) is required to be spent in the electricity supply
industry over the next 5 to 10 years. Of this total, 60% will be invested in
power generation, while the rest will be split equally among transmission and
distribution67.
The Ministry of Energy, Green Technology and Water has identified the following
objectives:

To follow the Fuel Diversification Policy (9th Malaysian Plan), set out in
2006. This has a target of renewable energy providing 5% of electricity
generation by 2005 (equal to 500 MW-600 MW of installed capacity) and
10% by 2010.

The current grid-based small renewable energy programmes (SREP)


incentivizes the connection of small renewable power generation plants
to the national grid.

To accelerate investments in the palm-oil industry for power generation.


Government has launched the Biomass-Based Power Generation and
Cogeneration (BioGen) Programme68.

Achieve 5 MT of GHG abatement in 2012 and 5 MT of GHG abatement in


2020 through the use of renewable energy

The policies have been reinforced by fiscal incentives, such as investment tax
allowances69. Other policy instruments and institutional mechanisms are in
place to drive the renewable and energy efficiency strategies. Companies enjoy
incentives such as pioneer status, import duty and sales tax exemption for
equipment used in energy conservation. In addition, preferential loans, grants
and other funding structures are in place for renewable energy development. The
Malaysia Electricity Supply Industry Trust Account (MESITA) is a social obligation
fund contributed to by the major power utilities. Each utility contributes 1% of
Responsible Research 2010 | Green Building: Issues for Responsible Investors | 34

their annual revenue to the fund. The proceeds are used to assist government
projects and studies on rural electrification, renewable energy and energy
efficiency.
Other supporting policies include the Renewable Energy Power Purchase
Agreement (REPPA), which is a Malaysian government regulation dealing with
power purchases between the power utility TNB and private investors. Under
the REPPA, renewable electricity producers are given a license for a period of 21
years from the date of commissioning of the plant. REPPA also allows independent
power producers to sell electricity to the grid. Revenues from generating Certified
Emissions Reductions under the Clean Development Mechanisms also support
the growth of the renewable sector in Malaysia.
There is large potential for biomass power generation in Malaysia due to the
waste product of the booming palm oil industry. The country is also considering
the construction of a nuclear power generator70. A comprehensive energy policy
study, including the potential for nuclear, is due for publication shortly.The stateowned utility TNB is tentatively in favour of nuclear power and in August 2006
the Malaysian Nuclear Licensing Board said that plans for nuclear power after
2020 should be brought forward and two reactors built much sooner.
Recent Events:
Minister Chin of the Ministry of Energy, Green Technology and Water said in
late 2009 that there would be no independent action from the government to
encourage efforts towards an agreement at Copenhagen. 71
The only National Communication on Climate Change was from the Ministry of
Science, Technology and the Environment in 2000. This 131-page document,
which included a sectoral inventory of GHG emissions, was funded by the Global
Environmental Facility (GEF) and the United Nations Development Programme
(UNDP).

PHILIPPINES
Total installed generation capacity (2008)72

15,936 MW

Energy mix (as % of total installed capacity)

Coal 28%, Geothermal 17%, Hydro


14%, Natural gas 32%, Oil 9%
74

CO2 intensity of coal-fired elect. generation

1,008 g CO2/kWH

CO2 intensity of elect. generation

77

The Renewable Energy Act (Dec 2008) provides fiscal and non-fiscal
incentives for renewable energy investors, including tax credits on domestic
capital equipment and services, special realty tax rates on equipment
and machinery, tax exemption of carbon credits, duty-free importation
mechanisms, and income tax holidays, among others81. End users are also
offered net-metering and green energy options. The Act covers biomass,
solar, wind, geothermal, ocean and hydro.

27%

Price of electricity per kWH (USD cents, Oct 2009)75


76

In February 2008, Philippines President Gloria Arroyo announced that the


country will phase out incandescent bulbs by 2010, making it the first
plan of its kind in Asia. Under the project, 13 million compact fluorescent
lamps (CFLs) will be distributed, free of charge, to homes and businesses
throughout the Philippines. The project is estimated to save US$100 million
in annual fuel costs, and allow the deferment of US$450 million in new
power plant construction costs.

59.6

Total amount of electricity generated 2008 (TWH)73


Expected electricity demand growth rate (2008-2013)

449 g CO2/kWH

CO2 emissions (from all sources, 2008)78

73.3 million metric tonnes

CO2 emissions per capita (from all sources, 2008)

0.79 metric tonnes

The Philippine government has been in the process of restructuring the Philippine
power market since serious shortages arose in the early 1990s. The purpose of
the restructuring was to provide reliable power to aid economic growth and
development. The Republic Act No. 9136 or the Electric Power Industry Reform
Act (EPIRA) ushered in the restructuring of the electric power industry and
privatization of government interests in generation and transmission with an end
in view of having competition in electricity generation and supply.
The independent regulator Energy Regulatory Commission (ERC) oversees
all these reforms. ERC is active not just in the regulated sectors, but also in
the wholesale and retail markets. It delivers regulatory policies to support the
States policy of promoting the utilization of new and renewable energy sources
in power generation while ensuring electricity prices are reasonable, reflective
of true cost, and free from cross-subsidization and other distortions. Among the
powers granted to the ERC is the power to set the rates of the 140 distribution
utilities (DUs) operating throughout the country.
Philippines alternative energy mix ambitions and energy efficiency goals:

2001: to increase renewable energy capacity by 100% by 2013 and have 9


GW of renewable capacity by 2020.

2001: to achieve 20 MT of abatement in 2012 and 30 MT of abatement in


2020

Under the Renewable Energy Policy Framework (2003) the government


aimed to develop more than 4,000 MW of additional renewable energy
capacity. In fact plans are to source 40% of the countrys primary energy
needs from renewable sources between 2003 and 2013 or a 100% increase
in the target of renewable energy capacity from the current production of
4,698 MW to 9,147 MW by 2013. This goal is to be achieved through:
-

The installation of an additional 1,200 MW of geothermal capacity by


201379, resulting in an increase of about 60% from the 2002 level of
1,931 MW.

The installation of up to 2,950 MW of additional hydro capacity to be


installed by 2013 on top of the 2002 level of 2,518 MW, reaching a
total of 5,468 MW.

The installation of up to 548 MW from other RE sources by 2013 (417


MW from wind-based power, the remaining 131 MW will be sourced
from solar, ocean and biomass80).

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 36

There is considerable potential for renewable energy generation development in


the Philippines. Wind is plentiful, although the situation is complicated by the 25
or so typhoons that arrive each year. One 8 MW project was commissioned in
October 2008 bringing total capacity to 33 MW82. Foreign investors, however, are
generally reluctant to invest due to constitutional restrictions on land ownership.
Under Philippine law, foreign stakes in land ownership is limited to 40%. This
equity issue may only be resolved by amending the national constitution.
The Philippines are the worlds second largest producers of geothermal power. The
Philippines plan to hold this position through significant investments in this field. To
promote wide-scale use of renewable energy and to complement the governments
program on rural electrification, 30 islands have been targeted as locations for
hybrid power systems. In addition, 1,500 barangays (small towns) are programmed
to be electrified using renewable power systems. The Asian Development Bank
promised the Philippines US$2 billion in June 2009 for renewable programs.
The Philippines have one nuclear power reactor completed, however due
to litigation concerning bribery and safety deficiencies operations have been
aborted.In the context of an overall energy plan for the country the government
set up a project to study nuclear energy, to reduce dependence on imported oil
and coal in 2007. In 2008 an IAEA mission commissioned by the government
concluded that the existing nuclear plant could be refurbished and economically
and safely operated for 30 years83.
Recent Events:
The Philippines has noted its support for the Copenhagen Accord, and was
involved in brokering the agreement. The country is also looking to the Reducing
Emissions from Deforestation and Degradation (REDD) program, developed at
Copenhagen, to protect forestry areas. The Philippines has not disclosed CO2
abatement goals.
The Philippines Inter-Agency Committee on Climate Change published the first
National Communication on Climate Change in 1999 for the UNFCCC with funding
provided by the Global Environment Facility (GEF) through the United Nations
Development Programme (UNDP). It has not updated this Communication.

SINGAPORE
Total installed generation capacity (2008)84

10,785 MW

Energy mix (as % of total installed capacity)

Natural gas 70%, Oil 30%

Total amount of electricity generated 2008 (TWH)85

41.7

Electricity demand growth rate (Expected 2009)86

0.5 2%

Price of electricity per kWH (USD cents, Oct 2009)


CO2 intensity of coal-fired elect. generation
CO2 intensity of elect. generation

88

89

87

15.34
535 g CO2/kWH

CO2 emissions (from all sources, 2008)90

173.2 million metric tones

CO2 emissions per capita (from all sources, 2008)

37.59 metric tones

Public Utilities Board (PUB) was the sole provider of electricity in Singapore until
the 1990s. In 1995, the Government decided to undertake industry reforms.
The first step was to have the electricity and gas assets and services in the PUB
corporatized under a separate vertically integrated power corporation, Singapore
Power. PUB remains as a regulatory body for the electricity industry. An electricity
market was subsequently started in 1998, with the generation companies in
Singapore Power competing with each other for the dispatch of electricity.
Senoko is a privately owned Singaporean utility with strong ESG performance
and CSR Management. It has participated in Singapores deregulated electricity
retail market since 2001 and is one of the leading energy service providers to
contestable customers. It produces an excellent annual Environmental Report,
which states that the replacement of its oil-fired generation with state-of-theart gas-fired combined cycle turbine technology, at a cost of S$600m, reduced
its carbon dioxide emission by 2.5 million tons per annum. To date, 95% of its
electricity generation comes from clean natural gas-fired generating plants. It
reduced nitrogen-based emissions by retrofitting the burners of four older gas
turbines at an additional cost of $17m.
In 2000, the Government decided to take further steps to open the electricity
sector to competition. This decision led to the separation of the electricity grid
from the generation and retail companies, which can operate in the commercial
domain. The Energy Market Authority (EMA) was formed in 2001, as the industry
regulator and system operator, and facilitates the wholesale electricity market.
Since then new generation companies have entered the market. On 1 January
2003, the National Electricity Market of Singapore (NEMS) commenced operation.
Generation companies bid every half-hour to sell electricity into the new wholesale
electricity market. As a result, prices reflect more closely changes in the supply
and demand of electricity. By 2007, about 10,000 accounts, representing about
75% of electricity consumed in Singapore, had been made contestable.
Singapore currently has no renewable energy targets. According to commentators
in an article Singapore is Not Ready for Renewable Energy91 the government
is not in favour of stimulating renewable energy generation through subsidies,
as David Tan, Deputy Chief Executive of the Energy Market Authority, has
said. Without subsidies, the use of renewable energy such as solar energy is
still not price competitive. However, Singapore is well placed to provide Photo
Voltaic capabilities and serve as exporter for the region. The National Research
Foundation has provided $170 million for solar research and there are many
grants available to support growth in the sector.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 38

Recent Events:
Although there has been much deliberation between Singapores Ministers,
National Environment Agency and NGOs, a clearly defined strategy is lacking.
As one of its climate negotiators commented, it is a small country that lacks
alternative energy potential92.
Senior Minister Professor S Jayakumar, Chairman of the Inter-Ministerial
Committee on Climate Change claims that Singapore contributes less than 0.2 per
cent of global greenhouse gas emissions. In spite of this, Singapore is committed
to reducing carbon emissions growth by 16 per cent below the projected 2020
level. This is, however, only if a global agreement is reached and other countries
implement significant targets of their own.93
Singapore has pledged to reduce emissions growth by 16 per cent below the
projected 2020 level, provided that other countries announce meaningful
emissions cut targets. Prime Minister Lee Hsien Loong noted that if theres no
agreement, were not obliged to hit the 16 per cent target. We have a sustainable
development blueprint which is a 7 to 11 per cent target.
To reach 16 per cent, well have to take new measures. We have to consider
what these will be, and therell be regulations. For example, energy efficiency
standards may be necessary.94

SOUTH KOREA
Total installed generation capacity (2008)95

73,373 MW

Total amount of electricity generated 2008 (TWH)96

Coal 45%, Hydro 1%, Natural gas


13%, Nuclear 38%, Oil 2%
462.9

Electricity demand growth rate (Expected 2009)97

1.5%

Price of electricity per kWH (USD cents, Mar 2009)98

10

CO2 intensity of coal-fired elect. generation 99

902 g CO2/kWH

CO2 intensity of elect. generation

455 g CO2/kWH

Energy mix (as % of total installed capacity)

100

CO2 emissions (from all sources, 2008)

101

CO2 emissions per capita (from all sources, 2008)

663.6 million metric tonnes


13.48 metric tonnes

Privatization of the electricity market in Korea has been slow, primarily due to
the political strength of the existing generating companies along with adverse
public opinion and union opposition. There is still a plan to reform and privatize
the generating capacity and introduce more competition over time but there
is also a desire to maintain the financial strength of KEPCO as it competes for
projects in overseas markets.
Koreas Alternative Energy Act was implemented in 1982 and revised in 2002.
It constituted the initial framework for the development of renewable energy
technologies and energy efficiency. It aimed to secure cost-effective renewable
energy by fitting the production strategy to geographical characteristics and
through cost effective business modelling. It encouraged the installation of wasteincineration plants to generate heat and power. It also promoted residential solar
heaters, small hydropower plants and facilities to use methane gas. In 2008
the South Korean government announced plans to set up the Act on Climate
Change. This act supports industries that voluntarily develop and implement
GHG reduction plans through various taxation measures, including a carbon tax.
Koreas goals as stated in the Act on Climate Change and other legislation aim
to:

Increase the share of renewable energy generation capacity to 5% by


2012 and 9% by 2030, announced in 2007. As part of this initiative Korea
is also considering expanding its nuclear power programme.

A total of 11% of energy consumption from renewable sources by 2030,


announced in 2007.

Mix bio-diesel, mostly from palm oil, into fuel in increased quantities,
from 0.5% in 2007 to 3% in 2012.

Set up a voluntary emissions trading agency and a carbon trading market


by 2009.

Achieve a 2.5 million tonne CO2 reduction by 2012 for large-scale


residencies and industrial complexes.

Absorb as much as 12 million tonnes of CO2 through reforestation efforts.

Stimulate the use of alternative energy through the Renewable Portfolio


Standard. The Government has signed a Renewable Portfolio Agreement
with nine public corporations to increase the use of alternative energy in
the industrial sector. The Government has allocated 1.2 trillion won from
2006 to 2008 to lay the groundwork for this plan102.

Reach average power plant fleet fuel efficiency of 40 mpg by 2015.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 40

Reduce emissions to 4% below 2005 levels by 2020, equal to 30% below


CO2 emissions under a business as usual scenario (stated in November
2009).

Different policies are in place to incentivize the development of renewable energy


generation assets:

Feed-in tariffs were adopted for solar PV in 2006. The tariffs distinguish
between systems >30 kWp and systems <30 kWp. The result of these
tariffs has been a huge growth in solar demand.

In 2008, 533 billion won was slated for the development of alternative
energy, up from 435 billion won in 2007. In order to meet this goal,
investment in research and development will be increased to some 210
billion won ($210 million). In January 2009 South Korea announced the
launch of its $38.1 billion Green New Deal103. The Green New Deal will
focus on pollution control, energy efficiency and clean technologies.
Under the plans, $3.32 billion will be spent on clean energy infrastructure
technology products and constructing low carbon transportation systems.
An additional $6.64 billion would be allocated for research and development
of higher efficiency and non-silicon-based solar cells, electric vehicles,
highly efficient LEDs, smart metering and rechargeable batteries.

There is considerable potential for renewable energy in South Korea. According


to Displaybank, the new Photo Voltaic Market Creation Plan announced in 2009
is expected to boost the Korean PV instalment market to increase to 200MW by
2012104.
South Korea has an extensive fleet of reactors: 20 units in operation (17.5
GWe),3 under construction,5 planned, also 2 research reactors. It meets 35% of
its electricity needs from nuclear power, and this is increasing. The national plan
is to expand to 28 nuclear power reactors, including advanced reactor designs,
and achieve 60% nuclear supply by 2035. Demand for electricity in South Korea
has been increasing strongly105.
Recent Events:
South Korea is impressive in its vision of lowering emissions unilaterally. There
is a desire to support the UN Secretary-General Ban Ki-moon and to commit to
UN backed accords, although an emphasis is made on the difference between
emissions targets for developed and developing countries. According to President
Lee Myung-bak106, the 2020 target to reduce GHG emissions to 4% below 2005
will be implemented regardless of a Copenhagen agreement. President Lee
Myung-bak said the target was in the wider national interest and hoped it will
trigger further international efforts towards emissions reductions.107 Korean
efforts are strategic; the government is pushing to ready the economy for future
carbon trade tariffs and to acquire early market leads in green energy, products
and services. There is also a desire to reduce reliance on imported fuels and
become more energy secure.

TAIWAN
Total installed generation capacity (2007)108

45,816 MW

Energy mix (as % of total installed capacity) 109

Hydro (15%), Thermal (68%), Coal


(29%), Oil (12%), Gas (28%), Nuclear
(17%)

Total amount of electricity generated 2008 (TWH)110

237.7

Electricity demand growth rate (Mar 2009)111

3.3%

Price of electricity per kWH (US cents, 2007)

112

1.44

CO2 intensity of coal-fired elect. generation 113

ND

CO2 intensity of elect. generation

ND

114

CO2 emissions (from all sources, 2008)

115

CO2 emissions per capita (from all sources, 2008)

340.6 million metric tonnes


14.86 metric tonnes

The electricity market in Taiwan ruled by a single state-owned integrated utility


(Taipower), eight IPPs, and captive power plants. The privatization of the
energy market, originally planned in 2001, has been postponed several times116.
Taipowers monopoly status technically ended in 1994. In that year independent
power producers (IPPs) were allowed to provide up to 20% of Taiwans
electricity117. However, Taipower retains a monopoly on electricity transmission
and distribution in Taiwan. As a result IPPs are required to sign power purchase
agreements with Taipower. After joining the WTO in 2001-2002, foreign firms
were permitted 100% ownership of generation companies. Under the framework
envisioned Taipowers generation assets would be split between several firms.
According to the Taiwanese Ministry of Economic Affairs Bureau of Energy the
planned privatization of Taipower is the result of rapidly rising power demand in
Taiwan, and Taipowers inability to build sufficient capacity118.
A total of 98% of energy supply in Taiwan is dependent on imported fuel. Energy
security is of significant economic and political concern to the government119. In
order to reduce Taiwans dependence on foreign energy sources, the Ministry of
Economic Affairs Bureau of Energy has actively been promoting energy research
and investments in renewables since the 1990s. Currently, Taiwan has only
2,278 MW of renewable energy generation assets, or 5.8% of installed capacity.
Steps taken so far have included:

August 2008: The government aims to grow the solar power industry to
$16 billion by 2012 by introducing a renewable energy law120.

December 2008: Taiwan to make Taipei its first low-carbon city, with local
government hoping to reduce emissions by 20 percent by 2020121.

April 2009: Taiwan will invest 45 billion New Taiwan dollars (US$1.3 billion)
to expand and upgrade the Islands solar and wind energy industries and
help reduce the use of fuel;

June 2009: The Legislative Yuan (the parliamentary chamber) passed a


renewable energy act aimed at promoting the use of renewable energy.
The aim was to increase Taiwans renewable energy generation capacity
by 6,500 MW to 10,000 MW within 20 years122123. The share of renewable
energy in the electricity system could reach 8% by 2025. The new law
authorizes the government to enhance incentives for the development
of renewable energy via a variety of methods, including the acquisition
mechanism, incentives for demonstration projects, and the loosening of
regulatory restrictions.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 42

July 2009: The Executive Yuan (the executive branch of the government)
approved a proposal consisting of 16 measures to transform Taiwan into
a low carbon country by 2020. A Sustainable Energy Policy was defined
with a goal of improving energy efficiency by more than 2% per annum;
to reduce emissions to 2008 levels between 2016 and 2020 and to 2000
levels by 2025. The aim is to achieve 15 MT of abatement in 2012 and 20
MT of abatement in 2020124.

August 2009: Taiwans government announced that it will invest T$45


billion (US$1.4 billion) in the islands domestic renewable energy sector
in an attempt to help the sector grow nearly eight-fold by 2015 thereby
increasing industry production value to T$1.158 trillion in 2015 compared
to T$160.3 billion in mid-2009125.

In Taiwan renewable energy development receives strong government backing.


Strong investment opportunities exist as a result of these incentives.
Nuclear power is an important source of electricity in Taiwan, which has six
reactors. The first was built in 1972. There are a further two advanced reactors
under construction now. Figures suggest that nuclear provides around 25% of
base-load power and 17% of the overall 238 billion kWh generated in 2008.
The three nuclear plants comprise four General Electric boiling water reactors
and two Westinghouse pressurized water reactors. Construction of the first unit
began in 1972.All reactors are operated by the utility Taipower and are expected
to be in operation for 40 years.126
Recent Events:
For Taiwan, the issue of climate change is an issue of sovereignty. Though it
is not a member of the United Nations, and has not Taiwan had hoped to be
included as an independent state at the Copenhagen round. Inclusion in climate
change discussions would enhance the recognition of the islands independent
status in the international community. Taiwan, not being a member of the United
Nations, is party neither to the United Nations Framework Convention on Climate
Change (UNFCCC) nor to the Kyoto Protocol. The wording of the UNFCCC excludes
Taiwanese participation, although it allowed Switzerland, to formally accede to
the convention. Earlier this year, at the World Health Assembly, Taiwan took part
as an observer under the name of Chinese Taipei. That marked the first time in
38 years that it had participated in a meeting hosted by a U.N. agency. It seems,
however, that, in Copenhagen, only its civic groups and non-governmental
organizations represented it.
Taiwan has said that while not required to, it will follow the guidelines set out by
the Copenhagen Accord, although EPA Minister Stephen Shen has noted that this
would require carbon emissions to be cut by 80-90 per cent. This would need
the Greenhouse Gas Reduction Act to be passed, which has been stalled since
2006.127

THAILAND
Total installed generation capacity (31-10-09)128

+/- 29,000 MW

Energy mix (as % of total installed capacity)

Coal 19%, Hydro 6%, Natural gas 74%,


Other 2%

Total amount of electricity generated 2008 (TWH)129

147.5

Electricity demand growth rate (2008-2013)130

16.1%

Price of electricity per kWH (USD cents)

131

CO2 intensity of coal-fired elect. generation132

927 g CO2/kWH

CO2 intensity of elect. generation 133

536 g CO2/kWH

CO2 emissions (from all sources, 2008)

134

CO2 emissions per capita (from all sources, 2008)

253 million metric tonnes


3.86 metric tonnes

The most significant development in the regulation of Thailands energy sector


is the passage of the Energy Industry Act in December 2007 that endorsed
the establishment of the Energy Regulatory Commission (ERC). The ERC was
appointed in February 2008. ERC works within the policy framework established
by the National Energy Policy Council (NEPC), chaired by the Prime Minister135.
A key instrument available to the ERC in fulfilling its mandate is the Power
Development Fund. The Fund is to be used as a channel for implementing the
subsidy arrangements for, i.e. the promotion of renewable and environmentally
friendly energy.
In Thailand, efforts have been made to diversify away from the use of oil and natural
gas for power generation by, among others, increasing the use of indigenous
renewable energy resources and using fuel energy-efficient technologies for
power generation so as to enhance the security of national power supply as well
as to reduce environmental impact136. Steps undertaken include:

May 2001, the government initiated the pricing subsidy in the form
of energy payment adder for electricity generated by renewable energy
for a period of five years at a maximum rate of 0.36 baht/kWh, under a
competitive bidding.

In mid-2002, the government, via the two power distribution utilities i.e.
the Provincial Electricity Authority (PEA) and the Metropolitan Electricity
Authority (MEA), announced power purchase from VSPPs with capacity
supply to the grid <1 MW.

4 September 2006, the government, via the National Energy Policy


Council (NEPC), approved the increase of capacity purchase from VSPPs
from 1 MW to 10 MW each.

In 2007 the Ministry of Energy set a target to purchase power from SPPs
using renewable energy, totaling 530 MW Fixed Adder (230 MW) Adder
Bidding (300 MW)

The Thai government targets to have a total installed renewable generation


capacity of 3,276 MW by 2011137, equivalent to an increase of 59%. The
Power Development Plan aims to have renewable energy providing about
10% of the installed capacity by 2022,

expected to total more than 51,000 Megawatts. The drive to a clean


energy future has strong political backing.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 44

Wind speeds in Thailand are lower than in Europe, on average, but slow motion
wind turbines are being considered. Thailands geographic conditions seem most
appropriate for the development of biomass energy. In 2009 Thailand generates
about 1,700 MW from biomass fuel. The Ministry of Energy (MoE) expects that a
total of 3,700 MW could be generated using biomass. Tropical weather conditions
in Thailand and economic rationale favour biogas generation138.
Thailand has had an operating research reactor since 1977 however Thailands
nuclear power program has undergone a revival due to a forecasted growth in
electricity demand of 7% p.a. for the next twenty years. Capacity requirements
in 2016 are expected to reach 48 GWe139. In June 2007 the Energy Minister
announced plans to build two nuclear power plants including one US$6bn 4,000
MWe nuclear power plant to be operational in 2020. The Thai government has
budgeted funds to 2011 for preparatory work.The International Atomic Energy
Agency will cooperate with the Thai government to build the nuclear power
plant140. Construction will commence in 2015 and is estimated to take 13 years
to complete construction of the nuclear reactors.
Recent Events:
Thailand issued its first national communication on Climate Change in 2000 from
the International Environmental Affairs Division of the Office of Environmental
Policy and Planning (OEPP) at the Ministry of Science, Technology and Environment.
There have been no subsequent communications.
In January 2008 the Office of Natural Resources and Environmental Policy and
Planning, a division of the Ministry of Natural Resources and Environment released
the Strategic Plan on Climate Change 2008-12.
There have been no official government emissions reduction target statements
but the ONREPP has been actively developing mitigation and adaptation strategies
and ensuring the implementation of CDM across various sectors. By May 2009 the
DNA-CDM had apparently approved 66 CDM projects with a total abatement of
over 4 MTOE/year. These are mostly small biogas projects. Civil Society has been
active on the climate change issue in Thailand.141 The Department of Alternative
Energy Development and Efficiency is promoting private investment in R & D of
renewable energy sources through tariff promotion, as well as a greater emphasis
on conservation and efficiency.142

ISSUES FOR
RESPONSIBLE
INVESTORS

CONCLUSION

International discussions around the impact of the Copenhagen Accord


will continue in the weeks after the Copenhagen climate conference in
December 2009. Although there were no legally binding agreements on
emissions reductions, the developing nations in Asia finally have found a
voice in the debate.
Not only is a global treaty that includes mandatory targets for limiting
the growth in GHG emissions in emerging markets unworkable at this
stage, it seems that the concept of comprehensive national emission
trading schemes in which countries force companies to pay for their GHG
emissions is currently, and within the short to medium term, unrealistic.
Electricity is crucial for economic development and it is not feasible for
governments to punish emerging markets utilities for their existing
generation capacities.
On the other hand, unexpected measures could be triggered by the
current climate change talks. Recently more detailed discussions on
the abolition of energy subsidies, which in many countries set wrong
incentives and hinder the effectiveness of energy efficiency measures,
have taken place. The abolition of subsidized electricity prices would have
a significant effect on the power utility sector.
We would therefore recommend investors to closely follow the direction
of climate change policies and their interplay with energy policies at a
national, and even state level, to be able to judge how power utilities will
be affected.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 48

Appendix: Company
Profiles
Company Name (country)
RIC / ISIN: 2
Market Cap

There is a chapter on Environmental Protection and Social Responsibility in the companys annual report as well as the same
information on its website. There is no information on how the management of environmental and social issues is organized.
Stakeholders are not mentioned. Some information about philanthropic activities, for example after the Sichuan earthquake, but not in
a systematic and structured way

China Power International Dev. Ltd. (Hong Kong)


380.HK / HK2380027329
US$ 1,297m

Ownership structure

China Power Investment Group Ltd (56.05%), others (43.95%)

Company type

IPP
engaged in developing, constructing, owning, operating and
managing power plants in Peoples Republic of China. Plans to invest
in transmission and distribution of electricity as well

Business Model
Asian Utilities Environment and Social Rating

33%

Corporate Governance Rating


CDP disclosure

58%
No response

China Power International has started to disclose some environmental information. Apparently there have been some improvements
in sulphur dioxide, nitrogen oxide and carbon dioxide emissions, but overall information disclosure still leaves a lot of room for
improvement. Coal consumption rate was relative high compared to other Chinese utilities in our universe.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

2009 (MW)
2009 (%)
110
1%
8,946
81%
0
0%

0
0%
1,988
18%
0
0%
0
0%
11,045
100%
750MW of additional hydro projects until end 2010, another 250MW
hydro until end of 2011. 2400MW of additional coal capacity planned
until end of 2010. Potential of further asset injection from the parent
company

1,833
34,035,697 ED1 cost (m USD)
24,360 ED impact on 2008 revenue
131%
1,880 ED impact on 2008 EBITDA
1646%

Operational efficiency metrics


In 2008, net coal consumption rate of China Power was 334.38 grams/kWh, representing a decrease of 9.03 grams/kWh compared
with last year. Net/gross generation in 2008: 93.2% Net coal consumption varied between 373 g/kWh for the Shentou I Power Plant
and 315 g/kWh for the Pingwei Power Plant II (see AR08 p.24)

Water and waste treatment


In its 2009 Interim report CPI states that waste water treatment and emission of pollutants met the requirements of relevant policies
and the emission of various pollutants was in compliance with national environment protection standards.

Overall CSR reporting & management

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 50

Score:

No absolute emissions data. Vague comments on its environmental management system, which is not certified. One statement about
past climate change management, but no current information.

Safety is said to be a key objective but there is no information on actual safety management.

Generation Mix Plans Disclosed

Score:

Climate change management


Score:
0
One statement on what they have done in the past, but no further information and no emissions data. We have strived to reduce
consumption of coal and emission of greenhouse gas via various measures such as closing-down of small thermal power generation
units with high energy consumption, developing large scale and high efficiency environmental friendly generation units, enhancing
operation management and technical upgrades.

Health & Safety management


Score:
0

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Environmental management

Corporate governance

Score:

Separation of Chairman & CEO: no, percentage of independent board members: 43%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nomination
committee members: the same as remuneration committee, disclosure of executive and board remuneration: yes.

Controversies

Gravity:

Low

No controversies directly related to China Power Int Dev, but a lot of issues surround its parent company, China Power Investment:
For example, CPI was fined by the Ministry of Environmental Protection for emitting excessive amounts of sulphur dioxide in 2007. CPI
is active in Burma, building dams and working with the local ministry of electric power. In 2007 CPI was called the worlds 5th largest
polluter by Think-tank Center for Global Development.

Community investment
No community investments disclosed.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type
Business Model
Reporting
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

China Resources Power Holdings Co. Ltd. (Hong Kong)

Environmental management

0836.HK / HK0836012952
US$ 8,860m
China Resources National Corporation owns 64.75%, free float (35.2%)
IPP
Independent power producer, which invests, develops, operates and manages
power plants in China. The Company is engaged in two operating divisions:
sales of electricity (inclusive of supply of heat that is generated by thermal power
plants) and coal mining.
0
0%
92%
No response

Climate change management


no mention. No emissions data

Score:

Score:

Score:

11

Separation of Chairman & CEO: yes, percentage of independent board members: 36%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 67%, percentage of independent nomination
committee members: 67%, disclosure of executive and board remuneration: yes.

Controversies

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

5,828
169%
719%

Operational efficiency metrics


The net generation coal consumption rate of the operational power plants increased slightly from 2007s 338.9g/kWh to 340.5g/kWh in
2008 mainly attributable to the acquisition of 200MW class generation units of Jinzhou Power Plant and Shenhai Thermal Power Plants.
No clear trend in the ratio of net / gross generation: In 2007 it was 93.75% / 93.6% for consolidated/all plants, in 2008 93.34% / 93.33%,
in H1 2009 is was 93.45% for all its plants.

Water and waste treatment


No mention of water and waste treatment

Overall CSR reporting & management


Score:
The company states that it is committed to environmentally friendly operations and a satisfying work place, but no further information
given.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 52

Gravity:

High

sightseeing trips from the California-based company Control Components Inc. China Resources Power Holdings was added to a
list of six Chinese entities (Jiangsu Nuclear Power Corp, Guohua Electric Power, China Petroleum Materials and Equipment Corp,
PetroChina, Dongfang Electric Corporation and China National Offshore Oil Corporation) allegedly involved in the corruption scandal,
according to documents released by the US Department of Justice.
According to a recent Greenpeace report, CRP is the most carbon dioxide intensive Chinese power producer with 816.5 g CO2/kWh.
In July 2008, the Chinese Ministry of Environmental Protection has stated that China Resources Power Holdings, Guizhou Jinyuan
Group and Shanxi International Electricity Group energy projects are not eligible for environmental impact assessments because they
failed to add the required sulphur-eliminating facilities prior to the end of 2007. Its parent company is involved in further controversial
issues.

2009 (MW)
2009 (%)
473
3%
14,810
94%
0
0%

0
0%
158
1%
0
0%
315
2%
15,755
100%
plan to expand to 21GW by end of 2010 with 6% from alternative energy
99,639,200.00
28,845
3,479

Corporate governance

China Resources Power discloses virtually no information on environmental and CSR issues. Its generation mix is highly dependent on
coal and its coal consumption rate is the highest among the Chinese utilities we looked at. On top of this, the company was involved in
number of controversies.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Little mention of environmental issues. State that all the power plants which were constructed and managed by CR Power have
installed flue gas desulphurisation (FGD) facilities, but it is not obvious how many of the plants they constructed themselves and what
are the plans for plants constructed by somebody else. For the power plants under construction, they started the installation of denitration facilities, which is more than the environmental protection requirements set by the PRC Government.

Health & Safety management


No mention of Health & Safety management

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

Score:

Community investment
No community investments disclosed.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

GCL-Poly Energy Holdings Limited (Hong Kong)


3800.HK / KYG3774X1088
US$ 3,458m

Ownership structure

Zhu (Gong Shan) (CEO & chairman) owns 40.97%. Poly lomited (HK)
also substantial owner. Incorporated in the Cayman Islands. GCL
Silicon unsuccessfully tried to do an IPO in 2008. GCL Poly and GCL
Silicon have the same founder.

There is a section on Corporate Citizenship on the GCL-Poly Energy website, but there is almost no CSR related information to be
found. No useful information such as data, information on environmental management system, CSR management etc.

Company Type

IPP

Business Model

Foreign-owned independent cogeneration plant operator in the


Peoples Republic of China, engaged in the development, investment,
management and operation of cogeneration and power plants, and
trading of coal in the Peoples Republic of China. In June 2009, it
acquired GCL Silicon and thus became Chinas largest polysilicon
producer and a leading player in the countrys solar industry. Also
acquired interest in a coal mining project from its chairman.

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

2009 (%)
41.1%
51%
8%
0%
0%
0%
0%
100%

In its 2 (small) biomass / coal power plants in Baoying and Lianyungang they successfully improved the efficiency of their direct
combustion boilers and feeding systems, resulting in the reduction of raw coal consumption by 200,000 ton a year. This led to a
decrease in emissions of carbon dioxide by approximately 400,000 ton. No CO2 emission data, no further mention of climate change.
Score:

Corporate governance

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nomination
committee members: -, disclosure of executive and board remuneration: partly
Gravity:

Low

Community investment
GCL-Poly has made several donations. Chairman Zhu made a contribution to Nanjing University, it is not known whether this was in his
own name or not. These are philantropic investments.
Note 1: ED stands for environmental damage

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

231
43%
239%

Water and waste treatment


No mention of water and waste treatment.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 54

Score:

Controversies
No news coverage on controversial issues

Operational efficiency metrics


Not disclosed

Overall CSR reporting & management

Climate change management

none

4,059,523.00
7,578.00
142.00

All power plants have adopted various internal safety policies. The companys polysilicon facilities comply with all applicable
governmental regulations and internal environmental health and safety (EHS) standards. GCL-Poly sponsored a number of training and
development programmes for its employees in 2008.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

All GCL-Poly Energy plants have installed the CEMS (Continuous Emissions Monitoring System) which is required by the PRC
Government. Most of GCLs cogeneration plants use circulating fluidized bed (CFB) boilers, thus substantially lowering emission
of sulfur dioxide. Desulphurization equipment has been installed for the few pulverized coal boilers. There is no information on
environmental management inspite of the fact that the polysilicon production has a very high toxicity (TCS gas).

Health & Safety management

Disclosure on ESG issues by GCL Poly is almost completely missing and inadequate. The company is trying to position itself as a
leading clean energy company after its acquisition of its parent companys polysilicon business that delivers raw material to the solar
industry. Polysilicon production is very energy intensive and uses highly toxic and dangerous, Therefore we would expect the company
to focus more on environmental and H&S management.
2009 (MW)
360
444
72
0
0
0
0
876

Score:

5%
67%
no request by CDP

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

Environmental management

Score:

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type

Hongkong Electric Holdings Limited (Hong Kong)


0006.HK / HK0006000050
US$ 11,569m
Cheung Kong Infrastructure (38.7%), other (61.3%)
Electricity generation, transmission & distribution

Business Model

International business is mainly focused on transmission &


distribution, but the company also has interests in generation assets.
Vertically integrated in HK

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Environmental management

65%
67%
yes

2009 (MW)
2009 (%)
1,745.10
30%
3,955.56
68%
0%
0%
0%
0%
116.34
2%
5817
100%
100MW offshore wind farm planned
10,038,245.00
6,091.00
350.00

Score:

Report CO2 emissions and climate change activities only on HK operation, not internationally. Reporting is extensive. Some activities
top support energy efficiency with customers: for example, starting from 2009, HK Electric has been carrying out energy audits for the
customers free of charge in order to promote energy efficiency. Further, they established a loan fund of HK$12.5 million per annum
over a five-year period (total HK$ 62.5 million) to provide interest-subsidized loans to their customers to implement energy saving
initiatives identified in the energy audits.
CO2 emissions intensity is with 0.75 kg CO2 / kWh significantly higher than CLP at 0.54 kg CO2 / kWh for its HK operations. No
emissions reduction target set. CO2 emissions for its HK operations are published in the Environmental Report. They show a slightly
decreasing trend. They state that they recognise their responsibility to contribute to global efforts to reduce Greenhouse Gas (GHG)
emissions by switching to low carbon fuel, promoting energy efficiency and applying renewable energy.
They also do environmental education campaigns, which promote private energy saving activities. Are in the process of installing
emission reduction equipment at the Lamma power station. The last of the FGD and low nitrogen oxide burner works is expected to be
completed in the second quarter of 2010 by which time over 95% of the electricity generated at the Lamma power station will be either
generated by gas or by coal fired units fitted with FGDs and low nitrogen oxide burners.

Hongkong Electrics disclosure on ESG issues is relatively extensive and far above sector average. The company scores as an ESG
leader. They publish emissions and safety data. CO2 emissions intensity for its HK operations is significantly higher than the one of its
competitor CLP. There is room for improvement on disclosure for non-HK facilities.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Report CO2 emissions and climate change activities only on HK operation, not internationally. Reporting is extensive. HK Electric
has been carrying out energy audits for its customers free of charge in order to promote energy efficiency. HK Eletric established a
loan fund to provide interest-subsidized loans to their customers to implement energy saving initiatives. Quarterly emissions data for
the Lamma Power Station are available. The Lamma Power Station is ISO 14001 certified. Claim that most of the fly ash is used in
construction. There are no targets and no group wide information. In HK the operations are certified according to OHSAS18001. There
is data on the companys safety performance (injury frequency and severity) which is available only for very few Asian utilities. The data
shows little clear trends but varies widely from year to year. They set some environmental targets, most of which are part of their usual
operations, though, such as the implementation of its emissions reduction facilities at the Lamma Power Station which is needed to
meet regulatory standards.

Climate change management

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

Score:

Health & Safety management

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

581
35%
43%

Score:

HKE has established a clear H&S policy and an H&S Board. HKE follows international standards and has received external
certification. There is data on the companys safety performance (injury frequency and severity) which is available only for very few
Asian utilities.

Corporate governance

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 19%, percentage of independent audit committee
members: 75%, percentage of independent remuneration committee members: 67%, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: yes. 2 of the independent directors have been with the company since
1985. One executive director is 77, all non-execs are 67+ years old.

Operational efficiency metrics


Thermal Efficiency 2008: 35.8%, annual load factor: 53.9 %

Water and waste treatment

Lamma Power Station awarded Wastewi$e and Energywi$e Labels in recognition of efforts to reduce waste, save energy and promote
wider use of renewable energy.

Controversies

Score:

There is a section on environmental issues on the companys website. Little data is available, though. There is also a chapter in the AR
on the latest environmental developments and on some community investment activities. The company also publishes an annual Social
& Environmental Report.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 56

Low

Criticised in the past couple of years for air pollution in HK

Overall CSR reporting & management

Gravity:

Community investment
Various community and educational programmes all related to the field of energy, e.g. Energy Efficiency Education Kit for Secondary
Schools, providing learning and teaching resources on topics of energy efficiency for students and teachers in Hong Kong. These are
strategic investments.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

ESG Summary

Datang International Power Generational Co Ltd. (China)


0991.HK / CNE1000002Z3
US$ 12,070m
Beijing Energy Inv. Holding (11.41%), China Datang Group
Corporation (33.61%), Hebei Constr. Investment Company (11.07%),
Tianjin Jinneng Investment Company (10.29%), other holders of
domestic share (5.48%), Holders of H shares (28.15%).
IPP
Datang Power is engaged in the development and operation of
power plants, the sale of electricity and thermal power, and the repair
and maintenance of power equipment and power-related technical
services in the PRC.
60%
67%
No response

Generation Mix Plans Disclosed

2009 H1 (%)
Reporting on fuel mix breakdown is confusing as the company reports
only outdated (2006) or ambiguous data, that is fuel breakdown
per unit installed and total installed capacity instead of attributable
capacity. Main fuel source is coal with probably around 90% of
attributable capacity. There are some very small wind power plants
and the remaining capacity is hydro plants.
27790.2 MW
The Fujian Ningde Nuclear Power Station, which is owned by Datang,
Guangdong Nuclear Power Investment Company Limited and Fujian
Coal Industrial (Group) Corporation, commenced construction in
February 2008
120,510,729.00

CO2 intensity (tonnes/ m USD rev.)


CO2 damage cost (m USD)

22,289.00
4,207.00

Overall CSR reporting & management

Score:

Publish a separate 2008 sustainability report. Some parts contain concrete data, for example on emissions, but mostly written as a
marketing brochure. State that they abide by the 10 principles of the UN Global Compact. Global Compact seems to have verified the
report. Some emissions data is also included in investor presentations.

Score:

Datang has nuclear generation assets. GHG emissions data is available. Datang is investing in renewable energy generation assets.
Company follows national policy on environmental management. Datang was the first Chinese IPP to have all units equipped with flue
gas desulphurization units. The company claims that their emissions of smoke dust, SO2, NOx and waste water are lower than the
national average. First power plant with DeNOx facilities in China. All emissions show decreasing trends. Most succesful have been the
reductions in SO2 emissions which have declined to 1.16 g/kWh in 2008 from 6.6 g/kWh in 2004. 65.7% of coal ash was used in 2008.

Climate change management

Score:

no mention of climate change. No CO2 emissions data. Share of renewable & clean energy in its portfolio has increased rapidly in 2008

CO2 emissions (tonnes)

Datang places emphasis on recycling water resources, and treatment of industrial waste water. Datang publishes water and waste
treatment data. Datang focused on strengthening the management of water saving in coal-fired power plants and proactively promoted
the application of new technologies. As at the end of 2008, eight air-cooling generating units and ten seawater-cooling generating units
commenced operation, thereby leading to a decrease of 37.8% in water consumption per unit of power generated. Ten plants realised
zero drainage of industrial waste water.

Environmental management

Compared to others in the sector, reporting on ESG issues is relatively extensive, including concrete data on emissions. In other
aspects disclosure is insufficient, though. For example, the company does not give a split of its generation capacity for example.
Datang is a member of the UN Global Compact.
Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Water and waste treatment

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

5,296.00
98%
353%

Operational efficiency metrics


unit coal consumption declined from 332.47 to 326.8 g/KWh from H1 08 to H1 09. For 2008, unit coal consumption was approximately
331.46 g/kWh, a decrease of approximately 4.87 g/kWh over the previous year, the consolidated electricity consumption rate of power
plants was 6.01%. For 600MW and 300MW units Datangs consumption is below the national average.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 58

Health & Safety management

Score:

Datang strives to provide employees with better working and living conditions. Some information on staff development and training. No
information on safety policies in place or days without injuries.

Corporate governance

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committee
members: 33%, percentage of independent remuneration committee members: 60%, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: yes.

Controversies

Gravity:

Medium

Datang Power was one of the companies involved in a corruption scandal for accepting bribes from US listed Control Components
(CCI). Criticised heavily for environmental impacts of planned hydro projects in the Mekong Delta. As most other Chinese IPPs using
coal fired power plants the company has been under criticism in the past for high pollution levels from their plants

Community investment
Datang donates to poverty stricken areas and in the event of natural disasters. Datang supports different schools. Investments are
philanthropic.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

Ownership structure

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

ESG Summary

Huadian Power International Corp. Ltd. (China)

Environmental management

1071.HK / CNE1000003D8
US$ 4,373m
China Huadian Hong Kong owns 6% of H-shares and 64.51% of
A-shares, Shandong International Trust & Investment Corporation
owns 17.45% of A-shares. China Huadian Corp owns altogether
50.60% of the company, Shandong International Trust Corporation
13.3%
IPP

Environmental information is quite sparse. According to the emission reduction data approved by State environmental protection
authorities, the Groups average emission of sulphur dioxide achieved a year-on-year decrease of 0.69 g/KWh. Unfortunately the
company does not disclose absolute SO2 emissions, even though it knows the data. As at the end of 2008, generating units with a
total capacity of 19,145MW, representing about 90% of the coal-fired generating units controlled by the Group, were equipped with
desulphurisation facilities. There is no further information on environmental management

Construction and operation of power plants and businesses related to


power generation. Owns interests in coal mines.
0%
50%
No response

CO2 emissions (tonnes)

Climate change management


Score:
0
No mention of climate change. Coal consumption rate for its coal fired power plants is relatively low (probably due to the fact that most
units are large)

Health & Safety management


Score:
0

Corporate governance

CO2 intensity (tonnes/ m USD rev.)


CO2 damage cost (m USD)

22,021.00
3,385.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Controversies

Community investment
No community investments disclosed.
Note 1: ED stands for environmental damage

5,250.00
119%
1008%

On-grid power sold: 46.57 million MWh, average utilization of coal-fired generating units: 2,320 hours, coal consumption: 326.21 g
/ MWh, unit fuel cost for power generation RMB 216.13/MWh. Over 90% of its installed capacity is composed of units of 300MW or
above.

Water and waste treatment


No mention of water or waste treatment

Score:

No CSR information on the companys website. Very sparse environmental information in the AR. No indication of how environmental
and CSR issues are handled within the company

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 60

Gravity:

High

June 2009, the Ministry of Environmental Protection suspended approval for two hydropower station projects on the Yangtze River over
concerns that they would cause the irreversible loss of aquatic diversity. Allegations of serious environmental pollution in the past. In
2007, China Huadian Corporation was put on a blacklist and was to be banned from launching new projects until it had cleaned up its
existing facilities in a name and shame approach by the State Environmental Protection Administration.

Operational efficiency metrics

Overall CSR reporting & management

H1 2009 (MW)
2009 (%)
918.40
4%
19,377.61
94%
0%

0%
168.72
1%
0%
92.28
0%
20,557.00
100%
1283 MW hydro, 545 MW wind, 3800 MW of coal capacity under
construction

96,957,485.00

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committee
members: 60%, percentage of independent remuneration committee members: 60%, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: partly.

Generation Mix Plans Disclosed

Huadian states that production took place without incident at different sites, but fails to mention health and safety management. No
emissions data

There is very little disclosure of environmental and CSR related information and the company scores as an ESG laggard. Its coal
consumption rate is relatively low. Huadian is involved in controversial projects such as the Ludila hydropower project, for which the
Ministry of Environment has suspended approval.
Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Score:

Environmental management

Company Name (country)


RIC / ISIN: 2
Market Cap

Huaneng Power International, Inc. (China)


0902.HK / CNE1000006Z4
US$ 11,846m

Ownership structure

Huaneng International Power Development Corporation owns 42.0%


of the company (56% of A shares), China Huaneng Group owns 8.8%
of the company (11.7% of A-sahres and 0.7% of H-shares). SOE China
Huaneng Group owns a controlling stake in HIPDC.

Company type

IPP

Business Model

Investment, planning, operation and management of power plants.


Largest Chinese IPP by capacity. HPIs parent company, Huaneng
Group, is the largest central-government-administered state owned IPP
with more than 70GW controlled capacity. Bought the Tuas generation
facilities in Singapore that have a local market share of around 25%

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

0%
75%
yes, answered 2008 & 2009 CDP but details are not publicly available

Score:

In 2008, 86.2% of the coal-fired generating units were equipped with desulphurization facilities. The company claims that it will have
completed the installation of desulphurization equipment for all of its facilities be the end of 2009. There is little further information on
environmental issues. Reportedly responsible persons have been assigned to ensure environmental protection at a plant level.

Climate change management


No mention of climate change. No emissions data

Score:

Score:

Score:

Health & Safety management


No mention of health & safety management

Corporate governance

Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 57%, percentage of independent nomination
committee members: 57%, disclosure of executive and board remuneration: yes

ESG Summary

Controversies

There is very little disclosure of environmental and CSR related information. The company scores as an ESG laggard. Huaneng Power
International is involved in controversial projects such as the Longkaikou hydropower project, for which the Ministry of Environment has
suspended approval.

In June 2009, the Ministry of Environmental Protection has suspended approval for two hydropower station projects on the Yangtze
River over concerns that they would cause the irreversible loss of aquatic diversity, and have negative impacts on communities. The
Ludila hydropower project by Huadian Power, and the Longkaikou project by Huaneng Power were allegedly constructed illegally
before reviewing potential environmental impacts. But environmental groups including Friends of Nature and the Chengdu Urban
Rivers Association have questioned whether construction has really stopped on the dams.
Also, in 2009, Huaneng Power has been accused of deviating from the original construction design of one of its biggest coal-fired
plants in Inner Mongolia, using water rather than air to cool generators although the supply is under threat in the area.
In 2007, Huanengs parent company China Huaneng Group was named the worlds largest carbon polluter, which is a consequence
of it being the largest Chinese power producer by capacity installed. The parent company has also frequently been criticized by the
central government for not meeting environmental standards.

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

2008 (MW)
ND
ND
ND
ND
ND
ND
ND
39,159
No Disclosure

CO2 emissions (tonnes)

183,597,411.00

CO2 intensity (tonnes/ m USD rev.)


CO2 damage cost (m USD)

18,513.00
6,410.00

2008 (%)
ND
ND
ND
ND
ND
ND
ND
100%

Community investment
No community investments disclosed.
Note 1: ED stands for environmental damage

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

10,028.00
101%
968%

Operational efficiency metrics


Average coal consumption rate for power sold (2008): 325.94 g / MWh, internal usage rate: 5.38%.

Water and waste treatment


Every power plant has waste water treatment facilities for treating waste water coming out from the operating units before it goes into
the river or sea

Overall CSR reporting & management

Score:

No information on CSR management. Outdated information available on the website.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 62

Gravity:

High

Company Name (country)


RIC / ISIN: 2
Market Cap

GVK Power and Infrastructure Ltd. (India)


GVKP.BO / INE251H01024
US$ 1,547m

Climate change management


No mention and no emissions data disclosed

Ownership structure

Promoters (60.94%), foreign institutional investors (17.85%), banks,


FI, mutual funds ( 8.24%),
others (12.97%)

Health & Safety management


No mention of Health & Safety management

Company type

IPP

Business Model

focus on power generation assets (gas, hydro and thermal), roads,


airports, coal mines and oil and gas. Business organized into Energy,
Transportation and Urban Infrastructure. Power is expected to be
around 70% of FY10 EBITDA

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

ESG Summary

Corporate governance

Gravity:

Low

Community investment

24
21%
40%

Operational efficiency metrics


No information.Natural gas projects were idle for a some time due to non-availability of natural gas, but run on high plant-load factors
now

Water and waste treatment


No mention of water or waste treatment

Score:

No CSR related information available at all. GVK states that it has a socially responsible vision, however it provides no information that
supports this vision. Has a foundation.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 64

Score:

Controversies
No controversial news coverage to our knowledge

2009 (MW)
2009 (%)
901.00
100%
0%
0%
0%
0%
0%
0%
901.00
100%
700MW hydro, 540MW coal in 2010

466331 ED1 cost (m USD)


3983 ED impact on 2008 revenue
16 ED impact on 2008 EBITDA

Environmental management
No mention of Environmental management & climate change management

Separation of Chairman & CEO: no, percentage of independent board members: 50%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nomination
committee members: ND, disclosure of executive and board remuneration: partly

0%
50%
Not requested to disclose

Overall CSR reporting & management

Score:

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

GVK Power does not disclose any environmental information, which is inadequate for a power and infrastructure company and makes
it impossible to assess its environmental performance. Its distribution mix is relatively favourable with 100% of gas powered generation
capacity and significant hydro expansion planned.
Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

Score:

Score:

GVK makes community investments through the GVK Foundation. Investments are focused on the poor, rural communities living near
its plants. The Foundation builds primary schools and community halls and provides drinking water. These investments are strategic.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

KSK Energy Ventures (India)


KSKE.BO / INE143H01015
US$ 1,591m

Ownership structure

KSK Energy Ltd. (55.25%), LB India Holdings Mauritius (8.41%), LB


Mauritius (20%), Other (6.35%), Free float (9.99%)

Corporate governance

IPP
Power project development company (power development, operation,
maintenance)
0%
67%
Not requested to disclose by CDP

Controversies

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Health & Safety management


No mention of Health & Safety management

Generation Mix Plans Disclosed

2009 (MW)
57.60
86.40
144.00

2009 (%)
40%
60%
0%
0%
0%
0%
0%
100%

under construction: 718MW of coal (540 of which are lignite), under


advanced development: 1800MW of coal and 130 hydro. 5400MW of
coal planned & 945MW of hydro. Interest in Lignite mining

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

548,185.00
9,219.00
19.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

31
51%
58%

Operational efficiency metrics


ND

Water and waste treatment


No mention of water and waste treatment

Overall CSR reporting & management


Score:
No reporting on any CSR issues. Laggard in terms of international CSR and environmental management

Environmental management
Score:
No emissions data, no information on environmental management or climate change

Climate change management


Score:
No information at all on climate change. No emisisons data given

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 66

Separation of Chairman & CEO: yes, percentage of independent board members: 40%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nomination
committee members: ND, disclosure of executive and board remuneration: partly

Gravity:

Medium

Some local resistance against its Kameng region hydro project, not large-scale.

Community investment

Note 1: ED stands for environmental damage

2010 (MW)
57.60
804.40
862.00

Score:

KSK has financed the construction of two temples, a marriage hall, water tanks for a remote community and a medical camp. These
investment are philanthropic.

Today, KSK Energy Ventures has an environmentally relatively favourable generation mix with 40% gas, but this will change for the
worse, once its capacity expansion comes through. Clear laggard with regards to international CSR and environmental management.

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Score:

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Lanco Infratec (India)


LAIN.BO / INE785C01030
US$ 2,765m
73.6% in the hands of the promoter group: Prince Stone Investments,
Ltd. Owns 45.1%, Lanco Group, Ltd. 13.25%, LCL Foundation
4.41%, Rao (Bhaskara G) 2.37%, Rajagopal (L) 2.28%, Rao
(Madhusudan L) 2.27%, Sridhar (L) 2.27%
IPP
Integrated infrastructure company with focus on construction, power,
roads and property development. According to recent estimates,
power assets are about 45% of company value. Also active in power
trading
10%
67%
No request to disclose by CDP

Generation Mix Plans Disclosed

08-09 (%)
95%
0%
0%
0%
2%
0%
3%
100%

Plans (MW)
368.00
6,775.00
705.00
7,480.00

Consider (MW)
250.00
250.00

plans 6775MW of coal, 705MW of hydro and 368MW of gas. 3,913MW are already
under construction. Later will also consider 250MW of wind

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

1,962,000.00
2,431.00

ED1 cost (m USD)


ED impact on 2008 revenue

104
13%

69.00

ED impact on 2008 EBITDA

53%

Operational efficiency metrics


ND

Water and waste treatment


No mention of Water & Waste treatment

Overall CSR reporting & management

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 68

Score:

No information on energy savings in annual report. Only information on environmental and OHSAS certification available. Information
on initiatives at its construction activities and emission data is missing. (Lancos flagship Kondapalli power plant has ISO 14001:2004
certification for Environmental Management, . Lancos Aban power plant has ISO 14001:2004 certifications.)

Climate change management


Brief mention of climate change in Lancos CSR report. No emissions data.

Health & Safety management

Score:

Score:

Relatively clean IPP in the Indian context due to its high reliance on gas for power generation. Mix will become less favourable in the
future, when its large expansion in coal fired capacity comes on-stream. Clear laggard with regards to internal CSR and environmental
management.

08-09 (MW)
488.00
10.00
13.00
511.00

Environmental management

No mention of Health & Safety management, yet Lanco invests in community health programs.Lancos flagship Kondapalli power plant
has OHSAS 18001:2007 for Occupational Health & Safety, and OHSAS 9001:2000 for Quality Management Systems. Lancos Aban
power plant hasOHSAS 18001:1999 certifications.

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

UN Global Compact member. Lanco publishes an annual CSR report that is focused on community investments. Lanco has a CSR
management team. But no info on company international CSR activities or management

Score:

Corporate governance

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committee
members: 75%, percentage of independent remuneration committee members: 100%, percentage of independent nomination
committee members: ND, disclosure of executive and board remuneration: partly.

Controversies

Gravity:

Medium

Lanco Amarkantak Thermal Power Station was criticised for an incident with the World Bank which referred to its coal projects as
clean. Lanco Infratech is mentioned in a report by International Rivers as being interested in dam projects that destroy the livelihoods
of local people in the Himalayas, but no details are given. Overall modest criticism.

Community investment
Strong philanthropic activities via the LIGHT foundation. Report of these activites can be found in the annual CSR report.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

Neyveli Lignite Corporation Limited (India)


NELG.BO / INE589A01014
US$ 5,149m

Ownership structure

Central government (93.56%), institutional investors (4.39%), noninstitutional investors (2.05%) holding company KSK Energy Limited owns
55.24%, which in turn is owned by AIM listed KSK Power Venture

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Environmental management

2009 (%)
0%
100%
0%
0%
0%
0%
0%
100%

Controversies

Gravity:

Medium

Some local resistance against its Kameng region hydro project. In the past, there were serious issues around labor conditions for
contract workers. In April 2008, 13,000 contract laborers at the NLC have staged a demonstration to demand the regularization of
services as well as housing, medical and transportation provisions and bonuses. Protests of the labour unions against potential
disinvestment plans by the central government.

Community investment

941
129%
201%

Only some information on community programs with little relevance to environmental efforts. Neyveli provides no information on how CSR
is addressed within the company.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 70

Score:

Operational efficiency metrics


No disclosure. Ageing machinery is a serious risk. Partly plants are very old, and therefore not only inefficient, but will also have to be
replaced at some time soon. Risk of disruption in operations when old machinery fails.

Water and waste treatment


No mention of water and waste treatment

Overall CSR reporting & management


Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 40%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 100%, percentage of independent nomination
committee members: ND, disclosure of executive and board remuneration: partly

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Score:

Corporate governance

plans another 750MW of lignite coal capacity linked to its mining activities,
plus another 3000+MW in planning, partly as JVs. Overall expansion
plans are >15`000MW, all lignite or coal with only 2GW hydro and 200MW
wind further down on the priority list. In Sept 09, more commitment to
renewable was made, plans to commence production of electricity by wind
(50MW in an initial stage) by Oct 2010.
17,534,902.00
23,931.00
612.00

Health & Safety management


No mention of Health & Safety management

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Score:

Considering delaying the shut-down of its oldest TPS I generation plant, which is at the end of its life as it has been running for over
40yrs already. From environmental and climate change point of view, fast replacement by an efficient new plant would be the preferable
option. No emissions data, targets etc.

From an environmental point of view Neyveli Lignite has a very unfavourable generation mix with a 100% lignite coal. It is not expected
to improve significantly by its expansion plans. It also runs one of the oldest power plants in the whole country. Its (publicly available)
environmental management is grossly inadequate for such a high impact company.

Generation Mix Plans Disclosed

Neyveli Lignite has a very unfavourable generation mix (100% lignite coal). Its power plants are old. Some information on restoration
of abandoned mine land, afforestation and greening activities around its mines. Its (publicly available) environmental management
is inadequate for such a high impact company. No GHG emissions data or targets. Environmental management is a must for a high
impact activity such as open cast mining. It is telling that NLC has carried out a study on trees tolerance to air pollution for part of its
remediation efforts and that the company itself mentions resistance to costs associated with environmental laws.
Climate change management

ESG Summary

2009 (MW)
2,490.00
2,490.00

Generation
lignite mining and power generation
0%
67%
No Response

Generation type
Gas
Coal (ligtnite)
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Score:

Neyveli actively provides welfare services to the community of Neyveli township, most noteworthy would be Neyvelis contribution to
the education of handicapped children. These investments philantropic.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

NTPC Limited (India)


NTPC.BO / INE733E01010
US$ 36,594m

Ownership structure

Government of India (89.5%), FII (3%), domestic institutions & public


(7.5%)

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Overall CSR reporting & management

Power generation, transmission & distribution

50%
33%
No response

ESG Summary
In absolute and relative terms, NTPC is a large polluter. Although expansion plans will tilt the capacity mix a little more towards
renewables, it will continue to be heavily dominated by coal. NTPC has implemented a couple of very positive CSR initiatives, but given
its high impact we would expect the company to be even more proactive. It scores as a follower in our ESG scoring. NTPC is involved
in a number of controversies that is not surprising for a company of its size.

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

2009 (MW)
5,515.92
25,128.08
30,644.00

2009 (%)
18%
82%
0%
0%
0%
0%
0%
100%

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

10,282.00
103%
304%

Operational efficiency metrics


Operational efficiency metrics: show plant load factor and availability factor of coal based power plants over a 10yr history. Availability
is at its highest value at 92.47%. PLF is relatively high, even though slightly lower than 07/08 at 91.14%. It is significantly higher than
the Indian average of 77.22%. But one has to consider that high PLF might also be related to better fuel availability for a company of
the size and political power of NTPC. Claim that energy conservation parameters like specific oil consumption and auxiliary power
consumption have also shown considerable improvement over the years, but do not show any proof. Note that too high PLF is not
desirable as time for operation and maintenance is important for efficient operation.

Water and waste treatment

Score:

Some good environmental and CSR information on company website and in AR. 3 level approach to CSR: 1) compliance, 2) philanthropy and image
building, 3) innovations & key business strategies. Global Compact member. Some proactive efforts related to resettlement: NTPC has formulated
specific guidelines for the welfare of Project Affected Persons (PAPs). It has also undertaken community development activities in and around the
projects. Rehabilitation Action Plans are implemented in most of the projects. Some projects of NTPC were already fully or substantially developed by
the time the 1993 R&R Policy was implemented. The company did a re-assessment of the activities in the older projects and carried out a retrofit R&R
operation to bridge the gaps wherever they had occurred. NTPC has formulated an Initial Community Development (ICD) policy to take up community
development activities in greenfield/expansion projects. Strong commitment to education.

Environmental management
Score:
1
NTPC has decided to set aside 1% of its distributable profit for research and development including 0.5% for research activities related to clean coal
and climate change initiatives. An Efficiency Management System (EMS) has been implemented at all stations to focus on periodic performance
evaluation, analysis and development of action plans for performance restoration. All NTPC power stations have been certified for ISO 14001 & OHSAS
18001. According to the company environmental parameters are monitored, but no data on emissions is provided.
Climate change management

under construction: 11510MW of coal, 1920MW of hydro, in addition


4000MW with JVs. 1000MW of renewables (ex large hydro) in its
business plan

190,629,375.00
19,123.00
6,655.00

Provision of advanced treatment facilities in its Liquid Waste Treatment Plants (LWTP), installation of recycling systems for ash pond effluent called Ash
Water Recirculation System (AWRS) and installation/ operation of closed cycle condenser cooling water systems with higher Cycle of Concentration
(COC) are some of the measures implemented in most stations. Ash Utilization is one of the key concerns at NTPC. NTPC has a strong water and
waste treatment program.

Score:

No emissions data available. NTPC has decided to set aside 1% of its distributable profit for research and development including 0.5% for research
activities related to clean coal and climate change initiatives.
A fossil fuel fired power plant using Super Critical Technology has been approved by UNFCCC for CDM credits.
The Center for Power Efficiency and Environmental Protection (CenPEEP), set up with technical assistance of USAID/USDOE, has a mandate to
reduce GHG emissions per unit of electricity generated by improving the overall performance of coal-fired power plants. Various state-of-the-art
technologies and practices for improvement in efficiency and maintenance have been demonstrated in local conditions and disseminated to power
stations through hands-on-training, guidelines and workshops.
An Efficiency Management System (EMS) has been implemented at all stations to focus on periodic performance evaluation, analysis and development
of action plans for performance restoration.
International cooperation for climate change has expanded with signing of an agreement between Ministry of Power, NTPC Ltd. and Japan International
Agency for Cooperation (JICA) to undertake a Study on enhancing Efficiency of Operating Thermal Power Plants in NTPC-India.
The new NTPC Energy Technology Research Alliance (NETRA) is envisioned as a state of- the-art centre for research, technology development
and scientific services in the domain of electric power. NETRA has filed 12 patent applications for various activities like assessment of high voltage
transformers, fly ash based utensil cleaning powder, CO2 capturing Zeolites from flue gas; etc
Health & Safety management

The company states that it has internal checks to prevent complicity in human rights abuses.

Corporate governance

Score:

Score:

Separation of Chairman & CEO: no, percentage of independent board members: 50%, percentage of independent audit committee members: 80%,
percentage of independent remuneration committee members: ND, percentage of independent nomination committee members: ND, disclosure of
executive and board remuneration: partly, comments: directors are appointed by the government of India.

Controversies

Gravity:

Medium

Think-tank Center for Global Development issued its list of the worlds worst polluting companies, with Chinas state-run Huaneng Power International
ranking at number one. The list, which is compiled on the basis of factors including carbon emissions, energy generated, intensity, and usage of fossil,
hydro, nuclear and other renewable sources puts Indias NTPC third. NTPC is mentioned by NGO International Rivers as being involved in planning
dams in the Himalayas that destroy the livelihood of the local population.
In January 2008, three people were killed and others injured when police opened fire on hundreds of local people protesting outside NTPCs plant in the
state of Bihar, India. The protesters were demanding electricity supplies from NTPC following acute power shortages in the state. The state government
accused Indias UPA-ruled government of discriminating against non-UPA ruled states in the electricity crisis.
In June 2007, NTPC has opposed an Environment Ministrys proposal about early disposal of fly ash and lesser storage time. The Environment Ministry
suggested a time line for the clearing of existing fly ash. Fly ash is a significant water, air, and soil pollutant.
Community investment

Extensive community development programs around its operating stations. NTPC has formulated specific guidelines for the welfare of Project Affected
Persons (PAPs). It has also undertaken community development activities in and around various projects. NTPC has formulated an Initial Community
Development (ICD) policy to take up community development activities in greenfield/expansion projects. NTPCs community investments are strategic.
Note 1: ED stands for environmental damage
Responsible Research 2010 | Green Building: Issues for Responsible Investors | 72

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type

Business Model

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Power Grid Corporation of India (India)


PGRD.BO / INE752E01010
US$ 9,421m
Government of India (86.36%), other (13.64%)
Transmission
Monopoly over the inter-state and inter-regional transmission of power
across the country. Plus telecom, connectivity, consultancy, and
leasing. transmission network of around 71,500 circuit km. Powergrid
has been assigned the job of execution of rural electrification in 68
districts covering 87,300 Villages at an estimated cost of about Rs.
9,400 Crore. It has established the infrastructure for electrification of
over 22,002 villages in India.
38%
25%
Not requested to disclose by CDP

Corporate governance

Score:

Separation of Chairman & CEO: no, percentage of independent board members: 50%, percentage of independent audit committee
members: 67%, percentage of independent remuneration committee members: ND, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: no, ownership structure: The Indian government owns 86.36%,
comment: 2 out of 12 are government sent directors.
Gravity:

Medium

Significant involvement in Burma: In July 2008 the Export-Import Bank of India signed a line of credit agreement with Myanmar Foreign
Trade Bank and the Power Grid Corporation of India Ltd. was to undertake the construction of three transmission projects in Myanmar.
In February 2009, Power Grid and state-run Transmission Corporation were criticized for allegedly attempting to erect pylons on
community property, without compensating the land owners.

Community investment

2009
71600
122

POWERGRID organizes regular health camp and blood donation camp in collaboration with leading medical institutes for free medical
check-up of villagers and also provide free medicines. Apart from this women organization of POWERGRID also organizes various
welfare camp for the welfare of communities by providing vocational training and distribution of articles like swing machines, cycles etc.

232,957.00
184.00
8.00

The company seems to have a solid operational track record. Focusing purely on transmission, Power Grids environmental impact is
automatically a lot lower than the one of power generating utilities. The companys is involvement in Burma may be an issue for some
responsible investors.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

OHSAS 18000:1999 for health and safety management. Environment & Social Policy Statement
was revised in 2005. Its based on the basic principles Avoidance, Minimization and Mitigation.
Gives information on employee training and development.

Controversies

ESG Summary

Transmission asset
Transmission lines (ckt km)
Number of sub-stations
Generation Mix Plans Disclosed

Climate change management


Score:
0
R&D on Super Grid comprising 1200kV UHVAC, which would be more energy efficient. No reference to climate change. No emissions
data.

Health & Safety management


Score:
1

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

11
1%
1%

Operational efficiency metrics


Solid operational track record, maintaining its transmission availability at more than 99%, which is on par with international utilities.
Consistently outperforms the efficiency targets the government sets in MoUs. Has been in the highest bracket, i.e. excellent, of the
governments public service rating for a couple of years. Data for system losses is missing

Water and waste treatment


No mention of water and waste treatment.

Overall CSR reporting & management

Score:

Some CSR information on the company website and in AR. Certified to Social Accountability Standard SA 8000:2001.

Environmental management

Score:

Integrated management system: ISO 9001:2000 for quality, ISO 14001:2004 for environment management. Development of power
lines has a huge impact on forests, recently forest involvement which was about 6% in 1998 has been brought down to 2%. Power Grid
consistently outperforms the efficiency targets the government sets in MoUs. Current principles guiding environmental management
are in line with government regulation. Power Grid mentions that it is investing in R&D on Super Grid comprising 1200kV UHVAC,
which would be more energy efficient.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 74

Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

Reliance Infrastructure Ltd (India)


RLIN.BO / INE036A01016
US$ 4,963m

Ownership structure

Reliance ADA (37.45%), institutional public (44.68%), non-institutional public


(17.11%), other (0.46%)

Company type

Integrated (generation, transmission, distribution, trading)

Business Model

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Environmental management

Score:

Reliance has an environmental board committee. Information on environmental management is available on the company website.
Yearly publication of CO2 emissions. Flue Gas De-sulphurisation seems to have been introduced in 2008/09. No/little mention of
climate change.

Climate change management

Score:

formerly Reliance Energy Limited. The engineering, procurement,


construction (EPC) segment does value-added services in construction,
erection and commissioning. Other operations include development,
operation and maintenance of toll roads, metro rail transit system and real
estate projects, including special economic zone.

no mention of cliate change. Both the Flue Gas De-sulphurisation units were in service throughout the year with SOx absorption more
than 90% as stipulated. Flue Gas De-sulphurisation seems to have been introduced in 2008/09 as SOx levels dropped from 29.4 the
year before to 3.92. Further detailed emissions data on p38/39 of AR. There is no reportable accident in more than 17.5 million man
hours

65%
92%
No response

Health & Safety management

Score:

Reliance Infrastructure formulated a health and safety policy to confirm its commitment to H&S. No reportable accident in more than
17.5 million man hours.

ESG Summary

Corporate governance

Reliance Infrastructure has done some efforts in environmental and h6S management and scores in the mid-range of the sector. It reports
on emissions data and has reduced SOx emissions significantly by installing flue gas desulphurization systems. On the negative side, the
company does not address climate change as an issue and has high losses in its distribution system.

History of Corporate Governance problems due to controlling family diagreement (the two Ambani brothers) Separation of Chairman &
CEO: no, percentage of independent board members: 50%, percentage of independent audit committee members: 100%, percentage
of independent remuneration committee members: 100%, percentage of independent nomination committee members: 100%,
disclosure of executive and board remuneration: yes.

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed

2009 (MW)
433.32
499.26
9.42
942.00

2009 (%)
46%
53%
0%
0%
0%
0%
1%
100%

Controversies
Only some general criticism on planned hydro projects in India that displace people and destroy local livelihoods.

Community investment

Note 1: ED stands for environmental damage

100MW gas or naphtha expansion planned at Goa facility, most other


expansion in distribution segment and growth in EPC business

6036127
19123
6655

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Operational efficiency metrics


AT&C losses for distribution companies: 20.59% at BRPL, 24.02% BYPL, SOx absorption: more than 90%

Water and waste treatment


No mention of water and waste management

Overall CSR reporting & management


some CSR info on the websites, but no targets, quantitative data etc.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 76

10282
103%
304%

Score:

Gravity:

Reliance Infrastructure Ltd. has formulated policies for social development. These policies have resulted in both strategic and
philantropic investments in its direct community.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Score:

11

Low

Company Name (country)


RIC / ISIN: 2
Market Cap

Reliance Power Ltd (India)


RPOL.BO / INE614G01033
US$ 7,379m

Ownership structure

Reliance ADA Group (47.68%), AAA Project Ventures Pvt. Ltd. (42.23%),
other institutional investors
(5.58%), other non-institutional investors (9.64%)

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Environmental management

Climate change management

Reliance Power does not yet have any operational power capacity, which makes it difficult to assess its performance in managing
environmental and social issues. The company claims to have a pro-active Rehabilitation and Resettlement policy in place, but there is
still a petition pending with the High Court amongst others because of claims of no proper public involvement processes.

Corporate governance

Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committee
members: 75%, percentage of independent remuneration committee members: 67%, percentage of independent nomination committee
members: 67%, disclosure of executive and board remuneration: ND.
Gravity:

Medium

Community investment

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

0
0
0

Water and waste treatment


No mention of water and waste treatment.

Score:

Reliance Power does not yet have any operational power capacity, which makes it difficult to assess its performance in managing
environmental and social issues. Reliance Power is committed to adopting Rehabilitation & Resettlement (R&R) policies which go
beyond the norms set out by the Government and to ensure that they meet the development needs of the local community. Claims to
follow a participatory development-oriented approach that strengthens the bond with the local communities.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 78

Score:

Large-scale development of hydro power in Arunachal Pradesh has been heavily critizised for destroying the livelihoods of local people.
Some sources criticise the eligibility of coal-fired power plants for CDM credits. A petition with the High Court is still pending that ask the
court to withdraw the Environmental Impact Assessment of Reliance Powers 1000MW Siyom Hydro Electric Project.

Operational efficiency metrics


No metrics available, generation assets or not yet in operration.

Overall CSR reporting & management

0
0
0

Score:

Controversies

no capacity operational, yet. If projects are executed according


to plan: by FY12 2160MW of domestic coal (100%), by FY
2014 4200MW (36%) gas and 7440MW (64%) coal, by FY2018
3300MW, (10%) hydro, 10280MW (32%) gas, 18580 MW (58%)
coal

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

ESG Summary

Generation Mix Plans Disclosed

Score:

Applying for CDM credits for part of their projects including Sasan and Krishnapatnam Ultra Mega Power Projects (UMPPs) as the
projects will employ supercritical coal technology. Also its hydroelectric power projects under implementation and the gas based
generation projects will apply for CDM credits. Some sources criticise the eligibility of coal-fired power plants for CDM credits. No
emissions data
Health & Safety management
Safe power generation is one of Reliance powers missions

FY 2012 (MW)
2,160.00
2,160.00

Applying for CDM credits for part of their projects including Sasan and Krishnapatnam Ultra Mega Power Projects (UMPPs) as the
projects will employ supercritical coal technology. Also its hydroelectric power projects under implementation and the gas based
generation projects will apply for CDM credits. No emissions data available yet.

IPP
development, construction and operation of power projects
10%
75%
Not requested to disclose by CDP

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Score:

A compensation package for project affected families is being developed with inputs from various key stakeholders, including senior
district officials, representatives of local communities and credible outside agencies such as The Energy Research Institute (TERI).
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

Tata Power (India)


TTPW.BO / INE245A01013
US$ 6,695m

Water and waste treatment


Tata Power has invested in streamlining water use

Ownership structure

Tata Group companies (33.12%), Life insurance corp. Of India


(11.71%), others (55.17%)

Overall CSR reporting & management

Company type

Integrated (generation, transmission, distribution, trading)

Business Model

power generation, transmission (1200km) and distribution (800000


customers). Power trading. Strategic interest in Indoneisan coal
assets. development & manufacturing of tanks/weapons in its Strategic
Electronics Division working for the Indian defence sector.

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Score:

Score:

Tata Power has a Health & Safety Policy, but certification of the workplace safety system is missing.

Corporate governance

Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committee
members: 67%, percentage of independent remuneration committee members: 33%, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: yes.

730
26%
112%

Controversies

Gravity:

High

Critisism against the World Bank and Tata Power for promoting Tatas 4000MW super-critical coal project as clean. Also, opponents to
the project at a local village claim that it will be detrimental to the local environment and affect the livelihoods of about 20,000 villagers.

Operational efficiency metrics

Community investment

Transmission: 1200 km, distribution: 800,000 customers, generation availability wind: 94-99%, AT & C losses (FY 09): 15.2%,
Transmission grid availability: 99.31%. Generation availabilities and plant load factors for the thermal power plants. For its North Delhi
distribution subsidiary owned jointly with the Delhi government, the AT & C losses have been reduced from 18.5% at the end of FY08
(53.4% at the time of takeover of the business in July 2002) to around 15.2% at the end of FY09, against the regulatory target of
20.35% at the end of FY09 and 17% at the end of FY11. This has been achieved by measures like energy audits, replacement of old
meters with theft-proof electronic meters, automated meter reading, metering of previously unmetered consumers who were earlier
charged a flat rate, aggressive enforcement and recovery and awareness drives. Transmission grid availability in Mumbai was 99.31%
as against MERC norm of 98%. Powerlinks Transmission Limited, a joint venture with Power Grid Corp of India, that delivers electricity
from Bhutan, has 99.73% average availability

Through Tatas Corporate Sustainabiliy Initiatives program many strategic investments have been made in health care, education,
clean water and accessibility.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 80

Addresses the issue in its AR and on the web and has a clear strategy on how to deal with climate change. This includes the
application of super-critical coal technology, further exploring renewables opportunity, working towards energy efficiency in plants and
offices, awareness raising on energy savings in schools. Some of its wind projects are CDM registered and they are applying for the
new super-critical coal project as well. Publicly available data on CO2 emissions would be appreciated. Apparently Tata Power has
commissioned Ernst & Young to measure their carbon footprint.
Health & Safety management

12,084,101.00
4,267.00
422.00

Score:

4866MW coal, 30MW wind and 111MW of waste gas under


construction

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Climate change management

2009 (%)
6%
42%
0%
3%
26%
16%
0%
6%
100%

Score:

Addresses the issue of climate change in its AR and on the web and has defined a strategy on how to deal with it. Tata Power has
invested heavily in pollution control equipment. Tata Power: will strive to go beyond simple compliance and excel in its environmental
performance. Initiatives for voluntary reduction in SO2, SPM, NOx and CO2 emissions are a part of ongoing strategy. This includes
the application of super-critical coal technology, further exploring renewables opportunity, working towards energy efficiency in plants
and offices, awareness raising on energy savings in schools. Unfortunately no underlying data is provided. Some of its wind projects
are CDM registered. No emissions data yet. No environmental management system in place.

Tata Power performs relatively well in our ESG scoring. Tata Power has a clear strategy on how to deal with climate change and
initiatives to reduce emissions of SO2 and NOx. The company has significantly lowered its losses in its Delhi distribution system. It
plans to publish its second sustainability report in 2009. But there is significant room for improvement: Disclosure on GHG emissions
would be appreciated. And in spite of its new super-critical coal projects application for CDM credits, its generation mix will become
more CO2 intensive with its significant investment into coal fired generation.

Generation Mix Plans Disclosed

Published a sustainability report in 2003 according to GRI guidelines, plan to publish another one in 2009. Tata Power also publishes
its Corporate Sustainability Policy, its environmental and health & safety policies. Tata Power has created a Sustainability Council
(SC) under the leadership of Mr.Agrawala, Executive Director (ED) of Business Development and Strategy. The whole Tata Group has
definitely worked well on their image: In BTs 2008 survey of corporate leaders in sustainable development, Tata Group ranked by far
first with 31% vs Reliance with 13% at the second place
Environmental management

ESG Summary

2009 (MW)
167.10
1,169.70
83.55
724.10
445.60
167.10
2,785.00

85%
67%
Yes, but not public

Generation type
Gas
Coal
Biomass
Steam (Industrial)
Oil
Hydro
Nuclear
Renewable
Total

Score:

Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

Torrent Power (India)


TOPO.BO / INE813H01021
US$ 3,083m

Ownership structure

Torrent Private Limited (52.78%), Life Insurance Corp. of India


(9.56%), Gujarat State Investments (9.92%), Reliance Capital Trustee
(3.07%), public (24.67%)

Company type

Integrated (generation, transmission, distribution, trading)

Business Model

generation, transmission and distribution. T&D business serves 1.97


million customers in the cities of Ahmedabad, Gandhinagar and Surat

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Environmental management

0%
33%
No response

Number of T&D customers: 1.97 million, T&D losses: 7.51% (low compared to national average). Torrent Power Limited has one of the
lowest T&D losses in the country. Took over the Bhiwandi Distribution Franchise in Dec 2006. Here T&D losses are still significantly
higher. PAF and PLF of its 2 generation plants were 93.85% and 91.55%

Water and waste treatment


No mention of water and waste treatment.

Score:

Comprehensive information on Torrents CSR program available on its webpage. However its CSR program is mainly focused on
community investments. Apparently very efficient in disaster management, such as during floods or an earth quake

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 82

Score:

Score:

Separation of Chairman & CEO: no, percentage of independent board members: 64%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: ND, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: partly, comment: 1 director by Gov of Gujarat.

Operational efficiency metrics

Corporate governance

2009 (MW)
2009 (%)
100.00
20%
400.00
80%
0%

0%
0%
0%
0%
500.00
100%
1147.5 MW under implementation, advanced class CCPP based on
LNG (eligible for CDM carbon credits). Another 6.875GW in early
planning stages: 2GW of coal, 4.875GW of gas

213
3,750,061.00 ED1 cost (m USD)
4,149.00 ED impact on 2008 revenue
24%
131.00 ED impact on 2008 EBITDA
147%

Overall CSR reporting & management

Score:

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Health & Safety management


No mention of Health & safety management

laggards in our assessment. Its generation capacity is dominated by coal. On the positive side, its T&D losses are among the lowest in
the country at only 7.5% for the districts that they own for some time.

Generation Mix Plans Disclosed

Environmental initiatives include: installation of 90 m. tall chimneys for better dispersion of flue gases, use of very high efficiency
electrostatic precipitators to remove fly ash from gases emitted from chimneys, regular monitoring of pollutants like Sulfur Oxides,
Nitrogen Oxides and Stack Pollution Monitoring in flue gases. But no systematic information on environmental performance.

Climate change management


no mention

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Score:

Controversies
None found

Community investment

Gravity:

Low

Torrent made several philantropic investments through Sparsh, its CSR Initiative, it paid for the construction of a public garden in
Gujarat, donated money in the aftermath earthquakes, helped in the construction of a hospital. These investments were not strategic.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type

Business Model

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Korea Electric Power Corporation (South-Korea)


015760.KS / KR7015760002
US$ 17,639m
Korea Finance Corporation (29.96%), Ministry of Strategy and Finance
(21.12%), foreigners (23.79%), others (25.14%)
Power generation, transmission and distribution
State-owned power monopoly in Korea that owns, together with its
generation subsidiaries, approximately 87.6% of the total electricity
generating capacity in Korea (as of end 2008) and 100% of
transmission/distribution. The company spun off its power generation
division into 6 affiliates (Genco) in 2001. Korea Hydro & Nuclear
Power Co., Ltd. is the wholly owned nuclear and hydroelectric power
generation subsidiary. KEPCO also wholly own its five non-nuclear
generation subsidiaries, Korea South-East Power Co., Ltd, Korea
Midland Power Co., Ltd., Korea Western Power Co., Ltd., Korea
Southern Power Co., Ltd., and Korea East-West Power Co., Ltd. The
Company operates three segments: transmission and distribution,
power generation and other.
58%
25%
Yes

Kepco scores as a leader in environmental issues among the sector, but there are still some open questions regarding their ESG
performance. The company reports very detailed on their CO2 emissions. They have a voluntary target to cut the 2000 emission
intensity of 0.424 kgCO2/kWh by 30%. But as of 2008, the figure has risen to 0.459 kgCO2/kWh, so it is not clear they will achieve their
target in spite of a planned increase in nuclear and renewables capacities. Whilst they have been doing relatively detailed sustainability
reporting until 2007, it is not clear if they still follow up with the activities described there. There is more environmental information on
the level of its generation companies, but here quality varies widely. The company has some involvement in Burma, which may be a
problem for some responsible investors. Corporate Governance is lacking in transparency.

Generation Mix Plans Disclosed

KEPCO has installed comprehensive waste water treatment systems in its plants.

Overall CSR reporting & management

2009 (MW)
13,097.60
24,230.56
4,584.16
4,453.18
18,991.52
65.49
65,488.00

2009 (%)
20%
37%
0%
7%
6.80%
29%
0.10%
100%

Environmental management

CO2 intensity (tonnes/ m USD rev.)


CO2 damage cost (m USD)

Score:

7,538.00
6,661.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Operational efficiency metrics


T&D losses: 4.01%, distribution automation ratio: 63.5%, CO2 emission intensity: 459 ton-CO2e/GWh

Kepco produces 27% of Koreas CO2 emissions. Climate change related targets: Kepco plans to increase the number of nuclear power plants from
the current 20 to 28 in 2020 and the portion of power generated from renewable energy sources to 9.96% in 2020. KEPCO plans to bring down the
average emission per unit generated to: 0.296 kgCO2/kWh in 2020 (from 0.424 kgCO2/kWh in 2009). In 2005, KEPCO and the GENCOs established
the Climate Change Commission to formulate comprehensive measures against climate change. The consultative body focuses on climate change and
renewable energy development, which comprises the Climate Change Convention Working Committee and the Renewable Energy Working Committee.
Score:

Kepco produces 27% of Koreas CO2 emissions. At the Copenhagen climate conference it will be decided whether Korea will become an Annex I
country.
CO2 emission intensity: 459 ton-CO2e/GWh. 5% increase in CO2 emissions vs last year with 4.85 increase in electricity generation.
Climate change related targets: Kepco plans to increase the number of nuclear power plants from the current 20 to 28 in 2020 and the portion of power
generated from renewable energy sources from 1.26% in 2000 to 9.96% in 2020. Voluntary target: the 2000 emission unit of 0.424 kgCO2/kWh will be
brought down to 0.296 0.424 kgCO2/kWh in 2020, cutting the figure by 30%. They are planning a carbon emissions reduction through the expansion of
renewable and nuclear energy plants. The amount of power generated from renewable energy sources is expected to go up from 3,196 GWh in 2000 to
47,637 GWh in 2020 while electricity generated from nuclear energy is to increase from 108,964 GWh in 2000 to 249,847 GWh in 2020.
KEPCO operates a high efficiency equipment support system for customers to increase energy efficiency and is developing IT-based demand-side
management technologies including remote management of building heating/cooling load.
It is are establishing one of the worlds first Smart Grid verification complex on Cheju Island for completion in 2013
In 2005, KEPCO and the GENCOs established the Climate Change Commission (Chairman: Executive Vice President, seven members: the
management of generation companies and the President of Korea Electric Power Research Institution, Secretary General: Vice President of the
Technology and Policy and Planning Department) at the Power Group level to formulate comprehensive and joint measures against climate change.
The consultative body focuses on climate change and renewable energy development, which comprises the Climate Change Convention Working
Committee and the Renewable Energy Working Committee. The Committees meet at least once every quarter.
Very detailed CO2 emissions data. Measures to improve energy efficiency: have distributed high-efficiency equipment and LED lighting devices to
consumers while improving transmission and distribution loss rate, implementing an energy portal system for more comprehensive energy management,
running an odd-even car restriction system and promoting the BMW (bicycle, metro and walking) Movement.

Health & Safety management

Score:

Score:

No mention of Health & safety management

Corporate governance

6800MW of nuclear power, 2270 MW gas, 805MW hydro, 2853 coal


(probably only part of the whole expansion plans)
190,793,692.00

KEPCO provided detailed sustainability reports following GRI guidelines between 2005-2007. In 2005, KEPCO introduced a sustainability management
framework that focuses on 4 key areas; economy, environment, society and human resources. The company publishes very detailed information on their
CO2 emissions. Have minimized the emission of harmful substances by installing desulphurization facilities and comprehensive waste-water treatment
systems in its power stations. Relatively detailed information on environmental management at the level of its generation companies. But quality varies,
with some of the Gencos quite proactive and providing updated data, whilst others seem to have updated the pages in 2004 or 2005 and not since

Separation of Chairman & CEO: no, percentage of independent board members: ND, percentage of independent audit committee members: 0%,
percentage of independent remuneration committee members: ND, percentage of independent nomination committee members: ND, disclosure of
executive and board remuneration: no

CO2 emissions (tonnes)

Score:

Climate change management

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Water and waste treatment

8,610.00
34%
320%

Controversies

Gravity:

High

In 2008 there were accusations of corruption at Kepco. Some involvement in Burma: They performed a Power System Development Study in the
country. Its partly owned subsidiary KOGAS entered into a gas field development project in the A1/A3 Block of Myanmars northwestern sea in
November 2001, which is it exploring with a JV now.
In mid 2009, concerns were raised about the environmental performance of KEPCOs coal fired power plant in Naga City in the Philippines. For example
NGO EcoWaste Coalition is opposing a planned coal ash dump site, which would manage coal combustion waste from the coal power plant in the
Philippines, as the NGO is worried about potential toxic releases and possible health and environmental problems.

Community investment
KEPCO Social Service Teams perform philantropic social work. Through Mecenat KEPCO invests in art projects. KEPCO commits itself to social service
activities, which are now referred to as The Third Management.
Note 1: ED stands for environmental damage

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 84

Company Name (country)


RIC / ISIN: 2
Market Cap

MMC Corporation Berhad (Malaysia)


MMCB.KL / MYL2194OO008
US$ 2,099m

Ownership structure

Seaport Terminal Johore (51.76%), Permodalan Nasional Berhad


(PNB) / Amanah Saham
Bumiputera (ASB) 21.52%, Employees Provident Fund Board 7.58%,
other (19.14%)

Company type

IPP

Business Model

investment holding, construction, mining and mineral exploration.


Four segments: transport and logistics, energy and utilities,
engineering and construction, and others. Key businesses include the
Port of Tanjung Pelepas (Malaysias largest container terminal), Johor
Port (Malaysias leading multi-purpose port), Malakoff (Malaysias
largest independent power producer + water provider) and Gas
Malaysia (Peninsular Malaysias sole supplier of natural gas to the
non-power sector). MMC has interests in IJM, one of Malaysias
premier construction companies, and Zelan Construction, a specialist
contractor for power plants. More than 1/3 of 2008 profit before tax
came from Malakoff, other large contributions by Gas Malaysia and
the Johor Port

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

CO2 emissions (tonnes)

18,433,553.00

CO2 intensity (tonnes/ m USD rev.)


CO2 damage cost (m USD)

7,354.00
644.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Climate change management


no emissions data. No reporting and no management system in place.

Health & Safety management


No mention of Health & Safety management.

Corporate governance

Score:

Score:

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 33%, percentage of independent nomination
committee members: 67%, disclosure of executive and board remuneration: partly, comment: CEO and executives join all but one audit
committee meeting. Legal dispute with Tenaga Nasional Berhad on metering.

Gravity:

Low

Involvement in Burma via its power plant engineering subsidiary that has built 2 small hydropower plants in Burma. The projects are
completed.

Community investment
Under the New Straits Times School Sponsorship Programme MMC aims to promote the study of English. Other investments are
philantropic in nature and can be seen as part of MMCs marketing campaign.
Note 1: ED stands for environmental damage

1,022.00
41%
110%

Operational efficiency metrics


No mention of operational metrics. Malakoff claims to be an efficient operator, but no proof/data is given

Water and waste treatment


MMC operates water desalination and purification plants. However, there is no mention of what is done to the water used during the
power generation process.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 86

MMC presents itself as an environmentally conscious company, however there is no publicly disclosed information on this. No climate
change management activities.

Controversies

0%
75%
Not requested to disclose by CDP

ESG Summary
Disclosure on ESG issues is insufficient and the company scores among the laggards in our assessment

Generation type
2009 (MW)
2009 (%)
Gas
1,356.91
53%
Coal
1,203.29
47%
Biomass
0%
Oil
0%
Hydro
0%
Nuclear
0%
Renewable
0%
Total
2,560.20
100%
Generation Mix Plans Disclosed
no disclosure

Overall CSR reporting & management


Score:
Some info on the website on their education and corporate giving programs. Disclosure on ESG issues is insufficient.

Environmental management
Score:

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type

Sarawak Energy Berhad (Malaysia)


SARA.KL / MYL2356OO003
US$ 1,232m
State Financial Secretary, Sarawak (64.65%), employees provident fund
(3.71%), Cimsec nominees (3.55%), Multi-purpose holdigs Berhad (2.99%),
other (25.1%)
Integrated (generation, transmission, distribution, trading)

Business Model

The Companys principal activities are as the electric power utility of


Sarawak and as an Independent Power Producer (IPP). Also steel
fabrication and galvanising, engineering and other related support services.

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

35%
75%
Yes

ESG Summary
Disclosure on ESG issues is insufficient and the company scores among the laggards in our assessment. Sarawak Energy has answered
the CDP questionnaire, where the company discloses its CO2 emissions but give relatively little further information. Sarawak Energy is
subject to very strong criticism on its hydro expansion plans on Borneo.

Generation Mix Plans Disclosed

2009 (MW)
546.10
482.60
152.40
88.90
1,270.00

2009 (%)
43%
38%
0%
12%
7%
0%
0%
100%

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Score:

Controversies

241
61%
151%

Water and waste treatment


No mention of water and waste management.

Gravity:

High

heavily criticised for the development of hydro dams: In January 2009, the Malaysian government has given its approval for Sarawak
Energy and Tenaga Nasional to take over the operation of the controversial Bakun hydroelectricity project and develop the proposed
700 kilometre undersea transmission cable link from eastern Sarawak state on Borneo island to Peninsular Malaysia. The stateowned company Sarawak Hydro is expected to complete construction and commissioning of the dam in 2010. Environmentalists have
continued to oppose the project due to the dams flooding of an area the size of Singapore, the forced relocation of 10,000 people,
associated environmental impacts, and concerns about the earthquake-prone nature of the undersea cables route.
Apparently, Sarawak Energy has a second highly controversial dam project under planning, i.e. the 220MW Tutoh dam, which might
partly flood the UNESCO World Heritage-status of Mulu National Park in Sarawak. Opponents, including NGO Bruno Manser Group,
have also stated that it will force the relocation of local indigenous groups and affect the native bat population.
Sarawk Energy has plans for 11 further hydro plants on Borneo, despite the fact that Bakun dam alone has the capacity to produce
significantly more power that consumed today in Sarawak. The hydropower projects scheduled for the 2008 to 2020 period by
Sarawak Energy have a power generation capacity of 7000 MW. Sarawaks energy consumption amounted to 1120 MW in 2005 and
is expected to rise to 1550 MW by the year 2010. While the Sarawak government rushes to set up energy-intensive industries, excess
production is planned for export to West Malaysia, Brunei and Kalimantan.
In contrast to mainland Malaysia, apparently in Borneo, Environmental Impact Assessments do not include the need for public
consultation. In Sarawak, power, industrial and palm oil projects have frequently been criticised to be harmful to the environment,
intransparent and not respecting the rights of indigenous people.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 88

Separation of Chairman & CEO: yes, percentage of independent board members: 50%, percentage of independent audit committee
members: 67%, percentage of independent remuneration committee members: 67%, percentage of independent nomination
committee members: some as remuneration committee, disclosure of executive and board remuneration: partly.

Operational efficiency metrics


No mention of operational metrics.

Overall CSR reporting & management


Sparse information on community activities available in Annual Report 2008.

Environmental management
Little information given

Score:

Corporate governance

4349714
11075
152

The only Malaysian electric utility and one of the few Asian utilities to have answered CDP9, already answered the 2008 questionnaire.
Emissions data given for 2007: 3`944`381 t CO2 emissions vs 3,537,286 metric tons CO2 in 2005. We would appreciate it, if for the
2007 data, there was also disclosure on energy generated to be able to compare CO2 intensity. Registering their first CDM project
based on CC gas turbines. State that they undertake the following activities to reduce CO2 emissions / increase energy efficiency, but
no further concrete information is given:
(i) Conversion of Open Cycle to Combined Cycle Power Plant.
(ii) Implementing biomass power generation.
(iii) Rehabilitation of mini hydro stations and construction of new ones.
(iv) Efficiency Improvement for Power Plants.
(v) Proposal for Rural Stand-alone Renewable Hybrid Systems.
(vi) Incorporate Energy Efficiency for New Office Buildings.
(vii) Study the possibility of adopting carbon capture and sequestration technologies.
(viii) Study the possibility of utilizing power plant CO2 emissions for algae cultivation to produce biofuel in future.
(ix) Adopting fuel cell technologies as cleaner way to generate electricity and efficient use of gas fuel
Have one CDM project, where they converted two existing open-cycle gas generating sets in the Bintulu Power Station to one block
of combined-cycle power generating plant with a total capacity 330 MW of which 110 MW is new generation. In the 2008 annual
report they state that this project is eligible for CDM because it generates electricity without polluting the environment with greenhouse
gases, which is not quite correct as it just generates less emissions.
Health & Safety management
No mention of Health & Safety management.

Have a target of installed capacity of 6,000MW by 2015 and 10,000 MW


by 2020. Have commenced the construction of the 944 MW Murum Hydro
Electric Power project. They state in the 2008 AR, that the construction of
Limbang hydro dam (195MW) Trusan and Lawas hydro dam (300 MW),
Baleh (1400 MW), Metjawah (300 MW) and others will follow suit.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Score:

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Climate change management

Score:

Score:

Community investment
Sarawak has organized sports events and launched an English development program, in addition to ongoing community support
projects of a philantropic nature.
Note 1: ED stands for environmental damage
Note 2: Have also commenced the construction of the 944 MW Murum Hydro Electric Power project. They state in the 2008 AR, that
the construction of Limbang hydro dam (195MW) Trusan and Lawas hydro dam (300 MW), Baleh (1400 MW), Metjawah (300 MW)
and others will follow.

Company Name (country)


RIC / ISIN: 2
Market Cap

Tanjong Public Limited Company (Malaysia)


TJPL.KL / GB0008722323
US$ 1,924m

Ownership structure

Usaha Tegas Sdn Berhad (30.9%), Ultimate Corporation Sdn Berhad


(7.53%), Marlestone Investment Limited (4.0%), others (5.57%), free float
(56%)

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Power generation
investment holding company, engaged in power generation, gaming,
leisure and property investment. Power generation contributes around
80% to operating profit
33%
83%
No disclosure

Generation Mix Plans Disclosed

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

4,562,723.00
5,424.00
159.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

199.00
24%
48%

Tanjong owns and operates a water desalination plant, but doesnt refer to its treatment of waste and water.

Only information on the usual community programs. No mention of CSR in leisure, power and gaming operations

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 90

Gravity:

Gaming business potential exclusion criteria. Otherwise nothing found

Score:

10

Water and waste treatment

Environmental management

Score:

Controversies

Score:

Comment: has won awards for good IR and CG, e.g. Finance Asia 2006 No 4 in Best Corporate Governance, AsiaMoney 2008
No1 Best IR in Malaysia etc. Separation of Chairman & CEO: yes, percentage of independent board members: 60%, percentage
of independent audit committee members: 67%, percentage of independent remuneration committee members: 67%, percentage
of independent nomination committee members: 67%. Disclosure of executive and board remuneration: partly, ownership structure:
Usaha Tegas Sdn Berhad owns/controls 30.9%, Ultimate Corporation Sdn Berhad owns 7.53%, Marlestone Investment Limited 4.0%, 6
others <1%.

Operational efficiency metrics


weighted average availability at 92.8% in 2009 vs 88.4% in 2008

Overall CSR reporting & management

Score:

Corporate governance

Currently 100% gas (1490 MW in Malaysia, 1365 MW in Egypt, 200


MW of ownership of combined power and desalination project in Abu
Dhabi, 375 MW in Egypt, 248+198+36 MW Combined Cycle Gas Turbine
(CCGT) in Bangladesh, 36 MW in Pakistan) - busy integrating current
acquisitions. No information about longer term plans.

The Groups power plants in Malaysia, Egypt, Abu Dhabi and Bangladesh continue to maintain their OHSAS 18001 Occupational
Health and Safety Management System. Committed to implementing stringent Occupational Safety and Health (OSH) practices. They
benchmark themselves against
current international best practices. Claim that they roll out fire drills, first aid training, cardiopulmonary resuscitation training, safety
and health talks as well as plant evacuation exercises at various properties and that they ensured that equipment and building safety
systems were functioning properly and were well maintained.

2009 (%)
100%
0%
0%
0%
0%
0%
0%
100%

Score:

Tanjong Publics generation mix is relatively favourable with respect to CO2 emissions as it is based to 100% on natural gas. But its
disclosure on ESG issues is insufficient and the company scores among the laggards in our assessment.
2009 (MW)
3,951.00
3,951.00

Climate change management


No information available. No emissions data
Health & Safety management

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

The Groups power plants in Malaysia, Egypt, the UAE and Bangladesh are ISO 14001 Environmental Management Systems
certified. They benchmark themselves against current international best practices. Claim that they roll out fire drills, first aid training,
cardiopulmonary resuscitation training, safety and health talks as well as plant evacuation exercises at various properties and that they
ensured that equipment and building safety systems were functioning properly and were well maintained. the Groups power plants in
Malaysia, Egypt, the UAE and Bangladesh are ISO 14001 Environmental Management Systems certified

Community investment
Some strategic investments in the form of educational scholarship at all leves of schooling. However most of the community
investments are philantropic.
Note 1: ED stands for environmental damage

Low

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type

Business Model

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Tenaga Nasional Berhad (Malaysia)


TENA.KL / MYL5347OO009
US$ 10,605m
Khazanah Nasional Berhad (37.8%), Employees provident fund board
(13.66%), Amanah Raya Nominees (Tempatan) SDN BHD (9.97%), others
(38.57%)
Power generation, transmission & distribution
In addition to electricity generation, TNB manages and operates the
National Grid, a transmission network that is also interconnected to
Thailand and Singapore. The Companys subsidiaries principal activities
include operation of power plant and generation of electricity; investment
holding; purchase and supply of fuel and coal for power generation;
Generation and supply of various energy sources and provision of related
technical services, and research and development, consultancy and other
services

2009 (%)
45%
34%
0%
4%
17%
0%
0%
100%

Operational efficiency metrics


system losses at 18.07% in 08 (vs 17.57& in 2007 and 18.81% in 2006)

Water and waste treatment


Mo mention of water and waste treatment

Overall CSR reporting & management

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

1,758.00
23%
78%

Score:

Some information on CSR activities and environmental management on the companys website and in its annual report. Proud of past
achievements on rural electrification especially in remote islands. Focus is on community programs and philanthropy.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 92

Climate change management


no information. No data on emissions

Score:

Gravity:

High

Controversies: high
high: repeated criticism for planned coal-fired power plants: In 2009, Malaysian companies Jimah Energy Ventures and Tenaga
Nasional have been criticized for the proposed Jimah coal-fired power plant to be located in Port Dickson in Malaysias state of
Selangor. The NGO Malaysian Nature Society, local residents and tourism developers claimed that the plant would have ecological
effects by disturbing marine ecosystems and causing declines in fish populations, add to climate change and pose health risks by
emitting pollutants, and affect the eco-tourism potential of the area. Jimah Energy Ventures stated that approval was obtained from the
Department of Environment in January 2005. Also, in 2009, locals on Sabah have objected to Tenaga Nasional Bhds (TNB) proposed
coal-fired power plant, which allegedly contradicts the objectives of The National Green Technology Policy. They are concerned about
potential pollution they believe would be caused by the plant.
In Jan 2009, The Malaysian government has given its approval for Sarawak Energy and Tenaga Nasional to take over the operation
of the controversial Bakun hydroelectricity project and develop the proposed 700 kilometer undersea transmission cable link from
eastern Sarawak state on Borneo island to Peninsular Malaysia. The state-owned company Sarawak Hidro is expected to complete
construction and commissioning of the dam in 2010. Environmentalists have continued to oppose the project due to the dams flooding
of an area the size of Singapore, the forced relocation of 10,000 people, associated environmental impacts, and concerns about the
earthquake-prone nature of the submarine cables route.

(current figures are installed capacity, no data on attributable capacity). NO


data on expansion plans given
30,036,556.00
3,845.00
1,049.00

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Some general information on environmental management, e.g. one plant ISO 14`001 certified, other plants are now implementing ISO
14001 based EMS. Its disappointing that, as Malaysias largest power producer, the company does not at all address issues such as
SO2 emissions, or use of its waste ash in coal fired plants

Controversies

The companys disclosure on ESG issues is insufficient and it scores among the laggards in our assessment. System losses in its T&D
systems are in the middle of the sector in Asia.

Generation Mix Plans Disclosed

Separation of Chairman & CEO: yes, percentage of independent board members: 56%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 60%, percentage of independent nomination
committee members: same are remuneration committee, disclosure of executive and board remuneration: partial

ESG Summary

2009 (MW)
5373.9
4060.28
0
477.68
2030.14
0
0
11,942.00

Score:

Health & Safety management


Score:
Company wide H&S management system. The H&S management is now being brought to the OHS 18000 standard.

Corporate governance
Score:

15%
67%
No response

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Environmental management

Community investment
Tenaga invests heavily in education. The Tenaga Nasional Foundation offered around 900 loans to univeristy students. This investment
is strategic.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

YTL Power International Berhad (Malaysia)


YTLP.KL / MYL6742OO000
US$ 4,312m

Ownership structure

YTL Corporation Berhad (50.99%), Employees Provident Fund Board


(11.39%), other (37.62%)

Company type

Power generation

Business Model

investment holding company. The Company is organized into three main


business segments: investment holding, power generation, and sales of
water and disposal of waste water

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Environmental management

Climate change management

2009 (MW)
2009 (%)
2,164.05
45%
384.72
8%
0%

2,260.23
47%
0%
0%
0%
4,809.00
100%
none disclosed, would probably be through acquisition
2,327,945.00 ED1 cost (m USD)
1,723.00 ED impact on 2008 revenue
81.00 ED impact on 2008 EBITDA

Score:

YTL invests in its human capital and ensures a work-life balance through its Vibrancy Committee. However it does not report on health
and safety management.

Corporate governance

Score:

10

Comment: Won awards for good IR and CG, e.g. Finance Asia 2006 No 4 in Best Corporate Governance, AsiaMoney 2008 No1 Best
IR in Malaysia etc. Separation of Chairman & CEO: yes, percentage of independent board members: 60%, percentage of independent
audit committee members: 67%, percentage of independent remuneration committee members: 67%
Percentage of independent nomination committee members: 67%, disclosure of executive and board remuneration: partial.

Controversies
No controversies found

Gravity:

Low

4,037.00
299%
513%

NB The main activity for YTL Power International is selling water and disposing of waste water. There is a significant external cost for
water abstraction which makes up 96% of the total direct environmental cost of YTL Power here.

Operational efficiency metrics


No mention of operational metrics.

Water and waste treatment


YTLs water and waste management program is one of the most comprehensive of all Asian utilities. PowerSeraya has developed and
implemented two projects, namely a rainwater recovery system and a modified drainage system with wastewater being reused for cooling
purposes. Its desalination plant has also reduced YTLs reliance on Singapores freshwater resources. Power Seraya has used GRI
Reporting Guidelines.

Score:

YTL Corp. publishes a annual sustainability report. Due to its broad business portfolio, it is difficult to keep track of the power divisions
performance and it is unclear if CSR aspects are addressed systematically. However, YTL seems serious about CSR reporting.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 94

Health & Safety management

YTL Power Internationals ESG performance scores in the mid-range when compared to the sector. Its parent company publishes an
annual sustainability report. There is detailed emissions data on some of the companys plants, but is shows little improvement. Its
acquisition of Power Seraya in Singapore has changed its generation mix towards fuel oil, even though the company prefers using its gas
fired plants in Singapore.

Score:

YTL is quite explicit they recognize climate change as a clear risk and want to take measures to prevent it. work on raising awareness
on climate change nationally. Acquired a carbon credit consultancy in 2008. Actively pursuing to improve operating efficiency in ist Jawa
power plant. Detailed GHG emissions reporting for some parts of its business, e.g. the Wessex Water utility in the UK. Report some
emissions data - NOx, SO2 and PM for its Jawa plant. But little improvements shown to date.

45%
83%
No request for disclosure by CDP

Overall CSR reporting & management

Emissions data: yes, NOx, SO2 and PM for its Jawa plant. But little improvement in performance. Malaysian plants follow national
and World Bank emission limits. Jawa plant is ISO 14`001 certified and has received a Green Rating by the Indonesian Ministry of
Environment under its Environmental Rating Programme. Active efforts to improve operating efficiency in its Jawa power plant. Reuse
of fly ash at 76% in 2006, from 2006 onwards use of more than 98% at its Jawa power plant. Malaysian plants follow national and World
Bank emission limits. Jawa plant is ISO 14`001 certified and has received a Green Rating by the Indonesian Ministry of Environment
under its Environmental Rating Programme

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed
CO2 emissions (tonnes)
CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Score:

Community investment
YTL supports arts and culture in Malaysia and contributes to promote education. Scholarships are given to talented students to pursue
higher education at the Swiss German University located inTangerang in Indonesia.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap
Ownership structure
Company type

Aboitiz Power Corporation (Philippines)


AP.PS / PHY0005M1090
US$ 1,343m
Aboitiz Equity Ventures (76%), other (24%)
Power generation, transmission & distribution

Climate change management

Business Model

Mostly generation with 35% of operating income from distribution

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

0%
50%
No response

Health & Safety management


No information on Health & Safety management.

Aboitiz Power has a very high share of renewables in its generation portfolio, and therefore a relatively low carbon footprint. Regarding its
internal ESG performance, the company scored quite low, but one has to consider that it is the smallest company in our universe.

389,605.00
1,481.00
14.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

Gravity:

AP and its subsidiaries donated to or implemented projects ranging from education-related assistance, community infrastructure,
livelihood opportunities, rural electrification, to environmental projects for the communities within the areas where the different AP
businesses operate.
Note 1: ED stands for environmental damage
23
9%
35%

Average system loss (2 largest systems): 8.7%, average net capacity factor Hydro (H1 09): 35%

Water and waste treatment


Mo mention of water and waste treatment

Score:

Some reporting and CSR information in shareholder presentation. AP publishes a five page sustainability report together with its AR, but
this is mostly focused on philanthropy and the Aboitiz foundation.

Environmental management
Score:
0
No emissions data. Very little information on environmental management which is disappointing as the company runs old diesel plants and
is involved in building a new coal plant.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 96

Community investment

Operational efficiency metrics

Score:

Low

In 2008, Aboitiz Equity Ventures faced opposition against the construction of a new hydro facility, the Tudaya hydro power plant which
allegedly threatens the land of an indigenous tribe. Yet, it is claimed that each time the group expresses complaints, the military
conducts operations, causing fear. According to the opponents, the plant threatens land and water biodiversity.

NB The carbon intensity seems high for a company with such a large proportion of power coming from renewables. Trucosts data includes
some additional fossil fuel capacity at the Group Subsidiary level - absolute ownership of this additional capacity is unclear wihtout further
engagement with the company

Overall CSR reporting & management

Comment: AsiaMoney 2009 awards as best managed mid-cap in the Philippines, mention code of ethics. Separation of Chairman &
CEO: yes, percentage of independent board members: 22%, percentage of independent audit committee members: 33%, percentage of
independent remuneration committee members: 33%, percentage of independent nomination committee members: 33%, disclosure of
executive and board remuneration: partly, ownership structure: 76% owned by Aboitiz Equity Ventures.

Controversies

2009 (MW)
2009 (%)
0%
75.84
6%
0%

151.68
12%
328.64
26%
0%
707.84
56%
1,264.00
100%
42.5 MW hydro, 64 MW coal, further expansion plans in coal fired
plants

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Score:

Corporate governance

ESG Summary

Generation Mix Plans Disclosed

no CDP answer, no efficiency data for plants, no targets, no info at all. CDM credits for new hydro plant, stress that the new alternative
energies law should be positive for their business

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable (geothermal)
Total

Score:

Company Name (country)


RIC / ISIN: 2
Market Cap

Energy Development Corporation (Philippines)


EDC.PS / PHY2292S1043
US$ 1,831m

Ownership structure

Red Vulcan Holdings Corporation (60.25%), PCD Nominee Corporation


(36.25%)

Company type

Generation

Business Model

Energy Development (EDC) Corporation, formerly PNOC Energy


Development Corporation, is engaged in the exploration, development
and operation of geothermal energy. It is also involved in geothermal
drilling and consultancy services. Bought a majority share in a hydro
plant by its parent company in 2008

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Environmental management

2009 (MW)
2009 (%)
0%
0%
0%
0%
112.50
9%
0%
1,198.50
91%
1,311.00
100%
300MW geothermal, 84MW wind

5,178.00 ED1 cost (m USD)


12.00 ED impact on 2008 revenue
0.2 ED impact on 2008 EBITDA

Score:

Gravity:

Community investment
EDCs CSR community programs rests on four pillars of Health Promotion, Educational Support, Livelihood Development and
Environmental Enhancement. Some investments are strategic, most are philanthropic.

Note 1: ED stands for environmental damage

9
2%
8%

Water and waste treatment


No mention of water and waste treatment

Score:

CSR information on its websites focuses on its philanthropic and community activities. But there is a detailed report on HS&E in its 2008
AR, most of it is descriptive in nature. Have a board committee on CSR to oversee its community activities.

Medium

In 2008, Green Alert activists campaigned against EDCs proposal to tap additional geothermal power inside Mt Kanlaon Natural
Parks buffer zone in the Philippines. Environmentalists say the project would further deplete the forest cover, cause damage to
biodiversity, and aggravate a watershed crisis.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 98

Score:

Score:

Controversies

Operational efficiency metrics


No mention of operational metrics

Climate change management


Knows its relatively low carbon footprint and plans to offset it with tree planting at its plant sites

Health & Safety management

Separation of Chairman & CEO: yes, percentage of independent board members: 27%, percentage of independent audit committee
members: 60%, percentage of independent remuneration committee members: 33%, percentage of independent nomination committee
members: same as remuneration committee, disclosure of executive and board remuneration: no.

Overall CSR reporting & management

Emissions data: yes, on boron content in water at its project sites and on H2S emissions compared to the legal standard. Not clear if
there is a systematic environmental management, but the company is aware of its environmental impact and strives to keep pollution
levels low. EDC is aware of its relatively low carbon footprint and plans to offset it by planting trees at its plant sites.

Corporate governance

55%
33%
No request from CDP

Among the universe of Asian electric utilities, EDC has the highest share of renewables in its portfolio and consequently the lowest carbon
footprint among the power generating companies. Its expansion plans also focus on renewable energy only. Regarding its internal ESG
performance, the company scores in the mid-range of the sector.

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Reports H&S data. EDC has programs to improve employee health and keep absence rates low. EDC trained 329 health workers from
23 local clinics.

ESG Summary

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable (geothermal)
Total
Generation Mix Plans Disclosed

Score:

Company Name (country)


RIC / ISIN: 2
Market Cap

Manila Electric (Philippines)


MER.PS / PHY5764J1483
US$ 4,985m

Ownership structure

Lopez Group (13.4%), San Miguel Corp (27.0%), Pilipino Telephone


Corp (20.0%), PLDT Beneficial Trust Fund (10%), other (70.4%)

Company type
Business Model
Asian Utilities Environment and Social Rating
Corporate Governance Rating
CDP disclosure

Environmental management

Climate change management

As a pure distribution company, Manila Electrics environmental impact is comparatively low. Distribution losses have improved
significantly, coming from more than 20% down to 9.5%. They are still above the cap of 8.5% which will come into force in 2010. The
company discloses some selected information on its ESG activities and scores in the mid-range of the sector.

Health & Safety management

Score:

Meralco recognizes the importance of health & safety management. It has an ongoing commitment to installing safety and environment
protection programs aimed at protecting employees, contractors, and the public. Good H&S management

2009
9369
49%

Corporate governance

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

37
1%
16%

Operational efficiency metrics


Interruption Frequency Rate (the average number of times a customer is without power in a year, which also takes into account both
forced and pre-arranged interruptions by Meralco) has constantly improved over the years: 6.8 in 2008 vs >30 in the 90s. Cumulative
Interruption Time now at 5.77, also its lowest number. current system loss level of 9.28% is one of our best operating results in 2008
and the lowest we have attained thus far in this performance area since 1981. In 1986, after Meralco was returned to the Lopez family,
system loss was at a very high level of 21.01%. System loss has been their priority since that time, due to its financial impact to the
customers and the Company. It was in 2008 when we were able to achieve for the first time a level below the 9.5% cap that was set in
1999 under the Republic Act 7832. the new cap set by the Energy Regulatory Commission (ERC) starting January 2010 will be 8.5%.
Customer satisfaction varies among the years, at 7.3 in 2008 at an slightly above average level. High customer per employee ration of
755

Water and waste treatment


Water preservation campaigns and waste management programs are underway. Meralco has training projects on solid waste
management for partner communities. In October 2004, Meralco signed a memorandum of agreement with Bantay Kalikasan in
support of the latters Bantay Baterya project. The projects objective is to create a sustained public awareness on the health and
environmental hazards posed by the indiscriminate disposal and handling of junk batteries.

Overall CSR reporting & management

Score:

CSR website focuses mainly on community programs, corporate giving etc., some slightly more business relevant activities such as
some electrification projects. CSR activities seen as a tool to help support Meralcos public image.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 100

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 27%, percentage of independent audit committee
members: 60%, percentage of independent remuneration committee members: 33%, percentage of independent nomination committee
members: same as remuneration committee, disclosure of executive and board remuneration: no

785,002.00
190.00
29.00

Score:

Apparently some commitment on climate change and encouraging efficient use of electricity, e.g. participation in the earth hour. But
no meaningful initiatives published. On renewable energies: states that they support the Renewable Energy Act of 2008, which was
signed into law on December 16, 2008, and signed in April 2009 a Contract for the Supply of Electricity with Montalban Methane Power
Corporation (MMPC), which would enable us to source renewable energy from MMPC. MMPC has a 8.19MW renewable power plant
in Rodriguez, Rizal (which does not sound very meaningful). As of end 2008, 17.8% of its energy supply mix came from renewable
energy sources such as hydro, geothermal, and wind. 51.1% of electricity comes from natural gas. No emissions data

ESG Summary

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Some internal environmental initiatives such as air pollution control of its own vehicles. Meralco is commited to climate change and
encouraging efficient use of electricity, e.g. participation in the earth hour. On renewable energies: Meralco supports the Renewable
Energy Act of 2008, which was signed into law on December 16, 2008. As of end 2008, 17.8% of its energy supply mix came from
renewable energy sources such as hydro, geothermal, and wind. 51.1% of electricity comes from natural gas.

Distribution
mainly electricity distribution to 4.6m customers (+real estate and
services)
55%
33%
No request to disclose by CDP

Distribution assets
Area covered
% of countrys gross domestic product
Generation Mix Plans Disclosed

Score:

Controversies

Gravity:

Medium

In 2008, Green Alert activists campaigned against the EDCs proposal to tap additional geothermal power inside Mt Kanlaon Natural
Parks buffer zone in the Philippines. Environmentalists say the project would further deplete the forest cover, cause losses to
biodiversity, and bring on a watershed crisis.

Community investment
Meralco invests heavily in social projects. These include Christmas gift-giving activities for children, corporate-wide outreach projects,
and relief operations.
Note 1: ED stands for environmental damage

Company Name (country)


RIC / ISIN: 2
Market Cap

Electricity Generating Public Company (Thailand)


EGCO.BK / TH0465010005
US$ 1,236m

Ownership structure

Electricity Generation Authority of Thailand (25.41%), OneEnergy Thailand


(22.42%), Free float (52.17%)

Company type

IPP

Business Model

EGCO Engineering and Service Company Limited is EGCOs wholly


owned subsidiary, which provides operation, maintenance, engineering and
construction services to power plants, petrochemical plants, oil refineries
and other industries. EGCO holds an indirect 70% stake in Egcom Tara
Company Limited (ET), which operates in water business. EGCO also
invests in Eastern Water Resource Development and Management Public
Company Limited (East Water)

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Environmental management

Score:

Emissions, noise and water data available. Data for some of its facilities, i.e. the ones owned 80% and more, data on water, NOx and
SOx emissions. NOx emissions have improved slightly from 2006 to 2008. all emissions below the legal thresholds. Also noise data
available
Climate change management

Score:

Score:

No mention of a climate change strategy.

Health & Safety management

H&S training, H&S management committee, some safety metrics (accumulated safety hours), REGCO and KEGCO have implemented
the Occupational Health and Safety Management System TIS 18001:1999 & OHSAS 18001. egco WON some awards, e.g. the 2008
national safety award for the 9th consecutive year. Info on training hours.

75%
58%
no response

Corporate governance

Score:

ESG Summary

Separation of Chairman & CEO: yes, percentage of independent board members: 29%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 60%, percentage of independent nomination
committee members: same as remuneration committee, disclosure of executive and board remuneration: partly

EGCO ranks among the leader within the sector in our assessment. It reports on emissions and some of the metrics (water use, NOx and
SOx emissions) have decreased since 2006. the company has an H&S management committee, does H&S training and reports on safety
performance. There is significant room for improvement in addressing climate change.

Controversies

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total
Generation Mix Plans Disclosed
CO2 emissions (tonnes)
CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

2009 (MW)
2,862.30
832.30
20.30
40.60
284.20
4,060.00
not disclosed

2,004,273.00
6,704.00
70.00

Community investment
The group supports, initiates and develops various projects that involve education, career, health and environmental care for a better
quality of life in communities where EGCo is active.
Note 1: ED stands for environmental damage

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

120
40%
40%

Heat rate (kJ/kWh) for REGCO (2008): 9107, KEGCO (2008): 9311, EGCO Cogen (2008): 9204, Rol-Et Green (2008): 18564. No clear
positive trends visible

Water and waste treatment


Data on water use is available for all subsidiaries owned for more than 80% by EGCo. EGCO holds an indirect 70% stake in Egcom Tara
Company Limited (ET) which operates in water business via ESCO.

Score:

Reports on various metrics (water use, NOx and SOx emissions), and has achieved reductions since 2006. EGCo publishes an annual
sustainability report, has a CSR committee, and information on CSR is included in the Annual Report. Missing: targets & inclusion of nonmajority owned subsidiaries.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 102

Medium

EGCO has a holding in a 200 MW coal-fired project, the Kamanga Power Plant. The local council unanimously voted against it in
June 2009 due to concerns about impacts on the environment and human health. The council is seeking to have its environmental
compliance certificate cancelled. Criticism on involvement in large dam project in Laos. Involved in Sudan and listed as High Offender
in 2007.

2009 (%)
71%
21%
0.50%
1%
0%
0%
7%
100%

Operational efficiency metrics

Overall CSR reporting & management

Gravity:

Company Name (country)


RIC / ISIN: 2
Market Cap

Glow Energy Public Company Limited (Thailand)


GLOW.BK / TH0834010009
US$ 1,365m

Ownership structure

GDF Suez Energy Thailand (44.11%), SUEZ-Tractebel Energy Holdings


Cooperatieve U.A (25%), State Street Bank and Trust Company for London
(3.8%), Nortrust Nominees Ltd (3.57%), other (23.52%)

Company type

IPP and cogeneration

Business Model

Glow Energy Public Company Limited is a Thailand-based company


engaged in the generation and distribution of electricity, steam and
water for industrial use. The Company operates an Independent Power
Producer (IPP) business and cogeneration facilities. Its core business is
the generation and supply of electricity to Electricity Generating Authority
of Thailand (EGAT) and the generation and supply of electricity and steam,
with clarified and demineralised water as secondary products, to industrial
customers. Steam was 12.5% of revenues in 08

Asian Utilities Environment and Social Rating


Corporate Governance Rating

38%
50%

CDP disclosure

answered CDP, but within the answer of parent company GDF Suez

Environmental management

Score:

No emissions data. Some CO2 emissions data provided by GDF Suez. However, there is no indication that climate change
considerations play a role for GDF in managing Glow Energy. Plants are ISO 14`001 certified. General information on technologies
employed to minimize emissions is given.
Website has some information on environmental management. ISO 14`001 certification
of its plants. General information on technologies employed to minimize emissions.

Climate change management

Score:

Some CO2 emissions data provided by GDF Suez, butthere is no indication that climate change considerations play a role for GDF in
managing Glow Energy in Thailand.

Health & Safety management

Score:

Glow has a H&S management team. Glow established and follows a set of rules called Corporate Health and Safety Policies and
Procedures. In 2008, Glow included safety targets as criteria determining the variable bonus of its employees. Training programs
are conducted to help employees and contractors. No data on injuries or certification. Website has some information on H&S
management.

Corporate governance

ESG Summary
The company scores in the mid-range compared to the sector. It is owned to almost 70% by GDF Suez.

Generation type
2009 (MW)
2009 (%)
Gas
1,403.53
78%
Coal
298.82
17%
Biomass
0%

Oil
0%
Hydro
108.66
6%
Nuclear
0%
Renewable
0%
Total
1,811.00
100%
Generation Mix Plans Disclosed
115 MW cogen coal, 382 MW cogen gas, 660 MW IPP coal

CO2 emissions (tonnes)


5,027,042.00 ED1 cost (m USD)
CO2 intensity (tonnes/ m USD rev.)
5,145.00 ED impact on 2008 revenue
CO2 damage cost (m USD)
175.00 ED impact on 2008 EBITDA

Operational efficiency metrics


Unplanned outage at Cogen (H1 09): 4.81%, unplanned outage IPP (H1 09): 2.39%

Water and waste treatment

Controversies

Gravity:

Medium

In October 2008, local residents and organisations staged protests at several locations in Bangkok to challenge the construction of four
power plants in their regions. The protesters claimed that the coal- or gas-fired plants, which would sell electricity to state-owned utility
EGAT, would cause air and water pollution to more than 2,000 farmers and affect the environment of agricultural areas. The plants
were: Bang Kla proposed by Gulf Electric and J-Power, Gheco-One proposed by Glow Energy and Hemaraj, Khao Hin Son proposed
by CMS and Kaset Rungruang Peudphol, and Nongsang proposed by Gulf Electric and J-Power.

Community investment
Glow is concerned about developing the quality of life of people in the communities where it conducts business. Glow lays a focus on
educational and cultural activities. These investments are strategic.
Note 1: ED stands for environmental damage

322
33%
158%

Score:

Information on Glows CSR program is available, in detail, on the company website. Similar information but with some general descriptions
of environmental and H&S achievements in its AR.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 104

Separation of Chairman & CEO: yes, percentage of independent board members: 25%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 33%, percentage of independent nomination
committee members: same as remuneration, disclosure of executive and board remuneration: partly.

Glow has a water quality management team. The management team focuses on wastewater treatment, seawater quality and marine
ecology.
Overall CSR reporting & management

Score:

Company Name (country)


RIC / ISIN: 2
Market Cap

Ratchaburi Electricity Generating Hldg (Thailand)


RATC.BK / TH0637010008
US$ 1,516m

Ownership structure

Electricity Generating Authority Of Thailand (EGAT) (45%), Banpu


Public Company (14.99%), Nortrust Nominees (5.19%), Social
Security Office (4.93%), State Street Bank and Trust (4.88%),Others
(25.01)

Overall CSR reporting & management

Company type

Power generation

Business Model

investment company engaged in holding power generating


businesses. Thailand`s largest IPP.

Asian Utilities Environment and Social Rating


Corporate Governance Rating
CDP disclosure

Ratchaburis ESG performance scores in the midrange of the sector. They report on emissions data, seem to have comprehensive
H&S management in place and have specific policies addressing stakeholders.

2009 (%)
84%
0%
0%
16%
0%
0%
0%
100%

Score:

Score:

One of the few Asian utilities to respond to CDP since 2006. The company is aware of their CO2 emissions. In the frame of the Carbon
Disclosure Project they report plant specific data on SO2, and NOx emissions. Have achieved some, even though small, improvements
in energy efficiency, but have reported the same achievements for the past 3 years already. These are:
- Improved Gas Turbine performance with 0.4%. by changing high efficient compressor for 6 unit
- Improved 0.3% performance of 2 units of thermal plant by install on line performance optimizer software
- Promoted to reduce electric power consumption 8% or 100 tones of CO2e from year 2005

Health & Safety management

Score:

Ratchaburis Committee on Workplace Health and Safety runs a succesful H&S program. In November 2008, the Ratchaburi Power
Plant celebrated a new milestone as it achieved 2,500,000-hour-man safety with no accident. However it doesnt have a international
certification.

Corporate governance

Score:

Separation of Chairman & CEO: yes, percentage of independent board members: 33%, percentage of independent audit committee
members: 100%, percentage of independent remuneration committee members: 0%, percentage of independent nomination committee
members: ND, disclosure of executive and board remuneration: partly

153.75 MW hydro plant in Laos under construction. Under


development: 751 MW of lignite coal plant for which they also own
a share in a lignite coal mine, and 247.5MW of hydro in Laos, and
118MW of wind in Thailand

Controversies
Criticised for involvement in controversial dam construction in Laos

Gravity:

Medium

Community investment

CO2 emissions (tonnes)


CO2 intensity (tonnes/ m USD rev.)
CO2 damage cost (m USD)

Operational efficiency metrics


No mention of operational efficiency metrics

Environmental management

ESG Summary

Generation Mix Plans Disclosed

Some efforts towards CSR management. Since 2007, have specific policy for each group of stakeholders including the Shareholders
Policy, Employees Policy, and Social and Environment Policy. In 2009, the Company plans to prepare a policy on other stakeholder
groups: creditors and partners (including business partners, suppliers and subcontractors). Has answered the CDP since 2006, as one
of only a few Asian utilities.

Climate change management

2009 (MW)
3,651.48
1,529.60
4,347.00

Emissions data available in the frame of the Carbon Disclosure Project report (SO2, and NOx emissions).
Have achieved some, though small, improvements in energy efficiency.

50%
50%
Yes

Generation type
Gas
Coal
Biomass
Oil
Hydro
Nuclear
Renewable
Total

Score:

11,690,141.00
9,560.00
408.00

ED1 cost (m USD)


ED impact on 2008 revenue
ED impact on 2008 EBITDA

489
40%
158%

Water and waste treatment


The Company started a feasibility study for using plants in treating waste water. Ratchaburi aims to reduce waste water released
into the Bang Pa canal, and aims to recycle more water. To reduce consumption of water from public resource Ratchaburi started the
Cooling Water Reuse Project. Ratchaburi has a water project called Communitys Participation in Khlong Bang Pas Water Quality
Improvement, and Pollution Reduction. The project is aimed at creating awareness on water resource development.

Responsible Research 2010 | Green Building: Issues for Responsible Investors | 106

Ratchaburis Love the Forest and the Community project promotes human-forest harmonious living. Many tree planting initiatives.
Ratchaburi feels strongly committed to the communities surrounding the Companys premises and invests in those communities.
Investments are strategic.
Note 1: ED stands for environmental damage

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exit
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Indonesia
44 Source: Advanced Research Institute, Virginia Polytechnic Inst & State University (September
Responsible Research 2010 | Green Building: Issues for Responsible Investors | 108

15, 2009), Electricity in Indonesia Universal Coverage and Fuel issues


45 Source: BP Statistical Review of World Energy June 2009, BP research
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development at its 1 October 2009 Board of Directors Meeting
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Investors Assessment, Detailed Analysis of Targets by Region and Country
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Energy Market
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Indonesia
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63 Source: The Energy Conservation Centre, Japan, Energy Prices
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91 Source: AsiaIsGreen.com (July 18, 2009), Singapore is Not Ready for Renewable Energy
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Responsible Research 2010 | Green Building: Issues for Responsible Investors | 110

135 Source: ERC (2009), Thailand Energy Regulatory Developments 2009


136 Source: Energy Regulatory Commission of Thailand (November 11, 2009), Dr. Pallapa
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