Strategic responses to global climate change: a UK analysis

Strategic responses to global climate change: a UK analysis Research executive summary series Volume 7 | Issue 11

Jan Bebbington University of St Andrews Scotland

Nick Barter University of St Andrews - Scotland Griffith University - Australia

Overview of the project The purpose of this research executive summary is to provide an understanding of the way in which organisations are translating strategic issues into management action in the context of their carbon impact. The report is based on interviews conducted with a cross section of public and private sector organisations that are at the leading edge of responding to global climate change. Interviewees were questioned about their strategic response to the challenges of global climate change itself as well as regulatory requirements that emerge to address the issue. In addition, the implications for management accountants and accounting were explored. The aim of this report is to support the development of management accounting for organisations as they respond to the threat of global climate change.

Introduction

fall patterns and temperature ranges as well as the price and availability of raw materials, most especially energy.

The threat of global climate change (GCC) has prompted governments around the world – as well as supra-national governmental bodies such as the United Nations and European Union – to enact governance regimes designed to reduce emissions of greenhouse gases (GHG). In particular, the UK and Scottish Government are the first, and so far only governments to have passed legislation that sets statutory targets for country wide GHG emission reductions. These Acts require an 80% reduction in the Kyoto basket of GHG emissions by 2050 (from a 1990 baseline).

This research sought to understand how a range of organisations – in both the public and private sector – are responding both to the governance regimes emerging to regulate GHG emissions as well as the impact of GCC itself. The research explored how interviewee organisations are strategically responding to the challenges. Moreover, the interview questions also sought to elicit what management accounting information was used to inform this area and/or what information would be sought in the future. Taken together, this report supports the development of management accounting expertise for organisations that are responding to the threat of GCC.

In the shorter term, the UK Government has mandated a 36% reduction in GHG emissions by 2020 – Scotland requires a 42% reduction by 2020. Both targets are aimed at ensuring global average temperature rises remain at or under 2ºC as it is believed this is the threshold for ‘dangerous’ climate change.

Both the 2020 and 2050 goals will require a considerable response from organisations, individuals and institutions as we move towards a low carbon economy. Two different, but related sets of actions will be required: mitigation (seeking to reduce GHG emissions) and adaptation (responding to physical impacts that arise from current levels of GCC). The nature of the response required will be dictated by various regulatory interventions (such as the Acts but also the European Union’s Emissions Trading Scheme) as well as by physical changes in the operating environment of organisations – in terms of rain

In total 24 public and private sector organisations were interviewed. Refer to Table 1 – interviewees are named where permission has been given. These people worked for organisations that are exposed to GCC pressures and that were proactively addressing the issue. Interviewees were drawn from carbon intensive industries, such as electricity and oil and gas. Interviewees were also those who provide services that are heavy users of energy – such as the water industry and manufacturing sector – and where significant changes would be required to reduce GHG emissions – such as in construction/ built environment and transport. The public sector was also included in the analysis because they generate substantial GHG emissions in their operations.

Table 1: Interviewee summary (see note 1) Named participants

Anonymous participants

1. Graham Hutcheon, Operational Director, Edrington (whisky producer).

1. Organisation A, transportation services.

2. Terri Vogt, CSR Manager, FirstGroup (public transport provider).

3. Wilma Harper, Head of Corporate and Forestry Support, Forestry Commission (forestry).

2. Organisation B, telecommunications.

4. Mike Kelly, Partner, KPMG (accountancy and management consultancy).

4. Organisation D, property developer.

5. Ian Gearing, Corporate Responsibility Manager, National Grid (energy).

5. Organisation E, banking services.

6. Sonia Roschnik, Sustainable Development Unit, NHS England and Wales (health provider).

6. Organisation F, banking services.

7. Paul Eggleton, Energy and Carbon Manager, O2 (mobile telecommunications provider).

8. Organisation H, water utility.

8. P eter White, Global Corporate Sustainability Director, Procter and Gamble (manufacturing).

10. Organisation J, oil and gas.

3. Organisation C, manufacturing.

7. Organisation G, primary producer.

9. Organisation I, water utility.

9. Alan McGill, Partner, PWC (accountancy and management consultancy).

11. Organisation K, service provider.

10. Gregor Alexander, Finance Director, Scottish and Southern Energy (energy).

12. Organisation L, regulator.

11. Gordon McGregor, Energy and Environment Director, Scottish Power (energy).

12. Keith Coloquon, Climate Change Manager, Thames Water (water utility).

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In summary, the interviews undertaken were with leading edge organisations that were likely to have started to respond to the GCC agenda. As such, observations drawn from this work are not representative of organisations in general. However, the organisations may provide an indication of the path that others will/should follow. In addition, some interviewees were able to bring a broader array of views to the study and four of the interviewees could be seen to speak for their sector. These four interviewees were: Graham Hutcheon, Operational Director, Edrington; Wilma Harper, Head of Corporate and Forestry Support, Forestry Commission; Sonia Roschnik, NHS Sustainable Development Unit; and Organisation G. The inclusion of accounting firm interviewees provides a glimpse into practices and concerns of their client organisations, as well as reflecting the actions taken by organisations within the service sector.

stated, ‘There’s no point in building sustainable buildings in unsustainable locations,’ and further, ‘if we build a sustainable building but then use it in an unsustainable manner, all the good has been destroyed.’

Note 1: Taken together, interviewees worked as: corporate social responsibility/sustainability managers (seven interviewees); climate change manager/director (six interviewees); managing/ operational directors (five interviewees); chief executives (two interviews); partners (two interviewees); and finance directors (two interviewees).

‘It’s not just about reducing the carbon footprint of an organisation, it is how that organisation is thinking about carbon and thinking about what it needs to do for adaptation and contribute towards sustainable development in the context of the decisions and the duties it undertakes.’

Identifying the nature of the challenge Interviewees saw the challenge presented by GCC and possible solutions to these challenges as requiring a whole systems approach. That is, the way in which the challenges/solutions are conceptualised needs to look beyond an individual entity’s impact. Indeed, Gregor Alexander (Finance Director, Scottish and Southern Energy) noted that GCC can be distinguished from other strategic challenges on the basis that it is, ‘right across the value chain.’ Moreover, interviewees noted the growth in GHG emissions arose from the pursuit of other objectives. For example, Organisation I noted,

‘[Over] the last ten years we’ll have invested around £4 billion in capital enhancements to deliver these [water] quality outcomes [and] that has added to our energy base… we’re now in a position whereby we have an appreciable carbon impact at the national scale.’

The size of this organisation’s impact is intrinsically linked to the pursuit of other outcomes – in this case water quality. The same point could be made with respect to the GHG impacts of energy production, communications technology, transportation, the built environment and food production. Indeed, Organisation D was clear their activities, building houses, were only one part of creating a more sustainable built environment when they

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The interconnected nature of GCC issues led some organisations to frame their understanding of GCC issues around a broader conceptualisation of the purpose of their core business and the role of organisations in society more generally. For example, Scottish and Southern Energy noted sustainable development is one of their core values and ‘Climate change is probably… the top issue that we deal with.’ Further, given the nature of their business – energy generation and distribution – GCC will require a transformation of their business.

Organisation I, expressed the same view noting,

A similar point was made by Organisation H who saw, ‘Mitigation as… helpful, but it is only to hold the position while we find the space and the time to move from an economy that’s based on fossil fuels to one that isn’t.’ Indeed, this interviewee was clear GCC was one part of a broader agenda within society, ‘For a fairer more equal world,’ an aspiration that fits comfortably within a sustainable development framing.

Moreover, and in support of the need for whole systems’ considerations to come to the forefront, Organisation G noted that given land use is central to the GCC policy agenda – as land can be used for flooding buffers, food production, forestry, bio fuels and/or for biodiversity management – decisions in this area will have an impact not only on the agriculture sector but also on food and drink manufacturers as well as water companies. Therefore, the particular route the agriculture sector goes down will change the context within which other organisations operate. Determining how an individual entity responds to GCC issues, therefore, requires much broader focus.

Indeed, this wider framing has resulted, in some sectors, in the active involvement of industry associations in developing strategic responses to GCC.

Several interviewees highlighted that they gained considerable support from industry associations (see Table 2) in developing their own strategies. The usefulness of a sectorial approach was highlighted by Graham Hutcheon, Operational Director of Edrington who suggested, ‘You’ve got it written down in terms of long-term strategy… [so you] get everybody in behind it.

Everybody will understand that they have a bit to play in that journey and there will be some interesting discussions.’ Further, the same interviewee noted that the value of this approach depends on the scale of your organisation,

‘I think if you look at somebody like [large industry player], they were pretty well down the road… modelling carbon input to their product… the smaller companies are less so and tend to follow what’s happening in the industry. So for our industry, the most effective route of delivering improvement is to do it together. So it is a non-competitive arena… we’ll work together to deliver value.’

This view was echoed within the water industry where Organisation H noted,

‘... we do a lot as an industry… all of the water companies are involved and many of them are actively engaged in sharing information and learning from each other as we tackle these issue … the industry has got together to do certain things, to make sure that we’re doing things in a similar way with a degree of consistency. And we have shelved any sort of competitive aspect to it, as far as we can… it’s like having a joint enemy, you stop bickering amongst yourselves.’

Other interviewees, such as Organisation F, noted for their industry (banking) individual organisation’s responses to GCC issues are part of competitive positioning so an industry wide approach has not evolved nor would it in all sectors.

Responding to the challenge Key actions undertaken The detailed actions being undertaken by interviewees were as varied as the arenas in which they operated. All interviewees were addressing the twin challenges of mitigation and adaptation, with mitigation challenges currently at the forefront.

The key areas for these interviewees included:

• Investing in energy efficiency as well as buying or generating their own lower carbon energy.

• Waste management practices that focused on recycling in order to displace the need for virgin raw materials as well as reducing the carbon impacts of waste disposal.

• Future proofing infrastructure as it is being created – including: buildings, utilities and transport infrastructure – as a way of safeguarding new and existing investments.

• Investigating issues related to freight and logistics in order to reduce travel footprints.

• Redesigning working practices in order to achieve whole system benefits.

• Developing adaptation responses so that physical changes due to GCC do not significantly affect operational activities.

Table 2: Examples of industry wide approaches to GCC

• The Scottish Whisky Association has an environmental strategy that addresses GCC – www.scotch-whisky.org.uk/swa/51.html • The water industry, via Water UK, has a range of climate change resources – www.water.org.uk/home/policy/climate-change • Smart 2020 provides information as to how ICT could assist in addressing GCC – www.smart2020.org • Parts of the public sector have developed processes to collectively address GCC. For example, the Scottish Local Authorities Declaration on Climate Change and the Sustainable Scotland Network – www.sustainable-scotland.net • The National Health Service support cross sector work via their Sustainable Development Unit. See Figure 1 www.sdu.nhs.uk

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Whole system, multiple benefit actions

Potential action plan

All interviewees identified to some extent with the common theme that organisations are looking at all aspects of their operations in order to respond to the challenge. For example, in the context of agriculture, Organisation G noted addressing GCC involves the better use of nutrients via precision farming practices – with a knock on beneficial impact on water companies as nutrient run off drives water treatment requirements and hence water company GHG emissions. As well as this, developing anaerobic digestion capacity to transform what is currently a waste product (slurry) into energy. This latter approach has the effect of both displacing other GHG emissions as well reducing input costs and waste disposal costs.

These sorts of whole system, multiple benefit actions were identified by all interviewees to a greater or lesser degree with the common theme being that organisations are looking at all aspects of their operations in order to respond to the challenge.

Taking the interview findings as a whole we have synthesised various actions into a ten step process (see Figure 1). Alongside this ten step process we have provided example actions and links to resources that may prove useful, focusing on examples from the Sustainable Development Unit, the NHS in England and Wales. This unit has produced a comprehensive set of publically available resources in this area and is an exemplar of how to systematically address GCC concerns. As a result, any organisation wishing to ensure they are responding to GCC across the board and in a manner that is likely to ensure their success should consider the elements of the action plan outlined and adapt these to their particular organisational setting.

Figure 1: Ten step process to address GCC

1

Establish consensus The case for a response and the appetite to respond

The Department of Health and the NHS conducted a widespread survey where 95% of respondents indicated that GCC was an area of importance and concern.

In addition, the Faculty of Public Health produced a declaration addressed to all health leaders, ‘Climate change is the public health challenge of the 21st century and that, unless decisive action is taken now, the world will face global public health and environmental catastrophe.’ www.fph.org.uk/sustainable_development

2 Develop data baseline GHG emissions footprint

NHS footprint is: building energy (24%), travel (17%) and procurement (59%). This process identified the importance of procurement and, in particular, the high carbon intensity of pharmaceuticals. These figures impact practice and highlight there are GHG emissions benefits from preventative health spend. www.sdu.nhs.uk/publications-resources/26/NHS-Carbon-Footprint-/

3 Develop a procurement plan

4 Co-create a vision of a low carbon future

The NHS plan focuses on whole system reductions in GHG emissions and includes roadmaps, hierarchies of interventions and prioritisation tools. www.sdu.nhs.uk/publications-resources/23/Procuring-for-Carbon-Reduction-P4CR--NEW

Use that vision to prompt thinking about how to respond to current challenges. A series of scenarios for low carbon healthcare in 2030 were published through a participative process and these have been used to stimulate thinking, including the idea of ‘low carbon treatment/patient pathways’. See, Fit for the future. www.sdu.nhs.uk/publications-resources/4/Fit-for-the-Future-/

4 | Strategic responses to global climate change: a UK analysis

5 Support current and future leaders

Support the current and future leaders that will need to tackle the challenges of the GCC agenda – help them understand the issues and support required actions. www.sdu.nhs.uk/publications-resources/7/Board-Leadership-Programme-/

6 Develop process standard for sector

Develop governance routines that support the delivery of desired GCC outcomes. A good corporate citizenship guide could be part of this process. www.sdu.nhs.uk/publications-resources/15/Good-Corporate-Citizenship/

7 Place GCC in wider SD approach

8 Fund the transition

Place GCC considerations within a broader framework of sustainable development and taking a whole systems approach will help avoid dysfunctional effects of a narrow focus on GHG emissions and undermining the purpose of the organisation. This might lead one to consider, in the context of healthcare, the GHG and social benefits of health prevention activities versus treating illness (see point 2, above).

Access or create the facilities that would allow you to fund the transition to low carbon.

In the case of the public sector there is a rolling investment facility for investment in energy efficiency. www.salixfinance.co.uk/home.html

9 Ensure financial accountability including GCC concerns

Ensure the financial accountability mechanisms include GCC thinking. For example, in 2010 the Foundation Trust Network published a report titled Making sustainability add up: accounting for sustainability – a strategic priority for foundation trusts. www.nhsconfed.org/Networks/FoundationTrust/Publications/Pages/Makingsustainability-add-up.aspx

10 Develop an adaptation plan

Develop an adaption response. For example, the Department of Health has a National Heat Wave Plan, first published in 2004 with most recent plan published in 2010. In addition the government has an adaptation report power that is applicable for some strategic assets/ organisations such as water and energy companies (see ‘Resources’ section of this report).

The need for collaboration The interviewees also indicated that in order to address GCC, a whole systems approach is necessary, one that develops partnership working with others in sector (where appropriate) as well as significant stakeholders – such as suppliers, employees, customers, regulators and funders. As a result, GCC was viewed as a strategic challenge for all parts of the economy. Reductions

in GHG emissions are required at every stage of all production and consumption activities. These two observations suggest we might expect that organisations are engaging all stakeholders – to a greater or lesser degree – in their responses to GCC. As Graham Hutcheon, Operational Director of Edrington noted collaboration, ‘Will be a natural progression because no one sector is going to achieve anything significant on their own.’

Strategic responses to global climate change: a UK analysis | 5

The role of accounting in decision making At its simplest, there is a need for all parts of an organisation to be involved in supporting GCC responses and this includes the accounting function. There are three ways in which support from accountants and accounting could be – and was being – realised: 1. Developing baseline data on organisation related GHG emissions and reporting that data within and outside of the organisation.

2. Ensuring GHG emissions are incorporated into current decision making and performance measurement.

3. Providing information to support choices about the future – including both mitigation and adaptation pathways.

As expected given the level of GCC responsiveness of these organisations, all interviewees had developed information on GHG emissions, often over the whole value chain. For example, Peter White, Global Corporate Sustainability Director, Procter and Gamble stated that:

‘Opportunities to reduce emissions in our plants are almost negligible compared with what we can do through product innovation. This is the big opportunity area for us. If we can provide products that wash in cold water, and persuade consumers to do this, we can save much more CO2 than from improvements in our plant operations. Not only that, we can save consumers money on their water heating bills and also gain market share.’

This quote highlights to the whole systems perspective that interviewees were taking with respect to GCC issues. In addition, organisations were also prioritising actions according to what would deliver greatest GHG benefits for least cost. Indeed for Organisation B and KPMG, organisation specific marginal cost of abatement curves had been developed and the data required to create this information was considerable. Other organisations had developed business plans for future investment – with Thames Water’s approach being commended by Offwat.

Likewise, KPMG described how they used the GHG impacts of travel as a full part of decisions regarding utilisation of their human resource.

It was also universally acknowledged by interviewees that the market price of carbon was presently too low (for a whole variety of reasons) to really affect their decision making routines. However, it was assumed the market price of carbon would increase in the future and as this happens, investments in GHG reductions are likely to become more attractive. Some interviewees had conducted sensitivity analysis on investment decisions, modelling how higher prices of carbon would affect their choices.

6 | Strategic responses to global climate change: a UK analysis

The need for a holistic approach that considers the long term While at times some interviewees felt unable to invest in GHG reducing activities due to the current low price of carbon, others reflected a more holistic approach to investment. For example, Graham Hutcheon, Operational Director of Edrington, stressed when they replaced plant for other reasons they believed,

‘The companies that have survived have made [the decision to]… future proof it as far as possible… when you’re in that part of the investment cycle… do you replace it with, like for like? I can probably spend half the money, and this is tens of millions, by putting like for like in, or the modern version of like for like. But actually we need to do something different. So there’s a leap of faith required to say, actually we can invest the money in driving a quality investment that’ll reduce our energy requirement long-term because it will be beneficial… I think that’s the challenge… and we made that decision as a business and we will invest in that way because it is the right and logical thing to do. There is logic to it, if you think more than five years ahead [and]… if I convince my colleagues on the board, that actually this is what you have to do, we’ll do it… regardless of what the [return is]… not to the point that it endangers the company, but in terms of a reasonable spend threshold.’

This quote demonstrates, as we have seen before, some interviewees were taking a longer term perspective with respect to GCC concerns. This sort of observation was also made in other interviews.

The second point which emerged from the interviews is CIMA (rather like the industry associations) was viewed as having the opportunity to facilitate concerted action in the area. One area where two interviewees indicated further thought would have to be given in terms of financial decision making was on the practice of discounting future ‘carbon’ costs in project appraisal.

In particular, Alan McGill, Partner, PWC, touched on this point and noted:

‘Most companies are still using the traditional net present value discounting models… once you go beyond sort of five or six years… because of the discount rate you’ve applied it means that it’s marginal… there is an interesting piece about looking at stepped discounting which has been talked about by a few corporates, but none of them are bold enough to apply it. But certainly they are running sensitivities with step discount rates so

that there’s a smaller discount rate for the future periods where they go out beyond a certain timeframe [and] that means therefore that those potential savings or implications are not as marginalised as they are with an existing discount factor.’

Another example explored was the dysfunctional effect of separating the evaluation of capital and operational expenditure decisions (in financial terms) when decisions made during the capital phase may have a significant impact on GHG emissions during operations. The need to jointly consider these issues was identified as being a possible area for development and speaks to the earlier observations made about these organisations appearing to take a whole systems perspective. If organisations are taking this wider perspective, but their accounting decision making protocols are working against such a view, then problems will arise with realising a low carbon economy.

In summary, for the leading edge of UK organisations who are addressing the challenges posed by GCC, accounting routines are providing valuable information to enable them to make future decisions. Good quality accounting information in the areas of establishing carbon benchmarks, supporting decision making routines and guiding longer term investment decisions were highlighted as being key areas where management accounting can contribute.

Concluding comments The key message of this work is that organisations being proactive in this area are looking to the wider effects of their interactions and to longer term horizons to formulate their strategic responses. Organisations are also starting to be concerned that the physical realities they have previously worked within are going to change radically and rapidly.

Moreover, as Graham Hutcheon, Operational Director of Edrington observes, ‘In terms of strategic drivers for business, I think we’re probably just at the start of the game.’ Indeed, Alan McGill of PWC suggests organisations are at the ‘... crossroads of saying, well the next stage is some serious investment and a step change as opposed to more tweaking at the edges… and that’s getting them to start thinking critically about their business model.’

Furthermore, the regulatory environment within which organisations operate will continue to evolve in this area. As various regulatory systems for GCC emerge – especially from international and supra-national levels – there will be a need for other regulatory processes to change in order to come in line with GCC aspirations (termed cross compliance). At that point in time, there will be another array of GCC related governance changes to respond to. Organisation I noted that, ‘It’s broadly recognised that… the entirety of the European framework of legislation that’s been transposed into law was written in a pre-carbon era.’ When that legislation is GCC proofed, demands for organisational change will accelerate.

Organisations which have taken a whole system, long term and strategic approach to the issues will be well placed to ride out that trend. Initial conclusions from the work undertaken here suggest the accounting profession is essential to the realisation of a low carbon economy and well placed to contribute to such a journey.

Corresponding author Jan Bebbington School of Management The Gateway, North Haugh University of St Andrews, St Andrews, KY15 4SU Scotland, UK E: jan.bebbington@st-andrews.ac.uk

Acknowledgements The researchers would like to thank those who took the time to speak with us during the work as well as CIMA’s General Charitable Trust for funding this project. The insightful input from report reviewers and the support of Susan Kendall and Naomi Smith is also gratefully acknowledged.

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Resources

Adaptation resources

Here is a selection of resources that provide a starting point for accessing GCC information. The key locations for understanding GCC are provided as well as selected topics mentioned in the report.

The UK Climate Impacts Programme (UKCIP) is a government funded body that provides resources to help organisations understand what climate change impacts are inevitable, given past emissions; those that are yet to come; and depend on future mitigation actions – www.ukcip.org.uk/index.php

Scientific and policy information on GCC (at the global and regional scale) The United Nations’ Intergovernmental Panel on Climate Change is the overarching scientific body for GCC issues – www.ipcc.ch/index.htm Much of their work is technical but they also provide background information on the issue.

The most accessible technical summary of GCC is their policy makers and synthesis report of the fourth assessment. A fifth assessment is under preparation – www.ipcc.ch/publications_ and_data/ar4/syr/en/contents.html How this work plays out in terms of the Kyoto Protocol – http://unfccc.int/kyoto_protocol/items/2830.php and its application in the likes of the EU’s Emission Trading Scheme, can be found on the European Commission website – http://ec.europa.eu/clima/policies/g-gas/index_en.htm Many other bodies will provide briefings/outlines of how GCC impacts upon their activities. For a human and development centred outline, see United Nations’ environment programme www.unep.org/pdf/UNEP_Profile/Climate_change.pdf

UK Government resources The main UK Government department responsible for climate change is the Department of Energy and Climate Change – www.decc.gov.uk/ There are other departments also sharing responsibility for other aspects of GCC, for example the Department for Environment, Food and Rural Affairs – www.defra.gov.uk/ There are a myriad of resources for individuals and organisations in these websites including a web based tool that allows you to explore what actions will need to be undertaken to meet the 2050 emissions targets, taking into account technical feasibility of this – www.decc.gov.uk/en/content/cms/ tackling/2050/2050.aspx Likewise, information on the various regulatory approaches being used in the UK to tackle GCC is provided, see www.decc.gov.uk/en/content/cms/emissions/ emissions.aspx. Oversight of the UK Government’s actions is provided by the Committee on Climate Change – www.theccc.org.uk

8 | Strategic responses to global climate change: a UK analysis

The basis for predictions is data from UKCP09 (UK Climate Predictions released in 2009) which looks at three different future scenarios –representing low, medium and high levels of GHG emissions –and models on a probabilistic basis, likely trends in precipitation and temperature. For more information on this work see – http://ukclimateprojections.defra.gov.uk/ content/view/12/689/ In addition, the UK Climate Change Act gives the Secretary of State the power to direct reporting authorities – organisations with functions of a public nature and statutory undertakers – to produce reports on:

• the current and future predicted impacts of climate change on their organisations • proposals for adapting to climate change For adaptation report – www.defra.gov.uk/environment/ climate/sectors/reporting-authorities/

Marginal cost of abatement curves This is a technique that provides an indication of how much it costs to mitigate a set amount of GHG. These curves are useful in deciding what actions to take first. McKinsey & Company are one among many organisations that prepare these – https:// solutions.mckinsey.com/ClimateDesk/default.aspx This information is useful in deciding what needs to be achieved in terms of mitigation efforts.

ISSN 1744-702X (print) Chartered Institute of Management Accountants 26 Chapter Street London SW1P 4NP United Kingdom T. +44 (0)20 7663 5441 E. research@cimaglobal.com www.cimaglobal.com Š October 2011, Chartered Institute of Management Accountants