Man is a world-leading alternative investment management business. With a broad range of funds for institutional and private investors globally, it is known for its performance, innovative product design and investor service. Man manages over $61billion in funds under management (as at the beginning of November 2008) and employs 1,700 people in 13 countries worldwide.

The original business was founded in 1783. Today, Man Group plc is listed on the London Stock Exchange and ranked in the top 50 companies of the FTSE 100 Index, with a market capitalisation of around $10billion.

Man supports many awards, charities and initiatives around the world, including sponsorship of the Man Booker literary prizes and is also a member of the Dow Jones Sustainability Index and FTSE4GOOD.

Rob Challis is Global Head of Corporate Responsibility, Man Group plc. In November 2007, Rob was invited by the Man Group Board to take up the position of Global Head of Corporate Responsibility reporting into the Group Chairman. His appointment followed a long career, with a number of Board appointments with major financial institutions in international banking and finance.

Rob co-founded Quadrant Risk Management (International) Ltd some 18 years ago. He has broad experience with a number of major financial institutions and regulators and is a globally recognised expert in business ethics, strategic and business planning, corporate governance, compliance, risk assessment and evaluation and embedding these disciplines into global financial institutions.

What ethos informs the Man Group's attitude towards climate change and carbon reduction?

"The ethos that informs Man Group's attitude towards all corporate responsibility (beyond climate change and carbon reduction) is the belief that our reputation is held in trust by our people. Reputation is what drives our market value, sustains and enhances our marketplace relationships, enables us to attract the best talent and creates and sustains stakeholder loyalty.

"Corporate responsibility is the discipline by which we evidence and quantify responsible behaviour to our stakeholders. In doing so, we build and sustain their trust in and commitment to our Group.

"Our Corporate Responsibility Programmes are predicated on the basis that they are 'research and risk-based added value' propositions which form the bedrock of our being a sustainable company.

"Unless there is an added value proposition then it begs the question 'why bother?' What justification beyond the 'nice to have' would exist for investment in them particularly in the challenging times we are currently experiencing?

"Corporate Responsibility primarily concerns the identification, analysis, and mitigation of key non financial risks which, if they were to crystallise, might have a material adverse impact on the financial performance of the company.

"Communicating to all stakeholders that we have a clear understanding of these risks and can evidence we have programmes in place to mitigate them are at the heart of evidencing we are a sustainable company.

"As a service company, Man has a relatively small carbon footprint.

"This said we believe it is the duty of everyone to take account of their footprint, take steps to reduce it and then to offset essential emissions whilst encouraging positive behavioural change toward the planet.

"We know from research that two of our main stakeholders - our people and our shareholders - value our involvement in climate change.

"Our people in that they like working for a company which is a 'good corporate citizen' (and this is evidenced to be a competitive differentiation factor in recruitment) and our shareholders because they accept that our ability to attract and retain the best possible talent and to be credible and 'walk the talk' in terms of aligning our climate-related businesses with what we do as a company are important elements to our sustainability proposition.

"So our involvement in climate change goes some way in addressing our people and market place risks so continued investment in our climate related programmes can be justified.

"However good or competitive our products and services, if our integrity ever came into question, the trust of our stakeholders and thus the sustainability of our reputation and consequently our business could be impaired.

"For Man Group, corporate responsibility is a discipline rooted in hard data that is essential to the sustainability, credibility and future success of our business. It is not a question of simply 'ticking the box'; it is about protecting our reputation by systematically and proactively identifying, quantifying, managing and mitigating key non-financial risks and reporting them in a transparent way."

Can investors make money while helping to combat climate change?

"Environmental finance is an area of growing economic activity, largely driven by climate change regulations, rising energy prices and demand for a cleaner environment. The political response to climate change is driven by the electorate, governments, local councils and municipalities as well as supranationals such as the UN.

"At the same time large institutions and private organisations are heavily invested or involved to help stimulate change. Green issues top government agendas around the world and regulatory incentives are being put in place to force capital markets to bear the brunt of the risk capital required.

"These financial incentives provide a structural base for commercial and non-commercial initiatives. Advances in technology have provided clearer evidence of the effects of greenhouse gases and can now more accurately measure our environmental footprint.

"Capital markets are the key solution to reducing our environmental footprint because of their sheer size, truly global nature and discipline. We believe that there is a clear commercial opportunity supported by both demand and supply side factors."

What internal low-carbon initiatives has Man taken over the past two years?

"Man Group has had a very active couple of years in corporate responsibility, with numerous initiatives both direct and indirect delivering real and quantifiable environmental benefits. Some key highlights include:

• Replacing all plastic bottled water in 3 major offices with a filtered drinking water system
• Moved to paperless pay slips for all staff in the UK
• Surveyed all of our London staff on their attitudes towards the environment
• Sponsored the BitC Man International Climate Change Award for a second consecutive year in 2008.
• Held a series of carbon workshops for the Board of one of our top institutional investors
• Eliminated all desk bins in our London headquarters to take our recycling rate up to 80 per cent
• Recruited CO2 mentors in our New York and Chicago offices to join the existing group of mentors in our London and Pfäffikon offices
• Invited to join the Dow Jones Sustainability Index for a second consecutive year.
• Placed light sensors throughout our London offices
• 'Ice box' cooling technology installed in our London offices
• Installed a Combined Heat and Power (CHP) unit for on-site electricity generation at our London office
• Offset our global CO2 emissions from electricity, gas and business air travel via high-quality carbon projects which exceed the UK Government's proposed Code of Best Practice for carbon offsetting."

What's been the impact of these measures?

"In summary, whilst our 'per employee' CO2 output reduced year-on-year, our total year-on-year carbon output increased by circa three per cent in the aggregate. To put this small increase into context, our profit before tax on continuing operations increased by 60 per cent and funds under management have experienced a 38 per cent compound growth rate between 2002 and 2008.

"It is inevitable that for companies which experience high levels of growth and sustained success and who have global operations, the use of air travel will continue to be necessary.

"To compensate for this we have increased the availability globally of video conference units by 54 per cent year-on-year and by 104 per cent in the aggregate over the past three years.

"Our CO2 emissions from utilities continue to fall year-on-year, from 3,567 kgCO2 per employee in 2006 to 1,205 kgCO2 per employee currently - an aggregate reduction of more than 66 per cent over the last two years.

"This trend reflects the continuing programmes to reduce energy usage, purchase energy efficient technology and switch to green tariff electricity where available. In the last year we have benefited from a full year's use of green electricity in Centennium House where we were able to encourage the landlord to make the change."

How do you help bring staff on board?

"We organise a number of corporate responsibility workshops for our employees with guest speakers who are leaders in their field. These have included workshops on diversity, health, and work-life balance, amongst others.

"Our climate change engagement programme is focused on proactive employee involvement. We regularly hold carbon workshops for our employees that are informative and engaging on the subject of climate change. All carbon workshop participants have the opportunity to become a carbon mentor volunteer in their local office and assist other colleagues in adapting to low carbon behaviour.

"In March 2009 we will be launching a global carbon calculator for employees and their families, including hints and tips on how to be more eco-efficient. The calculator will also offer subsidised carbon offset to all employees."

How externally does Man spread the carbon reduction message?

"Man is an active member of a number of charities that share the responsibility for spreading the word about carbon reduction. We are members of The Climate Group, BitC and Green500; in addition to this we support charities such as Global Action Plan and The Prince's Rainforest Project in their work on carbon reduction.

"In September of 2008 we sponsored a dinner for the Prince's Rainforests Project at the Mansion House in the City. The dinner was hosted by HRH The Prince of Wales and over two hundred of the City's most influential decision makers were in attendance. Our City colleagues were challenged with proposing practical mechanisms that acknowledge the true value of the eco-system services provided by the world's remaining rainforests.

"Our former deputy Chairman, Stanley Fink, was awarded the Prince of Wales Ambassador Award by the BitC in July 2008 and the FT [Financial Times] claimed that Stanley Fink had tuned Man Group into a 'paragon of corporate social responsibility'."

Are recently revised UK Government carbon reduction targets achievable?

"The UK has taken real leadership with the Climate Change Bill and a revised carbon reduction target of 80 per cent by 2050 will require all businesses to consider their business model, in particular their exposure to carbon emissions. It will be a challenge, but not an impossible one, as business can be nimble at being innovative within a regulated market.

"Ironically, for the target to be achieved, government will have to work a lot harder at being joined-up and provide frameworks that enable long term business decision making.

"At the moment initiatives such as the Carbon Reduction Commitment are sending mixed messages to the market and furthermore, as long as the energy mix of the UK doesn't include far more clean energy, then any action taken by business will be wasted, with a possible threat to UK competitiveness, and the ambitious carbon reduction target will remain unconsummated."

How does the current economic climate impact on the battle against climate change?

"In the past year we have witnessed market conditions which have presented significant challenges to many leading financial institutions around the world. The credit crisis and subsequent liquidity and funding issues have made headlines since the summer of 2007. Economic slowdown and the prospect of recession on both sides of the Atlantic have weighed heavily on market sentiment.

"It is therefore very pleasing that Man has had a successful year. We executed on our strategy, delivered positive performance for our investors overall. Expanded our investment management capabilities, grown the business and generated record profits at the end of FY 2008.

"Man Investments' objective is to provide, structure and distribute a wide range of alternative investment products: essentially a mechanism for return diversification, whose principal aim is to produce attractive risk-adjusted returns with low correlation to traditional equity and bond investments. We expect activity in our Man ECO (Environmental Capital Opportunities) business to grow."

What are you working on right now?

"Our Corporate Responsibility programmes are ongoing as we seek further to embed these key disciplines deeper into the business.

"Our priority in the medium term is to 'do more with less'.

"An example of this is the virtualisation of our global workshop programme where, by using our expanded videoconferencing facilities we are able to reach more of our people globally at a low cost and significantly reduced carbon footprint.

"Our newly developed Corporate Responsibility website enables us to regularly update our stakeholders with CR developments and progress.

"This advanced technical architecture also has enabled us to reduce the production of paper-based communications."

Any advice for fellow carbon reduction/environmental professionals?

"Take the time to identify non-financial KPIs and implement a user friendly non-financial data collection system to manage performance - what you can't measure you can't manage.

"It is also of fundamental importance that any climate related activity fully aligns to the business and the nature and scope of it.

"This is particularly important when cash flow may be under pressure.

"Cutting back on a public commitment to positive climate change could have implications for a company's reputation."

Trimming The Footprint Of Commercial Property

Buildings account for an estimated 50% of the UK’s total energy consumption, according to government estimates. As part of a national strategy for reducing emissions commercial buildings will be required to have an Energy Performance Certificate (EPC), with a phased introduction beginning in October this year.

Commercial properties on the market before 1 October will not need an EPC until January 2009 at the latest, but if a property is sold or rented in the meantime, an EPC must be obtained by arranging a survey by an accredited energy assessor as soon as possible. The EPC will include details such as the dimensions of the property, its construction and provision of heating and hot water.

A national register will list EPCs and their issue dates. Following consultation over the summer, the Government has clarified some of the more tricky detail about EPCs.

The default assumption is that a commercial property EPC will be valid for 10 years, although if another EPC is obtained within that period, the earlier certificate will become invalid. Either tenants or landlords may obtain an EPC, and if one is obtained for part of a building any existing EPC for the whole building or a larger part of it will remain valid. The converse is also the case. Detailed guidance on how EPCs apply to buildings with shared or separate heating systems is also available.

A global perspective

Providing financial and professional services in the real estate investment and management markets in some 60 countries, Jones Lang LaSalle is well placed to comment on global trends. “All parts of our industry are now feeling the impact of regulation,” says Colin McPherson, an Associate Director in the company’s UK operations. “We’re seeing a new focus on building standards and energy performance. Energy Performance Certificates are here to stay,” he says.

Over the past two or three years, the company has also noted a steady growth in market demand for sustainability, says Stephanie McMahon, Head of Corporate Research in the UK. “The main drivers have been institutional investors, pressure to improve the efficiency of corporate operations, and greater reporting and disclosure. All these have meant that people are looking harder at property,” she says. A recent survey commissioned by Jones Lang LaSalle of 400 companies worldwide seems to bear this out. “One theme resonates in the demand side of the property industry during 2007 - sustainability,” it concludes. The research found clear geographical variations, with 60% of EMEA respondents seeing sustainability as a critical issue now, compared with 50% of Australasian respondents and 40% of those in Asia.

Making a start with reducing emissions needn’t require radical upheavals in day to day operations, suggests Colin McPherson. “Do what you do, but do it differently,” he says. This can include obvious reductions in energy consumption – such as adjusting the timer on heating systems, or switching off plasma screens when they aren’t needed, for example. But as is often the case, difficulties appear when some investment is at issue. “Who pays for improving the energy performance? In a tenanted building who bears the cost? If you’re a landlord you may be able to work your budget harder, but will your tenants pay more?”

Energy consumption within a commercial property is only part of the carbon footprint – there are emissions produced in the transport of goods and people to consider too. Efficient transport links have always important for commercial properties, says Colin McPherson. “Logistics developers are already acutely conscious of transport and of trying to find places near hubs, whether it’s the M25, or docks, or railheads,” he says.

For larger commercial developments it may be feasible to promote alternative, greener transport for staff and visitors, and this may also influence planning decisions, he says. “This could be monitored, but often it’s not. Benchmarking and measuring is part of life – there’s no reason why this should be exempt,” he suggests.

Retail therapy

Reducing the impact of cars is a challenge for The Mall, one of the largest owners of retail property in the country, including 20 malls housing more than 1,800 retail units, and attracting 4 million shoppers every week. “We own car parks and we like to make money out of them. But we’re looking at ways of educating the public, introducing charging points for electric cars, and surveying out visitors to discover what modes of transport they use and prefer,” says National Technical Manager Stuart Laidlaw.

Minimising emissions from transport is part of the company’s ‘EnviroMall’ strategy, which Laidlaw has been involved with from the start. “In around 2005-2006 we realised we needed to do something different. One of the first things I did was to work on an Environmental Management System for malls – something that owners and operators could use – because there was nothing available at the time,” he says.

From a 1999 baseline, the company aims at a 63% reduction in CO2 emissions by 2010, a 50% reduction in energy consumed by 2012, and 20% of its total energy supply coming from renewable sources by that date.

Key to reaching this target is winning support from operations managers in each of the malls, and encouraging them to engage with retailers – on top of their existing workload. “There was some humming and hawing at the start,” he says. However, a system for rating energy management and highlighting good practice across its portfolio of malls has produced significant progress, says Laidlaw. The company is now considering developing an independently verified accreditation system that could be used by other mall owners and operators.

Green regeneration

While Jones Lang LaSalle and The Mall operate at international and national levels, smaller commercial sites have made progress too. The only business park in the South West with the status of a Business Improvement District, Cater Business Park on the outskirts of Bristol has 50 companies on its site, including The Co-operative Group and Somerfield.

Because it also houses local companies Cater has drawn up an environmental policy that won’t rule out smaller participants. At present, this means encouraging companies in the park to manage their energy consumption more wisely, and offering guidance on good practice and external sources of help, says Business Improvement Manager Mike Knight.

“Even though there’s a mix of small businesses and large companies, virtually everyone has taken this on board,” he says. Among the next steps under consideration are helping companies to assess their carbon footprints, and encouraging a core group of leaders to share their insights with other tenants, he says.

Key Questions:

• How can EPCs help us become more energy efficient?
• How can we share knowledge about energy efficiency across our organisation?
• How might we benefit by being recognised as leaders in sustainability?