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Computer Sciences Corporation : Process Industry Doubles Down on Energy Management and Resource Efficiency to Boost Business Value from Sustainability Initiatives

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10/28/2011 | 07:05pm CET

Survey Shows Shift to Business Value Strategy

A survey released today by CSC (NYSE: CSC) and Chemical Week magazine finds that leading companies are pursuing the financial and competitive advantages derived from sustainability initiatives such as energy management and environmental impact reduction programs. This year's findings also highlight the broad growth initiatives underway to meet increasing global opportunities in harnessing clean energy, expanding food production and providing clean drinking water. Underlying these initiatives is a rapid adoption in the use of automation to address escalating product regulatory complexity and global expansion.

CSC identifies the following as the key components of sustainability: energy management, governance, risk management, product stewardship, carbon and environmental reporting, worker safety and other regulatory mandates such as cybersecurity.

The annual survey, now in its third year, includes interviews of senior executives at more than 200 leading global process industry companies to identify key challenges, new opportunities and top initiatives. The 2011 survey results reinforce trends from last year's findings, noting that while regulatory compliance is important, most companies are leveraging sustainability as a top business initiative to drive growth and cost competitiveness.

For the complete results and to register for a live CSC/Chemical Week webcast featuring insights into the survey findings (November 2 at 10:00 a.m. EDT), visit www.csc.com/2011sustainabilitysurvey.

"This year's survey results highlight that companies are taking in -- and preparing for -- expanded and more complex product regulations and deriving more value from their sustainability programs through an emphasis on energy management, zero emissions products and resource efficiency," said Chuck Deise, vice president, Process Industries, at CSC. "Unsurprisingly, government-mandated regulations continue to dominate sustainability expenditures, closely followed by energy management. The majority of companies are also investing in technologies to automate product regulatory compliance."

Global leaders such as Dow Chemical are using sustainability to accelerate innovation in resource efficiency by making products with fewer resources such as water to aid the bottom line. Dow aims to develop at least three breakthrough technologies to meet world challenges by 2015, and to improve energy intensity across the company by 25 percent in 2015, up from 2 percent in 2010.

"In the past two years, in particular, we have seen dramatic improvements in resource efficiency," says Neil Hawkins, a board member for Dow responsible for sustainability.

This year's survey also provides evidence of a sharp increase in the number of companies reporting customer imperatives on sustainability performance in their buying decisions. Procter and Gamble (P&G), which has sales of $83 billion annually from the sale of chemicals such as detergents and shampoos direct to the consumer, views sustainability less as a business opportunity and more as a business imperative. The key message from P&G's customers is that eco-friendly products have to provide equal performance and be available at equal cost to existing products.

"The mainstream consumer -- about 70 to 80 percent of the population -- will not pay more and will not tolerate trade-offs in performance or cost, and this is the consumer we target in our strategy," says Len Sauers, vice president, Global Sustainability, at P&G.


Sustainability Resources and Budget

In terms of internal resources and budgeting, government-mandated regulations continue to dominate sustainability expenditures today. These are now followed closely by energy management.

Sustainability Agenda

There is a sharp increase in the number of companies reporting customer imperatives on sustainability performance in their buying decisions. Most sustainability issues gained importance in 2011, and energy and regulatory compliance importance is consistent with the commitment of resources and budget. The increase in renewable energy and water conservation shows an additional interest in cost savings, and likely capital investment to achieve additional benefits.

Green House Gas (GHG)/Carbon Management

Respondents indicated significant progress toward common enterprise-wide carbon management since last year's survey. Those in the top level of sophistication moved from 15 percent last year to 26 percent this year.

Energy Management

ISO 50001 certification was ranked "most important" by respondents, meaning that companies are gearing up capabilities to more tightly manage energy costs, measure efficiency and reduce their environmental impact. Integration of energy and sustainability performance is also becoming more common, and manufacturers are relying more on capital investments to achieve energy efficiency.

Manufacturers are still in the early stages of managing production energy costs, representing a large potential upside. Companies are prepared with sufficient metering and measurement tools, but have not connected them sufficiently for real-time capture and monitoring against standards.

Climate Impact

While chemical production consumes and discharges vast amounts of water, few companies have an understanding of how future water availability and water levels will affect their operations. Leading companies are concerned about water consumption during production and throughout the product life cycle, but most are not properly prepared to address climate-related risks to their current and future operations.

Product Regulatory/Stewardship

Chemical companies are less confident in 2011 than in 2010 of their ability to comply with product stewardship and regulatory requirements. This is likely due to a comfort level they achieved last year in getting through the first registration period for REACH, only to be met with new requirements in other jurisdictions that changed their reality in 2011.

The highest correlation to product safety is the burden placed on the Product Stewardship organization for global GHS expansion, and expanded (M)SDS labeling requirements, followed closely by the complexity expansion of (M)SDS authoring requirements. The survey indicates that executive management recognizes the importance of Product Stewardship, in light of increasing complexity and the explosion of EH&S Product Safety implementations.

Life-Cycle Assessment (LCA)

The high cost of LCAs and historic lack of financial justification have resulted in low adoption levels, with nearly one-third of respondents indicating that less than five percent of their products are subject to this analysis. Within three years, all respondents indicated their products subject to LCAs would expand well beyond current levels, indicating a significant investment and importance to their product strategies.

The most common LCA focus now, and over the next three years, is in Manufacturing Operations. This is reflective of the relative ease of internal measures, compared with the complexity of getting consistent and compatible data from suppliers and customers. The least common focus areas, raw material selection and end of life management, are indicative of the significant challenges to gain both cooperation and overcome the lack of current information standards. While leading companies stress the importance of LCA to collaboration and innovation, most respondents indicate they expect LCAs to bring about additional energy savings and reduction to human health risks.

Plant Cybersecurity

Most respondents fully expect cyberattacks on their manufacturing facilities (a concern made more salient by the perceived vulnerability of industrial control systems to threats such as Stuxnet), and most believe they are sufficiently prepared to detect and stop them before damage occurs. Interestingly, there is no change in perceived plant risks (from 70 percent of companies in 2010 planning to expand investment in new capabilities to fend off attacks). The primary pressures for investment emanate from concern over increasing threats, internal company risk management policies and new government regulations, such as the Chemical Facilities Anti-Terrorism standards (CFATS).


The Third Annual Global Compliance and Sustainability Survey -- which covered energy management, governance risk management, product stewardship, carbon and environmental reporting, worker safety and plant cybersecurity -- was conducted from August to October of 2011. For complete results of the survey, visit www.csc.com/2011sustainabilitysurvey.

About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today's business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,100 people in more than 30 countries around the world.

About CSC

CSC is a global leader in providing technology-enabled business solutions and services. Headquartered in Falls Church, Va., CSC has approximately 96,000 employees and reported revenue of $16.2 billion for the 12 months ended July 1, 2011. For more information, visit the company's website at www.csc.com.

Chris Grandis
Media Relations Director
CSC Corporate
Bryan Brady
Vice President, Investor Relations
CSC Corporate

© Business Wire 2011
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Financials ($)
Sales 2017 7 671 M
EBIT 2017 642 M
Net income 2017 131 M
Debt 2017 1 982 M
Yield 2017 0,92%
P/E ratio 2017 61,28
P/E ratio 2018 26,02
EV / Sales 2017 1,47x
EV / Sales 2018 1,42x
Capitalization 9 285 M
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Computer Sciences Corporat Technical Analysis Chart | CSC | US2053631048 | 4-Traders
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Mean consensus HOLD
Number of Analysts 15
Average target price 72,4 $
Spread / Average Target 10%
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John Michael Lawrie Chairman, President & Chief Executive Officer
Paul N. Saleh CFO, Principal Accounting Officer & EVP
Dan Hushon Chief Technology Officer, VP & GM-Cybersecurity
Erich Windmuller Chief Information Officer
Brian Patrick MacDonald Independent Director
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