At the speed of ideas™

Corporate Responsibility Report 2011

Every year, Alcatel-Lucent shares its commitments, achievements and perspectives on Corporate Responsibility through the publication of this comprehensive report. For 2011, we expanded the report to thoroughly address the requirements of our key reporting frameworks. ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message ResponsibIlity overview Cah iN

This Corporate Responsibility (CR) report And finally, we have attempted to ABOUT THIS covers Alcatel-Lucent’s performance for ensure, that this year our report is also READ OUR the year 2011 in the areas of corporate consistent with the principles being LATEST TWEETS REPORT responsibility and sustainability, with established by the French law Grenelle 2, additional information from early 2012. which will come into effect in 2013. Our Corporate Our report consolidates all Alcatel-Lucent Reporting Portal very year, Alcatel- CR activities worldwide, focusing on key The auditing firm Ernst & Young has features a new Lucent shares its achievements and future objectives. conducted an independent review of discussion forum so that commitments, It presents relevant facts and examples it — that review and its conclusions you can share your E of some of the most compelling local can be found in the Independent thoughts and ideas on achievements and initiatives our employees are engaged Verification Statement on page 171. some of the issues perspectives on Corporate in around the world. Unless otherwise described in our various Responsibility through the stated, all performance data concerns In 2012, for the first time, we are reports. We welcome publication of this the company’s global operations. providing integrated access to a variety you to engage with us at of major reports and general information C www.alcatel- comprehensive report. An important component of our overall about Alcatel-Lucent’s strategy, business lucent.com/corporate- For 2011, we expanded public reporting, this document is and financial performance on our reporting the report to thoroughly intended for the full range of Alcatel- new Corporate Reporting Portal at: Lucent stakeholders – customers, For the second year, the report was Read more address the requirements investors, employees, analysts, prepared according to the sustainability C of our key reporting media, suppliers, government and reporting guidelines of the Global This portal includes access to the Alcatel- non-governmental organizations, and Reporting Initiative (GRI). The 2010 edition frameworks. Lucent Annual Review, the Document de other members of the communities received the GRI Application grade B+. Référence, the Annual Report on Form in which we are present. We submitted this edition to the GRI 20-F, and Additional Information reports. organization for its assessment and this Alcatel-Lucent has been publishing year we earned a GRI Application Level This portal features a new discussion annual Corporate Responsibility reports Check Statement A+ Alcatel-Lucent has forum so that you can share your since 2002. Since 2007, this report also applied the ‘Guidance on Defining thoughts and ideas on some of the — along with regularly updated CR Report Content’ and the associated issues described in our various reports. information — is only available online at: Principles as defined by the GRI.

C Read more on our Corporate Responsibility A For more information on GRI, see p. 152 Your feedback, suggestions and questions website are important to us. Please send them The report also follows the ten principles of to [email protected]. We have chosen not to print it for the United Nations Global Compact and is environmental reasons and urge you aligned with the Advanced Level principles to be eco-friendly and think of the of the United Nations Global Compact. environment before printing the report yourself. Our last edition A For more information on the United Nations Global Compact, see p. 31 was released in June 2011.

i ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

The interactive features of this Experience Augmented Reality ABOUT CONTENT CEO CORPORATE COMPANY SUPPLY GOVERNANCE ETHICS ENVIRONMENT OUR PEOPLE SOCIETY GRI VERIFICATION GLOSSARY report allow you to navigate Augmented Reality could dramatically THIS REPORT SUMMARY MESSAGE RESPONSIBILITY OVERVIEW CHAIN CEO MESSAGE easily between sections change the way we use mobile phones! The navigation bar on the top of This technology uses recognition ith these global changes, the and FP3 launch are just two examples Wexpectation that companies such as of the innovation we are bringing to the each page is provided to ease your of images in reports, magazines, Alcatel-Lucent accept the responsibility marketplace and co-creating with our of being committed corporate citizens is customers and partners. We are taking “I am very proud that “the norm” rather than the exception. steps to make all of our operations Alcatel-Lucent earned the greener, from the solar ‚ eld that now navigation across the document advertisements and websites to t makes no sense to think that when provides some of the power for our rank of sector leader in times are good and pro‚ ts are I Bell Labs headquarters in New Jersey the 2011 Dow Jones easy, then we can “afford” Corporate to more telecommuting options for Sustainability Index. It was and facilitate your reading. provide immediate access to additional Responsibility activities. Corporate our employees. All of our employees an objective measurement responsibility and sustainability has reviewed and acknowledged our Code of of our progress in ensuring to be part of our business strategy, in Conduct and know that we have a zero we act and behave as a information on your smartphone. good times, bad times and mediocre tolerance policy regarding any violations BEN VERWAAYEN times, day in and day out. Customers balanced, contributing of our ethics and compliance standards. CEO OF ALCATELLUCENT – consumers and enterprises – want global company.” Tens of thousands of my Alcatel-Lucent VIDEO to work with companies that treat colleagues also took part in volunteer employees with respect. They want to programs supported by the Alcatel- We also have a huge role to play in deal with a company that invests in talent Lucent Foundation, and I know that extending the bene‚ ts of advanced In this edition, we offer you an and diversity, operates with integrity, number and the impact will grow in 2012. communications technology to This indicates a video innovates in green and is engaged with Watch the video underserved communities and the communities in which they operate. ut now we need to do more ‘IT’S HOW WE WORK’ doing it using green innovation. Augmented Reality experience to – maintenance is not enough. Investors look for companies that B Alcatel-Lucent is available. We want to strengthen our nd ‚ nally, green is a necessity for To experience produce good ‚ nancial results, but Augmented Reality, commitment to sustainability and Athe industry as well as a response to 1. Download the more and more they also want to access and watch our videos on your invite others to partner with us and climate change and a driver of economic app using the QR code know how they get those results. Innovation Inside: 2. Scan the video contribute to our commitments. growth. Today’s video revolution requires picture with your phone. am very proud that Alcatel-Lucent a complete shift in the way telecom n 2012, our challenge will be to Read more earned the rank of sector leader in companies think about their solutions. smartphone/tablet, by interacting I embed Corporate Responsibility Augmented Reality by MNC AUGMENTED REALITY the 2011 Dow Jones Sustainability I Therefore, we will increase our ambitions and sustainability across the Index. It was an objective measure of in green innovation to be the absolute he world is changing every single day. Whole DNA of our organization. our progress in ensuring we act and industry leader in innovative, eco- with the online or print version of regions are undergoing massive changes. For behave as a balanced, contributing global We will put more focus on diversity sustainable communications technologies. some, tough economies are challenging people’s This icon indicates that T company. And it was a proud moment for – particularly in the area of gender So as you read through this report, ways of living. For others, worlds of opportunities are our employees to know they work for a equality – as well as develop more our Corporate Responsibility report. know that I am very excited about the opening as emerging economies now have emerged. company that wants to make a difference. of an understanding of cultural progress we made in 2011, but am you can access an Climate change, for example, is making its impact felt differences. This will be an important The augmented reality features of n 2011 our Bell Labs researchers and even more excited about what we will from pole to pole, but it is also spurring new innovation element in our ability to attract and This experience is available only on homegrown talents across the company accomplish – with you – in 2012. I retain the kind of talent needed by a as single biggest opportunity for the 21st century. And launched revolutionary products making augmented reality video. global high-tech company like ours. Ben Verwaayen this Corporate Responsibility report (1) (2) the digital economy and communications technology great contributions to eco-sustainability the iPhone , Android smartphone , are revolutionizing virtually every facet of people’s and to digital inclusion. Our lightRadio™ lives across the globe. (3) are powered by MNC, the mobile iPad and Android tablet. 1 PODCAST services factory of Alcatel-Lucent. MNC’s innovative mobile marketing This indicates a podcast How to use Augmented Reality in Whenever you see this icon next to an offerings include mobile direct is available. the report image in the report, point your marketing and geolocation NN Download the Augmented Reality smartphone/tablet at the image and WEBSITE campaign enablement, m-Payment Application for your mobile device your device will automatically serve and financial services, m-Couponing This means you can find from the following QR code. up extra content. more detailed information customer loyalty programs. on the Internet. You can learn more about MNC and To experience Augmented Reality, its mBox platform for managing CHECKMARK 1. Download the mobile transactions at app using the QR code www.mnc-services.com This shows the highlighted 2. Scan the video C indicator or qualitative picture with your phone.

assertion has been http://www.mnc-services.com/ALUApp/ reviewed by Ernst & Young as part of the NN Switch on the application then choose independent assurance “Experience Augmented Reality” process for 2011.

read more (1) iPhone is a trademark of Apple, inc., This means you can find registered in the U.S. and other countries. more detailed information (2) Android is a trademark of Google, inc. (3) iPad is a trademark of Apple, inc., within the report. registered in the U.S. and other countries.

ii ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI V erificATion Grlossa y THis ReporT Summary message ResponsibIlity overview ChaiN

3.0 2011 CORPORATE RESPONSIBILITY CONTENT CEO MESSAGE PERFORMANCE AND REPORTING (p9) ALCATEL-LUCENT COMPANY OVERVIEW 3.1 2011 CR achievements and progress (p9) SUMMARY 3.2 Social and environmental indicators (p14) (p1) 3.2.1 Social indicators (p14) 1.0 ABOUT ALCATEL-LUCENT (p39) 3.2.2 Environmental indicators (p16) 1.1 The Company in brief (p39) 3.3 CR commitments for 2012 and beyond (p21) 1.2 The business at a glance (p40) ABOUT THIS REPORT CORPORATE RESPONSIBILITY OVERVIEW 3.4 Hall of Fame (p23) 1.2.1 Networks (p40) 3.4.1 Receiving worldwide recognition (p23) 1.2.2 Software, Services & Solutions (S3) (p40) 1.2.3 Enterprise (p41) (i) 1.0 OUR APPROACH TO CORPORATE 3.4.2 Environment, health and 1.2.4 Customer Sales organizations (p41) RESPONSIBILITY (p3) safety awards (p24) 1.2.5 Global Customer delivery (p41) 1.1 The Alcatel-Lucent CR vision (p3) 3.4.3 Good in green (p24) CONTENT SUMMARY 1.2 Priorities and values (p4) 3.4.4 Diverse and talented (p25) 2.0 INNOVATION AT ALCATEL-LUCENT (p41) 1.3 Materiality assessment (p4) 3.4.5 Recognition around the world (p26) 2.1 About Bell Labs (p41) (iii) 1.4 Environment, health and 4.0 OUR ENGAGEMENT WITH 2.1.1 Profile of a research leader (p41) safety management (p5) STAKEHOLDERS (p27) 2.1.2 Recognized for innovation (p42) 1.4.1 Our EHS management system (p5) 4.1 Dialogue and action (p27) 2.2 Managing innovation at Alcatel-Lucent (p43) 1.4.2 OHSAS 18001 (p5) 4.2 Customer relationships (p28) 2.2.1 Patent portfolio management (p43) 1.4.3 The EHS compliance audit program (p6) 4.2.1 Customer satisfaction 2.2.2 Leveraging our talents (p44) 1.4.4 Risks related to climate change (p6) survey program (p28) 2.2.3 2011 breakthroughs and 1.5 Approach to marketing 4.2.2 Customer service channels (p29) key innovations (p44) and communications (p6) 4.2.3 Customer service quality (p29) 2.0 MANAGING OUR CORPORATE 4.2.4 Customer advocacy GOVERNANCE RESPONSIBILITY (p7) at Alcatel-Lucent (p30) 2.1 The Alcatel-Lucent Corporate 4.3 United Nations Global Compact (p31) 4.4 World Economic Forum (p32) Responsibility Council (p7) 1.0 BOARD OF DIRECTORS 4.5 Global eSustainability Initiative (p34) 2.2 Corporate Responsibility operations (p8) GOVERNANCE SYSTEM (p46) 4.5.1 Climate Change Working Group (p34) 1.1 Separation of functions (p46) 4.5.2 Energy Efficiency Working Group (p34) 1.2 Staggered Board 4.5.3 Communications Working Group (p34) – membership and diversity (p46) 4.6 Public Affairs (p35) 1.3 Selection criteria and independence 4.6.1 Contributing to a of the Directors (p47) sustainable Internet (p35) 1.4 Ethics and absence of conflicts of interest (p47) 4.6.2 Furthering the cause of 1.5 Board duties (p47) digital inclusion (p36) 4.6.3 Corporate governance (p37) 4.7 Responsibility to shareholders (p37)

iii ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI V erificATion Grlossa y THis ReporT Summary message ResponsibIlity overview ChaiN

2.0 BOARD EFFECTIVENESS 2.0 OUR COMPLIANCE 4.0 OUR APPROACH PART 3: REDUCING AND TRANSPARENCY (p48) GOVERNANCE STRUCTURE (p56) ENVIRONMENT OUR CARBON FOOTPRINT (p89) 2.1 Dialogue with Directors (p48) 2.1 A global compliance governance 4.1 Tracking and reporting on 2.2 Board access to information (p48) organization (p56) carbon emissions (p89) 2.3 Assessment of the Board’s own work (p48) 2.2 The Role of the Board of Directors (p56) 1.0 OUR ENVIRONMENTAL SUSTAINABILITY 4.1.1 Commitments and achievements (p89) 2.4 Communication with the shareholders (p48) STRATEGY (p69) 4.1.2 Scope 1, 2 and 3 emissions (p91) 3.0 OUR ANTI-CORRUPTION COMPLIANCE 1.1 How we approach environmental 4.1.3 Green teams (p91) 3.0 SENIOR MANAGEMENT REMUNERATION (p49) PROGRAM (p57) sustainability (p69) 4.2 Living our best practices (p92) 3.1 Principles (p49) 3.1 Anti-corruption approach (p57) 1.2 Committed at the highest levels (p69) 4.2.1 Electricity consumption (p92) 3.2 Executive Directors (p49) 3.2 Corporate Investigation Services (p57) 1.3 Engaging for success: 4.2.2 Travel, commuting and 3.3 Management Committee (p49) 3.3 Law Division (p58) stakeholder activities (p70) telecommuting (p94) 3.4 Members of the Board of Directors (p50) 4.0 COMPLIANCE HOTLINE (p59) 1.4 Governance and sustainability (p71) 4.2.3 Protecting biodiversity (p95) 4.0 CORPORATE RESPONSIBILITY (p50) 4.1 Data and metrics on violations of the 1.5 Adopting common carbon footprint 4.2.4 Paper products (p95) Code of Conduct (p59) assessment standards for ICT products (p71) 4.2.5 Conserving water (p95) 5.0 INDEPENDENCE OF STATUTORY 4.2 Management of incidents declared 4.2.6 Handling spills (p96) AUDITORS AND INTERNAL AUDIT (p50) 2.0 OUR APPROACH PART 1: DEVELOPING through the Compliance Hotline (p59) ECO-SUSTAINABLE NETWORKS (p73) 4.3 Encouraging eco-awareness among 6.0 E-NOTICE OF MEETING AND E-VOTE our people (p96) 5.0 PRIVACY PROTECTION AND 2.1 Measuring impact from end to end (p73) FOR 2012 SHAREHOLDERS’ MEETING (p50) 4.3.1 Earth Week 2011 (p96) INFORMATION SECURITY (p60) 2.2 Research and innovation (p75) 4.3.2 Our people making a difference 7.0 OUR APPROACH TO RISK AND CRISIS 5.1 Commitment to privacy principles (p60) 2.2.1 Extreme green innovation (p75) around the world (p97) MANAGEMENT (p51) 5.2 Governance of privacy-related activities (p60) 2.2.2 Open innovation (p75) 7.1 Enterprise Risk Management (p51) 2.2.3 The GreenTouch™ Consortium (p75) 6.0 INFORMATION SECURITY (p61) 7.2 Business continuity and 2.2.4 Other green research partnerships (p77) 6.1 Governance of information OUR PEOPLE crisis management (p52) 2.3 Reducing the impact of our products security-related activities (p61) 7.3 Contingency plans for environmental and solutions (p78) 6.2 Ensuring the security of information 2.3.1 Managing materials (p78) and CR-related risks (p52) 1.0 FOCUSED ON OUR PEOPLE (p99) systems and databases (p62) 2.3.2 Safety within the 6.3 Preventing hacker attacks (p62) electromagnetic environment (p79) 2.0 OUR VALUES (p100) ETHICS, COMPLIANCE AND BUSINESS CONDUCT 7.0 COMPLIANCE RISK ASSESSMENT, 2.3.3 Packaging and distribution (p79) 2.1 A platform for leadership (p100) ENHANCEMENT AND MITIGATION (p63) 2.3.4 Increasing the energy efficiency 2.2 Global human rights policy (p100) of products in use (p80) 3.0 OUR EMPLOYEES (p102) 1.0 OUR APPROACH TO ETHICS 8.0 EDUCATION AND TRAINING (p64) 2.3.5 Take-back, remanufacturing AND COMPLIANCE (p54) 8.1 Anti-corruption training (p64) and recycling (p83) 4.0 FOSTERING INTERNAL DIALOGUE (p103) 1.1 Communicating ethics and compliance (p55) 8.2 Internal communications (p65) 4.1 Communication at Alcatel-Lucent (p103) 3.0 OUR APPROACH PART 2: ENABLING A 1.2 Zero tolerance policy (p55) 4.2 Employee recognition (p104) 9.0 INTERNATIONAL INITIATIVES (p66) LOW-CARBON ECONOMY (p84) 1.3 Competition (p55) 4.3 Discussions with unions (p105) 9.1 World Economic Forum (p66) 3.1 The carbon-reducing capacity of ICT (p84) 9.2 Industry/trade associations (p67) 3.2 Bringing new capabilities to smart grids (p84) 5.0 EMPLOYEE HEALTH AND SAFETY (p106) 9.2.1 Industry dialogue on human rights (p67) 3.3 Propelling smart transportation (p86) 9.2.2 Ethics & Compliance Officer 3.4 Building smart cities (p87) Association (p67)

iv ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI V erificATion Grlossa y THis ReporT Summary message ResponsibIlity overview ChaiN

6.0 DIVERSITY AND EQUAL OPPORTUNITY (p107) 6.1 Gender diversity (p107) SOCIETY SUPPLY CHAIN GLOBAL REPORTING INITIATIVE 6.2 Being a multicultural company (p109) 6.3 Non-discrimination (p109) 6.4 Accessibility in the workplace (p111) 1.0 OUR APPROACH TO DIGITAL INCLUSION (p121) 1.0 OUR COMPREHENSIVE SUPPLY CHAIN 1.0 GRI Application Level Check A+ (p153) 1.1 Why digital inclusion matters (p121) APPROACH (p140) 6.5 Generation diversity (p111) 2.0 GRI Content Index (p154) 1.2 Impact on communities (p124) 2.0 MANAGING OUR SUPPLY CHAIN (p141) 7.0 DEVELOPING OUR WORKFORCE (p113) 1.3 Innovation for communities (p125) 2.1 Collaboration and communication (p141) 7.1 Workforce planning (p113) 1.4 Ensuring access to education (p126) 7.2 Employee learning (p113) 2.2 Enhancing our supplier scorecard (p141) INDEPENDENT VERIFICATION STATEMENT 7.3 Global framework (p114) 2.0 PURSUING SOCIAL INNOVATION (p127) 2.3 Engaging with suppliers (p141) 2.3.1 The 2011 supplier convention (p141) 7.4 Online learning (p114) 3.0 HOW WE GIVE (p128) (p171) 2.3.2 Strategic alliances (p142) 8.0 TALENT ATTRACTION AND RETENTION (p115) 3.1 Bringing digital literacy to all (p128) 8.1 The Alcatel-Lucent technical ladder (p115) 3.2 The Alcatel-Lucent Foundation: 3.0 OUR REQUIREMENTS FOR SUPPLIERS 8.2 Performance management (p115) governance (p130) AND SUB-CONTRACTORS (p143) 8.3 Mobility (p116) 3.3 The Foundation grassroots program (p130) 3.1 Adherence to the EICC Code of Conduct (p143) 8.4 Remuneration (p117) 3.3.1 Bridging for Life: South Africa (p131) 3.2 Adherence to international standards (p143) 3.3.2 Making a lasting impact in Uganda (p131) 3.3 Products and services that support 9.0 TALENT DEVELOPMENT (p117) 3.3.3 Promoting women’s CR commitments (p143) 9.1 Personal development (p117) entrepreneurship in Poland (p131) 3.4 Strong environmental performance (p143) 9.1.1 New leadership pipeline (p117) 3.3.4 Grooming new leaders 3.5 Product traceability and conflict minerals (p144) 9.1.2 New leadership development offer in Hong Kong (p132) 3.6 Supplier diversity (p145) for corporate high potentials (p118) 3.3.5 Developing junior achievers 4.0 ASSESSING SUPPLIER 9.2 Mentoring (p118) in Canada (p132) CR PERFORMANCE (p146) 9.2.1 First Forum Passeport Avenir 3.3.6 Mentoring in the United States (p132) 4.1 Supplier risk assessments (p146) in Suffren (p118) 3.4 Global signature program (p133) 4.2 EcoVadis CR ratings approach (p147) 3.4.1 “ConnectEd” to youth (p133) 10.0 ENABLING FLEXIBLE WORK 4.3 Executing CR assessments (p147) 3.4.2 The employee connection (p134) ARRANGEMENTS (p119) 4.4 CR audits (p147) 10.1 Telecommuting (p119) 3.5 Employee volunteering (p134) 10.2 Services for employees (p119) 3.5.1 China (p135) 5.0 SUPPLIER IMPROVEMENT PLANS (p149) 3.5.2 Brazil (p135) 5.1 Supplier improvement program (p149) 11.0 HOW WE MANAGE REORGANIZATION 3.5.3 Portugal (p135) 5.2 Developing innovative tools (p149) AND RESTRUCTURING (p119) 3.5.4 Spain (p136) 5.3 Spreading the sustainability message (p150) 3.5.5 Indonesia (p136) 5.4 Supporting suppliers (p150) 3.5.6 Korea (p136) 5.5 Supplier stories (p151) 3.5.7 India (p136) 6.0 COLLABORATIVE INITIATIVES (p151) 3.5.8 Cambodia (p136) 6.1 Collaborating with industry (p151) 3.5.9 Germany (p137) 6.2 Collaborating with small and 3.6 Giving in kind (p137) medium-sized enterprises (p151) 3.7 Responding when disaster strikes (p137) 6.3 Collaborating with NGOs (p151) 3.8 Corporate charitable contributions (p137) v ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary MESSAGE ResponsibIlity overview ChaiN

CEO MESSAGE

ith these global changes, the and FP3 launch are just two examples Wexpectation that companies such as of the innovation we are bringing to the Alcatel-Lucent accept the responsibility marketplace and co-creating with our of being committed corporate citizens is customers and partners. We are taking “I am very proud that “the norm” rather than the exception. steps to make all of our operations Alcatel-Lucent earned the greener, from the solar field that now t makes no sense to think that when provides some of the power for our rank of sector leader in times are good and profits are I Bell Labs headquarters in New Jersey the 2011 Dow Jones easy, then we can “afford” Corporate to more telecommuting options for Sustainability Index. It was Responsibility activities. Corporate our employees. All of our employees an objective measurement responsibility and sustainability has reviewed and acknowledged our Code of of our progress in ensuring to be part of our business strategy, in Conduct and know that we have a zero we act and behave as a good times, bad times and mediocre tolerance policy regarding any violations Ben Verwaayen times, day in and day out. Customers balanced, contributing of our ethics and compliance standards. CEO of ALCATEL-LUCENT – consumers and enterprises – want global company.” Tens of thousands of my Alcatel-Lucent to work with companies that treat colleagues also took part in volunteer employees with respect. They want to programs supported by the Alcatel- We also have a huge role to play in deal with a company that invests in talent Lucent Foundation, and I know that extending the benefits of advanced and diversity, operates with integrity, number and the impact will grow in 2012. communications technology to innovates in green and is engaged with Watch the video underserved communities and the communities in which they operate. ut now we need to do more ‘IT’S HOW WE WORK’ doing it using green innovation. – maintenance is not enough. Investors look for companies that B We want to strengthen our nd finally, green is a necessity for To experience produce good financial results, but Augmented Reality, commitment to sustainability and Athe industry as well as a response to 1. Download the more and more they also want to invite others to partner with us and climate change and a driver of economic app using the QR code know how they get those results. 2. Scan the video contribute to our commitments. growth. Today’s video revolution requires picture with your phone. am very proud that Alcatel-Lucent a complete shift in the way telecom n 2012, our challenge will be to Read more earned the rank of sector leader in companies think about their solutions. I embed Corporate Responsibility the 2011 Dow Jones Sustainability I Therefore, we will increase our ambitions and sustainability across the Index. It was an objective measure of in green innovation to be the absolute he world is changing every single day. Whole DNA of our organization. our progress in ensuring we act and industry leader in innovative, eco- regions are undergoing massive changes. For behave as a balanced, contributing global We will put more focus on diversity sustainable communications technologies. some, tough economies are challenging people’s T company. And it was a proud moment for – particularly in the area of gender So as you read through this report, ways of living. For others, worlds of opportunities are our employees to know they work for a equality – as well as develop more know that I am very excited about the opening as emerging economies now have emerged. company that wants to make a difference. of an understanding of cultural progress we made in 2011, but am Climate change, for example, is making its impact felt differences. This will be an important n 2011 our Bell Labs researchers and even more excited about what we will from pole to pole, but it is also spurring new innovation element in our ability to attract and homegrown talents across the company accomplish – with you – in 2012. I retain the kind of talent needed by a as the single biggest opportunity for the 21st century. launched revolutionary products making global high-tech company like ours. Ben Verwaayen And the digital economy and communications technology great contributions to eco-sustainability are revolutionizing virtually every facet of people’s and to digital inclusion. Our lightRadio™ lives across the globe. 1 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

WHAT IF A CORPORATION THOUGHT OF ITSELF AS A GLOBAL CITIZEN FIRST? Corporate responsibility overview

The world is evolving at a rapid pace. Because corporations have an important role to play in that changing global reality, Alcatel-Lucent considers Corporate Responsibility a business imperative.

2 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

1.1 The Alcatel-Lucent CR vision 1.2 Priorities and values 1.3 Materiality assessment 1.4 Environment, health and safety management 1.5 Approach to marketing and communications

We have also incorporated the principles 1.0 of the French Grenelle 2 requirements OUR APPROACH in advance of its legal implementation. TO CORPORATE To better focus both our corporate and CR strategy around those RESPONSIBILITY Our sustainability strategy and progress issues that have the most impact in 2011 led us to be recognized on our business, we performed our by the DJSI as the leader for the first materiality assessment. communications technology (CMT) eric OLSON For more information, see p. 4 sector. This acknowledgement of our A senior vice president, 1.1e Th Alcatel-Lucent CR vision CR performance was further validated adviSory services, bsr F inally, to be a leader in sustainability, we Corporate Responsibility (CR) is a by the GRI B+ level check. We were believe in reaching out to our partners – “To be a leader in business imperative for Alcatel-Lucent. also placed in the “A” band of the customers, businesses, NGOs, members sustainability, we Corporations have an important role to Carbon Disclosure Project (CDP) Carbon of civil society and public stakeholders believe in reaching play in responding to today’s changing Performance Leadership Index and – to help achieve our commitment of out to our partners global reality. We are committed to doing continue to be committed to integrating making communications more sustainable, our share by making communications Watch the video the United Nations Global Compact – customers, ‘BECAUSE EXPECTATIONS ARE HIGH’ more affordable and more accessible. more sustainable, more affordable principles into everything we do. businesses, NGOs, and more accessible as we pursue members of civil For more information, see p. 23 In our stakeholders section, you will our business mission – realizing the To experience A society and public Augmented Reality, see that we partnered with new potential of a connected world – in 1. Download the stakeholders – to stakeholders in our efforts to tackle line with today’s global reality. app using the QR code help achieve our 2. Scan the video today’s global challenges of climate commitment of picture with your phone. change, the transformation to digital In 2011, Alcatel-Lucent signaled a making Read more economies and digital inclusion. bold new direction in sustainability. communications We focused our activities on three more sustainable, Ultimately, we believe the challenge is core priorities: green innovation, more affordable and S ome 50 new targets were published in F or 2012 our objective is to raise the ours, together. our people and digital inclusion. We more accessible. It line with the Dow Jones Sustainability bar again on our CR and sustainability put our values at the core of our For more information about our CR target, cannot be done Index (DJSI) as well as the United Nations activities. We are once again positioning A day-to-day business by adopting a see p. 21 Global Compact to show our ambition our strategy in line with the DJSI but are alone. Ultimately, the zero tolerance policy in regards to to make Corporate Responsibility also integrating the UN Global Compact A For more information about our stakeholder challenge is ours, compliance violations, collaborating engagement, see p. 27 or contact us: a true business imperative. advanced-level principles and performing together.” only with partners who support our [email protected] an A+ GRI application level check. values and actively engaging as citizens CHRISTINE DIAMENTE, We also for the first time participated in communities across the globe. HEAD OF CORPORATE in the reporting guidelines of the RESPONSIBILITY, Global Reporting Initiative (GRI). ALCATEL-LUCENT

3 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

1.1 The Alcatel-Lucent CR vision 1.2 Priorities and values 1.3 Materiality assessmenT 1.4 Environment, health and safety managemenT 1.5 Approach to marketing and communications

1.2 Priorities and values continuous learning while fostering Corporate Responsibility is also Material Topics, 42 topics identified Alcatel-Lucent’s Corporate Responsibility diversity and open dialogue via innovative about putting our core values priorities and values align with the tools to share knowledge and celebrate at the heart of our day-to-day company’s vision of realizing the difference. The Alcatel-Lucent University business:

potential of a connected world. provided 1.3 million hours of training s r to our employees in 2011. Our award- e 1. d Our priorities are to: winning Engage internal social networking We take a zero-tolerance stance on ho l platform is enabling employees throughout compliance violations and reinforce e

the company to share, collaborate and full integrity in every business action tak exchange best practices, leveraging from every employee, as well as treat s

each other’s expertise and talents. each other with respect and empathy. to e c n

2. orta

We collaborate and do business only mp I environment with partners, including suppliers, Lead the industry in developing and contractors and sub-contractors, who Influence on business success deploying globally recognized innovation share and support our values. We in eco-sustainable communications commit to regularly and thoroughly technologies that enable our customers digital inclusion CR Reporting Support Innovation & Support Execution & assess their CR performance and Categories Differentiation Excellence to compete and win in a world facing Realize the potential of a connected partner to ensure improvement. increasing environmental challenges world and digital inclusion by developing Product Innovation Measure, support, increase Product safety to and resource constraints. We seek, with and deploying affordable communication 3. & Environment energy efficiency products customers & communities the GreenTouch™ Consortium initiated solutions that will increase access We commit to engaging – as a company Product stewardship: Managing customer by Bell Labs, to make communications to education and socio-economic and as individuals – with pride and minimize environmental satisfaction networks 1,000 times more energy development to the world’s citizens in impact through lifecycle passion as citizens of the communities Management of efficient than they are today. a sustainable manner. We will address where we are present across the globe. Co-development, R&D electromagnetic digital inclusion through our innovative partnerships (universities/ environment customers) products and solutions, through our 1.3 Materiality assessment Our carbon footprint High Leverage Network™ platform To identify where progress can be made as well as our applications offerings, and to develop new opportunities for Ethics & Compliance Protection of intellectual Anti-corruption & code of Business Conduct property conduct enabling global connectivity. This will improving its approach to Corporate change the way billions of people live Responsibility, Alcatel-Lucent carefully Our people Talent development Employee safety & and work, improve the quality of life monitors and evaluates sustainability well-being Our people around the globe and connect the Diversity issues and trends. In 2011 we carried out Employee engagement Invest in our people and talents while world’s talent to new opportunities. our first formal materiality assessment reflecting the diversity of the markets we to help identify and validate key areas Digital inclusion Affordable and sustainable Social economical & serve and the communities in which we access for digital inclusion environmental impact of of focus within our overall CR strategy. local operations operate. We will ensure our employees This initial assessment involved the work in a stimulating environment of internal analysis of 42 sustainability Supply Chain Supplier CR practices Product traceability

4 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

1.1 The Alcatel-Lucent CR vision 1.2 Priorities and values 1.3 Materiality assessment 1.4 Environment, health and safety management 1.5 Approach to marketing and communications

issues relevant to our industry, spanning I t is also important to note that while to meet the needs of customers who key areas such as customer expectations, the priority issues cited above should increasingly insist on EHS systems HIGHLIGHT risk management, the environment be considered as key areas of focus certified by third parties.D ecisions Impacts of our products on health (operation and product), employees, for Alcatel-Lucent, we must and will regarding third-party certification and safety ethics and governance, products, services, continue to manage or monitor the full are made at the local level based on Alcatel-Lucent assesses the health customers, supply chain, community and range of CR issues and expectations risk, the nature of hazards, customer and safety impacts of 100% of our philanthropy. Each issue was considered facing our company and industry, and requirements and competitive advantage. products for all stages of their by more than 50 Alcatel-Lucent work to improve our strategy and product lifecycle. For example, during executives and sustainability experts management systems over time. The company continues to drive this the design phase, we work with our involved in key company functions same EHS management approach suppliers to avoid using hazardous including finance, R&D, operations, 1.4 Environment, health and safety through its supply chain to minimize materials. We ensure that all legal, human resources, compliance, management the overall impact of its operations. materials are prepared for sales, marketing, procurement, 1.4.1 Our EHS Management System Employees are kept up to date on EHS transportation according to nationally communication, public affairs and Ensuring we conduct our operations in news and issues via the company’s or internationally accepted philanthropy. Our top customers also a safe and environmentally responsible collaborative social media platform regulations. Our technical shared their views on the assessment. manner is an essential part of our CR (Engage), an internal EHSMS website documentation provides specific commitment. Our Environment, Health and weekly summary emails. guidance for the safe use of the As shown in the chart on page 4, and Safety (EHS) Policy provides the product, and there is mandatory the assessment identified five areas framework for improving performance 1.4.2 OHSAS 18001 training or instruction for (encompassing some 20 specific in this area, while our Environment, The company’s health and safety Alcatel‑Lucent Services personnel sustainability issues) as having Health and Safety Management System management systems expanded in that covers a range of topics to the most significant impact on our (EHSMS) facilitates the use of a common 2011 as Alcatel-Lucent Ghana, Alcatel- ensure a safe workplace. Additionally, business and being of greatest management model as we implement Lucent Germany, Alcatel-Lucent Qatar all Alcatel-Lucent products that emit concern to our key stakeholders: the EHS Policy across the organization. and Alcatel-Lucent Turkey obtained radio frequency (RF) energy must NN Product innovation and environment certification inO ccupational Health comply with country-specific Read more about our EHS Policy NN O ur people C and Safety Management Systems regulations for human exposure to RF NN Digital inclusion (OHSAS) 18001:2007. Alcatel-Lucent emissions for manufacturing and The EHSMS is designed to identify risks, NN E thics, compliance and business Turkey also obtained certification inISO product-use phases. Compliance is maintain compliance and promote EHS conduct Environmental Management Systems determined by either analytical excellence. It provides an efficient and NN S upply chain 14001:2004, Alcatel-Lucent Singapore assessment or measurement of effective way to manage EHS issues received BizSafe Level 3 Certification, radiated RF energy. Finally, our associated with products, services Alcatel-Lucent regards all these and Alcatel-Lucent in Nogales, Mexico company requirement dictates that and activities while cost-effectively issues as important and relevant. obtained Safe Industry Certification. all electronic waste is shipped to pursuing continuous improvement in processing facilities that have passed EHS performance. Our EHSMS continues our EHS Liability Assessment. Unless otherwise specified, all electronic waste is processed to recover as much of its recyclable material as possible.

5 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

1.1 The Alcatel-Lucent CR vision 1.2 Priorities and values 1.3 Materiality assessmenT 1.4 Environment, health and safety managemenT 1.5 Approach to marketing and communications

1.4.3 The EHS Compliance Audit Program 1.4.4 Risks related to climate change In our supply chain, these types of The company’s corporate style guides The EHS Compliance Audit Program As is the case with any company with risks are surveyed and physically forbid exaggeration, implicit guarantees determines if EHS programs at global operations, there is the potential addressed by prevention/protection and financial promises in all marketing Alcatel-Lucent facilities are properly for Alcatel-Lucent to be exposed to measures where possible by Alcatel- communications and advertising. implemented and effective, and assures some extreme weather-related risk as a Lucent’s Risk Management Corporate Bell Labs, the CTO and the Marketing management that the organization is result of climate change. However, the function and are, in part, financially teams conduct detailed research and operating in a manner consistent with diversity of our physical locations gives mitigated by insurance vehicles insofar analysis to substantiate the facts EHS policy. Facilities are evaluated us the flexibility to respond to these as they are economically accessible provided in our marketing content. against a number of criteria including risks and ensure business continuity. and market capacity is available. Alcatel-Lucent standards, international These risks could affect our value chain The style guides also forbid disparaging norms, and country-specific federal and because our key suppliers could have Potential exposure worldwide to mentions of competitors, and local regulations. Each location’s EHS material disruptions to their business that hazards such as storms and floods has emphasize the importance of gender- program is also measured against the would then affect our supply chain. Our represented and continues to represent a and culturally neutral language – all established key performance indicator customers are themselves also exposed significant risk. However, at this juncture, part of the company’s commitment (KPI) metric of on-time completion. to the risk of extreme weather events Risk Management has not identified to encouraging the highest levels as many types of telecommunications any additional impact on such exposure of employee development and Audits conducted during 2011 included equipment (such as base stations, IP resulting specifically from climate change. conduct. Other activities include manufacturing and operations in switches and optical communications participation in the Corporate A For more information about Alcatel-Lucent’s Shanghai as well as service delivery/ equipment) are installed in locations Risk Management, see p. 51 Leadership Council, mandatory anti- installation audits in Mexico and where extreme weather events take corruption training and local programs the United States. All sites reviewed place. For that reason, many of Alcatel- 1.5 Approach to marketing for socio-economic development. showed 100% on-time completion of Lucent's products are designed to be and communications all identified EHS audit action items. operated outdoors and to withstand Alcatel-Lucent has put in place a number Our corporate style guides describe extreme weather conditions. Additionally, of measures to ensure its marketing and mandate the proper use of C Read more about Management of Environment, Health and Safety product specifications are customized communications and advertising activities intellectual property, proprietary and and developed to meet the individual remain truthful, legally compliant, and non-proprietary information, trade In 2011, Alcatel-Lucent did not identify needs of our customers, including socially and environmentally responsible. secrets and trademarks. Advisors from any instance in which the company did consideration of their local climate. the company’s Law and Compliance not comply with environmental laws or Alcatel-Lucent has established procedures Alcatel-Lucent’s marketing communications organizations are available to answer regulations regarding the provision and for its installation and engineering are regulated by national and international any employee questions about potential use of its products and services. As such, workforces that ensure their safety as law, and are also subject to voluntary legal issues in our marketing activities. no fines (significant or otherwise) were they perform their work activities. These codes and standards applied across levied against the company for violations procedures are reviewed periodically the organization. The company’s of environmental laws or regulations. and adjusted as needed to ensure our communications are also governed by its employees and contractors are able to Code of Conduct. Alcatel-Lucent reviews work safely in the conditions encountered these regulations, standards and codes on in the field, including conditions at least an annual basis. encountered due to climate change. A For more information about the Alcatel- Lucent Code of Conduct, see p. 65

6 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

2.1 The Alcatel-Lucent Corporate Responsibility CounciL 2.2 Corporate Responsibility operations

Customer satisfaction and brand The company has completely eliminated awareness surveys are conducted hard-copy user guides for its 2010 2.0 HIGHLIGHT regularly to ensure marketing strategies and 2011 Enterprise phone products, The Corporate Responsibility and campaigns align with market and for the fourth consecutive year MANAGING OUR Council expectations and perceptions. We the Corporate Responsibility Report is CORPORATE The Council is the highest level CR incorporate guidelines and feedback from available solely online with no printed governance body and includes the DJSI into our marketing programs. edition. In 2012, Alcatel-Lucent will RESPONSIBILITY 13 members. publish its Annual Report solely online. A For more information about our participation in the DJSI, see p. 23 Alcatel-Lucent also publishes a carbon- Chief Executive Officer neutral customer newsletter by planting 2.1 The Alcatel-Lucent Corporate Alcatel-Lucent regards social media as an trees to offset the carbon dioxide Responsibility Council Head of Corporate Responsibility increasingly important way for us to keep generated during its production. The Corporate Responsibility Council people informed of our business activities is the highest-level CR governance Executive Vice President Human A For more information about these activities, and results and for us to stay attuned to see p. 95 body within Alcatel-Lucent. Resources & Transformation the needs of our various constituencies. As part of our communications strategy To cut back on travel-related greenhouse Chaired by CEO Ben Verwaayen and President Bell Labs & Chief Strategy we seek to foster more dialogue with gas emissions, Alcatel-Lucent continued the head of Corporate Responsibility, Officer internal and external stakeholders to increase the number of virtual events the Council has 13 members including through social media channels and it holds for customers, media, analysts executives from the Management President EMEA & Chief Marketing improve visibility on our company and employees last year, and reduced the Committee as well as two external and Communications Officer activities by taking advantage of the full public industry events it attends by more advisors. It meets quarterly to set range of social media – from a simple than half between 2010 and 2011. We priorities, track progress on commitments Executive Vice President Public employee tweet to strategic press replaced a major internal management and review CR strategy issues. The Affairs announcements and blog posts from our event with a combination of local face- Council also provides perspective leaders, experts and Bell Labs researchers to-face meetings and virtual sessions to on potential risks and opportunities, President Operations – while also exposing those of us within reach more than 12,000 employees. and makes recommendations to the company to new voices and opinions. the Management Committee and Vice President Communications Board of Directors on emerging A For more information, see p. 6, p. 27 Alcatel-Lucent addresses questions and p. 99 or concerns regarding its products and critical sustainability issues Chief Compliance Officer through contacts provided on the for the company at large. I With regard to environmental matters, company website and in product Head of Corporate Finance & Alcatel-Lucent continues to dramatically support and documentation. Investment Office reduce its use of physical media, now Read more about product support sharing the vast majority of its marketing C Chair Alcatel-Lucent Foundation collateral, user guides, magazines and newsletters in electronic format only. Two external advisors: Claude Fussler and Eric Olson

7 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

2.1 The Alcatel-Lucent Corporate Responsibility CounciL 2.2 Corporate Responsibility operations

2.2 Corporate Responsibility operations CORPORATE RESPONSIBILITY STRUCTURE Alcatel-Lucent’s Corporate Responsibility I team defines and drives the BOARD OF DIRECTORS Ernst & young implementation of the company’s CR statement strategy and initiatives worldwide. It is responsible for consolidating all the social, CEO & MANAGEMENT COMMITTEE CR Governance economic and environmental indicators Corporate used to monitor progress. CR operations Responsibility (CR) is throughout the company are handled by considered a priority members of its Corporate Responsibility CR COUNCIL for Alcatel-Lucent’s Network. Network members come from top management. the company’s various business groups A major component and Bell Labs as well as a number of of this is the CR different departments, including Human Council, which is Resources, Office of Business Conduct, chaired by Alcatel- Governance, Purchasing, Risk and Crisis CORP. ORG. CENTRAL ORG. REGIONAL ORG. BUSINESS GROUPS Lucent’s CEO and the Management, Environment, Health Head of CR, and and Safety, Operational Eco-efficiency which includes and Sustainability, CTO Green Strategy, members from the and Eco-environmental engineering. Management MARKETING & GLOBAL CUSTOMER FINANCE AMERICAS NETWORKS COMMUNICATIONS DELIVERY Committee. Network members are responsible for: The Council meets NN Helping define, manage and implement CORPORATE SOFTWARE, SERVICES HR & TRANSFORMATION OPERATIONS EMEA four times a year to RESPONSIBILITY TEAM & SOLUTIONS CR action plans in their respective track CR domains of expertise; BUSINESS & IT achievements and set NN LEGAL APAC ENTERPRISE Ensuring CR messages and actions TRANSFORMATION priorities and goals. align with the company’s overall CR Council conclusions strategy, current global challenges and PUBLIC AFFAIRS are taken up by customer business imperatives; Alcatel-Lucent’s CR NN Serving as ambassadors of Alcatel- BELL LABS & CORP. team, which along STRATEGY Lucent’s CR strategy internally and with the company’s externally. CR Network, ensures internal consistency and harmonization of TEAM/BODY DEDICATED TO CR the company’s CR NETWORK ORGANIZATIONS INCLUDED IN CR NETWORK sustainability strategy.

8 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING

3.1 2011 CR Achievements and progress CHALLENGES 2011 INNOVATION REDUCE THE IMPACT REDUCE OUR CARBON MANAGEMENT OF OUR PRODUCTS FOOTPRINT ON THE S ee page 68 ENVIRONMENT S ee page 68

S ee page 68

CORPORATE RBY 2014: Triple our joint 2011 Status: The number of researchers TBY 2012: Improve the functional TBY 2015: Eliminate PVC from TBY 2020: Reduce our absolute RESPONSIBILITY research projects with working on green research doubled energy efficiency of key all products by 2015.* carbon footprint (CO2 universities on environmentally from 2010 to 2011. Bell Labs has products* by at least 25% by end equivalent) from our operations COMMITMENTS 2011 Status: Completed supplier sustainable technologies in the also more than doubled its number of 2012 (compared to 2010). by 50% of 2008 baseline by 2020. assessment for more than 90% next 3 years. of research projects with green as 2011 Status: On target to meet and of material spend to determine 2011 Status: As of the end of 2011, a major aspect. 2011 Status: A 5-fold increase in exceed this goal. technical and economic feasibility Alcatel-Lucent reduced the carbon green university collaborations of PVC alternatives – driving our footprint from its operations (Scopes BY 2014: Double the percentage * New or recently developed products : Achieved over 2010 (11 research projects in R on an upward lifecycle curve. substitution plans. 1 and 2) by 22% of 2008 baseline. progress in 2011 versus 2 in 2010. of research projects that have environmental sustainability as an * Subject to the availability of : Ongoing 5 additional projects proposed for technically, environmentally and BY 2013: Reduce water 2012. U.S. government funding indirect consequence (or one benefit TBY 2015: Improve the functional R energy efficiency of lightRadio™ economically sound alternatives. consumption by 20% of 2010 : Not achieved proposals will be submitted for of many). Timeframe: 3 years. by at least 75% by 2015 (from 2008). baseline by 2013. 5–10 additional 2012 projects). 2011 Status: Three new research BY 2011: Achieve a 40% increase 2011 Status: Water usage in 2011 : On hold projects in 2011 – smart grid, spatial 2011 Status: On target to meet and R in the number of base stations rose by slightly less than 1%. BY 2014: Double the percentage division multiplexing and green DSL exceed this goal. R deployed with alternative energy Additional employee engagement and of research projects dedicated – up from zero in the previous year. powering solutions (relative to 2010 exterior water measures will be taken directly to green technology (i.e., TBY 2012: Leverage our baseline) by end of 2011. in 2012. innovations whose primary function BY 2014: The target composite innovation to establish common R 2011 Status: We significantly and outcome is the reduction of total percentage of projects methodology for measuring the exceeded the objective with an energy and power consumption, resulting in innovations that have carbon footprint of network increase of 59%, having deployed etc.). An example of such a project either direct or indirect telecommunications products over 793 alternative energy-powered would be Active Antenna Arrays environmentally sustainable benefits their lifecycle. base stations. (also the Large-Scale Antenna Array is approximately 30% of the projects developed for GreenTouch that 2011 Status: Introduced and gaining in the research pipeline over this adoption of Bell Labs developed exploits existing technology – timeframe. massive MIMO – for energy lifecycle assessment methodology efficiency increase as opposed to 2011 Status: Focus on energy through industry consortia and capacity increase). Timeframe: efficiency has been incorporated reporting standards. 2010–2014. into more than 30% of the projects in the research pipeline. This number is expected to further increase over time. 9 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

CHALLENGES 2011 OUR PEOPLE

S ee page 98

CORPORATE RBY 2011: Continue simplifying TBY 2012: Launch a 3-year RBY 2011: Grow local management TB Y 2011–2014: Extend existing RBY 2011: Define top RESPONSIBILITY and standardizing HR processes workforce plan with tracks and mobility: +50% campus equal pay agreements: engage management Corporate COMMITMENTS by deploying MyHR Information development plans, human hirings by 2012. discussions in Europe and Asia by Responsibility metrics. System worldwide. Systems and capital performance metrics. end of 2011. By 2014 unexplained 2011 Status: Achieved – Campus 2011 Status: Each Alcatel-Lucent tools support business needs and gender pay gap <5%. 2011 Status: Workforce planning hirings increased by 81%. organization has identified a contribute to the achievement project completed; end-to-end 2011 Status: A plan to address measurable diversity-related of organizational efficiency Resource Planning processes will gender gaps of more than 5% in objective for their business and effectiveness. TB Y 2012–2014: Increase : Achieved be deployed in 2012. representation of women in Alcatel-Lucent’s 10 largest countries parameter and will show progress 2011 Status: The deployment of a management positions to at least will be finalized in 2012. against it annually. : Ongoing business intelligence data warehouse RBY 2011: Increase internal match the representation in portal and HR portal led to better mobility by 20% worldwide. company population by 2014: +20% RBY 2012: Extend teleworking RBY 2013: Build a systematic, : Not achieved data accessibility while improving women among corporate executives. agreement in top 20 countries. company-wide knowledge 2011 Status: In 2010 internal hiring the timing of actions for people management system, interactive accounted for 33% of all hiring. The 2011 Status: Number of women in 2011 Status: Alcatel-Lucent’s top : On hold managers and employees. knowledge platforms. Rebalance internal hiring was actually increased executive roles increased by 6%, but 20 countries all have teleworking training portfolio in order to by more than 50% to take the “market overall proportion remained at 15% policies in place. BY 2011: Have 80% of our high promote greater employee S share” of internal hiring to 51% overall. due to rise in the number of male potentials change position mobility and career development executives. Need identified to over 3 years. BY 2011: Finalize discussions opportunities across the company. expand pipeline of women leadership R BY 2011: Launch a group-wide on Global Committee for Target 2011: rebalance global/local 2011 Status: We made important R candidates through sponsorship, professional accreditation Information and Dialogue. trainings from 40/60 today to 55/45. progress as more high-potential program over 3 years: single training mentoring and coaching. Solid action 2011 Status: In 2011 we conducted employees were exposed to new and accreditation framework plan in place for 2012 with 5 focus 2011 Status: Training portfolio discussions with the European unions opportunities via EMEA and Global applying to all critical functions. areas: awareness building, leadership rebalanced: in 2011 the split between to adapt our current agreement based Customer Delivery reorganizations. Triple the certified People@ALU pipeline, staffing/recruitment, work/ global/local trainings was 58/42. on more than 16 years experience to Significant best practice population from 2009 to 2011. life balance, and equal pay. improve our communication with our improvements implemented via BY 2011: Launch a company- 2011 Status: A total of 1,057 unions at company level. The current R Leadership Pipeline process. We Company shifted 2012 target of 20% wide sponsored GenY employees have been accredited ECID platform will be extended to will continue this goal in 2012. increase in executive women to inclusion program. between 2009 and 2011. Community other regions that can be invited. At 2014, a realistic timeframe in which learning concept for critical functions the time of publication of this report, 2011 Status: Social media platform BY 2011: Triple the number to enact action plans and propel R (“hot profiles”) was launched. the official union position was not created (Engage) to bring the local of employees that complete measurable progress. yet made. GenY leads together and trigger professional certification, with cross-collaboration. impact on overall skill development TB Y 2011–2014: Launch SA 8000 and employability. certification in one of Alcatel- Lucent’s major countries in 2011 for 2011 Status: 541 accreditations were certification in 2012; extend to all finalized in 2011; a total number large countries by 2014. of 1,057 employees have been accredited between 2009 and 2011. 2011 Status: SA 8000 certification launched in Brazil and Mexico. Evaluation of other countries ongoing.

10 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

CHALLENGES 2011 STAKEHOLDERS: STAKEHOLDERS: STAKEHOLDERS: STAKEHOLDERS: CUSTOMER WORLD ECONOMIC PUBLIC AFFAIRS SOCIETY RELATIONSHIP FORUM See page 35 See page 120 See page 28 See page 32

CORPORATE RBY 2011: Reach 45% to 55% RBY 2012: Via the World RBY 2011: Via the Public Affairs RBY 2011: Via the Public Affairs SBY 2011: Sign an MoU with the RESPONSIBILITY response (where 55% = best in Economic Forum (WEF), play team, promote digital plans in team, promote with public African Medical and Research COMMITMENTS class) for the customer relationship a leadership role to establish a countries all around the globe to authorities best-in-class CR policies, Foundation (AMREF) to educate and product surveys. framework for corporate best support ICT benefits for all, with the in particular for corporate health workers via mobile phones practices on gender diversity. establishment of an EU plan by governance, to enhance legislation and other mobile devices. 2011 Status: The response rate for mid-July 2011. and voluntary initiatives. We intend customer relationship surveys 2011 Status: In 2011, CEO Ben 2011 Status: During 2011, we to include a reference to best-in-class increased from 49% in 2010 to 53% Verwaayen was nominated to the 2011 Status: On July 13, 2011, explored portfolio solutions and practices in the 2011 G8/G20 summit in 2011. Product surveys response WEF Gender Parity Board and the Mr. Verwaayen, Vivendi chairman business models for mobile learning. : Achieved results. rate reached 49%. company was active in the Jean-Bernard Lévy and Deutsche We expect to see implementation for : Ongoing preparation of the WEF Gender Telekom CEO Rene Obermann joined 2011 Status: During the G20 summit pilots and initial rollout in 2012. BY 2011: Establish a business Parity Report 2011. At Davos 2012, 35 other CEOs in Brussels to meet in Cannes, government leaders met R : Not achieved partner survey in 2011 to Mr. Verwaayen was a discussion Neelie Kroes, European Digital with business leaders during a B20 UBY 2011: Sign a MoU with improve our relationship and leader on closing the economic Agenda Commissioner, and offer an summit. Representing 20 countries Indira Gandhi National Open : On hold effectiveness with them, so that gender gap. 11-point outline of principles for and 85% of global GDP, the goal of University to support open and together we will better serve our meeting targets for rolling out this summit was to elaborate on distance learning opportunities customers. RBY 2012: Via the WEF, sponsor a superfast broadband networks recommendations to unlock the in rural and underserved areas Young Global Leaders initiative throughout Europe. Similar plans levers of global governance. across India. 2011 Status: A business partner to promote digital economies in have been shared with other Alcatel-Lucent was involved in 5 of survey was implemented in 2011, 2011 Status: Change in school Europe. countries: Kenya, Mexico, Brazil, the 12 working groups. Concrete generating some 3,000 responses. Argentina, Ecuador, Venezuela, propositions were brought to G20 administration delayed further 2011 Status: In December 2011, Colombia, Qatar, Algeria and leaders to facilitate adoption of progress. Executive Vice President Stephen Indonesia. best-in-class CR policies. Carter co-sponsored the Young Global Leaders UK Summit on Global Growth, where he contributed to discussion on technology as a lens for growth.

11 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

CHALLENGES 2011 PHILANTHROPY ETHICS AND GOVERNANCE ALCATEL-LUCENT COMPLIANCE FOUNDATION S ee page 45 S ee page 53 S ee page 128

CORPORATE RO NGOIng: Further foster the RBY 2011 AND ONGOING: As of RBY 2011: Target 100% without fear of retaliation, as well TBY 2012: Ensure the RESPONSIBILITY spirit of employee volunteerism 2011, all new grassroots participation in the employee as to enhance overall transparency. improvement of gender COMMITMENTS across the company. programs will be measured against review and acknowledgment of the Read more on p. 59 (Compliance diversity in our Board of Directors a monitoring and evaluating system. Alcatel-Lucent Code of Conduct. Hotline section). by 2012. 2011 Status: This is an ongoing initiative. In 2011, 6,300 Alcatel- 2011 Status: In 2011 we joined LBG 2011 Status: At the end of 2011, 99% 2011 Status: The Board of Directors Lucent employees donated about – London Benchmarking Group – to of employees globally had completed RBY 2011: Privacy and Data began a process to bring itself into 47,500 hours to contribute to more help us enhance our metrics and review and acknowledgment of the Protection program audited compliance with the provisions of externally by PwC in 2009. The : Achieved than 175 goodwill projects in 42 impact measurement. LBG is an Alcatel-Lucent Code of Conduct. French law concerning the balanced countries. In early 2012 we issued industry leader and advisor on company will be undertaking audits representation of men and women at in 2011 to follow up on these : Ongoing a volunteering handbook to further output and impact measurement, BY 2011: Target 100% of boards of directors, which requires R recommendations. help employees connect with and we are following their guidelines people managers for ethical that by the first AnnualS hareholders : Not achieved Foundation projects in their locations for the same. leadership training. 2011 Status: In 2011, the company’s Meeting held in 2014, 20% of the and around the world. The idea is to Privacy and Data Protection Program members of a board of directors 2011 Status: The company developed : On hold help employees not only volunteer BY 2014: Via the Alcatel-Lucent was audited by Corporate Audit be women. R web-based “Leading with Integrity” in traditional/on-site projects but Foundation, provide digital Services, and remediation actions are training for people managers. through the use of technology training to 13,500 children over the underway. The company will continue BY 2011: Improve the level Deployment of the training was R participate in our other global projects. next 3 years from 2010 to 2014. to implement audit action plans and and quality of the information accompanied by a robust recommendations in 2012. Also in provided to the Board of Directors 2011 Status: Our Global Signature communications plan highlighting the BY 2011: Focus our future 2011, the company continued to by 2011. R Program – ConnectEd – started in role of people managers in enhancing grassroots programs by 1) implement the overall Privacy and 2011 and reached its Year 1 target a culture of integrity. 2011 Status: A new internal tool was training our employees on our social Data Protection Plan. of providing digital training to 5,338 implemented in the context of the investments; 2) opening the RFP to young people by March 31, 2012. 2011 assessment of the Board of local NGOs; 3) clearly defining the BY 2011: Public reporting of Planning for Year 2 is underway. R BY 2011: Include ethical behavior Directors. This new dashboard impact expected for participating statistics related to breaches R considerations in the 2011 enables directors to apprehend the individuals. of the company’s Code of Conduct. performance management process. information made available to them 2011 Status: Consistent with its goal 2011 Status: Carrying over from 2011 Status: Ethical behavior in a more structured manner across to promote transparency, the 2010, our 46 grassroots programs considerations were incorporated the following main areas: strategy, company shared Compliance Hotline have shown steady progress. as part of the 2011 employee finance, risk management and metrics and related incident reports Volunteering activities with performance management process. compliance, corporate governance, quarterly with the company’s employees were at an all-time high. For this specific context, resource human resources and corporate extended compliance community to Employees had access to training materials such as briefing documents social responsibility. enhance awareness of the prevailing on charitable contribution – policy and Q&As were developed and issues and to encourage input on and guidelines and EZ Visit process provided for employees and people improving the overall program. – through Alcatel-Lucent University. managers, outlining expectations for Modified case information, including We are also working very closely ethical behavior and what that means summaries of regional compliance with our partner donor-funding for the business. The material has matters, were shared with employees agencies to help us measure impacts been published on our intranet site. and help our grassroots partners to promote a culture where achieve their objectives and goals. employees feel comfortable reporting issues compliant with local laws

12 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

CHALLENGES 2011 RISK & CRISIS SUPPLY CHAIN MANAGEMENT See page 139 See page 51

CORPORATE RBY 2011: Have three regional RBY 2011: Organize an annual SBY 2011: Include specific RESPONSIBILITY ERM (Enterprise Risk Audit & Finance Committee Corporate Responsibility COMMITMENTS Management) deliverables (risk ERM review. requirements in 70% of procurement maps), updated every two years. sectors for the purchase of own-use 2011 Status: The Audit & Finance services/products. 2011 Status: Risk maps covering the Committee conducted an overall company’s 3 regions were updated ERM review on March 15, 2011. 2011 Status: By the end of 2011, in 2010 (Asia-Pacific) and 2011 This global review was supported Alcatel-Lucent had specific corporate : Achieved (Americas, Europe Middle-East and by quarterly reporting on action responsibility requirements for 59% Africa). These are systematically plan status to the Audit & Finance of its procurement sectors for the : Ongoing updated every other year and were Committee. purchase of own-use services/ delivered accordingly. products. The pending requirements : Not achieved TBY 2012: Have more than 90% will be defined in the first half of RBY 2011: Have an updated of all identified critical functions 2012. For more information, see : On hold company-level (i.e., corporate- covered by our consolidated, p. 143. level) ERM deliverable (risk map). enterprise-wide Business Continuity Management Program (mature BCM BY 2011: Establish a systematic 2011 Status: The corporate-level risk S Program). improvement program with map was updated in 2011. suppliers assessed as being below 2011 Status: By the end of 2011, satisfactory, ensuring that by the end more than 69% of all identified BY 2011: Cover more than 80% of 2012, 80% of active suppliers R critical functions were covered by of key risks with a follow-up of assessed are satisfactory or above our consolidated, enterprise-wide mitigating actions. and that action plans are in place BCM Program. 2011 Status: All key risks had for the remaining 20%, with an associated mitigating actions in 2011; intermediate target of 63% 92 action plans were defined, satisfactory. implemented and monitored by 2011 Status: We achieved 60% risk owners. against our target of 63% suppliers earning a satisfactory rating on CR. We will adjust the timeline to 2014 (compared to 2012) to ensure completion in a realistic timeframe. For more information, see p. 149.

13 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.2 Social and environmental Social indicators 2009 2010 2011 2011 perimeter indicators 3.2.1 SOCIAL INDICATORS Global headcount 1. Headcount For 2011, data on all social indicators Total headcount as of December 31 78,373 79,796 76,002 100% have been collected and consolidated Number of recruits I 6,773 8,661 4,331 100% at the corporate level since the HR Headcount reduction due to businesses transferred or sold (699) (1,153) (14) 100% information systems have been fully Headcount increase due to the full consolidation of previously non-fully consolidated companies 1,468 53 51 100% converged, except for health and Headcount increase due to acquisitions and insourcing 4,219 3,687 442 100% safety data that are issued from our CR reporting tool. The health and Headcount reduction due to outsourcing and transfers (1,956) (666) (857) 100% safety survey covered 64 countries. Headcount reduction due to redundancies (4,246) (2,660) (1,542) 100% Headcount reduction due to normal departures (retirements, end of temporary work contracts, (4,903) (6,499) (6,205) 100% resignations, deaths) 2. Headcount/Diversity Percentage of women/headcount I 22.35% 20.60% 20.66% 100% Percentage of women – Asia-Pacific 20.73% 28.15% 28.95% 100% Percentage of women – Europe, South America, Middle-East, Africa and India 22.34% 17.01% 16.65% 100% Percentage of women – North America 24.19% 23.60% 23.82% 100% Percentage of women amongst the Leadership Pipeline 19.05% 19.37% 19.45% 100% Number of disabled employees 190 210(1) 238(1) France 3. Training Training budget (as a percentage of payroll) 1.10% 1.00% 1.00% 100% Total hours of training per employee 17 17.8 16 100% Percentage of training time via e-learning technologies 40% 38% 40% 100% 4. Mobility Number of expatriates worldwide 623 498 391 100% Expatriates by host region Europe 170 151 100 100% Expatriates by host region North America 55 31 24 100% Expatriates by host region South America 12 12 8 100% Expatriates by host region Middle-East, Africa and India 198 147 131 100% Expatriates by host region Asia-Pacific 188 157 128 100%

14 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

Additional notes Social indicators 2009 2010 2011 2011 perimeter NN Injury and lost-day rates calculation include injuries and illnesses of all occupational accidents resulting in 5. Health and Safety lost workdays. In 2011, injury rate Number of days of absence due to work-related accidents per employee I 0.09 0.07 0.08(3) 100% by region is 0.24 in APAC, 2.80 in Rate of frequency (number of accidents per year, per 1 million hours worked) 1.61 1.48 1.42 100% EMEA and 1.67 in Americas. 6. Performance Management NN In 2011, distribution of absentee rate Percentage of managers and professionals who had an annual performance review 85% NA(2) NA(2) – for total workforce (total employees Percentage of managers and professionals who had learning and development activities agreed upon 54% NA(2) NA(2) – and contractors) by region was 0.02 in APAC, 0.10 in EMEA and 0.17 (1) The number of disabled employees concerns only four French legal entities (Alcatel-Lucent France, Alcatel-Lucent Entreprise, Alcatel-Lucent Submarine Networks and in Americas. Alcatel-Lucent International). (2) In 2011 Alcatel-Lucent changed its performance management processes and IT systems; former indicators have not been followed and new indicators have been put in place NN In 2011, occupational diseases rate for 2012. (ODR) for total workforce (total (3) This indicator is reported based on country legislation. employees and contractors) by region was 0.0 in APAC, 0.06 in EMEA and 0.06 in Americas.

15 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.2.2 ENVIRONMENTAL INDICATORS 2011 Units 2009 2010(1) 2011 2011 (1) Figures for 2010 have been restated since we perimeter apply now a more specific and accurate calculation methodology. The difference is less than 1% compared to the data published in our 2010 Carbon Footprint Assessment-Worldwide Operations(8) CR report. S cope 1 (2) The presentation of our Scope 3 indicators follows the categories and guidance provided by (4) Stationary source fuel combustion tCO2e 73,709 63,403 54,541 100% the GHG Protocol Corporate Value Chain (Scope 3) Accounting & Reporting Standard, published in (4) Mobile source fuel combustion tCO2e 89,554 82,419 81,153 100% November 2011. (4) Facility and mobile source refrigerant losses tCO2e 5,778 5,333 4,381 100% (3) kt CO2e: Kilo metric tons of CO2 equivalency

(4) (includes the following GHGs: CO2, CH4, N2O , SF6, Direct emission of GHG from manufacturing/R&D/product development tCO2e 1,272 142 248 100% HFCs and PFCs). (4) Fire suppression system losses tCO2e 8 72 12 100% (4) t CO2e: Metric tons of CO2 equivalency (includes the following GHGs: CO2, CH4, N2O, SF6, HFCs Scope 2 and PFCs). (4) Electricity usage tCO2e 598,214 570,039 505,862 100% (5) CO2e values include Scope 1 and Scope 2

(4) emissions for facility operations only (including Purchase of hot water/steam tCO2e 10,596 9,377 5,761 100% facility mobile combustion). (4) Purchase of chilled water tCO2e 735 448 221 100% (6) CO2e values include 100% of the emissions Scope 3(2) based on intensity and throughput of our three largest contract manufacturers. 2010 figures have Purchased goods and services: been restated since our contract manufacturers now provide better reporting. (6) (4) Contracted manufacturing services tCO2e 36,352 99,632 94,083 100% (7) Product transport includes 100% of emissions (4) Contracted marine services tCO2e 63,443 58,019 58,768 100% from air and marine transport only.

(10) (4) Purchased paper tCO2e 1,359 1,257 1,229 100% (8) Emission factors based on initial values issued by IPCC and kept constant for data consistency. (16) (4) Fuel- and energy-related activities not included in Scope 1 and 2 tCO2e NA 45,273 39,188 100% (9) In 2011, we were able to gather commuting (7) (4) Upstream transportation and distribution tCO2e 201,043 208,578 198,782 100% figures on a worldwide scale. Therefore, estimates for 2009 and 2010 have been restated. (4) Waste generated in operations tCO2e 7,434 2,418 5,602 100% (10) Purchased paper includes 100% of paper used (4) Business travel tCO2e 105,025 114,494 107,184 100% in operations and purchased under corporate

(9) (4) contract; does not include externally printed Employee commuting tCO2e 111,062 109,555 104,237 100% marketing collateral. ( 7,16) (4) Downstream transportation and distribution tCO2e NA 6,447 5,861 100% (11) Recycled: not released in a landfill or not

(20,16) (4) burned without energy recovery. End-of-Life treatment of sold products tCO2e NA 2,951 2,951 100% (12) Associated with new products released during (15) I (4) Grand Total (scope 1 + 2 + 3) tCO2e 1,305,584 1,379,857 1,270,064 100% the cited year. Carbon Footprint Assessment-Facility Operations Only(5,8) (13) New or recently developed products on an upward lifecycle curve. 2011 improvement based (3) Indirect emissions of CO2e linked to consumed electricity ktCO2e 598 559 512 100% on 2008 baseline. Next update will be published in (4) the 2012 CR report in accordance with our current Indirect emissions of CO2e per employee tCO2e 8 7 7 100% goal to improve the functional energy efficiency of (3) Direct emissions of CO2e linked to consumed fossil energy ktCO2e 87 73 63 100% key products by at least 25% by end of 2012

(4) (compared to 2010). Direct emissions of CO2e per employee tCO2e 1 1 1 100% (14) New indicators published for the first time in I (3,5) Total emissions of CO2e ktCO2e 702 647 581 100% this report. No data available for prior years. (4,5) Total emissions of CO2e per employee tCO2e 9 8 8 100%

16 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

ENVIRONMENTAL INDICATORS 2011 Units 2009 2010(1) 2011 2011 (15) Grand Total for 2009 and 2010 have been perimeter updated this year due to the restatement of two Scope 3 indicators (Contracted manufacturing services and Employee commuting). As we Consumed Energy(17) integrate additional Scope 3 indicators and develop more accurate calculation methodologies, Consumed electricity I GWh 1,197 1,125 1,014 100% we will restate prior reporting figures to provide Consumed electricity by employee MWh 15 15 13 100% a better baseline for comparison. Consumed fossil energy I GWh 373 308 317 100% (16) For these newly reported Scope 3 indicators, we were unable to calculate emissions for the Consumed fossil energy by employee MWh 5 4 4 100% period prior to 2010. Total consumed energy, including hot and chilled water I GWh 1,634 1,491 1,357 100% (17) Consumed energy for facility operations only. (18) Our assessment for emissions resulting from Total consumed energy by employee MWh 20 19 18 100% combustion of fuels at our facilities includes the Water and Wastes following: NOx=47; CO=33; TSP=5; Pb=0; SO2=16 and VOC=2. Consumed water I m3 2,754,507 2,744,454 2,765,474 100% (19) WEEE data includes electronic waste Consumed water per employee m3 35 36 38 100% generated by Alcatel-Lucent operations and WEEE take-back. Not reported as production per I Production of hazardous waste t 1,517 2,230 1,116 100% employee since production includes take-back. Production of hazardous waste per employee kg 19 28 15 100% (20) Includes recycled electronic equipment. Percentage of hazardous waste recycled(11) % 79 80 50 100% Production of non-hazardous waste I t 29,932 19,767 20,934 100% Production of non-hazardous waste per employee kg 382 248 275 100% Percentage of non-hazardous waste recycled(11) % 58 68 71 100% Production of Waste Electrical & Electronic Equipment (WEEE)(19) I t 3,380 4,464 6,314 100% Percentage of WEEE recycled/reused % 99 98 96 100% Other Emissions Solvents No significant quantities, indicator not relevant and not consolidated Halogenated hydrocarbon No significant quantities, indicator not relevant and not consolidated Discharge into water (heavy metals) No significant quantities, indicator not relevant and not consolidated Ozone-depleting substances No significant quantities, indicator not relevant and not consolidated NOx, SOx and other criteria air contaminants(18) tonnes NA NA 103 100% Miscellaneous Alcatel-Lucent headcount, ISO 14001 certified % 39 29 39 100% New products covered by ecodeclarations(12) % 100 100 100 100% Functional energy efficiency improvement of key products(13) % NA 20 NA 100% Domestic product freight by truck(14) % NA NA 98 100% International product freight by ocean vessel(14) % NA NA 40 100%

17 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

DEFINITIONS AND METHODOLOGY for 100% of Alcatel-Lucent employees, energy usage information were required The 2011 energy and water extrapolation procedures were applied to participate within this web-based consumption reporting perimeter based on calculated ratios per employee. survey. As a result, more actual facility I includes all Alcatel-Lucent sites owned operational data was obtained, thereby Ernst & Young or leased as of December 2011. V. For Waste Electrical and Electronic requiring less estimation to obtain statement RFor the 2011 assessment, 292 Equipment (WEEE) production: 220 100% company-wide assessment. facilities representing a total of 85% sites accounting for 54% of total Hara, a new Environmental of Alcatel-Lucent employees and Alcatel-Lucent employees. To account Due, in part, to consolidation of facilities Reporting Tool 85% of gross building area were for 100% of Alcatel-Lucent employees, to more efficiently utilize our resources, surveyed utilizing an online tool. extrapolation procedures were applied implementation of energy efficiency In 2011, Alcatel-Lucent R From this scope of reporting, based on calculated ratios per employee. projects, as well as the deployment of implemented a new EHS reporting the number of facilities having employee energy efficiency awareness tool: Hara. effectively reported resulted in the For setting organizational boundaries programs, we have achieved an actual following corresponding percentage and for corporate reporting of reduction of total CO2e emissions from This tool, which is used for of total Alcatel-Lucent employees: consolidated greenhouse gas (GHG) our facilities of 10% from 2010 levels. collecting, reporting and analyzing emissions, Alcatel-Lucent will employ This is mainly driven by a 9.9% reduction CR metrics and information, I. For energy consumption and CO2e the “operational control” approach in in electricity use as well as modest contributes to better data reliability emissions: 100% of all sites were establishing organizational boundaries. reductions in other facility hot water for the Alcatel-Lucent CR report. accounted for. This included obtaining Under this approach, Alcatel-Lucent will and steam usage. Water usage rose specific facility data from surveyed sites, account for 100% of GHG emissions from less than 1% year over year. The main The tool includes a set of automatic and employing facility usage estimation operations over which it has operational reasons for this were an extraordinarily controls detecting discrepancies and factors for all non-contributor sites. control. Notwithstanding this established hot summer in many parts of Europe as inconsistencies in the reported data. approach, Alcatel-Lucent will still attempt well as better reporting from facilities. II. For water consumption: 117 sites to obtain utility information from the In addition, the tool can monitor the accounting for 65% of total Alcatel- landlord in leased situations where the We have clarified the wording of our evolution of EHS performance at Lucent employees. To account for utility usage can be accurately allocated commitment “reduce our absolute carbon the site level on a monthly basis, 100% of Alcatel-Lucent employees, to Alcatel-Lucent’s leased space, such footprint (CO2 equivalent) by 50% of facilitating the implementation of extrapolation procedures were applied as via a separate electric meter. If 2008 baseline by 2020” by adding the performance improvement plans. based on calculated ratios per employee. such information cannot be obtained, term “from our operations,” meaning electricity and/or natural gas usage Scopes 1 and 2 only. The reason for this III. For hazardous waste production: shall be estimated utilizing “energy is that we are year over year adding new 156 sites accounting for 48% of total intensity” factors established and set Scope 3 indicators and need to keep Alcatel-Lucent employees. To account in our Inventory Management Plan. a stable baseline from which to track for 100% of Alcatel-Lucent employees, our progress on reducing our carbon extrapolation procedures were applied 2011 EVOLUTION footprint. Additionally, we constantly based on calculated ratios per employee. The scope of the 2011 CR campaign work with our key suppliers to reduce covered more facilities than the 2010 our Scope 3 emissions, even though they IV. For non-hazardous waste production: campaign. For the 2011 CR campaign, are not part of our 50% reduction goal. 114 sites accounting for 54% of total all facilities, regardless of building area Alcatel-Lucent employees. To account or employee headcount, able to obtain 18 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

Direct energy consumption by primary energy source in 2011 TOTAL CO2e GWh GJ

Total energy consumption in joules or multiples Facility Operations_Coal Gas 3,472.01 MWh 559 3 12,499 Facility Operations_Distillate Fuel Oil (#1,2,4, and diesel) 3,680,161.67 liters 9,913 39 141,555 Facility Operations_Natural Gas 237,249.5 MWh 43,075 237 854,098 Facility Operations_Propane 19,410.22 liters 30 0.1 495 Facility Operations_Residual Fuel Oil (#5,6) 317,534 liters 995 4 13,276 Facility Mobile Sources_CNG 1,010 Kg 1 0.01 53 Facility Mobile Sources_Diesel 1,793,288.51 liters 4,852 19 68,668 Facility Mobile Sources_Ethanol 225,430 liters 18 1 5,311 Facility Mobile Sources_Gasoline 1,299,515.83 liters 3,054 13 45,037 Facility Mobile Sources_LNG 31,458 liters 40 0.2 724 Facility Mobile Sources_Propane 74,284.87 liters 115 1 1,893 62,652 1,143,609 Total direct energy consumption in joules or multiples by renewable primary source Facility Mobile Sources_Ethanol 225,430 liters 18 1 5,311 Total direct energy consumption in joules or multiples by non-renewable primary source Facility Operations_Coal Gas 3,472.01 MWh 559 3 12,499 Facility Operations_Distillate Fuel Oil (#1,2,4, and diesel) 3,680,161.67 liters 9,913 39 141,555 Facility Operations_Natural Gas 237,249.5 MWh 43,075 237 854,098 Facility Operations_Propane 19,410.22 liters 30 0.1 495 Facility Operations_Residual Fuel Oil (#5,6) 317,534 liters 995 4 13,276 Facility Mobile Sources_CNG 1,010 Kg 1 0.01 53 Facility Mobile Sources_Diesel 1,793,288.51 liters 4,852 19 68,668 Facility Mobile Sources_Gasoline 1,299,515.83 liters 3,054 13 45,037 Facility Mobile Sources_LNG 31,458 liters 40 0.2 724 Facility Mobile Sources_Propane 74,284.87 liters 115 1 1,893 62,634 1,138,298

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3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

Indirect energy consumption by primary source in 2011 TOTAL CO2e GWh GJ Renewable Non- GJ Renewable GJ

Total amount of indirect energy used by indirect non-renewable sources and indirect renewable sources in terms of intermediate energy Purchased Hot Water/Steam 25,378 MWh 5,761 25 91,362 29,468 61,895 Purchased Chilled Water 411 MWh 221 0.4 1,478 160 1,318 Purchased Electricity 1,013,648 MWh 512,474 1,014 3,649,133 746,763 2,902,370 TOTAL 518,456 3,741,973 776,390 2,965,583

20 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.3mmitments CR Co for 2012 and beyond CHALLENGES INNOVATION REDUCE THE IMPACT REDUCE OUR CARBON OUR PEOPLE MANAGEMENT OF OUR PRODUCTS FOOTPRINT ON THE S ee page 98 S ee page 68 ENVIRONMENT S ee page 68

S ee page 68

CORPORATE BY 2014: Triple our joint research BY 2012: Improve the functional BY 2020: Reduce our absolute carbon BY 2012: Launch a 3-year workforce BY 2012: [NEW] Leadership pipeline: RESPONSIBILITY projects with universities on energy efficiency of key products* footprint (CO2 equivalent) from our plan with development plans and Continuation of 2011 efforts with COMMITMENTS FOR environmentally sustainable by at least 25% by end of 2012 operations by 50% by 2020 (from human capital performance metrics. deployment of high potential technologies in the next 3 years.(1) compared to 2010. 2008 baseline). Bank on 2011 achievements to drive identification process, usage of THE COMING YEARS long & mid-term resource planning succession pools and pilot of new * New or recently developed products BY 2014: Double the percentage of on an upward lifecycle curve. BY 2013: Reduce water consumption capabilities. leadership development offer. research projects dedicated directly to by 20% from 2010 baseline. green technology (i.e., innovations BY 2015: Improve the functional BY 2012–2014: Achieve SA 8000 BY 2013: [NEW] Employee whose primary function and outcome energy efficiency of lightRadio by at certification in Brazil andM exico by engagement: Engagement survey is the reduction of energy and power least 75% by 2015 compared to YE 2012; extend to other countries to be launched to drive clear consumption, etc.). An example of such 2008. that are already compliant with the understanding of our human capital a project would be Active Antenna requirements. actions for improvement. Arrays (also the Large Scale Antenna BY 2012: Leverage our innovation to Array developed for GreenTouch that BY 2014: Increase representation of BY 2013: [NEW] Technical ladder: exploits existing technology – massive establish a common methodology for measuring the carbon footprint of women in management positions by Deployment of career development MIMO – for energy efficiency increase 20%. path for technical professionals as (1) network telecommunications as opposed to capacity increase). complementary focus on best-in- Timeframe: 3 years. products over their lifecycles. BY 2014: Extend existing equal pay class versus leadership pipeline. agreements. By end of 2012, have a BY 2014: Double the percentage of BY 2015: Eliminate PVC from all products.* plan in place to address gender pay BY 2012: [NEW] Professional research projects that have gaps. accreditation: Double the number of environmental sustainability as an * Subject to the availability of new accredited employees to 1,000 indirect consequence (or one benefit technically, environmentally and BY 2012: Further extend the number by year end 2012. of many). An example of such an economically sound alternatives. of countries with teleworking innovation would be the lightRadio policies by deploying agreements BY 2012: [NEW] Community learning: cube.(1) Timeframe: 3 years. in China and India. Launch community learning for 7 most critical functions (“hot BY 2014: The target composite total BY 2013: Build a company-wide profiles”) as parallel fast-track for percentage of projects resulting in learning architecture that combines learning from the best in-class innovations that have either direct or existing enterprise support for employees. indirect environmentally sustainable formal training with the new benefit is approximately 30% of the interactive employee-centric BY 2012: [NEW] Gender diversity: projects in the research pipeline over knowledge and learning platforms. Deploy gender diversity awareness this timeframe.(1) training to all people managers. (1) These targets were achieved in 2011, but we will maintain the same high level of commitment to extreme green innovation until 2014.

21 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

CHALLENGES STA KEHOLDERS PHILANTHROPY ETHICS AND GOVERNANCE SUPPL Y CHAIN CUSTOMER ALCATEL-LUCENT COMPLIANCE RELATIONSHIP FOUNDATION S ee page 45 S ee page 139 S ee page 53 S ee page 28 S ee page 128

CORPORATE BY 2012: [NEW] By 2012, enhance BY 2014: Via our Alcatel-Lucent BY 2012: People manager training: BY 2012: Ensure the improvement BY 2014: Establish a systematic RESPONSIBILITY our Customer Satisfaction Program Foundation, provide digital Target 100% participation in of gender diversity in our Board improvement program with suppliers COMMITMENTS FOR by providing quicker feedback and training to 13,500 children in ethical leadership. of Directors. assessed as being below satisfactory, THE COMING YEARS improvement plans to our customers. the 2010–2014 timeframe. ensuring 80% of active suppliers We will be asking more open-ended BY 2012: Business integrity training: assessed are satisfactory or above questions, allowing the customer to BY 2013: [NEW] Via the Alcatel- Target 100% participation by RIS K & CRISIS – and that action plans are in place tell us in their own words what is Lucent Foundation, create a employees globally in deployed MANAGEMENT for the remaining 20%. important to them. Goal: 45–56% group-wide strategy to guide ethics and compliance training. response rate (where 56% is corporate philanthropic activities BY 2012: Include specific Corporate considered best in class) for the S ee page 51 and include priorities aligned with BY 2012: [NEW] Conflict of interest: Responsibility requirements in customer relationship and business drivers, description of 70% of procurement sectors for product surveys. Increase transparency around system to measure results/impacts. disclosure of potential conflicts the purchase of own-use of interest. services/products. BY 2013: [NEW] Introduce executive STA KEHOLDERS program for employee volunteering, BY 2012 (APAC); 2013 (EMEA, PUBLIC AFFAIRS including skills enhancement and Americas): Update each regional training for community investment. Enterprise Risk Management (ERM) S ee page 35 deliverables (risk maps) every 2 years.

BY 2012: Have an updated corporate-level ERM deliverable.

BY 2012: [NEW] Via the Public Affairs BY 2012: Cover more than 80% of team, continue to promote digital key risks with a follow-up of plans in countries around the world mitigating actions. to support ICT for all.

BY 2012: Organize an annual Audit & BY 2012: Via the Public Affairs Finance Committee ERM review. team, continue to promote with public authorities best-in-class CR policies (in particular, corporate BY 2012: Have more than 90% of all governance) to enhance legislation identified critical functions covered and voluntary initiatives. by our consolidated, enterprise-wide Business Continuity Management Program.

BY 2012: [NEW] Run at least 1 crisis trial.

22 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.4 2011 HALL OF FAME band. In addition to being listed in Alcatel-Lucent received various awards the Carbon Performance Leadership and distinctions in 2011 relating Index, Alcatel-Lucent placed in the “A” to its performance in Corporate band and its disclosure score improved Responsibility and innovation. Many by 10% over the previous year. individual employees were singled out for their contributions, reflecting DJSI GLOBAL SCORE: 86/100 the talent throughout the company. We have shared a selection of some of these awards in this edition of the 89/100 – ECONOMIC 90/100 – ENVIRONMENT Corporate Responsibility report. 80/100 – SOCIAL Q Listen to the podcast with Christine C Read more on our blog Diamente, Head of Alcatel-Lucent Corporate 3.4.1 Receiving worldwide recognition Responsibility C Read more about CDP 3.4.1.1 Dow Jones Sustainability Read more about the DJSI C Read more about the SAM Sustainability 3.4.1.4 FTSE4Good Index sector leader C Yearbook In 2011, Alcatel-Lucent ranked first FTSE4Good indices objectively measure 3.4.1.2 Making the 2012 among communication technology 3.4.1.3 Leading in carbon performance the performance of companies that Sustainability Yearbook sector companies in the DJSI, topping Each year, Alcatel-Lucent responds to the meet globally recognized corporate Alcatel-Lucent was also selected for a list of 14 organizations assessed by Carbon Disclosure Project (CDP). 2011’s responsibility standards. Alcatel- inclusion in SAM’s 2012 Sustainability the DJSI’s rating agency, the Sustainable response yielded a score of 89 out of Lucent was pleased to rank once again Yearbook, a listing of the top-scoring 15% Asset Management (SAM) group. 100 possible points, and a spot on the as an FTSE4Good company in 2011 of the world’s largest 2,500 companies Carbon Performance Leadership Index. based on an assessment of its risk in 58 different sectors. In the 2012 The DJSI was developed to provide asset The CDP performance score assesses and performance related to material Yearbook, Alcatel-Lucent received three managers with objective benchmarks the level of action taken on climate environmental, social and governance top distinctions: Gold Class, Sector Leader to assess companies and manage their change evidenced in companies’ CDP issues. That assessment was carried out and Sector Mover. These recognize sustainability portfolios. In addition to responses, and this honor highlights our by the FTSE4Good rating agency EIRIS. the consistent progress Alcatel-Lucent financial performance, inclusion in the ability to put commitments into action. has made to implement a thorough index points to the strides Alcatel-Lucent and robust sustainability approach has made in a range of areas related to Representing some 550 investor groups aligned with its business priorities. sustainability including our environmental with combined assets of $71 trillion performance, corporate governance, risk in 2011, its mission is to “accelerate assessment, responsible supply chain solutions to climate change by putting activities, community support and human relevant information at the heart resource management. These assessments of business, policy and investment C Read more about FTSE4Good translated into scores in three dimensions: decisions.” The CDP provides companies Read more about EIRIS economic, environmental and social. meeting certain criteria with a C disclosure score and a performance

23 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.4.2 Environment, health and safety consecutive Trusted Enterprise for 3.4.2.3 BizSafe in Singapore NN The company placed in the top 10% awards Environmental Protection award. Alcatel-Lucent Singapore obtained BizSafe out of 500 in Newsweek’s Green 3.4.2.1 Environmentally active in Antwerp Level 3 Certification lastD ecember Ranking of Global Companies, and Alcatel-Lucent received an Antwerp Alcatel-Lucent Qingdao was awarded from the Singapore Workplace Safety seventh of 26 in the technology Environmental Charter award in June for being a Shandong Clean Production and Health (WSH) Council. BizSafe is a equipment sector. 2011 for its efforts to implement Enterprise, an Environmentally five-level program that helps companies C Read more about Newsweek’s green environmentally friendly business Friendly Enterprise, and a Company improve health and safety standards in Ranking initiatives such as reducing paper of Excellence in Clean Production. the workplace. To be considered BizSafe, use, launching GreenTouch and Alcatel-Lucent Singapore had to undergo NN Participating for the first time in the reducing overall gas consumption Customer Hong Kong Electric a WSH audit to assess the company’s Greenpeace Cool IT Leaderboard in at its Antwerp facility. recognized our commitment to safety compliance with Workplace Safety and 2011, Alcatel-Lucent ranked sixth with a Good Safety Performance Health Act Risk Management Regulations overall and second in the category of Award, acknowledging the efforts of as well as BizSafe Level 3 Requirements. IT Energy Impact. employees and contractors based on Read more about Cool IT Leaderboard EHS meeting attendance rate, safety 3.4.3 Good in green C performance and HEC safety audits. 3.4.3.1 Alcatel-Lucent global rankings 3.4.3.2 Green awards in 2011 Alcatel-Lucent’s green performance Alcatel-Lucent was proud to be was assessed and acknowledged by acknowledged for its commitment to a number of authoritative bodies in eco-sustainability in 2011 at a number 2011, including the Environmental of key industry events, including: Investment Organization (EIO), NN Being named Outstanding Vendor of Newsweek and Greenpeace. Specifically: the Year and receiving a Green NN The EIO ranked Alcatel-Lucent fourth Technology Initiative Award at the M Kris Van Doren, EHS Manager for Alcatel-Lucent worldwide and first in the technology World Vendor Awards. Notable in EMEA, accepted the award on behalf of the sector on its ET Global 800 Carbon company. contract wins and innovative new listing based on the company’s products such as lightRadio prompted 3.4.2.2 Committed to health comprehensiveness, transparency and the panel to comment that “Alcatel- and safety in China verification of emissions both in its Lucent is one to watch in 2011”. Alcatel-Lucent earned a variety of M Alcatel-Lucent CAT Team Leader Margaret Lee annual CR report and through the CDP. NN Taking two honors at the 2011 certifications and awards last year accepted the award during a presentation ceremony on June 14, 2011. Emerging Technology Awards, one for in China for its health and safety- lightRadio in the wide area network related performance. Alcatel-Lucent infrastructure category and another Shanghai Bell successfully completed for Telehealth Manager for the health, the second on-site audit in the ISO wellness and fitness category of 14001 EMS (Environmental Management mobile applications. System) process, passed the annual clean production assessment of the C Read more about ET Global 800 Shanghai Municipal Clean Production Office, and was honored with a second

24 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

In addition to the above, lightRadio NN CT IA E-Tech Award – Best Wireless NN Mohamed El-Haw, Human Resources NN I n December 2011, Merouane Debbah, garnered significant attention last year Network Infrastructure Innovation learning consultant in Cairo and a professor at France’s esteemed with a slate of awards including: Taleeda CEO, was named to the list of Supélec and the youngest-ever holder NN Telecom Asia Readers’ Choice Awards 3.4.4 Diverse and talented WEF Global Shapers in October 2011. of the Alcatel-Lucent Flexible Radio – Special Editor Recognition Award for 3.4.4.1 Human Rights Campaign Global Shapers is a community of Chair, received the prix Brillouin- LTE Innovation Foundation Corporate Equality Index young people who show great Glavieux – an award established by the NN LightReading – Best New Product For the third year in a row, Alcatel- potential for future leadership roles Society of Electricity and Electronics Mobile Lucent was named to the Human in any sector of society – established (SEE) and IEEE France Section to NN 4G World – Broadband Access Network Rights Campaign (HRC) Foundation’s in recognition of the fact that half the recognize work in science, technology Technology and Services (Wireless) Corporate Equality Index. The HRC rated world’s population today is under the and innovation by researchers under NN Popular Mechanics Breakthrough 590 businesses on their treatment of age of 27. 40. Debbah was recognized for his Awards – Brilliant Innovators gay, lesbian, bisexual and transgender research on matrix theory as it relates Read more about WEF Global Shapers NN BBW F Infovision Award – Outstanding employees, consumers and investors. C to wireless communication. “I am always searching Technologies for Broadband Services Alcatel-Lucent was one of 305 businesses C Read Mohamed’s blog Read more about this award (in French) for an understanding NN Tech Titan Corporate Horizon Award to achieve a perfect score of 100 for C NN G abriel Charlet, research manager in of today’s world, its – Outstanding Innovation in its commitment to protect individuals NN I n North America, Alcatel-Lucent Bell Labs Optical Technologies research contrasts, its people Technology and Communication from employment discrimination received several awards in recognition in Villarceaux, France, was awarded the and how I can make a Industry based on sexual orientation and of excellence in supplier diversity NN World Technology Award in November difference, whether as Mobile Merit Award – Best Mobile gender identity or expression. throughout 2011, including listing 2011 in the Communications category a business executive or Technology Infrastructure in the annual Women’s Business NN during a ceremony held by the as a global citizen. My G TB Innovation Award – Best Mobile 3.4.4.2 Recognition of employees Enterprise National Council (WBENC) World Technology Network (WTN) ambition is to take that Communication Innovation In addition to the company as a America’s Top Corporations for NN at the United Nations Headquarters knowledge and see I ndustry Achievement Award – Best whole being celebrated for CR Women’s Business Enterprises for in New York. He was also named a how I can transform Network Technology Innovation achievements last year, individuals the fourth year in a row. NN NGN Leadership Award – Best within Alcatel-Lucent were singled WTN Fellow. The World Technology other communities Products, Services and Technologies out for their accomplishments: Awards, which are organized by WTN A For more information, see p. 145 through education, for Next Generation Networks NN Christel Heydemann, Alcatel-Lucent in association with TIME, Fortune, CNN mentoring and bringing C For more information, visit the online Vice-President of Human Resources and Science/AAAS and Technology Alcatel-Lucent Recognition web page corporate leaders and Transformation, was appointed to Review, have been called the Oscars of together in a more the World Economic Forum’s (WEF’s) the technology world. balanced and proactive Young Global Leaders community for core value system 2012. WEF Young Global Leaders are suited to today’s dedicated to “improving the state of reality.” the world”. CHRISTEL HEYDEMANN, C Read more about WEF Young Global Leaders ALCATEL-LUCENT Read Christel’s blog VICE-PRESIDENT OF C HUMAN RESOURCES AND TRANSFORMATION

25 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

3.1 2011 CR achievements and progress 3.2 Social and environmental indicators 3.3 CR Commitments for 2012 and beyond 3.4 2011 HALL OF FAME

3.4.5 Recognition around the world with a Shanghai Corporate Social and men – resulting in Alcatel-Lucent 3.4.5.4 Spain 3.4.5.1 China Responsibility Promotion Award. being able to reduce the gap from 7% In 2011, the Spanish Ministry of Health, Alcatel-Lucent made the top 10 to 1%. Also, a specific training program Social Politics and Equality recognized of Southern Weekly’s Ranking of 3.4.5.2 Mexico was implemented to fight against gender Alcatel-Lucent with an Equality in the Contribution to China by Fortune 500 Alcatel-Lucent Mexico has earned, stereotypes and a new skills-based Company award, which celebrates Companies in 2011 and stood out as for the second year in a row, Socially professional development model has organizations for maintaining policies first within the telecom sector – marking Responsible Company (ESR) certification been proposed for the company. Thanks that foster equality, fair treatment in the company’s best performance since from the Mexican Center for Philanthropy to this agreement and other initiatives the workplace and work/life balance. joining the index in 2007. In sub- (CEMEFI). The rigorous evaluation aimed at improving work/life balance, rankings, Alcatel-Lucent placed 14th process examines linkages with the we were granted the AFNOR Label for 3.4.5.5 United Kingdom in the category of Philanthropy and community, business ethics, quality Professional Equality, officially awarded For the past four years, Alcatel-Lucent Charity and 19th in Public Image. of life in the company, and care and on February 9, 2012 by Roselyne has teamed up with the Haberdashers’ preservation of the environment. Bachelot-Narquin, French Minister of School for Girls Monmouth to take part Committed to delivering green Solidarities and Social Cohesion. in the Engineering Education Scheme technologies, building a responsible Alcatel-Lucent Mexico contributed for Wales – a competition designed to supply chain, and contributing to a with inputs to the certification process Launched as a pilot in 2010, the College@ encourage young students to pursue harmonious and healthy society, Alcatel- in corporate communications, human work initiative was so successful that careers in engineering. In 2011, Alcatel- Lucent Shanghai Bell (ASB, our flagship resources, legal and government relations, we have decided to deploy it across Lucent engineers Steve Trott and Chris company in China) continued its work Alcatel-Lucent University and EHS areas. 10 locations in France in 2011. The Dean provided technical support and last year to improve the educational objective of this program is twofold: guidance as the girls designed, built Read more (in Spanish) opportunities available to children in C encourage more women to consider and installed a repeater station to less-developed areas of the country. 3.4.5.3 France careers in our field and profession improve communication throughout To date, ASB has supported 71 schools Alcatel-Lucent’s internal social media by presenting the activities and the Wye Valley. This effort earned in 21 provinces, and the Alcatel-Lucent platform, Engage, won the Workplace professions of our company; and a Best Overall Team Performance Foundation has invested more than Environment and Mobility award at accompany secondary school students award and nominations for Best 4 million yuan in eight charity programs France’s IT’Night 2011. Adopted by more in a one-week educational project. Appreciation of Safety Issues, Most for disadvantaged teenagers in China. than 57,000 employees throughout all Effective Use of IT and Most Effective 130 countries in which the company Finally, Alcatel-Lucent’s EU industrial Presentation of the Chosen Solution. In November, the State-owned Assets operates, Engage was launched in 2010 service center in Haute Normandie Supervision and Administration to foster collaboration, communication took home a Sustainable Development Commission hosted a conference on and connection across distributed teams. Award in 2011 – given to organizations Corporate Social Responsibility in Beijing, for demonstrating initiative on where ASB received a 2011 Excellent C Read more (in French) environmental issues and applying Company for Social Responsibility best practices. Its conference on In early January 2011, a three-year Practices Award. At the eighth joint illiteracy in 2011 was singled out by budget was established to promote Shanghai International Symposium on the Sustainable Development Award actions in favor of gender equality and Quality and Forum of the International jury as a further example of Alcatel- to adjust the salary gap between women Academy for Quality, ASB was honored Lucent’s innovative, proactive approach.

26 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1l Dia ogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic Forum 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

A Year Of Engagement March 2011 – The Corporate Responsibility team and network 4.0 members met with Greenpeace, virtually and at our Paris headquarters, to discuss common ways of addressing global climate OUR change. We also invited Greenpeace to the Global e-Sustainability Initiative (GeSI) to promote open dialogue on climate change with the ENGAGEMENT Ap ril 2011 – We celebrated Earth Week by sharing interactive videos, ICT industry and followed up with discussions at Davos 2012. blogs, tweets about our eco-sustainability strategy, targets and local WITH best practices with employees across the world. Ma y 2011 – We communicated our CR priorities and commitments in a face-to-face forum with ECID, our European-based employee STAKEHOLDERS J une 2011 – We presented our sustainability priorities to the company labor unions. via Engage, prompting more than 4,000 responses by employees on how to improve our sustainability performance. Those responses were 4.1 DiaLOGUE and action presented to our company’s top 200 leaders at the annual management J uly 2011 – CEO Ben Verwaayen joined Vivendi Chairman Jean- Stakeholder dialogue remains the convention and contributed to our Corporate Responsibility Action Plan. Bernard Lévy, Deutsche Telekom CEO Rene Obermann and 35 other cornerstone of our approach to Corporate chief executives in Brussels to offer European Digital Agenda Responsibility, engaging us with partners Commissioner Neelie Kroes an 11-point outline of principles for J une and September 2011 – We presented our 2010 Corporate meeting superfast broadband network rollout targets in Europe who believe in our vision – realizing Responsibility Report as well as our 2011 priorities and targets to – and to accelerate digital inclusion and the digital economy. the potential of a connected world our investor community in a series of one-on-one dialogues on best – in a proactive, innovative way. practices and the improvement of our sustainability performance as part of the company’s long-term strategy. September 2011 – Jeong Kim, President Bell Labs and Chief Strategy Officer of Alcatel-Lucent, participated in the WEF’s Summer Davos in Dalian, China, meeting with Technology Pioneers, Young Global O cTOBer 2011 – Mr. Verwaayen participated in the UN’s Broadband Scientists and WEF participants to discuss the role of innovation and Commission Geneva meeting, where commissioners released targets science in promoting “quality growth.” He shared his thoughts as a challenging governments worldwide to achieve the Millennium WEF guest blogger throughout the three-day event on social Development Goals. innovation and smart growth.

Authorities O cTOBer 2011 – Bell Labs co-hosted a conference in Ghana with O cTOBer 2011 – Alcatel-Lucent’s Rajeev Singh-Molares (Executive social entrepreneur Bright Simons, industry leaders and government Vice President and President of the Asia-Pacific region) chaired a Unions NGOs on creating new employment opportunities leveraging mobile learning WEF Global Agenda Council on ICT, rallying global participants (mLearning). around the importance of mLearning at Abu Dhabi.

Customers E mployees Al - cATel Lucent O cTOBer 2011 – Alcatel-Lucent hosted a local UN Global Compact No vember 2011 – Alcatel-Lucent hosted a two-day virtual boot camp meeting in Antwerp to present our activities and partnerships in favor on the topic of social innovation with employees. It included the Governments/ of eco-sustainability and digital inclusion. participation of approximately five global sites and corporate leaders Analysts/Media (1) Regulators by video-conference with YouTube videos from external participants.

Stakeholders/ Suppliers/ December 2011 – Stephen Carter (Executive Vice President; President Investors Subcontractors of the Europe, Middle-East and Africa region; and Chief Corporate No vember 2011 – Alcatel-Lucent’s CEO co-chaired the India Marketing and Communication Officer) met with BritishY oung Global Sustainability Summit as well as the WEF’s India Economic Summit in Civil Society Leaders, technology entrepreneurs and key corporate leaders to Mumbai. Our CEO dialogued with Young Global Shapers, Young Global discuss global growth through the digital economy for the 21st century Leaders and Social Entrepreneurs on “linking leadership with in the United Kingdom. livelihood”.

(1) YouTube is a trademark of google, inc.

27 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

Throughout 2011, Alcatel-Lucent 4.2 CUSTOMER RELATIONSHIPS Corrective actions and results are and available benchmark data within connected with a variety of traditional 4.2.1 Customer Satisfaction Survey systematically tracked and stored using a the appropriate market segment. These and new stakeholders to respond Program computerized tool. All customers receive objectives for customer satisfaction to the global challenges of climate The Alcatel-Lucent Customer Satisfaction a follow-up communication after the results are aggregated and assigned change, the transformation to digital Survey Program – a series of five surveys are complete. These follow-up to each internal organization leading economies, and rural inclusion. surveys executed on an annual basis – communications are handled by our market activities, customer accounts, lets us know how well we are meeting account teams and can take the form central functions, services and products. In every interaction with stakeholders customer expectations and helps of meeting notes, emails, presentations – public sector, private sector, academic strengthen our customer relationships. or similar items. Face-to-face customer or civil – Alcatel-Lucent examines the meetings are the preferred method of 2011 ACHIEVEMENTS costs, opportunities and risks involved. Covering the entire customer lifecycle, the follow-up and are highly encouraged. 4% increase in customer satisfaction The company has developed a common surveys evaluate customers’ satisfaction versus 2010 understanding of issues relevant to in terms of their relationship with Alcatel- In 2011, Alcatel-Lucent improved its the underlying problems and mutual Lucent, the products we provide, and the performance on customer satisfaction 53% response rate to customer agreement on the type of engagement performance of our technical support, surveys in all three regions (Americas, relationship survey best suited to our priorities. repair and project management services. Asia-Pacific, and Europe, the Middle-East Among these surveys, a relationship and Africa). Our customer satisfaction The outcomes of these engagements are survey issued twice a year targets key level increased by an average of 4%, 49% response rate to product completely transparent, premised on decision makers and covers a broader and the global response rate increased surveys open dialogue and meaningful action. spectrum of the customer experience. I to 53% for the relationship surveys In most instances, we favored open and 49% for the product surveys. More 3,000 responses to the business interaction with our partners: direct Surveys and evaluations provide us with than 3,000 people responded to the partner survey implemented in discussions, joint initiatives, global forums insight into our customer relationships. business partner survey, which was 2011 and online dialogue via social media They also create opportunities for distributed for the first time in 2011. channels such as The Blog, Twitter(1), account teams to engage in follow-up YouTube and our internal social media discussions with customers (by email In 2011, Alcatel-Lucent defined Surveys are conducted online by an platform, Engage. In all stakeholder and, ideally, face to face), enriching customer satisfaction objectives for external company to ensure the engagements, we apply relevant relationships, uncovering new revenue approximately 500 customers worldwide, program’s integrity stakeholder governance structures opportunities, and identifying the areas representing about 80% of global and ethic and compliance policies. of greatest importance to customers. sales. In particular, each organization’s Additional face-to-face qualitative Corrective actions and results are regions, product divisions and services surveys are also carried out by our systematically tracked and stored have specific objectives for customer Quality Assurance team electronically, and are reviewed by the satisfaction. To ensure consistency, Management Committee and the CEO objectives are defined at the account as part of monthly business reviews. level and aligned with annual results

(1) Twitter is a trademark of Twitter, Inc. in the United States and other countries. 28 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1l Dia ogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic Forum 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

Satisfaction (Q & CSAT) strategy, and delivering faster, higher-value and HIGHLIGHTS planning and assessment to ensure we HIGHLIGHTS better-quality solutions and services. TRACKING CUSTOMER keep our promises while delivering a VERIFICATION OF ONLINE SATISFACTION WITH DEDICATED “right-first-time” customer experience. SERVICE DATA Through its Services Delivery Survey INDICATORS Alcatel-Lucent is certified to TL 9000 standards. Strategy, Alcatel-Lucent solicits, Customer satisfaction The GQ & CSAT organization is headed Verification of online customer service data is collects and measures input on measurements include: by the Alcatel-Lucent Executive Vice assessed as part of our internal audit as well as in customer perceptions of quality as they NN Customer loyalty index President, Global Customer Delivery, the audit conducted annually by an external relate to the delivery of contracted performance versus defined who reports directly to the CEO. The certification company.D edicated improvement plans services, which include but are not targets per region, country or central organization combines central are put in place after these audits. limited to managed services, remote account and regional GQ & CSAT teams into a technical support, on-site support, NN N et promoter score per account single entity to implement a common Q & and repair and exchange services. NN Percentage of analyses The TL 9000 quality-management system is the CSAT strategy across the company while completed by region, product telecom industry’s unique extension to ISO optimizing processes, methodologies Our Service Assurance organization division and key account (i.e., 9001:2008 and includes supplemental and skill sets globally and assessing all manages our welcome centers, technical customers with 20 or more requirements in many areas, including regions and products for systemic areas support, repair and return functions, respondents) performance measurements based on reliability needing improvement. Where necessary, escalation processes and more on a NN Close loop feedback (i.e., number of product, software development and lifecycle cross-organizational quality improvement worldwide basis. It accurately measures of accounts with confirmed management or addressing communications programs are established utilizing DMAIC the responsiveness of these services follow-up communications) between telecom network operators and (define, measure, analyze, improve, suppliers. TL 9000-certified organizations are versus each customer’s service-level control) Six Sigma methodology as well required to comply with: agreements. We are working to build as Lean Six Sigma, Theory of Constraints NN All requirement clauses of the International on our solid results (e.g., 96% of system 4.2.2 Customer service channels and Statistical Process Control. Standards ISO 9001:2008 outage restorations completed within D ata gathered from surveys are NN Telecom-specific requirements that apply to all SLA-requested times) and improve assessed by members of the company’s 4.2.3 Customer service quality registrations, product categories, hardware, the performance of our processes Account, Project Management, Service “Service quality” is defined as the software and/or service registrations to demonstrate our commitment to Assurance and Product Group teams, with customer’s perception of a delivered NN Telecom industry measurements that apply in customers. Our Quality organization coordination by the Quality Assurance service. “Service quality management” is certain product categories specific to hardware, periodically reviews the nature and Customer Satisfaction team. Many of the monitoring and maintenance of end- software and/or services of the customers’ service support the insights gained are acted on by the to-end services for specific customers. request to see if steps can be taken regional product or services organizations to eliminate recurring issues that closest to the specific customer, Quality and the right-the-first-time cause customers to call for support. product or service involved. Customer concept are based on “Operation Science,” satisfaction results and improvement which uses tools and techniques such as Read more about the TL 9000 measurements opportunities are part of monthly or Lean Six Sigma, Six Sigma and the Theory quarterly business and product reviews. of Constraints to provide scientific ways Additionally, a Global Quality & Customer of analyzing and improving operations, Satisfaction (GQ & CSAT) survey leads the predicting outcomes, avoiding errors company’s overall Quality & Customer

29 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

4.2.4 Customer advocacy at Alcatel- Lucent 2012 TARGETS CUSTOMER CRITICAL ISSUES PROCESS Alcatel-Lucent has a process in place to ensure all customer complaints – 1 CUSTOMER ISSUE solicited or unsolicited – are managed Enhance our Customer Satisfaction and monitored through appropriate Program by providing quicker PROBLEM OWNER ISSUE VALIDATION analysis and follow-up communications. feedback and improvement plans to BY QA&CSAT our customers. We will be asking INTERNAL SOURCE

Under the leadership of the account more open-ended questions, CUSTOMER FEEDBACK teams any customer complaint – referred allowing the customer to tell us in AND CUSTOMER DEFINITION OF SOLUTION ACCEPTANCE SOLUTION OWNER to as a Customer Critical Issue – receives their own words what is important follow-up communication from a to them. representative aligned directly to the area of concern. To ensure steps are SOLUTION PLAN ROOT CAUSE ANALYSIS LINK TO CORRECTIVE 2 FOR THE ISSUE AND SOLUTION PROPOSAL ACTIONS PROCESS/TOOLS taken to resolve issues, all complaints Reach 45–56% response (where are recorded and tracked through 56% is considered best in class) for YES Alcatel-Lucent’s Customer Critical Issues the customer relationship and NO CLOSED process, which is controlled by the Q & product surveys. LESSON LEARNT SYSTEMATIC ISSUE? END CSAT team. The process also allows for targets to be set and measured regarding the amount of time it takes to close a To ensure that the Alcatel-Lucent complaint. Leveraging the information Management Committee has visibility collected, corrective measures are into customer issues, the Q & CSAT team developed and tracked to completion, is responsible for preparing weekly and follow-up discussions with customers reports that outline the most pressing ensure all corrective measures have been issues affecting customers in each region. addressed to the customer’s satisfaction. Customer Critical Issues are further reviewed by region and product unit presidents during their quarterly reviews.

30 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

4.3 United Nations Global Compact PRINCIPLES NUMBER DESCRIPTION READ MORE

Human Rights 1 To support and respect the protection of p. 24, 51, 66-67, 100-101, 124, 143, 147, 167 internationally proclaimed human rights. 2 To make sure that we are not complicit in p. 66-67, 100-101, 143, 147, 167 human rights abuses. Labour 3 To uphold the freedom of association and the p. 4, 101, 105, 160, 168 effective recognition of the right to collective bargaining. 4 To support the elimination of all forms of p. 100-101, 143, 147, 168 Alcatel-Lucent is a longstanding signatory forced and compulsory labor. to the United Nations Global Compact. Both a policy platform and a practical 5 To support the effective abolition of child labor. p. 100-101, 133, 143, 147 6 To support the elimination of discrimination in p. 4, 25, 59, 64, 100, 107-112, 133, 145, 147 framework for companies committed M United Nations Global Compact Local to sustainability and responsible respect to employment and occupation. Network event at Alcatel-Lucent Bell, business practices, the UN Global Environment 7 To support a precautionary approach to p. 4, 5-6, 51, 143-144 Antwerp, Belgium, October 2011. Iris Van der Veken, Rosy Blue, Manager Compact is an international initiative environmental challenges. Corporate Affairs Global Chair, United that brings companies together with UN 8 To undertake initiatives to promote greater p. 4, 24, 27, 33-36, 69-72, 89-97, 143-144, Nations Global Compact Network Belgium and Katrina Destrée Cochran, environmental responsibility. 150-151 agencies, labor and community groups Director Stakeholder Engagement, to support universal environmental, 9 To encourage the development and diffusion p. 4, 25, 27, 33-36, 73-89, 121-127 Office of Sustainability, Alcatel-Lucent ethical and social principles. It is the of environmentally friendly technologies. world’s largest corporate citizenship Anti-corruption 10 To work against corruption in all its forms, p. 4, 6, 27, 33, 37, 51, 55-59, 63-67, 143, 147 initiative, with more than 6,000 including extortion and bribery. companies belonging to its network. JOINING THE UN GLOBAL COMPACT In 2011 we incorporated information Alcatel-Lucent values the opportunity BELGIUM NETWORK Read more about the UN Global Compact C on our CR activities in accordance to promote the UN Global Compact and with the 24 UN Global Compact its principles at both the global and local We are committed to integrating Alcatel-Lucent is an active member advanced-level criteria, particularly levels. In particular, regional partnership the 10 principles of the UN Global of the UN Global Compact Belgium in the following areas: networks allow us to better understand Compact into everything we do. To Network and in 2011 hosted an NN Strategy, governance and engagement the needs of our stakeholders and the increase our level of reporting and event on ICT sustainability for the NN UN goals and issues environments in which we operate. to demonstrate our sustainability Network’s partners. At the end of NN Implementation of Global Compact Exchanging best practices at the local level governance and management 2011, Alcatel-Lucent was elected to principles further supports the UN Global Compact’s processes, the Alcatel-Lucent 2011 CR the Network’s steering committee NN Value chain implementation mission for companies to implement its Report includes information relevant to provide strategic input, promote NN Verification and transparency principles into their strategy and day- to each of the 10 principles. the Network, and lead international to-day operations. The Global Compact’s Read more about advanced-level criteria partnerships (including partnerships C Read more about the UN Global Compact’s C local networks thrive by showcasing 10 principles and Alcatel-Lucent’s UN Global Compact with other local networks of the profile examples, learning from each other and Global Compact). sharing insights at the annual Global Compact meeting. They also form a unique community environment that supports the broader UN Millennium Development Goals. 31 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

4.4 World Economic Forum stakeholders – play a leading role in Alcatel-Lucent’s contributions to WEF improving the state of the world. entities and initiatives in 2011 included: NN CEO Ben Verwaayen is a member Throughout 2011 and early 2012, Alcatel- of the WEF Foundation Board, the Lucent focused its WEF participation and Global Gender Parity Group Initiative, resources on three CR priorities: digital and the Executive Committee of the inclusion, innovation and diversity. International Business Council. In 2011, CEO members of the IBC and the Our executives participated in numerous International Chamber of Commerce WEF meetings in Switzerland, Latin collaborated to develop proposals for Rajeev singh-Molares America, Africa, Europe, China, the G20 governments. Executive vice Robert Greenhill, Middle-East, East Asia and India. President and For more information, see p. 66 Managing Director and A Asia-Pacific President Chief Business Officer Alcatel-Lucent and World Economic Forum chairman of the wef ict 2011 ACHIEVEMENTS global agenda council Last year Alcatel-Lucent demonstrated its leadership by helping establish a framework of best practices related to gender diversity. Watch the video CEO Ben Verwaayen was nominated 'ENERGY + INSIGHT = CHANGING THE WORLD' to the WEF Gender Parity Board and Watch the video led discussions on closing the Our Strategic Partnership with the WEF economic gender gap at Davos 2012. remains a vital part of Alcatel-Lucent’s corporate stakeholder engagement and a key pillar of our Corporate “The World Economic Forum is a In December 2011, Executive Vice Responsibility activity. Our goal is unique place to look at issues President Stephen Carter co- to have our most senior executives from very different perspectives: sponsored the WEF Young Global and experts – in collaboration with innovation, sustainable green, Leaders UK Summit on Global our customers, partners and major new ways of engaging with the Growth, where he contributed to young. Bring it on!” discussion on technology as a lens To experience for global growth. Augmented Reality, BEN VERWAAYEN, 1. Download the CHIEF EXECUTIVE OFFICER, app using the QR code ALCATEL-LUCENT 2. Scan the video picture with your phone.

Read more

32 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1l Dia ogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic Forum 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

NN Alcatel-Lucent is a signatory to the In addition, Alcatel-Lucent supports NN Mohamed El-Haw participated at Partnering Against Corruption several WEF communities, including the first WEF Global Shaper summit Initiative (PACI) and is represented by Technology Pioneers, the Science meetings in Jordan and Davos. Barbara Landmann, Chief Compliance Advisory Council, Young Global Leaders, Read our blog Officer and SVP, Intellectual Property and Women Leaders and Gender C & Standards. Parity. Highlights in 2011 included: NN Ben Verwaayen co-chaired both the NN NN E xecutive Vice President and Asia- Adolfo Hernandez, Executive Vice India Sustainability Growth Summit Pacific President, RajeevS ingh-Molares President, President of Software, and the India Economic Summit in is Chairman of the ICT Global Agenda Services & Solutions, and Strategic Mumbai, actively participating in Council, where he is leading an Industries, was a panelist on the topic sessions focusing on climate change, initiative to promote “education for of infrastructure at the WEF Africa growth and youth. all” via mLearning. Summit in Cape Town. NN Alcatel-Lucent also has representation C Read our blog Read our blog on the WEF Green Growth Board C NN S tephen Carter, Executive Vice (Gee Rittenhouse, Chairman NN Jeong Kim, President Bell Labs and President, President of the Europe, GreenTouch, COO S3G Business Group) Chief Strategy Officer of Alcatel- Middle-East and Africa region and M Ben Verwaayen, Alcatel-Lucent Chief Executive Officer;F oundation and the Global Agenda Council for Lucent, participated at the WEF Chief Corporate Marketing and Board Member during the session ‘TIME Davos Debate on Capitalism’ the International Legal System at the Annual Meeting 2012 of the World Economic Forum at the Summer Davos in Dalian, China, where Communications Officer, co-sponsored (Steve Reynolds, General Counsel). congress centre in Davos, Switzerland, January 25, 2012. he spoke about “growth through the WEF Young Global Leaders United NN Christel Heydemann, Executive Vice science”, and mentored Technology Kingdom Summit on Global Growth President, Corporate Human Resources Pioneers, Young Global Scientists and in London. and Transformation, was appointed to entrepreneurs attending the forum. the 2012 WEF Young Global Leader He is also a member of the WEF Tech NN Alcatel-Lucent executives attended the class; Mohamed El-Haw, a member of Pioneers Selection Committee and WEF Annual Meeting at Davos, where our Human Resources team in Egypt, the WEF Science Advisory Council. Ben Verwaayen participated in the was nominated in the 2011 WEF TIME Magazine Davos Debate on Global Shaper Class. C Read our blog Capitalism: Is 20th Century Capitalism NN Christel Heydemann was invited as Failing 21st-century Society? and was a guest WEF Young Global Leader at a discussion leader on gender parity. their annual summit in Dalian, China, to C Read more about the TIME Magazine Davos discuss a new generation of leadership. Debate on Capitalism

C Read our blog C Read more about the discussion on gender parity

33 ABOUT Content Ceo C orporATe Company Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1l Dia ogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic Forum 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

4.5al Glob eSustainability Initiative reporting standard for corporate GHG 4.5.2 Energy EfficiencyW orking Group leveraging the strengths and expertise emissions. By focusing on methodologies, of their respective members in a processes and metrics used to quantify concerted effort to drive research the enabling effect of ICT, Alcatel- and investment into energy-efficient Lucent plays a leading role in the technologies and solutions. Their common technical working group responsible “The ICT industry plays a key role goal is to raise additional awareness of for developing the guidance as well in addressing climate change the challenges stemming from climate as the steering committee level. globally and facilitating efficient change and exploding traffic growth, Alcatel-Lucent is a founding member and low-carbon development. and to couple the developed technology C Read more about the Greenhouse Gas of Global eSustainability Initiative Protocol Partnering with GreenTouch will roadmaps to policies and regulations. (GeSI), a strategic partnership of move GeSI one step forward in C Read more about the partnership between ICT companies, associations and Alcatel-Lucent’s expertise comes from reducing the time it takes for GreenTouch and GeSI international organizations that are Bell Labs, namely from the product innovative ICT solutions for committed to creating and promoting environmental engineering and network climate change to hit the market.” 4.5.3 Communications Working Group technologies and practices that foster transformation area. For example, Alcatel-Lucent co-chairs the economic, environmental and social our experts are helping to model the LUIS NEVES, Communications Working Group, which sustainability. Formed in 2001, GeSI’s amount of energy and associated carbon CHAIRMAN, GeSI disseminates key ICT sustainability vision is a sustainable world through emissions it takes to communicate messages about supply chain, energy responsible, ICT-enabled transformation. information across the network. efficiency, public policy, e-waste and Alcatel-Lucent co-leads the Energy climate change issues. The group conveys C Read more about the Global eSustainability Initiative This work substantiates the message Efficiency WorkingG roup, which aims to GeSI’s mission to become a globally from GeSI’s flagship report,S MART improve and facilitate cooperation and recognized thought leader and driver 2020: Enabling a low-carbon society, coordination among standards-developing of the ICT sustainability agenda. highlight regarding the potential of ICT to enable organizations to promote and accelerate Within GeSI, Alcatel-Lucent other sectors to reduce their carbon the market availability of energy- The group also facilitates opportunities provides leadership in three areas: emissions. According to SMART 2020, efficientI CT products, architectures to engage with stakeholders who share climate change, energy efficiency the ICT sector is directly responsible for and practices. For example, this is the value of reducing GHG emissions and communications. only about 2% of total GHG emissions, but achieved by addressing information through the use of ICT. In June 2011, GeSI can substantially help reduce emissions gaps and eliminating duplication of and Greenpeace held a videoconference from the remaining 98%. By applying efforts or diverging standards. to discuss common goals related to 4.5.1 Climate Change Working Group ICT solutions to other sectors such as emissions reduction. Alcatel-Lucent was Working in collaboration with other power grids, logistics, buildings and At the end of 2011, GreenTouch and present at this meeting, which led to GeSI members, Alcatel-Lucent provided motor systems, global GHG emissions GeSI announced their partnership further engagement on shared goals in industry expertise for the March 2012 could be reduced by 15% by 2020. to coordinate research and policy responding to climate change challenges. ICT sector supplement to the Greenhouse developments to further disseminate Read more about SMART 2020 Gas (GHG) Protocol Product Accounting C the energy-efficiency tools needed for and Reporting Standard – the most significant mitigation of climate change. widely used global accounting and Both organizations are committed to

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4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

During negotiations under the United 4.6 Public affairs Alcatel-Lucent Global Government Commission has used this initiative Nations Framework Convention & Public Affairs works with policy to establish three working groups to on Climate Change (UNFCCC), GeSI makers, regulatory authorities and continue the dialogue with stakeholders members successfully raised awareness other institutions to help create a – some of whom have even begun to on the potential of ICTs to mitigate favorable political, financial, legal and engage in negotiations together. the consequences of climate change. regulatory environment that fosters At the 2010 UN Climate Change public and private investment in the Envisioning the future at e-G8 Conference COP-16 in Cancun, Mexico, digital and broadband industries. and B20/G20 the Guadalajara ICT Declaration for The e-G8 forum organized multiple Transformative Low-Carbon Solutions, Alcatel-Lucent’s Public Affairs activities conferences and discussions to gather supported by more than 40 companies help shape and socialize efficient companies, thinkers and Internet (including Alcatel-Lucent), encouraged spectrum allocation methodologies stakeholders to talk with the leaders policy makers to “recognize and for mobile broadband in a range of of G8 nations about the impact of the make full use of ICT as a solution”. Internet and online areas, including Internet on society and the economy. Internet sustainability, net neutrality, Alcatel-Lucent was a partner in the e-G8 C Read more about the Guadalajara ICT Declaration for Transformative Low-Carbon digital inclusion, broadband connectivity forum in Paris in May 2011, with CEO Solutions “Alcatel-Lucent’s public for social and economic development, Ben Verwaayen co-chairing the event. M B20/G20 Summit affairs initiatives focus on and corporate governance. The successful launch of that declaration innovations that support In the B20/G20, Alcatel-Lucent convened paved the way for GeSI’s work in 2011. sustainable economic growth, 4.6.1 Contributing to a sustainable a working group on ICT and innovation, Internet looking at ways to encourage authorities At COP-17 in Durban, South Africa, the competitiveness and social welfare.” Internet sustainability encompasses to create stable and predictable message of transformative, low-carbon the economic, technical and societal regulatory frameworks that promote solutions was well received, with three GABRIELLE GAUTHEY, issues related to net neutrality. In this competition and private-sector UN leaders declaring their support for EXECUTIVE VICE PRESIDENT arena, Public Affairs is active in shaping investment, as well as public initiatives in ICT and, for the first time, a coordinated GLOBAL GOVERNMENT & PUBLIC and sharing best practices related to fixed and mobile broadband, ultra-high- message between the ICT industry, the AFFAIRS, ALCATEL-LUCENT issues such as online trust, data privacy, speed broadband, content, applications UNFCCC, ITU, the UN Global Compact content protection and cyber security. and services. The group also agreed and the UN Environment Programme. on the importance of establishing new, Driving cross-industry collaboration more sustainable business models for Alcatel-Lucent fully supports the work in Europe all players in the Internet value chain. that organizations such as GeSI provide. Alcatel-Lucent was instrumental in Read more about the B20 final report By allocating resources to co-lead several launching and continues to propel C of GeSI’s working groups and providing cross-industry discussion on next- further support to the GreenTouch generation access (i.e., upgrading initiative, the company is demonstrating copper telecommunications to fiber) a long-term commitment to an ICT- among European operators. The EU enabled sustainable environment.

35 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

4.6.2 Furthering the cause of digital for a high-level ministerial summit on from around the world as well as the 2011 ACHIEVEMENTS inclusion the roadmap for mobile broadband. highest-level representatives from Our 2011 commitment was to To contribute to economic development, During this event, participants shared industry and international agencies and promote digital plans in countries public welfare and digital inclusion, their perspectives on the evolution of organizations and academia concerned all around the globe to support ICT Alcatel-Lucent Public Affairs works with the digital economy in key countries, with development. Mr. Verwaayen is benefits for all, with the governments and regulators globally including Kenya, Nigeria, Lebanon, among the initiative’s select group establishment of an EU plan by to develop digital networks capable Mexico, Colombia and Brazil. of commissioners. In 2011, Alcatel- mid-July 2011. of delivering e-health, e-learning and Lucent helped define the Commission’s Read more e-government services at the lowest C targets and challenge governments On July 13, 2011, Alcatel-Lucent possible cost. In particular, we promote Advancing mLearning worldwide to achieve them by 2015. public policies – including efficient Mobile learning holds potential to CEO Ben Verwaayen, Vivendi C Read more on Broadband Commission chairman Jean-Bernard Lévy, and spectrum policy – that support extending transform education, especially in targets Deutsche Telekom CEO Rene wireline and wireless connectivity to emerging and developing countries. In Obermann joined 35 other CEOs in underserved and rural populations in 2011, key initiatives in this area included Alcatel-Lucent also contributed to the Brussels to meet Neelie Kroes, both developing and developed countries. triggering mLearning projects in Africa Commission’s main report and has (training for health workers in Sub- participated actively in its working European Digital Agenda A For more information about digital Commissioner, and offer an 11-point inclusion, see p. 121 Saharan Africa) and India (mLearning for groups on e-government, climate outline of principles for meeting three-million students through Indira change, education, health and science; targets for rolling out super-fast Understanding the impact of Ghandi National Open University), and the latter sought to raise awareness broadband networks throughout broadband connectivity the development of reports, articles of the potential of ICT to reduce global Europe. Alcatel-Lucent continues to raise and presentations on mLearning, carbon dioxide emissions by 15%. awareness of the enabling effects of including a white paper for the WEF. C Read more about the Commission’s broadband connectivity and digital science report Similar plans have been shared with inclusion among stakeholders such A For more information about mLearning, see p. 126 other countries: Kenya, Mexico, as the UN, ITU, UNESCO, the World C Read more on The Broadband Bridge- Linking ICT with Climate Action for a Brazil, Argentina, Ecuador, Listen to the podcast of 'The world Bank and other regional development Q Low-Carbon Economy Venezuela, Colombia, Qatar, Algeria banks, GSMA, and various NGOs and needs mobile learning' hosted by Rajeev Singh-Molares and Indonesia. foundations. Recognizing the need for greater cross-sectoral work – and for Taking an active role in the tying infrastructure deployments to Broadband Commission applications, solutions and services Alcatel-Lucent is a committed participant 2012 TARGET that cater to health, education and in the Broadband Commission for other key sectors – Alcatel-Lucent Digital Development, a joint initiative 1 is also engaging with governments of the ITU and UNESCO established Via the Public Affairs team, continue to foster cross-ministry bridges. in response to UN Secretary-General to promote digital plans in countries Ban Ki-Moon’s call for greater effort around the world to support ICT In February 2012, Alcatel-Lucent hosted to meet the Millennium Development for all. governments from emerging digital Goals. Launched in May 2010, the economies at Mobile World Congress Commission includes government leaders

36 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN corporate responsibility ovErview > 1.0 OUR APPROACH TO CORPORATE RESPONSIBILITY 2.0 MANAGING OUR CORPORATE RESPONSIBILITY 3.0 2011 CORPORATE RESPONSIBILITY PERFORMANCE AND REPORTING 4.0 OUR EngageMENT with STaKeholders

4.1 Dialogue and action 4.2 Customer relationships 4.3 United Nations Global CoMPACT 4.4 World Economic ForuM 4.5 Global eSustainability Initiative 4.6 Public affairs 4.7 Responsibility to shareholders

4.6.3 Corporate governance 4.7 Responsibility to shareholders As governance is a key item on Alcatel-Lucent works with professional 2012 TARGET Alcatel-Lucent regularly updates the agendas of investor meetings, associations and international forums shareholders and prospective investors Alcatel-Lucent communicated with to promote best-in-class Corporate 1 on the company’s business strategy, shareholders ahead of the Annual Responsibility policies – in particular, Via the Public Affairs team, continue activities and financial performance. General Meeting to discuss and explain those related to corporate governance to promote with public authorities the resolutions on which they will be issues such as transparency, management best-in-class CR policies (in In 2011, the company announced a voting. The company also provided structure, whistle blowing and particular, corporate governance) to number of technical breakthroughs, stakeholders with information about compliance procedures, shareholder enhance legislation and voluntary enabling service providers to quickly our Dow Jones Sustainability Index structure, balance sheet financing initiatives adapt their fixed and wireless networks ranking and our role in the ICT sector. and financial results reporting. to end-users’ needs, and to substantially A For more information about the DJSI, reduce their infrastructure power see p. 23 consumption. During the May 2011 2011 ACHIEVEMENTS Technical Symposium in Villarceaux, In 2012, the Investor Relations team Work on the B20 platforms France, financial analysts, industry will focus on strengthening relationships During the November G20 meeting in Cannes, government and business leaders analysts and media toured Bell Labs with the financial community. held a B20 business summit to develop recommendations that would unlock and talked with company leaders and economic growth. Read more engineers on the way to further embed C environmental challenges as sustainability To facilitate adoption of best-in-class CR policies, Alcatel-Lucent was involved in criteria within our innovation process. five of the 12 B20 working groups. Their recommendations included: HIGHLIGHT Main shareholders as of NN Strengthening the international monetary system by encouraging At the end of 2011, Corporate December 31, 2011 convertibility of the Chinese yuan and developing local financial markets Responsibility and Investor Relations NN Making infrastructure a strong enabler for development, with increased teams jointly organized roadshows. investment from the private sector and promotional support from With primary focus being on our 4.8% Fidelity Management governments and multilateral organizations global CR approach and on our carbon & Research NN Recognizing corporate social responsibility as a key element for development footprint, those sessions were unique and growth opportunities for analysts to better 3.6% CDC An entire working group was dedicated to the topic of anti-corruption. Over the understand Alcatel-Lucent’s commitment to Corporate Responsibility. The two course of the year, this group has pressed actively for the adoption of anti- 3.3% Manning & Napier corruption rules and transparency measures, including at the level of the World teams intend to collaborate on similar types of roadshows in 2012. Trade Organization (WTO). The next G20/B20 will be held in Mexico in June 2012. 2.7% BlackRock Fund Advisors

4% Company-related holding

Read more about B20/G20 For more information about anti-corruption, see p. 57

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Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 InnOVATION AT ALCATEL LUCENT

if everyone’s connected, what will be possible? COMPANY OVERVIEW

We are committed to making communications more sustainable, more affordable and more accessible, pursuing our vision to realize the potential of a connected world.

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Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 InnOVATION AT ALCATEL LUCENT

1.1 The company in brief 1.2 The business at a glance

to meet the demands of transporting G eographic breakdown of revenues 1.0 rapidly growing video and mobile traffic, Key information consolidated F ull year 2011 – includes the results of our Genesys business and reduce overall operating costs. For in the group as of ABOUT those building private networks in the December 31, 2011 ALCATEL-LUCENT critical infrastructure segments, such as energy, transportation and public Employees services, HLN will provide the intelligence More than 76,000 and mission-critical reliability they need to support their operations. Operations in more than 130 countries The company is home to Bell Labs, one of the world’s foremost research Employee nationalities 1.1 The company in brief centers, responsible for breakthroughs More than 100 NORTH AMERICA - 38% The long-trusted partner of service that have shaped the networking and ASIA - PACIFIC - 17% providers, enterprises and governments communications industry. While Bell Labs Annual revenues EUROPE - 30% around the world, Alcatel-Lucent is is the research engine at Alcatel-Lucent, €15.3 Billion(1) REST OF THE WORLD - 15% a leading innovator in the field of innovation is a widely distributed and networking and communications core activity of the company as a whole. R&D expenses technology, products and services. We Bell Labs researchers and development O perating segments breakdown €2.4 Billion(2) are committed to making communications engineers work closely together to of revenues more sustainable, more affordable and produce innovations that bring visions F ull year 2011 – includes the results of our M arket capitalization more accessible; pursuing our vision of the future into reality, delivering Genesys business €2.7 Billion to realize the potential of a connected more reliable, secure, flexible and world – delivering the innovation our environmentally sustainable networks customers, the world’s communications than ever before. Markets served services providers and some 250,000 Americas enterprises, need to stay ahead, evolve, With operations in more than Asia-Pacific become radically more efficient, 130 countries and one of the most Europe, Middle-East and Africa and move at the speed of ideas. experienced global services organizations in the industry, Alcatel-Lucent is a local Headquarters Alcatel-Lucent’s High Leverage Network™ partner with global reach. The company Paris, France (HLN) provides the foundation needed achieved revenues of 15.3 billion NETWORKS - 62% to help service providers improve Euro in 2011 and is incorporated in SOFTWARE, SERVICES & SOLUTIONS - 28% the Internet experience for their France and headquartered in Paris. (1) Results excluding our Genesys business, ENTERPRISE - 8% customers – both businesses and which was sold to Permira on February 1, 2012. read more OTHER - 2% consumers – providing a platform for C (2) Adjusted R&D expenses, excluding the impact of the purchase price allocation entries in the profitable delivery of new revenue- C follow our blog connection with the Lucent business combination. generating services. HLN also gives service providers the agility they need C follow us on Twitter to develop applications faster, expand 39 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 INNOVATION AT ALCATEL LUCENT

1.1 The company in brief 1.2 The business at a glance

1.2 The business at a glance 1.2.2 Software, Services & Solutions (S3) Our operating segments are organized ALCATEL-LUCENT MARKET SHARES This operational segment delivers a ALCATEL-LUCENT MARKET SHARES to continue our focus on evolving INTERNET PROTOCOL portfolio of combined software, services SERVICES networks for the increasing demands #1 In mobile backhaul with 25% and solutions that focuses on the key #3 In overall services market, over of users while enabling network market share in the first half of opportunities and challenges facing our the rolling four quarters ending q3 operators, public and private, to create 2011 (Infonetics) customers and that supplements and ’11 (Analysys Mason, idc) new applications and consolidate and #2 In ip/mpls service provider enhances our HLN product strengths. #2 In oss/bss integration over the integrate their operations. Alcatel- edge routers with 23% market share The Software, Services & Solutions rolling four quarters ending q3 ’11 Lucent serves customers worldwide in 2011 (Infonetics) segment consists of the former Network (Analysys Mason) through three operating segments. Applications business and the former Managed services deals in 100+ Services group. The Services division networks covering 250 million 1.2.1 Networks WIRELESS designs, integrates and manages #1 In cdma with 37% market share subscribers (Alcatel‑Lucent This operational segment includes four networks through its consulting, estimate) main businesses – Internet Protocol in 2011 (Dell’Oro) professional and operations management (IP), Optics, Wireless and Wireline – and #2 In lte with 24% market share in practices. The Network Applications provides end-to-end networks and 2011 (Dell’Oro) division integrates services and software Network applications individual network elements that meet to offer a wide range of solutions that Customer experience solutions for the strategic communications needs of help service providers better monetize more than 150 of the world’s OPTICS fixed, mobile and converged service their networks and provide end-users a leading service providers #1 In submarine optical networking providers. As of December 31, 2011 the better quality of service. This operational (Alcatel‑Lucent) with estimated 35–40% market Networks group included another smaller segment also supports end-to-end share (revenues) 2011 98 Ims customer projects including business, Radio Frequency Systems. solutions for strategic industries (energy, (Alcatel‑Lucent estimate) 8 of the top 10 global operators transportation and the public sector). based on 2011 rankings #2 In terrestrial optical networking (Alcatel‑Lucent) with 16% market share based on revenues in 2011 (Dell’Oro) 200+ Subscriber data management deployments with more than one #2 In wdm long haul with 17% billion subscribers (Alcatel-Lucent) market share based on revenues in 2011 (Dell’Oro) 190+ Payment customers including 8 of the top 10 global mobile operators based on 2011 rankings WIRELINE (Alcatel‑Lucent) #1 In broadband access with 37% Motive’s customer experience- dsl market share based on management solutions are deployed revenues in 2011 (Dell’Oro) by almost 200 customers around #1 In vdsl2 with 44% market share the world (Alcatel‑Lucent) revenues in 2011 Dell’Oro) #2 In gpon with 24% market share based on revenue in 2011 (Dell’Oro)

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Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 INNOVATION AT ALCATEL LUCENT

2.1 About Bell Labs 2.2 MANAGING INNOVATION AT ALCATEL-LUCENT

1.2.3 Enterprise In addition, we organize our business as 2.1 About Bell Labs This operational segment provides follows. 2.0 2.1.1 Profile of a research leader voice telephony and data networking Today’s Bell Labs scientists build on a technology to more than 250,000 1.2.4 Customer Sales organizations INNOVATION AT long legacy of discovery. Some of the enterprises worldwide. On February 1, We continue to have three customer- ALCATEL-LUCENT most remarkable minds in industrial 2012, we completed the sale of our facing regional organizations – the research have worked within the Genesys call center business to Permira. Americas, Asia-Pacific and EMEA – that institution, and over the years have are accountable for serving customers HIGHLIGHT garnered seven Nobel Prizes. In addition and growing the business profitably. The Bell Labs’ global research centers to serving as the research arm of Alcatel- ALCATEL-LUCENT primary mission of these organizations collaborate with more than 250 Lucent, Bell Labs develops the company’s MARKET SHARES is to sell our products and services and universities and research partners technology strategy, sets its standards #2 In Europe, the Middle-East and ensure the highest customer satisfaction. around the world. for technical excellence and oversees its Africa (emea) in enterprise The three regions share responsibility for large portfolio of intellectual property. telephony in 2011 (Dell’Oro) customer-focused activities with separate, #3 In emea in managed lan dedicated sales teams for our vertically The work of Bell Labs spans all levels switches for twelve months ending integrated units (Submarine Systems, of research from the fundamental to October 31, 2011 based on Radio Frequency Systems and Enterprise). the applied. Some of its researchers revenues (Infonetics) explore the underlying science of 1.2.5 Global Customer Delivery physics and information theory to In July 2011, we created the Global build the deep, multi-disciplinary The solutions we deliver through each Customer Delivery organization (GCD) to foundation of knowledge needed of our operating segments provide serve as a single interface for Alcatel- to drive disruptive changes into the a variety of social, economic and Lucent when delivering on commitments market. Others work at the applied environmental benefits in keeping with to our customers. This new organization level to solve complex business our Corporate Responsibility principles. combines the resources from the former or market challenges faced by our Our network technologies extend the Quality Assurance & Customer Care customers. Working in multi-disciplinary benefits and opportunities associated teams with the regional organizations. teams, these efforts allow Alcatel- with advanced communications to an Lucent to bring innovative products ever-wider range of people – urban read more about Alcatel-Lucent C such as lightRadio™ to the market. and rural, in developed countries and C More Information in the Annual Report emerging economies, including those who on Form 20-F have never had access to a telephone. Our S3 offerings enable the delivery of e-health, e-learning and other services that realize the vision of digital inclusion. Our enterprise solutions help businesses operate more efficiently and effectively, driving prosperity and economic growth.

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Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 INNOVATION AT ALCATEL LUCENT

2.1 About Bell Labs 2.2 MANAGING INNOVATION AT ALCATEL-LUCENT

Bell Labs scientists conduct research As active members of these NN Bell Labs researchers Murali Kodialam C Read more about ITU at facilities in North America, Europe HIGHLIGHTS organizations, our researchers, scientists and TV Lakshman, along with James and Asia and – given Alcatel-Lucent’s Participation in approximately and experts shape Alcatel-Lucent’s B. Orlin and Sudipta Sengupta from C Read more about IETF support of open innovation – collaborate 100 standards organizations vision and contribute to industry MIT, were selected winners of the Read more about 3GPP with other scientists, engineers and advancement and the global economy. 2011 William R. Bennett Prize in the C researchers from more than 250 Field of Communications Networking Contributions to more than C Read more about IEEE universities and partner organizations for their excellent paper: Oblivious 200 different working groups 2.1.2 Recognized for innovation worldwide. Top experts across a range of Each year, Bell Labs researchers Routing of Highly Variable Traffic in C Read more about ATIS disciplines take on some of the toughest and alumni are recognized for their Service Overlays and IP Backbones. challenges associated with realizing The research expertise of Bell Labs outstanding technical achievements by NN Tod Sizer, Bell Labs Access C Read more about Broadband Forum the potential of a connected world. and the technical excellence of Alcatel- organizations around the world. During Technologies research leader, Lucent are recognized around the world 2011, several current and past members was awarded the Popular C Read more about CCSA – as suggested by the large number of the Bell Labs research community Mechanics 2011 Breakthrough HIGHLIGHT of researchers, scientists and experts and the broader Alcatel-Lucent technical Award for his groundbreaking C Read more about ETSI University of Pittsburgh Medical who hold leadership positions in key community were recognized as recipients work on the lightRadio cube. Center (UPMC) Read more about OMA standards organizations such as: of more than 30 prestigious awards. C An example of one such partnership NN the International is with UPMC in Pittsburgh, C Read more about Open Telecommunications Union (ITU) Highlights from 2011 include: HIGHLIGHT IPTV Forum Pennsylvania. Bell Labs is working Awards over the years NN the Internet Engineering NN Dennis Ritchie and Ken Thompson, with UPMC to develop a NN 7 Nobel Prizes in Physics Task Force (IETF) former Bell Labs Computer Science C Read more about TIA telemedicine platform and suite of NN 9 U.S. Medals of Science NN the 3rd Generation Partnership researchers, were awarded the applications that make use of web NN 12 U.S. Medals of Technology Program (3GPP) 2011 Japan Prize for developing services and cloud technologies to NN 1 Japan Prize NN the 3rd Generation Partnership the UNIX® operating system and enable patients to receive care even NN 2 Draper Prizes Program 2 (3GPP2) C programming language. when they are far from doctors and NN 14 John Tyndall Awards NN the Institute of Electrical and NN Gabriel Charlet, research manager hospitals. NN 1 GRAMMY® Award Electronics Engineering (IEEE) in Bell Labs Optical Technologies NN 8 Marconi International NN the TIS Broadband Forum research, was awarded the World Fellowship Awards NN China Communications Standards Technology Award by the World NN 7 C&C Prizes Association (CCSA) Technology Network for “innovative NN 28 IEEE Medal of Honor winners NN the European Telecommunications work of the greatest likely long- NN 1 Emmy Award For more information, see p. 127 Standards Institute (ETSI) term significance”. He has also NN 1 General Ferrié Award NN the Open Mobile Alliance (OMA) been named a WTN Fellow. NN 1 Blondel Committee Medal NN the Open IPTV Forum NN the Telecommunications Industry Association (TIA)

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Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 INNOVATION AT ALCATEL LUCENT

2.1 About Bell Labs 2.2 MANAGING INNOVATION AT ALCATEL-LUCENT

2.2 MANAGING INNOVATION AT Focused on strengthening science and property gives the company’s R&D (“RPX”), a company active in the patent ALCATEL‑LUCENT fundamental research within Bell Labs, community the design freedom to risk solutions business, pursuant to the Bell Labs Chief Scientist periodically develop and introduce compelling new which, for a finite period, RPX will offer reviews the research portfolio to products and services for the world’s access to our worldwide patent portfolio KEY FIGURES determine the quality and number telecommunications providers, who through non-exclusive patent licenses to R&D is at the heart of our of science and fundamental research in turn make it possible for billions of be entered into between members of the technology-driven company projects necessary to fulfill the Bell Labs people around the world to access a wide RPX client network and Alcatel-Lucent. mission – with the goal of identifying range of communications services on a Alcatel-Lucent dedicated 15% of its and building on areas important to the multitude of devices and platforms. revenue to R&D in 2011, and future interests of Alcatel-Lucent. HIGHLIGHT Entrepreneurial Boot Camp Program meaningful innovation has been On February 9, 2012, we entered into Bell Labs’ Entrepreneurial Boot Camp gives employees worldwide part of the company’s heritage 2.2.1 Patent portfolio management an agreement with RPX Corporation the opportunity to propose ideas for new products or services, as since day one The Bell Labs Intellectual Property and well as for improvements to existing products or services or Standards organization is responsible for 2011 ACHIEVEMENTS operational efficiencies. Proposals are reviewed by a panel of managing one of Alcatel-Lucent’s most More than 29,000 active experts drawn from inside and outside of the company. Teams are Bell Labs scientists work with developers important assets: its large and valuable patents held formed around the ideas that are judged to have the greatest and engineers in the company’s operating patent portfolio. More than 2,600 patents potential, and they work with experts to develop business plans for segments to drive innovation, resulting in were added to that portfolio in 2011, presentation to a cross-discipline panel. The panel considers the compelling and useful new communications bringing the total to more than 29,000 More than 2,600 patents proposals for integration into a product plan or to receive funding services and capabilities that are changing active patents across a wide array of awarded in 2011 for further development. In addition to serving as a potential the way the world communicates. technologies. This depth of intellectual source of revenue, boot camps offer employees a great learning opportunity and a rewarding experience. In 2011 the boot camp concept was used to explore ideas for social innovation opportunities that allow the company to participate more fully in socially responsible programs while achieving its business goals.

To experience Augmented Reality, 1. Download the antonia tulino Moritz Steiner BOB willett app using the QR code mts, access mts, network dmts, physical 2. Scan the video technologies technologies technologies picture with your phone. bell labs research bell labs research Bell labs research Read more

Watch the video ‘Looking forward’ Watch the video ‘The impact opportunity’ Watch the video ‘The pace of progress’ 43 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

Alcatel-Lucent Company Overview > 1.0 ABOUT ALCATEL-LUCENT 2.0 INNOVATION AT ALCATEL LUCENT

2.1 About Bell Labs 2.2 MANAGING INNOVATION AT ALCATEL-LUCENT

2.2.2 Leveraging our talents 2.2.3 2011 breakthroughs and key and virtualized into a network cloud. networks by up to 50% over current Alcatel-Lucent’s employees are a innovations Since its introduction, lightRadio radio access network equipment. rich source of fresh ideas. Bell Labs Our focus on innovation enabled us to has transformed industry thinking lightRadio has captured 12 industry encourages their creativity through an develop potentially industry-changing in the way wireless networks are awards including the coveted Best Entrepreneurial Boot Camp program offerings and enhance the solutions we designed and deployed to deliver Infrastructure Technology Award – designed to teach employees how deliver to our customers. In 2011, the mobile broadband more effectively. at Mobile World Congress 2012. to develop innovative ideas into entire Alcatel-Lucent R&D community The lightRadio network, which was read more about lightRadio comprehensive business plans and made major contributions across a exhibited live with Telefónica at Mobile C ultimately, new products, solutions wide range of disciplines, such as World Congress 2012, can support NN The world’s first 400G network M Best infrastructure or services – that is held at major optical networking and networking speeds of up to 10 times those offered processor: the FP3. Controlling Technology award at mobile World congress 2012 locations across the company. technologies. These included: by the 3G network while lowering just how fast bits travel across NN Our lightRadio product made its the cost per bit, meeting the needs the network, the FP3 network Bell Labs also rewards and recognizes debut early in 2011. This disruptive of more users in dense urban areas. processor optimizes 10G and 100G outstanding innovation and technical innovation condenses and combines In addition, the cost structure is networks, and provides a clear path excellence demonstrated by individuals cell tower components, such as such that it can also meet the needs to 400G networking. It ensures and teams in its R&D and engineering amplifiers and antennas, into a single, of users in rural or remote areas, higher performance, unlocks value communities through programs such small cube-shaped multi-standard delivering broadband to those on for the next generation of online as the Bell Labs President’s award, the radio. In addition, other elements of the other side of the digital divide. applications, entertainment and Bell Labs Fellows and the Distinguished the traditional Radio Access Network And finally, lightRadio will be able to communications while cutting power Member of Technical Staff programs. (RAN) architecture are combined reduce energy consumption of mobile consumption by up to 50% and reducing greenhouse gas emissions.

C read more about FP3 NN The first demonstration of spatial division multiplexing over a single optical fiber, a novel multiplexing technology that has the potential to dramatically increase optical transmission. It represents a viable way of satisfying demand for high- gee rittenhouse speed networks far into the future by chief operating officer basil alwan tod sizer overcoming limits to optical network sofTware, services & ip division president/ access technologies capacity imposed by Shannon’s Law. solutions, alcatel-lucent vp networks strategy domain leader and greentouch™ chairman alcatel-lucent bell labs research

To experience Augmented Reality, 1. Download the app using the QR code 2. Scan the video Watch the video ‘about Shannon’s Law’ Watch the video ‘about FP3’ Watch the video ‘about lightRadio’ picture with your phone. Read more 44 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SENIOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

GOVERNANCE

Alcatel-Lucent is compliant with the AFEP-MEDEF Code of Corporate Governance for listed corporations. The principles of the code govern, among other things, the operating rules of our Board of Directors and its committees. The code is based on specific principles that also largely underpin our corporate governance policy as those principles are in line with the organization, the status and the means of the company, unless otherwise mentioned.

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Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SENIOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

1.1 separation of functions 1.2 staggered board – membership and diversity 1.3 selection criteria and independence of the directors 1.4 ethics and absence of conflicts of interesT 1.5 Board Duties

Renewal of the Directors’ terms of office 1.0 Duration of the term of office Name office age independent nationality 2009 2010 2011 2012 2013 2014 BOARD OF director Philippe Camus Chairman 63 French DIRECTORS Director GOVERNANCE Ben Verwaayen CEO Director 60 Dutch Daniel Bernard Director 66 Yes French SYSTEM W. Frank Blount Director 73 Yes American Carla Cico Director 51 Yes Italian Stuart E. Eizenstat Director 69 Yes American 1.1 Separation of functions Alcatel-Lucent operates according to Louis R. Hughes Director 63 Yes American the “monist” system, meaning that it Lady Sylvia Jay Director 65 Yes British is managed by a Board of Directors. Jean C. Monty Director 64 Yes Canadian The duties of the Chairman of the Olivier Piou Director 53 Yes French Board and those of the CEO have been Jean-Cyril Spinetta Director 68 Yes French separated since 2006. Philippe Camus has been Chairman since October 1, 2008 and Ben Verwaayen has been 1.2 Staggered Board – Membership The Board of Directors also includes two CEO since September 15, 2008. and Diversity Board observers (“censeurs”), appointed 2011 ACHIEVEMENT Our Board consists of 11 directors, two for three years, who participate in The Board of Directors began Following the renewal of their terms of whom are women, representing six Board meetings on a consultative basis. a process to bring itself into of office at the Annual Shareholders’ different nationalities. The average age of They are employees of Alcatel-Lucent compliance with the provisions of Meeting of 2010, our Board of its members is 63. The term of office is or of an affiliate and members of an French law concerning the balanced Directors confirmed the principle of three years maximum and, in compliance Alcatel-Lucent mutual fund (in French, representation of men and women separation of functions of Chairman with the AFEP-MEDEF Code, the renewal “fonds commun de placement”). at boards of directors, which and CEO, and reappointed Mr. Camus of the terms of office of each director is requires that by the first Annual C Read more in the Form 20F – Section 7.1.2 as Chairman of the Board of Directors staggered so as to avoid the replacement “Management Bodies of the Company” Shareholders’ Meeting held in 2014, and Mr. Verwaayen as CEO. of the entire Board of Directors at one 20% of the members of a board of time. Starting 2013, one third of the directors be women. C Read more in the Form 20F – Section 7.1.1 “Principles of organization of our company’s members of the Board of Directors can management” be proposed for renewal each year.

2012 TARGET 1 Ensure the improvement of gender diversity in our Board of directors by 2012.

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Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SENIOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

1.1 separation of functions 1.2 staggered board – membership and diversity 1.3 selection criteria and independence of the directors 1.4 ethics and absence of conflicts of interesT 1.5 Board Duties

1.3 Selection Criteria and The Board re-examined the situation In accordance with the Directors’ Charter, The operating rules of the Board Independence of the Directors of each director with respect to the a director must notify the board of any of Directors specify the conditions The appointment of new directors independence criteria of the AFEP- actual or potential conflict of interest. according to which directors exercise must comply with the selection MEDEF Code and the NYSE rules. It The Alcatel-Lucent Board of Directors their functions and, in particular, the rules applied by our Corporate determined that nine of the 11 directors has no knowledge of any directors in thresholds above which the decisions Governance and Nominating are independent; i.e., all of the directors such a situation. There are also no of the CEO are subject to prior Committee. Members of the Board except the Chairman of the Board and family relationships between members approval of the Board of Directors. must be familiar with the company’s the CEO. Therefore, according to the of the Board of Directors and senior high-technology businesses, have AFEP-MEDEF Code, they could not be management and no arrangement or Also, the company’s by-laws specify sufficient financial expertise to considered to be independent since one agreement with a shareholder, client, that, subject to the authority expressly make informed and independent of the independence criteria stipulated by supplier or any third party pursuant reserved for the shareholders’ meeting decisions about financial statements the AFEP-MEDEF Code is that a director to which a member of our Board and within the limits of the corporate and compliance with accounting “must not be […] an executive director” of Directors or of our Management purpose, the Board of Directors addresses standards, and be entirely independent (“dirigeant mandataire social” in French). Committee was appointed in such any questions that affect the company’s of the company’s management. capacity or as CEO of the company. operations and governs the affairs of Read more in the Form 20F – Section 7.1.2 C the company through its deliberations. “Management Bodies of the Company” C Read more in the Form 20F – Section 7.1.2 “Management Bodies of the Company” C Read more in the Form 20F – Section 7.1.3 The independence criteria 1.4 Ethics and Absence of Conflicts “Powers and Activity of the Board of chosen by the Board of of Interest 1.5 Board Duties Directors” Directors are based on the Each director (and Board observer) In addition to matters related to its AFEP-MEDEF Code: undertakes to comply with the rules of legal or regulatory function, the Board A director is independent conduct set out in the Directors’ Charter, of Directors regularly decides upon the when he or she has no in particular concerning the compliance company’s strategic orientations and the relationship of any kind with any applicable securities laws, as main decisions affecting its activities. It whatsoever with the well as with the rules of our “Alcatel- also analyzes the outlook resulting from Lucent Insider Trading Policy,” designed our research and development activities corporation, its group or the to prevent insider trading. This policy sets and gives input on the main technology management of either that is limited periods during which transactions options chosen. Furthermore, the Board such as to color his involving our company’s shares are not monitors the company’s economic and or her judgment. authorized, the minimum number of financial management, and authorizes shares that each director must hold, and financial transactions that have a an obligation to notify the Autorité des significant impact on its accounts. Marchés Financiers (the French securities regulator) of any personal transactions involving Alcatel-Lucent shares.

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Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SENIOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

2.1 Dialogue with Directors 2.2 Board Access to Information 2.3 Assessment of the Board’s Own Work 2.4 Communication with the Shareholders

BOARD AND COMMITTEE MEETINGS Board Audit and Corporate Compensation Technology FInance governance committee committee 2.0 committee and nominating BOARD committee 2011 Overall participation rate of Board and EFFECTIVENESS committee members 96% 96% 100% 90% 100% AND TRANSPARENCY

2.1 Dialogue with Directors with those who demonstrate they Code, as well as of the performance of 2.4 Communication with the The Board meets at least once have a strong career potential. the executive directors at least once Shareholders 2011 ACHIEVEMENT every quarter either at corporate every two years. Its performance is Our Board of Directors ensured that Improving the level headquarters in Paris or at Murray Hill, 2.2 Board Access to Information assessed by an independent consultant shareholders were kept properly and quality of the NJ (USA) at the head office of Alcatel- To assist them in the performance in compliance with our operating rules. informed. This included a detailed information provided Lucent USA. However, in practice, of their duties, the members of the presentation of the company’s situation to the Board of the Board of Directors meets more Board receive all relevant information The Board performed an annual and its governance by the Chairman directors. frequently, illustrating the commitment regarding our company, in particular, assessment of its own work at the and the CEO at the Shareholders’ A new internal tool of its chairman and the directors to the the financial analysis reports. This beginning of 2012, with the assistance Meeting on May 27, 2011. The was implemented in company. Meetings are also held regularly information is available to the of an external consultant and a new Board of Directors also ensured that the context of the at other company sites with a view of Directors via a secured Intranet site internal tool that took the form of a investors and the public were properly 2011 assessment of facilitating dialogue among executives, dedicated to the Board members. dashboard designed to give the directors informed, as required under French the Board of Directors employees and directors, and to provide the information they need in a more and U.S. stock exchange regulations. in the form of a the directors with a better understanding The Board of Directors has four structured manner and organized by dashboard aiming to C Read more in the Form 20F – Section 7.1.3.2 of the company’s wide range of business specialized committees which main areas (strategy, finance, risk “Organization of Board Meetings” enable the Directors activities, as well as some of the specific report to it concerning the subjects management and compliance, corporate to apprehend the challenges in major markets. In 2011, presented to them: Audit and Finance, governance, human resources and information made our Board of Directors met in Sao Corporate Governance & Nominating, corporate social responsibility). The major available to them in Paulo (Brazil) to review the company’s Compensation and Technology. The points of the assessment are reported a more structured business activities in South America. attendance rate to the Board and its in the Chairman’s Corporate Governance manner, by main areas committees for fiscal year 2011 is Report. The assessment results confirmed as follows: strategy, The Directors may also seek the globally satisfying (see table above). that the Board and its committees finance, risk opinion of senior management on any function in a satisfactory manner, that management and subject they deem appropriate and 2.3 Assessment of the Board’s there is effective collaboration among compliance, corporate meet with them in an informal way Own Work the directors, and that the dialogue governance, human prior to the formal Board of Directors The Board carries out an annual between the directors and management resources and meetings. Directors also regularly assessment of its own work in is thorough and of quality. corporate social meet with employees, in particular accordance with the AFEP-MEDEF responsibility.

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Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SENIOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

3.1 Principles 3.2 Executive Directors 3.3 Management CommiTTEE 3.4 Members of the Board of Directors

3.0 EXECUTIVE DIRECTORS’ COMPENSATION CRITERIA GRANT DECIDED IN 2011 GRANT DECIDED IN 2012

SENIOR FIXED COMPENSATION VARIABLE COMPENSATION PERFORMANCE SHARES STOCK-OPTIONS PERFORMANCE SHARES STOCK-OPTIONS MANAGEMENT 2011 & 2012 2011 & 2012 INDIVIDUAL INDIVIDUAL PERFORMANCE: PERFORMANCE: 70% OF THE GRANT REMUNERATION INDIVIDUAL 70% OF THE GRANT CHAIRMAN PERFORMANCE OF SKILLS PERFORMANCE OF ALCATEL-LUCENT’S SHARES: ALCATEL-LUCENT’S SHARES: 30% OF THE GRANT 30% OF THE GRANT 3.1 Principles The Compensation Committee is PERFORMANCE OF responsible for making proposals CHIEF ALCATEL- LUCENT’S SHARES: EXECUTIVE INDIVIDUAL FINANCIAL 50% OF THE GRANT to the Board of Directors regarding OFFICER SKILLS CRITERION FINANCIAL CRITERION: compensation of the directors, the 50% OF THE GRANT chairman, the CEO and key senior executives. It evaluates all compensation LONG TERM PERFORMANCE LONG TERM PERFORMANCE paid or attributed to them, including compensation relating to retirement and all other benefits. It also reviews benchmarking, consistency, clarity of 30% of the performance evaluation significantly in 2011, the company had the policies relating to the grant the rules and reasonableness as set and of qualitative criteria equal to not yet reached ‘normality’ as described of stock options and performance forth in the AFEP-MEDEF Code. 70% of the performance evaluation. in the three-year plan for 2009–2011. shares to the company’s executive officers and in particular to members The compensation of the Chairman of The compensation of the Chief Executive The Chairman of the Board of Directors of the Management Committee. the Board consists of a fixed annual Officer, like that of all the company’s and the Chief Executive Officer are not compensation paid in cash and share- managers and executives, consists of entitled to any severance payment, 3.2 Executive Directors based compensation, in line with the a fixed portion and a variable portion, even upon forced termination resulting The Board of Directors determines all practices of companies in our main plus a long-term benefit. The variable from a change in control or strategy. compensation and long-term benefits reference markets. In application of compensation is determined each year awarded to the Chairman of the the AFEP-MEDEF Code, the evaluation by the Board of Directors according to 3.3 Management Committee Board and the Chief Executive Officer. of the performance of the Chairman pre-defined performance criteria. In 2011 The remuneration of the members The Board ensures a balance among of the Board must not only be based the Chief Executive Officer received, of the Management Committee the various components that make on quantitative criteria, but must also as in 2010, a long-term compensation consists of a fixed portion and a up executive directors’ compensation consider the work performed and consisting entirely of stock options and variable portion based on company (fixed and variable compensation, results obtained, as well as the specific 100% subject to performance conditions, performance criteria reviewed by the stock options and performance share responsibility assumed by the Chairman as recommended by the AFEP-MEDEF Compensation Committee, identical to awards, as well as additional CEO within the company. The acquisition of Code. In February 2012, the Chief those applicable to all executives and pension benefits). It also ensures performance shares for the 2011 and Executive Officer asked the Board of a large number of our managers, and that these components are set in 2012 fiscal years to the Chairman of Directors not to grant him any stock on their individual performance. accordance with the general principles the Board are subject to the satisfaction options or performance shares in 2012 of comprehensiveness, balance, of one quantitative criterion equal to because although results improved 49 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SENIOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

3.4 Members of the Board that cover a scope beyond the limited The corporate audit function is in charge in the company’s commitment to eco- of Directors part of what is meant by CR. of all internal audit engagements, as responsibility, the company offered to The only compensation paid to the well as the Sarbanes Oxley Project send notices of shareholder meetings Directors by Alcatel-Lucent is a director’s The Board of Directors is kept regularly Management Office. To accomplish its by email and to vote via Internet. fee. Directors fees, in accordance informed about the CR proceedings mission, in accordance with the Audit with the Board of Directors’ Operating that are reported by the different Charter, Corporate Audit Services Those shareholders who have agreed Rules, consist of: organizations within the company to team (CAS) has full access to all areas to this will receive meeting notices by NN a fixed portion, for performing their the Board’s Committees: the Technology of the organization. With a team of email with a link to a dedicated and duties on the Board of Directors Committee is concerned with the approximately 50 people, the Chief secure website where they can access and, where relevant, on one of areas of the environment, the Audit Audit Executive reports to the Audit and download the Board’s report on the Board’s committees, and and Finance Committee with the and Finance Committee and CFO on the resolutions, the Shareholders’ Meeting NN a variable portion, for their attendance conformity and risk management status of the audit plan and specifically notice and the Document de reference at the various meetings, in compliance areas, and the Board itself with the on the effectiveness of the internal 2011 filed with the AMF. In addition, as with the AFEP-MEDEF Code. strategy and human resources fields. controls of reviewed domains (including of the Shareholders’ Meeting of June notably Sarbanes Oxley compliance, and 2012, they will also be able to cast C Read more in the 20F – Section 7.1.3 Additional directors’ fees are spread “Powers and Activity of the Board of results of anticorruption reviews). The their vote by this dedicated website. equally among the Directors, subject to the Directors” audit results and the follow up of the investment in Alcatel-Lucent shares of the audit recommendations made by the A similar system also exists for the amount granted as additional fees after audit team are regularly shared with holders of American Depositary taxes and to the holding of the acquired 5.0 the Audit and Finance Committee. Shares (ADS)* with access to the voting shares throughout the duration of the Independence materials via a dedicated website. The term of office as director. The Chairman The audit department is regularly company has also implemented for these of the Board of Directors and the CEO of Statutory audited by a certified independent shareholders a “lightweight” notice of do not receive any directors’ fees. organization to assess its conformity meeting in compliance with the applicable Auditors and with professional standards. law that authorizes the sending of a C Read more in 20F – Sections 7.2.2.2 “Chairman of the Board of Directors”, Internal Audit two-page “Important Notice” with the 7.2.2.5 “Chief Executive Officer, 7.2.2.8 access to the dedicated website for the “Management Committee” and 7.1.2 6.0 Shareholders’ Meeting, and to get (if “Management Bodies of the Company” External auditors’ fees are closely E-NOTICE OF specifically requested) a paper copy of monitored and controlled. Their budget the documents regarding this meeting. 4.0 is approved by the Audit and Finance Meeting and Committee and a process has been * An ADS represents one underlying ORD, and allows U.S. investors to have access to non-U.S. CORPORATE established to approve additional audit E-Vote for 2012 corporate issuers. services fees (audit related or not audit Responsibility related). It has to be noted that services SHAREHOLDERS’ (not audit related) rendered by the two MEETING The principles of Corporate Responsibility statutory auditors in 2011 represent (CR) are essential part of our corporate less than 5% of the total amount paid governance. The Board of Directors to our two external audit firms. To enable shareholders (mainly the supports the initiatives of the company holders of ordinary shares) to participate

50 ABOUT Content Ceo C orporATe Cp om any Supply Governance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message ResponsibIlity overview Cah iN

Governance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SeniOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

7.1e Ent rprise Risk Management 7.2 Business continuity and crisis management 7.3 Contingency plans for environmental and CR-related risks

I nitiated more than 10 years ago, Alcatel-Lucent occurrences and control the impact of potentially 7.0 ERM complies with COSO II, an integrated ERM serious losses. More than 63% of our total insured 2011 ACHIEVEMENTS framework that allows companies to structure values are classified asH PRs, or “Highly Protected The overall key achievement of the year OUR APPROACH TO all kinds of risks and organize appropriate Risks”(1). Contingencies and interdependencies was full deployment of a mature ERM. RISK AND CRISIS mitigating actions. Our ERM process is also linked to internal and external manufacturing Others included: in line with the AMF (Autorité des Marchés and logistics nodes were thoroughly analyzed Financiers) recommendations and the Sarbanes- and a corrective risk-engineering program was MANAGEMENT Delivery of current risk maps covering the Oxley act, Section 404 compliance process. driven throughout our supply chain organization company’s three regions. 7.1 Enterprise Risk Management (again, both internally and externally). This policy Asia-Pacific risk map was updated in 2010 Enterprise Risk Management (ERM) at Alcatel- After prioritization, a number of key risks have and level of mitigation benefits everyone: our and Americas, Europe Middle-East and Lucent is built on a comprehensive framework been identified as warranting particular attention customers, employees, suppliers and stakeholders. Africa risk maps were updated in 2011. that covers 80 risks in the areas of operations, by the company on the basis of consolidated 2011 These are systematically updated every finance, legal and compliance,HR and security, ERM results and inputs from select corporate (1) A Highly Protected Risk is a facility at which exposure to loss due to natural hazards (earthquake, flood, windstorm, other year and were delivered accordingly. and strategy. Corporate responsibility-related stakeholders. These risks are at least annually etc.) and industrial risks (fire, etc.) has been reduced to an topics such as respect for human rights, communicated to and reviewed by the Board of acceptable level through all reasonable human elements (to anti-corruption, raw material prices and Directors and its Audit & Finance Committee, and avoid high-frequency risks) and physical protection measures Update of our corporate-level risk map. (to reduce high-impact risks). environmental regulations are either directly ERM disclosure is reconciled with 20-F risk factor addressed or nested into the risk catalogue. disclosure. Corporate risk owners and associated Definition of mitigating actions for 100% of mitigating actions are identified for each key risk. 2012 TARGETS the company’s key risks. ERM includes risk identification and evaluation Actions can either be recurrent (control activities) 92 action plans were defined, implemented as well as the setup and capture of mitigating or corrective (ad hoc). Action plans are monitored 1 and monitored by risk owners. actions for key risks. It gives enterprise-wide on a quarterly basis through specific indicators Ensure that updating of all three regional visibility to the impact of all types of risks on working with the corresponding Management ERM deliverables (risk maps) is executed Completion of a global ERM review by the processes, activities, stakeholders, products Committee member or his/her direct reports. according to the two-year process cycle. and services, allowing the company to define Risks and the status of mitigation actions are Audit & Finance Committee effective and sustainable risk responses. submitted quarterly to the Corporate Finance & on March 15, 2011, supported by quarterly 2 reporting to the Audit & Finance Committee Investment Office and Corporate AuditS ervices, Complete the updating of the corporate- on the status of action plans. Specifically, our risk-management which inform senior management and share level ERM deliverable (risk map) by the end process identifies the most significant information with the Board of Directors and its of 2012. risks and prioritizes them according to Audit & Finance Committee. Reporting on key risks the following evaluation criteria: and mitigating actions is complemented, where 3 NN S everity of impact relevant, by the presentation of hot risk topics to Cover more than 80% of the company’s key NN Likelihood of occurrence ensure our perspective on risks remains current. risks with regular follow-up of mitigating NN Control effectiveness actions over the course of the year. In 2011, one of the key risk mitigation The company’s Head of Corporate Finance & programs focused particularly on supply 4 Investment Office reviews the ERM program for chain contingencies and crisis management. O rganize an annual Audit & Finance the Board of Directors and its Audit and Finance Committee to review ERM achievements Committee; within Corporate Finance, the head The company enforces a policy to minimize and efficiency. of Risk & Insurance owns the ERM process. industrial risks in order to avoid high frequency 51 ABOUT Content Ceo C orporATe Cp om any Supply Governance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message ResponsibIlity overview Cah iN

Goe v rnance > 1.0 BOARD OF DIRECTORS GOVERNANCE SYSTEM 2.0 BOARD EFFECTIVENESS AND TRANSPARENCY 3.0 SeniOR MANAGEMENT REMUNERATION 4.0 CORPORATE Responsibility 5.0 Independence of Statutory Auditors and Internal Audit 6.0 E-NOTICE OF Meeting and E-Vote for 2012 Shareholders’ Meeting 7.0 OUR APPROACH TO RISK AND CRISIS MANAGEMENT

7.1e Ent rprise Risk Management 7.2 Business continuity and crisis management 7.3 Contingency plans for environmental and CR-related risks

establish a standard format and centralized repository for its business continuity plans. 2011 ACHIEVEMENT The four-year initiative aims to integrate plans By the end of 2011, more than 69% of all for coverage throughout the company. The identified critical functions were covered MINIMIZING EARTHQUAKE EXPOSURE L OCAL INITIATIVES IN California objective is to have a mature BCM program by our consolidated, enterprise-wide Ensuring business with more than 90% of all identified critical BCM Program. continuity in Egypt functions covered by the end of 2012. Program The 2011 earthquakes in Christchurch, progress is on track to achieve this target. Business continuity plans were activated in New Zealand and northeastern Japan 7.3 CoNTINGENCY plans for environmental Egypt in February 2011 due to political spurred a review of Alcatel-Lucent sites Business Continuity Management is and CR-related risks unrest in that country. Personnel were able in earthquake-prone areas. Following a complemented by a robust Corporate Crisis Real Estate Business Continuity Plans (BCPs) to work effectively from home until the Business Impact Analysis, structural Management process approved by the CEO. address environmental risks not as specific government interrupted Internet service. summaries were developed for two The process establishes an integrated approach threats but rather as risk responses to the loss Even though this was not specifically buildings housing labs at the IP Division’s to incident management of crisis situations for of critical functions. As of this writing, 77 real anticipated in the plans, IT personnel were R&D facilities in Mountain View, California, Alcatel-Lucent and provides the framework for estate facilities plans were in place. These target able to develop and implement an alternate identifying improvements to increase their efficient interaction between local, national, locations with more than 500 employees (or data connection to facilitate communication robustness. An integrated business regional, corporate and external stakeholders. more than 200 employees in areas with elevated and minimize business disruption. In continuity plan test involving an risks, such as proneness to earthquakes or parallel, country evacuations were planned earthquake scenario was also conducted; The Corporate Crisis Management team political volatility). The plans cover all critical real and executed for those who needed/ opportunities for improvement identified is activated in the case of a major event estate functions identified for a given location. wished to evacuate. during the test have been addressed. threatening people security, company image, customer satisfaction or business continuity. It With some exceptions, BCPs are not developed Maintaining continuity during provides guidance for events such as country per threat but instead per critical function. natural catastrophes 7.2 Business continuity and crisis evacuation, serious injury or fatality, data breach, Therefore, BCPs respond to any threat to management natural disaster, pandemic or geopolitical crisis. any system that becomes material, including Our enterprise-wide Business Continuity environmental risks. Some plans – both centrally Various business continuity plans were Management (BCM) Program, an integrated part managed plans within the Corporate Crisis activated in consequence of the Japan of the ERM, is designed to enable Alcatel-Lucent 2012 TARGETS Management process and local emergency earthquake in March 2011, the landfall of to continue business-critical functions and response plans – respond to particular hazards Hurricane Irene in the U.S. in August, and meet customer expectations during significant 1 such as earthquakes and pandemics. flooding in Thailand in October/December. business disruptions. BCM is closely linked to Cover more than 90% of all identified Execution of plans in these cases was and supports our Corporate Crisis Management critical functions with our consolidated, Regarding compliance, ethics and human effective. As part of our commitment to process. If and when needed, business continuity enterprise-wide BCM Program by end of resources management, key risks are identified continuous improvement, “Lessons plans are activated to support continuity of year (i.e., have a mature BCM Program). in the ERM, requiring dedicated mitigating Learned” sessions were held after each critical functions such as product delivery, actions to ensure continuity and avoid incident to help improve our risk response. installation and technical support for customers. 2 contagion or rapid deterioration. Dedicated R un at least one crisis trial. procedures, business continuity and crisis- Alcatel-Lucent has completed three years management plans are put in place to manage of a four-year plan launched in 2008 to the appropriate response to identified key risks.

52 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

how would you want a company to do business with you? ethics, compliance and business conduct

Alcatel-Lucent is dedicated to upholding the highest standards of ethical conduct – ensuring that customers are proud to do business with us, partners are proud to work with us, and our communities are proud we are making a difference.

53 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

1.1 Communicating ethics and compliance 1.2 Zero tolerance policy 1.3 Competition

1.0 THE MAIN CHARACTERISTICS OF OUR APPROACH TO ETHICS AND COMPLIANCE 2011 ACHIEVEMENTS 99% I of employees globally our approach completed review and THE CEO AND ALCATELLUCENT MANAGEMENT COMMITTEE HAVE DEFINED THE A STRONG “TONE AT THE TOP” to ethics and CORPORATE CULTURE AND ETHICS & COMPLIANCE MANAGEMENT SYSTEM PRINCIPLES. acknowledgment of the Alcatel- compliance Lucent Code of Conduct A KEY ROLE FOR PEOPLE MANAGERS THEY SET THE BAR FOR BUSINESS INTEGRITY WITHIN THEIR RESPECTIVE TEAMS. Developed web-based “Leading t Alcatel-Lucent, with Integrity” training for people our commitment to managers, accompanied by a robust ethics and compliance SENIOR LEADERSHIP RESPONSIBILITY THE SENIOR BUSINESS LEADERS ARE ACCOUNTABLE FOR communications plan highlighting A FOR BUSINESS INTEGRITY PROGRAM IMPLEMENTATION AND RESULTS. the role of people managers in is communicated widely enhancing a culture of integrity and regularly and is an INCREASING REGIONAL THE REGIONAL LEADERS ARE RESPONSIBLE FOR IMPLEMENTING essential aspect of how LEADERSHIP AND OVERSIGHT ETHICS AND COMPLIANCE ACROSS THE BUSINESS we conduct business. 2012 TARGETS

COMPREHENSIVE COMPLIANCE MEASURES THEY ARE PUT INTO FORCE TO HELP AVOID AND MITIGATE COMPLIANCE RISKS. OUR COMMITMENT AND RELATED INTERNAL CONTROLS 1 Target 100% participation in ethical leadership training for people Alcatel-Lucent has a zero tolerance managers AN INTEGRAL ETHICS & COMPLIANCE PROGRAMS AND RELATED INITIATIVES ARE INTEGRATED INTO BUSINESS OPERATIONS AND policy for compliance violations and MANAGEMENT SYSTEM CONSISTENT WITH BEST PRACTICE STANDARDS AND EVOLVING LEGAL REQUIREMENTS reinforces full integrity in every 2 business action from every Target 100% participation by employee. We treat each other with policy, and to cultivate an ethical business NN Ethics and compliance employees globally in deployed respect and empathy at all times. culture throughout the company. communications focusing on ethics and compliance training maintaining a “speak-up” culture To deliver on our commitment, Alcatel- The following are key elements of our NN Consolidated Compliance Hotline 3 Lucent has developed and implemented Ethics & Compliance Management System: and other reporting venues Increase transparency around a comprehensive Ethics & Compliance NN A comprehensive compliance NN Global compliance resolution process disclosure of potential conflict of Management System. This system is governance structure interest issues designed to promote compliance and NN The Alcatel-Lucent Code of Conduct Building a comprehensive Ethics & ethical behavior consistent with the NN Policies, procedures and controls Compliance Management System within highest standards of our customers, NN Monitoring and auditing practices the framework of a corporate culture shareholders and employees, and to NN Annual compliance risk assessment, of integrity has been a dominant focus contribute to our long-term success. with related mitigation plans and for Alcatel-Lucent since 2007 and has Specifically, it aims to prevent and detect processes for continuous improvement continued throughout 2011. Every violations of law, regulation and company NN Education and training individual has a role in maintaining high standards of ethical conduct. 54 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

1.1 Communicating ethics and compliance 1.2 Zero tolerance policy 1.3 Competition

1.1 Communicating ethics and 1.2 Zero tolerance policy We engage in lawful means of obtaining compliance The company continued to implement information about our competitors. We a zero tolerance policy consistent with comply with all international trade laws, its established regional and corporate including applicable export, import and 2011 Achievement compliance resolution processes, sanctions laws and regulations in the Ethical behavior considerations requiring 100% integrity in all business countries where we conduct business. were incorporated as part of the practices. Management expects all 2011 employee performance employees to comply with applicable Our employees know that to win in management process. legal and company requirements. Any the marketplace, we must provide For this specific context, resource identified violations are addressed a compelling offer comprised of materials such as briefing swiftly, consistently and fairly. Last competitive pricing, strong support and documents and questions & year, we continued to execute on our integrated services for reliable, quality, answers were developed and In 2011, Alcatel-Lucent initiated a mandate to terminate the use of agents technologically advanced products. provided for employees and people comprehensive communications campaign and consultants in conducting commercial managers, outlining expectations to promote its culture of exemplary activities to reduce the risk of corruption. The company’s competition/antitrust for ethical behavior and what that business ethics. Under the leadership law policy is readily available through means for the business. of the Office of Business Integrity & The status of this program is reviewed its Intranet, and employees whose jobs These materials were published on Compliance, the company took advantage regularly at the highest levels of are affected by this policy participate in our Intranet. of various communications means, the company, including the Alcatel- relevant training programs. Alcatel-Lucent including town hall meetings, CEO videos, Lucent Ethics & Compliance Council employees are instructed to avoid contact blogs, employee stories and management and the Board of Directors. with competitors except for participation messages, to underscore the importance in certain types of activities that have of establishing and maintaining a Alcatel-Lucent has not identified any been reviewed in advance by the corporate culture of integrity. Particular non-compliance with laws or regulations Alcatel-Lucent Law Division (e.g., industry attention was paid to communicating regarding the provision and use of its forums, standards-setting organizations, with people managers, who have a products and services and, as such, research projects). Employees are significant impact on the behavior of the company did not pay any fines not permitted to participate in any employees throughout the company in in 2011 (significant or otherwise). agreements or exchanges of information their dealings with customers, vendors, with competitors to avoid or reduce government authorities and others. 1.3 Competition competition. When in doubt, they are Alcatel-Lucent has a clear policy to urged to consult the Law Division obtain business solely on the merits to ensure their activities comply of its products, services and people. with competition/antitrust laws. Compliance with laws promoting and protecting competition in the marketplace, known as competition laws (or antitrust laws in the U.S.), is carefully spelled out in our Code of Conduct.

55 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

2.1 A global compliance governance organization 2.2 The role of the Board of Directors

2.0 ALCATEL-LUCENT COMPLIANCE BOARD OF DIRECTORS AUDIT COMMITTEE ALCATEL LUCENT CEO GOVERNANCE STRUCTURE our compliance GENERAL COUNSEL governance REGIONAL COMPLIANCE OFFICERS CHIEF COMPLIANCE OFFICER structure OFFICE OF BUSINESS INTEGRITY & COMPLIANCE

ALCATEL LUCENT ETHICS & COMPLIANCE COUNCIL 2.1 A global compliance governance organization OPERATING UNIT COMPLIANCE COUNCIL Alcatel-Lucent has developed and OPERATING UNIT COMPLIANCE WORK GROUPS implemented a global compliance REGIONS PRODUCT GROUPS CENTRAL FUNCTIONS governance structure that defines responsibilities for designing its Ethics & Compliance Management System, ASIA AMERICAS EUROPE, MIDDLEEAST SOFTWARE SERVICES ENTERPRISE NETWORKS BELL LABS & BUSINESS OPERATIONS PROCUREMENT FINANCE GLOBAL PUBLIC HUMAN RESOURCES PACIFIC & STRATEGIC AND AFRICA & & SOLUTIONS S3G CORPORATE AND IT & DELIVERY AFFAIRS & implementing program elements and ALLIANCES MARKETING COMM STRATEGIC INDUSTRIES STRATEGY TRANSFORMATION DESIGNTOCOST TRANSFORMATION ensuring overall accountability for results. The structure incorporates guidance from global standards and elements consistent NN Regional Compliance Leaders: provide effectively managed and consistent the Audit & Finance Committee – with evolving best practice standards, as support and operationalize ethics and in quality across the organization. plays an important role in overseeing well as defined accountabilities to ensure compliance initiatives regionally. NN Law Division: supports the compliance performance. The company’s alignment with business requirements. NN Alcatel-Lucent Ethics & Compliance enforcement of company policies by Chief Compliance Officer and the General Council: chaired by the Chief the Alcatel-Lucent Ethics & Compliance Counsel provide periodic updates to Key elements include: Compliance Officer, consists of Council, the Chief Compliance Officer the Audit & Finance Committee and to NN CEO: sets tone and demonstrates senior management responsible and the Regional Compliance Officers. the entire board on the status of ethics the importance of business for overseeing program status NN Compliance Issues Reporting Methods and compliance activities at Alcatel- integrity consistent with our across the business. Initiative: provides several options Lucent. These status reports occur at zero tolerance policy. NN Operating Unit Compliance Council for employees to report suspected least twice per year and more often, NN Chief Compliance Officer: oversees (and Work Groups): with representation violations of law or company policy as required. In addition, the Chief Audit the Ethics & Compliance Management from each business unit, accountable without fear of retaliation. Executive provides regular updates on System, setting strategic direction and for implementing initiatives and significant compliance-related audits ensuring Alcatel-Lucent operations are ensuring measurable results. 2.2 The role of the Board of and investigations to the Audit & consistent with a culture of integrity. NN Compliance Program Owners: Directors Finance Committee. In 2011, the board NN Office of Business Integrity & consisting of the subject matter Separate from, but aligned with the received compliance training to ensure Compliance: executes the strategic experts for the company’s key governance mechanisms established its knowledge in critical areas, with a direction and provides expertise and compliance program areas, responsible through the Ethics & Compliance focus on anti-corruption. In addition, leadership for ethics and compliance for ensuring that programs are fully Management System, the company’s the board reviewed and acknowledged initiatives across Alcatel-Lucent. integrated into business operations, Board of Directors – with support from the Alcatel-Lucent Code of Conduct.

56 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

3.1 AnTi-corruption approach 3.2 Corporate Investigation Services 3.3 Law division

Key activities in 2011 included: status reports to the Office of Business 3.2 Corporate Investigation Services 3.0 NN Ongoing monitoring of legislative Integrity & Compliance on how their units In addition to the corporate-wide Anti- and regulatory activities are implementing their action plans. Corruption Compliance Program (which OUR Anti- NN Annual program self-assessment In 2011, 100% of operating units (i.e., establishes the anti-corruption standards, corruption and development of related regions, product groups and central policies and procedures), the Corporate enhancement plans functions) across all aspects of the Investigation Services (CIS) organization compliance NN Annual compliance risk assessment company’s business were analyzed for risks established an Anti-Corruption with related mitigation plans related to corruption. The anti-corruption Competency Center responsible for program NN Regular status reporting to risk assessment facilitated by the Anti- facilitating a global anti-corruption risk senior management Corruption Competency Center assesses all assessment used to identify high-risk 3.1 AnTi-corruption approach NN Continued implementation of Alcatel-Lucent entities using a prescribed entities for inclusion in the company’s Anti-corruption is the company’s top EZVisit, a tool to ensure that gifts, set of anti-corruption risk factors. internal audit plan. CIS also developed compliance priority. Our policy is to travel and hospitality events and maintains the audit testing approach conduct business only on the merits are granted in accordance with and methodology used by Corporate of our products, services and people. anti-corruption policies. Audit Services to test the effectiveness We never pay, offer or promise to of the controls in place to help ensure provide anything of value to obtain In 2011, every part of Alcatel-Lucent’s compliance with Alcatel-Lucent’s internal or retain business or to secure any business (including regions, business anti-corruption policies and procedures. improper advantage, and we never groups and central functions) was allow a representative or business analyzed for risks related to corruption. CIS also administers the Corporate partner to make illegal payments To ensure full alignment, each operating Compliance Hotline and performs or promises on our behalf. unit’s compliance risk assessment investigations (globally) of allegations report was reviewed, approved and affecting accounting, internal control and Our Anti-Corruption Compliance documented by the Management audit-related issues, overall compliance Program focuses on ensuring employee Committee member responsible for and Code of Conduct incidents, including awareness of and compliance with that organization. Consolidated risk anti-corruption. Legal guidance is sought company policies and applicable laws, assessment results are shared regularly on all investigations to ensure compliance such as the United States Foreign with all interested stakeholders, including with local laws and regulations. Corrupt Practices Act (FCPA) and senior management. In addition, unit the United Kingdom Bribery Act. compliance leaders provide quarterly

57 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

3.1 AnTi-corruption approach 3.2 Corporate Investigation Services 3.3 Law division

3.3 Law division Our Law division plays a critical role in supporting the company’s Anti-Corruption Compliance Program. In this regard, the Reaching settlement Law division drives the development and implementation of anti-corruption policies; administers and implements In December 2010, Alcatel-Lucent entered into final the gifts, travel and hospitality approval settlement agreements with the U.S. Securities and process; and administers and implements Exchange Commission (SEC) and the Department of the company’s third party screening Justice (DOJ) related to alleged violations of Laurent Cohen-Tanugi and approval process. The Law division anti-bribery, internal controls and books and french anti-corruption is also involved in terminating former records provisions of the U.S. Foreign Corrupt compliance monitor agent/consultant relationships and Practices Act (FCPA). Under its agreement with the handling any ensuing disputes. Further, SEC, the company neither admitted nor denied the the Law division actively monitors allegations. Through the SEC complaint, the sales practices to ensure that company company is permanently restrained and enjoined policy is not circumvented through from future violations of U.S. securities laws, and the inappropriate use of consultants has paid U.S. $45.4 million in disgorgement of Watch the video ‘Ready and Vigilant’ disguised as, for example, resellers. profits and prejudgment interest. The agreement with the DOJ, approved by the Court on June 1, 2011, is a three-year deferred prosecution Concerning political contributions, To experience Alcatel-Lucent does not directly spend agreement (DPA) charging the company with Augmented Reality, corporate funds on political activities. violations of the internal controls and books and 1. Download the app using the QR code Our employees in Alcatel-Lucent USA records provisions of the FCPA. Under the 2. Scan the video have formed a voluntary political action agreement, the company will pay a total criminal picture with your phone. committee (PAC), which made $20,500 fine of U.S. $92 million in four installments over Read more in political contributions to candidates three years. Assuming full compliance with the for federal office consistent with terms of the DPA, the DOJ will dismiss the charges employee priorities in 2011. The Alcatel- upon conclusion of the three-year term. In addition, Lucent USA employee PAC operates in three of our subsidiaries – Alcatel-Lucent France, accordance with all U.S. law and Federal Alcatel-Lucent Trade International AG and Alcatel Election Commission regulations. Centroamerica – each pled guilty to conspiracy to violate the FCPA’s anti-bribery, books and records and internal accounting controls provisions. In August 2011, pursuant to a requirement in both agreements, Alcatel-Lucent engaged a French anti-corruption compliance monitor for a three-year term, and has since been supporting the monitor’s activities in furtherance of this mandate.

58 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

4.1 Data and metrics on violations of the Code of Conduct 4.2 Management of incidents declared through the Compliance Hotline

The Compliance Hotline has been 4.2 Management of incidents violations of company policies. External 4.0 formally deployed in 114 countries declared through the Compliance reporting of such matters is considered and is available 24 hours a day, seven Hotline only with the guidance and approval COMPLIANCE days a week. Employees who want to All reports made to the Compliance of the Alcatel-Lucent Law division. HOTLINE enter a report can use a multilingual Hotline are subject to due diligence to web interface available in 11 languages. determine the organization best suited 2011 achievement The company has a “non-retaliation” to respond. The majority of issues are In 2011, consistent with its goal to policy that specifically prohibits investigated by a corporate investigation promote transparency, the company undamental to the adverse action against employees team with assistance from other shared Compliance Hotline metrics who report, in good faith, suspected corporate organizations, as appropriate success of the Alcatel- and related incident reports violations of law or company policy. (e.g., Law, Human Resources, Audit). F Lucent Ethics & quarterly with the company’s extended compliance community to Compliance Management Employees and contractors of Alcatel- The investigation protocol enhance awareness of the System is the confidence of Lucent (or one of its affiliates) also includes the following steps: prevailing issues and to encourage have other options available to report NN Understanding the issue or allegation employees and contractors input on improving the overall suspected violations of company policy NN Consulting with Alcatel- program. Modified case to raise ethical questions or the law, including contacting their Lucent’s Law division information, including summaries of and concerns without human resources business partner NN Gathering and reviewing regional compliance matters, were or regional compliance leader. evidence and documentation fear of retaliation. Under shared with employees to promote NN Interviewing key individuals the Compliance Issues a culture where employees feel 4.1 Data and metrics on violations NN Analyzing all evidential materials comfortable reporting issues Reporting Methods initiative of the Code of Conduct to conclude and determine related to local laws without fear of implemented by the There were a total of 558 issues/ if company policies or local retaliation, as well as to enhance allegations reported to the Compliance laws have been violated. company, several options overall transparency. are available for reporting Hotline for fiscal year 2011. Of the 558 issues/allegations reported: If the investigation determines there has suspected violations of NN 79 were substantiated with “cause been a violation, a compliance resolution We will continue to report statistics law or company policy. found” after the investigation was team is convened. This team follows related to breaches of the Employees are encouraged completed. Of these 79 cases, 71 a process established for resolving all company’s Code of Conduct. matters resulted in disciplinary compliance issues requiring individual to initially raise issues action, up to and including corrective action, including disciplinary with their direct line termination. Sixteen of the 79 action and internal control opportunities, manager or to use the cases were opened in 2010. where appropriate. Disciplinary action Compliance Hotline where NN 65 were allegations of potential can include coaching, written warnings, harassment or discrimination suspension and termination. All reported permitted under local law. (including those categorized as incidents are documented in a secured, sexual harassment). Of the 65 cases limited access, central database reported, 19 cases of harassment repository, compliant with local laws. or discrimination resulted in a The same process is followed if internal “cause found” determination. audits and/or compliance reviews identify 59 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

5.1 Commitment to privacy principles 5.2 Governance of privacy-related activities

ALCATEL-LUCENT APPROACH 5.0 2011 ACHIEVEMENTS TOWARD PRIVACY PROTECTION In 2011, the company’s Privacy & PRIVACY Data Protection (P&DP) Program PROTECTION AND RIGHTS OF was audited by Corporate Audit INDIVIDUALS Services (perimeter covered INFORMATION customers, vendors, employees TRANSPARENCY DATA SUBJECT and third parties), and remediation SECURITY ACCESS INFORMATION actions are underway. The CONTROLS company will continue to INFORMATION CONSENT DATA PROTECTION implement audit action plans and 5.1 Commitment to privacy LIFECYCLE DATA QUALITY recommendations in 2012. principles PROPORTIONALITY DISCLOSURE Alcatel-Lucent is committed to respecting individual privacy rights and MANAGEMENT Also in 2011, the company MANAGEMENT AND continued to implement the overall expectations, and to protecting personal ACCOUNTABILITY data against unauthorized access, MONITORING AND P&DP Plan. use, retention/storage or disclosure. ENFORCEMENT In 2011, the company revised and Accomplishments included: enhanced its internal global privacy NN Compliance assessments of 50 and data protection policy to fulfill this identified critical applications well commitment. This policy relies on and underway; all application privacy reflects the following privacy principles: profiles completed; country reviews continuing 5.2 Governance of privacy-related NN Awareness modules for activities Read more Information Security/Information The Chief Privacy Officer is responsible Technology fully completed; Human for ensuring Alcatel-Lucent has a on our global privacy Resources course launched in consistent and effective privacy and data protection English; Sales & Marketing and data protection strategy in line policy awareness module design initiated with its overall business strategy NN Privacy policy revised to align and with applicable privacy and data with privacy principles protection laws. He or she also has NN Vendor communication responsibility for defining, documenting, reiterating data protection promoting and communicating the responsibilities drafted and company’s global privacy and data approved protection policies. These policies are NN Guidelines for internal and applicable to all personal information external surveys released. processed by or for the company.

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Ethics and compliance > 1.0 our approach to ethics and compliance ur 2.0 o compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMpliANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION D 8.0 E UCATION AND TRAINING N 9.0 I TERNATIONAL INITIATIVES

6.1 Governance of Information Security-related activities 6.2 Ensuring the security of information systems and databases 6.3 Preventing hacker attacks

T he owner of the Privacy and Data Protection (P&DP) Compliance Program 2012 Priorities 6.0 establishes and executes the program In 2012, the Privacy & Data and is responsible for developing and Protection (P&DP) Compliance INFORMATION implementing processes and procedures Program will focus on raising the SECURITY to ensure global compliance with compliance profile of the company’s defined strategies and policies. most critical applications, such as those containing human Other key stakeholders include: resource data. 6.1 Governance of Information NN The Privacy & Data Protection Security-related activities (P&DP) Steering Committee, Alcatel-Lucent has established an Specific groups of employees (e.g., which provides cross-functional information security governance function sales and marketing, law, or leadership and direction to the under the direction of the Director research and development) will P&DP Compliance Program, is of Information Security, part of the receive tailored training to heighten chaired by the owner of the P&DP Business and Information Technology their awareness of the issues and Compliance Program. It gathers the Transformation (B&ITT) department. This ensure they understand the policies Chief Privacy Officer, theC hief P&DP individual is responsible for establishing and related actions. Counsel, and members of Human the information security policies, Resources and Business & Information strategies, architecture and compliance Technology Transformation In the medium term, the program programs needed to protect our valuable (B&ITT) about once per quarter. also intends to develop metrics to information assets, which include data, NN The Chief P&DP Counsel, who ensures measure the effectiveness and information systems and IS/IT services. that the Chief Privacy Officer, the track the progress of the company’s owner of the P&DP Compliance privacy and data protection An Information Security Steering Program and all other personnel initiatives. Committee ensures corporate- with responsibilities for privacy wide implementation of strategies and data protection have all the focused on the following areas: necessary legal advice and support. NN Service hardening and NN The Data Privacy Network, which compliance management consists of legal, human resources and NN T hreat and incident response other specialists representing countries NN Data protection in which Alcatel-Lucent operates. NN A ccess and collaboration NN Security awareness and cultural transformation.

61 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

6.1 Governance of Information Security-related activities 6.2 Ensuring the security of information systems and databases 6.3 Preventing hacker attacks

Risk mitigation plans are also developed information security topics are delivered at the operating unit level, in alignment on a regular basis. The company with the overall information security regularly audits implementation of these strategy. Compliance assessments policies, using both internal and external are used as a core management audit resources. Remediation plans practice to drive accountability and for audit findings are developed and awareness of compliance and security implemented by information and asset risk management into all areas of the owners and IT support organizations in company. Executive-level information cooperation with company management owners provide additional focus on and the applicable audit organization. protection measures for customer data, Global audits of information security personal data and technical information also guide the company’s overall on our product and financial data. A information security strategic plan. strong investment and gating process ensures that new service and system 6.3 Preventing hacker attacks ENSURING COMPLIANCE WITH OUR designs comply with approved security Like many other large enterprises, INFORMATION SECURITY POLICY architectures and include appropriate Alcatel-Lucent employs a defense-in- protection measures. In 2011, more depth approach to fend off hacking than 300 projects underwent internal attacks against its network. Controls Alcatel-Lucent’s information security reviews. Compliance assessments such as firewall, intrusion detection and security policy defines the were conducted on more than 100 prevention, anti-virus, encryption and fundamental principles for the applications, 100 labs, 6,000 servers, monitoring technologies are used in protection of Alcatel-Lucent 60 suppliers and 21 IT services. conjunction with strong passwords and information resources, the proper other proven security practices to reduce controls needed to ensure 6.2 Ensuring the security of the likelihood of a successful attack. compliance with internal policies information systems and databases and external regulations, and Alcatel-Lucent has established a A relatively new form of cyber attack, strives to uphold Alcatel-Lucent’s comprehensive set of information known as an advanced persistent threat, reputation for safeguarding security policies to cover the full uses a high degree of stealth over a information it is entrusted with by spectrum of security domains: physical prolonged period to avoid detection while its customers. All Alcatel-Lucent security, applications and operations compromising systems and obtaining employees and contractors are security, access control and identity sensitive information from them. responsible for ensuring compliance management, security monitoring with this policy. Control standards and incident response, information Alcatel-Lucent has implemented a provide requirements for specific, classification, business continuity, variety of measures to counter this technology-independent areas of and compliance management. These type of threat and will continue to policy. In addition, baseline policies are accessible by all employees enhance its defenses in 2012. standards are maintained to provide on internal corporate web pages, and detailed instructions for communications related to specific implementing security controls within a specific technology.

62 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

In continuing to implement the 2011 7.0 program, compliance experts worked CONTROVERSIES with each operating unit to assess COMPLIANCE implementation of the compliance As part of its policy supporting program across the business. To address RISK transparency, Alcatel-Lucent keeps identified gaps and associated risks, stakeholders up to date on various business leaders and their respective ASSESSMENT, controversies involving the work groups, with the support of company. The controversies section ENHANCEMENT functional compliance experts, were of our web site provides responsible for developing, implementing information on legal proceedings AND MITIGATION and monitoring remedial action and and ethical business practices issues ongoing enhancement plans. To ensure in which Alcatel-Lucent is involved. Alcatel-Lucent continued its efforts to full alignment throughout the company, ensure that key compliance program every risk assessment was reviewed and areas – such as anti-corruption, data approved by a member of the appropriate privacy and protection, information Alcatel-Lucent senior management team. security and others – were fully In 2011, the company achieved 100% integrated into business operations, across this review and validation process. Read more effectively managed and consistent in quality across the company. In 2011, Operating unit compliance leaders compliance experts worked closely with are required to provide periodic management – supported by the Office status reports on how they are of Business Integrity & Compliance implementing their enhancement plans. – to review and enhance compliance This information, along with the risk programs, both on an ongoing basis assessment, action plans and related and formally at least once per year. resource materials, are posted on a web- These reviews ensure that the internal based SharePoint site for easy access controls embedded within each program and to promote information sharing of area are comprehensive, robust and best practices. This ensures stakeholder reflective of the evolving nature of access to important resource information the company’s business and applicable and ongoing connectivity between the regulatory requirements. Inputs into business and compliance experts. the continuous improvement process included experience from prior audit cycles, guidance from the compliance risk assessment process, changes in the regulatory environment and compliance issues encountered by the business.

63 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message ResponsibIlity overview ChaiN

Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

8.1 Anti-corruption training 8.2 Internal communications

In recent years, Alcatel-Lucent has 8.0 2011 ACHIEVEMENTS focused particularly on middle 12 specialized ethics and management through enhanced EDUCATION compliance courses targeting communications and targeted AND TRAINING key stakeholders. training to help people managers be effective compliance role models and ethical leaders. In 2011, the 10,000+ people managers were he company’s company developed a web-based identified as candidates to undergo ethical leadership training module for compliance ethical leadership training in 2011. training program is people managers, targeting more than T 10,000 people managers globally. This designed both to educate Training courses are updated annually and important training was supported by employees about their as needed to ensure they reflect current an extensive communication plan to In November 2011, the company personal and professional business needs and evolving regulatory inform people managers of their role delivered anti-corruption training to new requirements. All training is documented in continuing to enhance a culture hires and other employees based on their responsibilities under the through our Compliance Training Roadmap of business ethics and integrity. job function. To accommodate changes Code of Conduct and to and tracked to verify full participation in anti-corruption legislation around instill an ethical culture through our Compliance Dashboard. 8.1 Anti-corruption training the world, the company developed that fosters a commitment and deployed targeted web-based In 2011, the company continued to and in-person training for employees, 2011 ACHIEVEMENT to the highest levels of implement a comprehensive global highlighting the U.K. Bribery Act. 97% participation rate in Alcatel- ethical business conduct. ethics and compliance training program, Lucent anti-corruption training. The training program deploying 12 specialized compliance The company’s web-based ethics provides all employees courses targeted to key stakeholders. and integrity overview training, Compliance areas included export Formal anti-corruption training at which is mandatory for all employees with a general introduction compliance, preventing harassment Alcatel-Lucent is delivered over the and contractors, also includes an to the company’s major and discrimination, privacy and web and through in-person sessions. entire section on anti-corruption. compliance areas as well data protection, ethics and integrity training, information security Targeted training on anti-corruption was as specialized training training for contractors and, most updated and deployed in 2010 to an based on job function. importantly, anti-corruption training. audience of more than 29,000 employees globally, including corporate executives and employees who interact or interface directly or indirectly with external parties. This training was completed in 2011 with an overall participation rate of 97% by year’s end, with additional follow- up to achieve 100% completion of this requirement across the target audience.

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Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

8.1 Anti-corruption training 8.2 Internal communications

8.2 Internal communications An important component in the In 2011, Alcatel-Lucent continued to communication effort – the Office of develop and implement a comprehensive, Business Integrity & Compliance web site multi-media communication initiative – consolidates essential compliance and focused on enhancing its culture business conduct resources in one central of business ethics – directed to all location. In 2011 there were 24,818 visits employees and, in particular, people to the site, up from 21,508 in 2010. managers. Through CEO/senior leader- hosted broadcasts to all employees, audiocasts and town hall meetings – with 2011 ACHIEVEMENTS 99% of employees globally links provided to important policies I completed review and and processes – the initiative informed acknowledgment of the Alcatel- employees about their responsibilities, Lucent Code of Conduct. emphasized the importance of integrity, and promoted a “speak-up” culture. CODE OF CONDUCT 24,818 visits to the Alcatel-Lucent Specific key messages included: Office of Business Integrity & NN Value of compliance and Compliance web site. The Alcatel-Lucent Code of Conduct is the cornerstone of the company’s Ethics & consequences of lapses, both to Compliance Management System. It sets out the company’s standards for ethical the business and to employees business conduct and is binding on all employees globally in their daily NN Imposition of consequences activities, including relations with competitors, suppliers, shareholders, partners consistent with the company’s and customers. The standards in the Code of Conduct are based not only on the stated zero tolerance policy laws and regulations in force, but also on the notions of integrity, respect, NN Management’s role in holding equity, diversity and ethics. The code is available in 22 languages and is posted employees personally accountable on the company Intranet site, which also provides links to additional resources. for wrongdoing, operating with integrity themselves, and actively In 2011, all employees were required to review the code and acknowledge their monitoring to ensure compliance understanding of their obligation to abide by its terms. The company achieved NN Importance of supporting the business 99% compliance globally for this review and acknowledgment process. In addition, in finding “compliant solutions” all board members completed the required review and acknowledgment. NN Resources to support employees Understanding of the code is further reinforced through mandatory ethics and in reporting potential violations integrity training, as well as specialized training in key compliance areas. without fear of retaliation.

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Ethics and compliance > 1.0 our approach to ethics and compliance 2.0 our compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 INFORMATION SECURITY 7.0 COMPLIANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION 8.0 EDUCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

9.1 World Economic Forum 9.2 Industry/trade associations

More than 150 chief executive signatories incorporated input from representatives legislative framework, the adoption C read more about the WEF 9.0 are engaged in the implementation of from the French, Korean and Mexican of national measures to prevent and a zero tolerance policy toward bribery governments in the crafting of the combat corruption and foreign bribery, C read more about the G20 INTERNATIONAL and an effective internal anti-corruption proposed recommendations. To ensure the strengthening of international INITIATIVES program. PACI is a multi-stakeholder a cohesive overall private-sector cooperation in fighting corruption, and C read more about MEDEF initiative that works with organizations message to the G20 leaders, these the development of joint initiatives such as the Basel Institute on Governance, recommendations were developed in between the public and the private sector. C read more about the OECD lcatel-Lucent the International Chamber of Commerce close coordination with Mouvement (ICC), the Organisation for Economic des Entreprises de France (MEDEF), the participates in Co-operation and Development (OECD), national business confederation in France. C read more about Transparency A numerous cooperative the United Nations Global Compact, International anti-corruption initiatives Multilateral Development Banks, and Several key concepts recommended RESIST select international financial institutions. by the WEF G20 Working Group were C read more about PACI to contribute to an ethical reflected in the final G20 declaration. Alcatel-Lucent was the only business environment and In 2011, CEO members of the WEF These underlined the need for swift telecommunications supplier among International Business Council implementation of a strong international help us keep abreast of the 27 companies and organizations (IBC) and the ICC collaborated to evolving requirements and that contributed to the first and develop integrated proposals for latest editions of the RESIST guide, best practices, assuming a G20 governments on seven topics published in June 2010. RESIST, an leadership role in the ethics corresponding to the G20’s 2011 agenda. acronym for Resisting Extortion and and compliance global arena. UN HUMAN RIGHTS AND BUSINESS Solicitation in International Within this framework, Mr. Verwaayen DILEMMA FORUM Transactions, is a training toolkit engaged with other international business published by the International 9.1 World Economic Forum leaders to contribute substantive Alcatel-Lucent is listed among the Chamber of Commerce (ICC), Alcatel-Lucent CEO Ben Verwaayen private-sector input into the G20 good practice case studies in the UN Transparency International, the was the first chief executive in the process. More specifically, he provided Human Rights and Business Dilemma United Nations and the WEF. information and communications leadership as a member of the WEF Forum as a result of our phase-out Designed as a practical tool for technology sector to sign the World G20 Working Group on Improving of the use of external agents and companies of all sizes and available Economic Forum (WEF) Partnering Transparency and Eliminating Corruption consultants, and our transparent now in six languages, the RESIST Against Corruption Initiative (PACI) in in developing specific actionable approach to past allegations on guide helps companies train 2009. PACI brings together companies anti-corruption recommendations corruption and other compliance employees to respond appropriately across industries and regions to fight for the G20’s consideration at its issues through the “controversies” to bribery solicitations. bribery and corruption. In addition, the November 2011 summit in Cannes. section on our website. status of the risk assessment process is reviewed with senior management and This group collaborated with other the various compliance stakeholders on organizations (such as the OECD a regular basis throughout the year. and Transparency International) and Read more Read more

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Ethics and compliance > 1.0 our approach to ethics and compliance ur 2.0 o compliance governance structure 3.0 OUR Anti-corruption compliance program 4.0 COMPLIANCE HOTLINE 5.0 PRIVACY PROTECTION AND INFORMATION SECURITY 6.0 InfORMATION SECURITY 7.0 COMpliANCE RISK ASSESSMENT, ENHANCEMENT AND MITIGATION D 8.0 E UCATION AND TRAINING 9.0 INTERNATIONAL INITIATIVES

9.1 World Economic Forum 9.2 Industry/trade associations

9.2 Industry/trade associations Alcatel-Lucent is now working with 9.2.2 Ethics & Compliance Officer 9.2.1 Industry dialogue on human rights other stakeholders in the industry, Association Alcatel-Lucent considers the UN such as telecommunications operators In 2011, Alcatel-Lucent continued Guiding Principles on Business and vendors, to define how theUN its leadership position in the ethics Industry dialogue on human and Human Rights establishing the Framework should be applied in rights and compliance arena through active UN Protect, Respect and Remedy our sector, especially as it relates to representation on the Board of Framework – the so-called “Ruggie freedom of expression and privacy. Directors of the Ethics & Compliance Principles” – a significant milestone. Alcatel-Lucent took an active role OfficerA ssociation (ECOA). An industry dialogue was initiated during in a dialogue initiated in June 2011 This framework, which was endorsed in the summer of 2011 to explore the by global telecommunications The ECOA is the leading global member- June 2011, clarifies the responsibility interaction and boundaries between the operators and vendors to address driven association exclusively for of governments to protect human duty to protect and the responsibility to the issues of privacy and freedom individuals responsible for their rights and the responsibility of the respect human rights. The participating of expression in the organization’s ethics, compliance business community to respect companies want to jointly develop and telecommunications sector. As a and business conduct programs. human rights in their global business provide broadly accepted principles, tools result of today’s changing operations and eco-system. and due diligence mechanisms to ensure geopolitical landscape, Alcatel- Alcatel-Lucent is also represented the respect for privacy and freedom of Lucent has updated its human rights and is an active member in the ICC’s expression. The participants are seeking policy and will continue to work International Commission on Corporate input, ideas and feedback from a wide with key industry stakeholders to Responsibility and Anti-Corruption. range of stakeholders at these early initiate dialogue on our common stages of the dialogue to ensure that its responsibilities to human rights work is built on a good understanding around the world. of stakeholder expectations, rather than industry principles developed in isolation.

As it is still very early in the process, specific deliverables and timelines R ead more are still to be developed.

67 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

WHAT IF TELECOMMUNICATIONS TECHNOLOGIES COULD NOT ONLY BRING US CLOSER, BUT ALSO MAKE OUR WORLD MORE SUSTAINABLE? ENVIRONMENT

Telecommunications technologies have the potential to make our world greener and more sustainable. Alcatel-Lucent is committed to leading the industry in developing and deploying globally recognized innovation in eco-sustainable communications technologies that enable our customers to compete and win amidst growing environmental challenges and resource constraints.

68 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

1.1 How we approach environmental sustainability 1.2 Committed at the highest levels 1.3 Engaging for success: Stakeholder activities 1.4 Governance and sustainability 1.5 Adopting common carbon footprint assessment standards for ICT products

1.1 How we approach 1.0 environmental sustainability TARGETS OUR Alcatel-Lucent is transforming communications for a sustainable planet. 1 ENVIRONMENTAL Developing eco-sustainable Environmental responsibility and networks SUSTAINABILITY sustainability are cornerstones of Alcatel- Creating and bringing to market Lucent’s corporate strategy. In addition products, services and solutions STRATEGY to reducing our own direct impact on that contribute to environmentally the environment, we understand our responsible end-to-end networks. “The world really energy efficient business in the long term depends needs growth, and networks service on helping our customers respond to 2 providers’ green you need to be their environmental challenges as well. Enabling a low-carbon economy choices green to grow.” With this in mind, we have factored Helping businesses and consumers environmental considerations into reduce their respective BEN VERWAAYEN, CHIEF EXECUTIVE virtually every aspect of our business, environmental impacts with OFFICER, ALCATEL- taking a three-part approach. innovative applications and LUCENT solutions. Watch the video, This approach relies on Alcatel- which features various customers as they discuss Lucent’s ability to leverage its 3 how energy efficiency is one of the most critical capacity for eco-innovation and play Reducing our carbon footprint issues facing service providers. a leading role with key stakeholders. Shrinking our absolute carbon Watch the video from OUR COMMITMENT Bell Labs actively participates in footprint from our operations by open, collaborative partnerships and Ben Verwaayen 50% by 2020 from its 2008 To experience ‘BROADBAND BRINGS GREEN forums focused on establishing broad baseline. To date our footprint has Augmented Reality, AND GROW TO LIFE’ Lead the industry in developing and sustainability strategies and initiatives. decreased by 22%. 1. Download the app using the QR code deploying globally recognized 2. Scan the video innovation in eco-sustainable 1.2 Committed at the highest levels picture with your phone. communications technologies that Alcatel-Lucent CEO Ben Verwaayen has Since joining Alcatel-Lucent in 2008, Read more enable our customers to compete long been an outspoken advocate for Mr. Verwaayen has insisted the company: and win in a world facing increasing recognizing the “low-carbon economy” NN Develop low-carbon communications environmental challenges and (economic activity that produces as few technology solutions global GreenTouch Consortium resource constraints. greenhouse gas emissions as possible) NN Reduce its own carbon footprint by Bell Labs, which aims to make as a fundamental driver of innovation NN Participate in key global discussions communications networks 1,000 We seek, with the GreenTouch™ and growth. In November 2011, he on combating climate change, times more energy efficient than Consortium initiated by Bell Labs, to co-chaired the India Sustainability with participation led by company they are today. GreenTouch has been make communications networks Growth Summit in Mumbai. He also executives and specialists recognized worldwide – including by 1,000 times more energy efficient chairs the Confederation of British the World Economic Forum (WEF) – as than they are today. Industry (CBI) Climate Change Board. In 2010, Mr. Verwaayen was a strong an industrial best practice for meeting proponent of the formation of the today’s global sustainability challenge. 69 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

1.1 How we approach environmental sustainability 1.2 Committed at the highest levels 1.3 Engaging for success: Stakeholder activities 1.4 Governance and sustainability 1.5 Adopting common carbon footprint assessment standards for ICT products

In 2011, Alcatel-Lucent strengthened its commitment to sustainability by OUR PRINCIPAL GLOBAL COMMITMENTS the launch of a breakthrough green technology solution: lightRadio™, a To encourage the uptake of low-carbon ICT NN World Resources Institute (WRI) – by leading Standards Developing Organizations technology that streamlines and radically solutions locally, regionally, nationally and standards development in greenhouse gas NN Alliance for Telecommunications Industry simplifies mobile networks while shrinking internationally, Alcatel-Lucent has publicly emissions (GHG) measurement and reporting Solutions (ATIS) – by contributing to standards their carbon footprint by more than 50%. endorsed the following commitments and for ICT hardware, and by contributing to the development for ICT energy efficiency allocated staff to support their related goals, WRI’s telecom network services chapter (STEP-TEE) and to the ad hoc committee 1.3 Engaging for success: action plans and deliverables. These studying environmental initiatives (EGG) Stakeholder activities commitments represent areas where we believe Industry Commitments NN European Telecommunications Standards No single company can achieve lasting, we have the greatest possible opportunity to NN Digital Europe – Alcatel-Lucent participates Institute (ETSI) – as chair of its Technical large-scale global change on its own. We achieve meaningful impact for our stakeholders in the Environmental Policy Group and its Committee and actively contributing to energy recognize the need to work closely with and our company: clusters on eco-design, resource efficiency, efficiency standards, and by leading liaisons other organizations in pursuing our vision of a connected, green world. As a result, waste, chemicals and substance-related between ETSI and several other we have made stakeholder engagement Global Commitments restrictions, as well as contributes toward telecommunications standards development NN fundamental to the way we do business. Broadband Commission eHealth and Climate Digital Europe’s statements on ICT’s organizations such as IEC, CENELEC, ATIS and Change Task Forces – a UN initiative formed contribution to a digital economy, low-carbon ITU-T NN In every case, we choose to approach in 2010 to respond to the Millennium economy and energy efficiency policy GSMA – collaborative efforts on cellular organizations with whom we feel Development Goals and made up of visionary developments, including the EU’s 2050 industry commitments and policy we can achieve mutually meaningful leaders from UN agencies, ministries, Roadmap recommendations NN NN outcomes – taking care from the start academia, civil society and business Global eSustainability Initiative (GeSI) – as International Telecommunications Union NN to establish a shared understanding of Business for Environment Global Summit (B4E) co-chair of working groups on energy (ITU) – as an active participant in the ITU-T the issues, the nature of the engagement Green Imperative Manifesto efficiency and communications, and as a Focus Group for ICT and Climate Change NN and measures of success. Particularly International Chamber of Commerce (ICC) participant in its Transformative Step of the since its establishment in 2008; in the when working toward longer-term Green Economy Task Force – with United Day initiative (launched at the UNFCCC COP-17 ITU’s Study Group 5; and in developing goals, this kind of engagement can Nations Environment Programme (UNEP) climate change negotiations), providing two important recommendations on, yield tremendous benefits and also coordination on the green economy in examples of transformative solutions and respectively, the environmental impact produce enduring relationships. connection with the Rio+20 international supporting initiative-related communications assessment of ICT goods, networks and development conference efforts services (L.1410) and organizational One of the issues we have found to NN United Nations Global Compact (UNGC) Caring NN GreenTouch Consortium – which was organized requirements for assessing energy resonate strongly among stakeholders for Climate Initiative – through participation at by Alcatel-Lucent Bell Labs to dramatically consumption and GHG emissions (L.1420) over the years is the role information the global level and at the Steering Committee improve the energy efficiency of ICT networks and communications technology (ICT) level within a UNGC local network NN International Electronics Manufacturers can play in combating climate change NN World Economic Forum Green Growth Board Initiative (iNEMI) – as a board member and as – and how this responds to the UN’s – Gee Rittenhouse (Chairman GreenTouch, COO chair of or participant in environmentally Millennium Development Goals (MDGs). S3G Business Group) is a member focused work groups, such as lead-free solder Our part in the launch of GreenTouch, assembly, PVC alternatives and Lifecycle our commitment to and engagement Assessment (LCA) Estimator

70 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

1.1 How we approach environmental sustainability 1.2 Committed at the highest levels 1.3 Engaging for success: Stakeholder activities 1.4 Governance and sustainability 1.5 Adopting common carbon footprint assessment standards for ICT products

in the Global eSustainability Initiative carbon footprint information is reported (GeSI), our leadership in the World reliably and on time, and that local action HIGHLIGHT Economic Forum (WEF) and dedication plans are implemented properly. Carbon More than 75 Bell Labs green research to the United Nations Global Compact’s footprint is calculated twice a year and team scientists are involved in (UNGC’s) climate change efforts are all communicated not only internally but research and worldwide collaborations collaborative initiatives in which we apply externally as well, with full transparency. focused on green networks and our ICT expertise to eco-sustainability. energy-efficient services for various The company’s Environment, Health & sectors of the economy. Read more C Safety (EHS) Office is responsible for developing policies and compliance In addition to these commitments, we sustainable assurance programs to meet legal, 1.5 Adopting common carbon consider the views of new and potential consumption customer and company requirements. footprint assessment standards longer-term stakeholders. In 2011, for report 2012 The EHS Office provides technical for ICT products instance, we began consultations with support to local EHS representatives for Proper measurement of GHG emissions Greenpeace International in connection the implementation of EHS programs, – using externally verified, industry- with their CoolIT Leaderboard evaluation, and uses the EHS Management Systems standard methodologies and metrics – and increased our participation in approach to ensure compliance, continual is essential for the accurate assessment UNGC Local Networks to engage with Watch the video on ‘SUSTAINABLE CONSUMPTION’ improvement and performance in of GHG emission impacts and the net our stakeholders about best practices line with industry best practices. savings associated with ICT solutions. and insights gained from implementing In general today, measurement UNGC 10 principles in our business. The Chief Technical Office C( TO) of Bell approaches are not entirely mature. To experience Augmented Reality, Labs addresses environmental initiatives Given their importance, Alcatel-Lucent 1. Download the 1.4 Governance and sustainability and goals linked to products, services and is taking a major role in advancing app using the QR code The two highest-level Corporate 2. Scan the video solutions. In collaboration with product GHG emissions assessment and the Responsibility governing bodies within picture with your phone. and research teams, the CTO looks for development of metrics and standards. Alcatel-Lucent are the Corporate Read more ways to minimize the environmental Examples of this work include: Responsibility Council and the Corporate impact of the company’s products NN Leadership in determining Responsibility Network. As part of throughout their lifecycle, developing GeSI’s contribution to the GHG their broad CR responsibilities, the and deploying eco-conscious design Protocol Product Standard ICT pair shares the tasks of monitoring processes, practices and tools. Bell Labs’ Sector Guidance development performance and tracking progress CTO also seeks to identify ways ICTs can process, launched in 2011. on environmental issues. be used to enable a low-carbon economy. NN Serving as co-author on two ITU-T A For more information, see p. 7 SG5 documents on assessing energy and emissions related to ICTs: L.1410 The members of the Alcatel-Lucent – Methodology for environmental Green Team and Office of Sustainability impact assessment of ICT goods, oversee operational sustainability issues networks and services and L.1420 linked to the environment and climate – Methodology for energy consumption change. Green Team leaders ensure

71 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

1.1 How we approach environmental sustainability 1.2 Committed at the highest levels 1.3 Engaging for success: Stakeholder activities 1.4 Governance and sustainability 1.5 Adopting common carbon footprint assessment standards for ICT products

and greenhouse gas emissions impact International Telecommunications Union assessment of ICT in organizations. (ITU) Study Group 5 PILOT TESTING WITH BT AND CISCO 2011 ACHIEVEMENT NN Proposing and leading an International Alcatel-Lucent is co-author for the In 2011 the European Commission We have introduced and are gaining Electronics Manufacturing Initiative drafts of both L.1410 – Methodology (EC) called for volunteers from adoption of Bell Labs-developed Work Group to develop a lifecycle for environmental impact assessment across the ICT industry to pilot test LCA methodology through industry assessment approach that efficiently of ICT goods, networks and services methodologies recently completed consortia and reporting standards. evaluates and produces environmental and L.1420 – Methodology for energy or under development by In 2011, Alcatel-Lucent provided impact information for ICT products. consumption and greenhouse gas international standards development key expertise in network energy emissions impact assessment of ICT organizations including the ITU, ETSI and GHG modeling methodology to GHG Protocol Product Standard in organizations. These will be used to and IEC, and by industry bodies such WRI-GHG Protocol and ITU Alcatel-Lucent has taken a leadership assess energy and emissions generated as the WRI. This was associated with standards development role in GeSI’s contribution to this multi- from ICT goods, networks and services, implementation of the Digital organizations, and initiated pilot “Alcatel-Lucent has stakeholder initiative, a partnership and also for organizations from Agenda for Europe Key Action 12, testing for the EC to evaluate a carbon footprint between the World Resources activities related to their operations. with the goal of establishing a telecom network service under the expertise that is Institute (WRI), the World Business common methodological framework new measurement standards from cutting-edge.” Council for Sustainable Development Alcatel-Lucent is also participating in for measuring energy intensity and WRI, ETSI and ITU. I GABRIELLE GINER, (WBCSD), the Global e-Sustainability the ITU’s development of Guidelines carbon emissions from the PROGRAM Initiative (GeSI) and the Carbon for Environmental Sustainability for production, transport and selling MANAGER, Trust established in March 2011. the ICT Sector, serving as lead author processes of ICT goods, networks ENVIRONMENTAL of a chapter on sustainable products. and services. Importantly, the 2012 TARGET SUSTAINABILITY The initiative is developing guidelines The guidelines will provide technical framework is to be broadly AT BT for assessing the GHG impact of ICT guidance on environmentally conscious adoptable by the ICT industry. 1 products (including goods and services) design principles and best practices We want to leverage our innovation as part of the GHG Protocol Product as to how ICT companies can provide In response, Alcatel-Lucent joined a to establish common methodology Life Cycle Accounting and Reporting products that are more “environmentally consortium with BT and Cisco to for measuring the carbon footprint of network telecommunications Standard. The guidelines are meant conscious” throughout their full lifecycle pilot three methodologies for a Listen to an interview with BT to help practitioners measure GHG – from development and manufacture wholesale Internet service offered products over their lifecycle emissions in a clear and credible way. through usage to end-of-life treatment. by BT. The results will be submitted by 2012. to the EC and analyzed with those C Read more about ITU-T Study Group 5 Alcatel-Lucent has provided expertise at of other entities, with conclusions C Read more Seven Steps to Greater GHG both the steering and technical committee C Read more about the ITU Guidelines for published in mid-2012. Through the Awareness in ICT levels, and co-authored chapters on Environmental Sustainability pilot tests, Alcatel-Lucent is ICT hardware and telecommunications contributing to the standards and network services – in the latter case, helping demonstrate their usability. drawing on specific expertise in network energy use modeling. Both chapters will be available for public comment in 2012.

C Read more Read more on the EC call for volunteers

72 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

International Electronics Manufacturers this means solutions have to be assessed Initiative (iNEMI) eco-impact lifecycle 2.0 from initial design through to the end GREEN MAKES ECONOMIC SENSE IMPACTS A SIGNIFICANT PORTION assessment – data collection and of the equipment’s life, taking into OF CUSTOMERS’ OPEX analysis tools OUR APPROACH account how all related elements work Lifecycle assessment (LCA) is an together and influence each other. PART 1: Mobile Broadband INTERNET essential ICT industry practice for developing products that use materials, DEVELOPING ECO- Alcatel-Lucent has built this end-to- +60% 5th manufacturing processes and energy end thinking into its High Leverage INCREASE HIGHEST COUNTRY resources efficiently and sustainably. SUSTAINABLE Network™ (HLN), offering service In the number of mobile If the internet was a country, A major obstacle to the use of LCAs providers a simpler, more integrated broadband subscribers in its energy consumption NETWORKS 2010, with 558 million would be higher than Russia today is the lack of sufficient, current network infrastructure that is less worldwide and should top and a little less than Japan. environmental data for processes costly to operate, maintain and evolve 2 billion by 2015. and materials used in ICT products 2.1 Measuring impact from – and cuts power consumption as INTERNET ENERGY BILL – compounded by the fact that ICT end to end well, leveraging alternative energy products are composed of hundreds Broadband traffic – both fixed and sources to build a more eco-sustainable and even thousands of separate (1) network. HLN-based solutions comprise 75% 7-20% wireless – is growing dramatically ~ENERGY BILL OPERATOR OPEX components from a multitude of in mature and developing markets 48% of our Network sales (Q4 2011) 70 to 80% overall energy bill From 7% in mature countries suppliers. This can make the collection as people continue to embrace which is 1.913 Billion Euros. of an operator to +20% in emerging countries of environmental data and LCA-based video and other media for social RAN: +70% of network Read more about HLN electricity cost information extremely complex. and professional communication. C

Alcatel-Lucent proposed and is leading As a result, service providers are having CONVERGED, GREEN AND EFFICIENT NETWORK REDUCES CARBON FOOTPRINT AND LOWERS COSTS an iNEMI work group to develop to deploy more capacity in their networks a framework for more efficiently in the form of new technologies such as CONVERGED evaluating and producing environmental Long Term Evolution (LTE). However, this SERVICES CONTROL WIRELESS ACCESS impact information on ICT products, needed network evolution can increase drawing on initial R&D by Bell Labs. operational costs, power demands and Key to this is assessing data needs overall network complexity. Developing for use in developing an LCA-based efficient, eco-sustainable options has tool for the industry. We have shared become critical to ensuring the long- Bell Labs’ preliminary work through term affordability of telecommunications industry partnerships and consortia networks – and requires a shift in how CONVERGED AGGREGATION BACKBONE CONVERGED EDGE & BACKHAUL WIRELINE ACCESS for broader adoption and evolution technology companies like Alcatel- with strong, industry-wide support. Lucent think about their products. WIRELESS AUTOMATED GREEN DSL & PON SILICON INNOVATION INTEGRATION INNOVATION Self-conguring, Higher bandwidth, Low power, high IP/optics, C Read more about Eco-Impact Evaluator for lightRadio, self-optimizing, less power, thermal efciency, service control, ICT Equipment To know what the ultimate environmental smart antenna, self-healing higher efciency, fewer watts per unied management impact of any network technology will dynamic power save, lower carbon gigabit be, companies have to take an end-to-end direct cooling, footprint alternative energy view of their products, processes and systems. In communications networks, 73 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

Looking at the whole lifecycle The Alcatel-Lucent lifecycle assessment introducing this methodology for GHG For all new products and (LCA) estimator emissions measurement and reporting ENVIRONMENTAL LIFECYCLE technologies, such as lightRadio, that To assist with these assessments, Alcatel- standards adoption under the WRI. ASSESSMENT incorporate significant differences Lucent has pioneered a simple, accurate A For more information, see page 70 in the materials used from LCA estimator tool to provide eco- We minimize the environmental previous generations, Alcatel- impact information on all new product (1) According to Infonetics, the number of cellular impact of our products based on a Lucent performs a full life cycle families, with the results contributing to mobile broadband subscribers jumped almost 60% lifecycle approach that assesses all assessment to evaluate its impact on each product’s eco-declaration. Alcatel- in 2010 to 558 million worldwide and should top two billion by 2015. stages – development through end the environment and ensure it is Lucent eco-declarations conform to of life. Using this approach, we manufactured and will operate in the ECMA-370 standard issued by the C Read more evaluate eventual impact during the an eco-sustainable manner. Some European Association for Standardization early product concept stages and examples are replacing traditional Information and Communication Systems ABI Research estimates that the number of worldwide fixed broadband subscribers will rise to seek continuous improvements in solder with lead-free solder, and the International Electrotechnical 548 million in 2015. design, material selection and such using energy-saving chipsets in Commission (IEC) 62430 standard for operating characteristics as energy C Read more components or employing alternative Environmentally Conscious Design for efficiency. Environmental impacts energy powering sources for wireless Electrical and Electronic Products. are further minimized through the base stations. We also examine non- rigorous use of best practices that product specific aspects of the lifecycle. Alcatel-Lucent is championing further incorporate key product impact For example, in looking at the eco- adoption and development of the issues, such as: impact of packaging materials, we have LCA estimator framework for broader conducted a full LCA analysis of the Static industry-wide use and alignment via the Intercept packaging system invented at iNEMI consortium. Alcatel-Lucent is also NN Extending product lifetime and Bell Labs, with results showing a 40- value fold improvement in GHG emissions LIFECYCLE ASSESSMENT NN Occupying less space and over the use of traditional polyethylene generating less heat packing bags due to longer shelf life and NN Providing more functionality per lower defect rates. The key findings of kilowatt used LCAs are continuously incorporated into NN Operating on alternate energy our best practices for environmentally when/where applicable conscious product design. DEVELOPMENT MANUFACTURING PACKAGING DISTRIBUTION & USE & RECYCLING NN Assuring electromagnetic INSTALLATION SERVICING C Read more about Lifecycle Assessment environment safety Approach NN Reducing acoustic noise NN Using materials with low environmental impact NN Managing end-of-life disassembly and treatment NN Providing eco-efficient product packaging and transport

74 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

2.2 Research and innovation increasing the capacity and energy 2.2.2 Open innovation 2.2.1 Extreme green innovation efficiency of optical transport systems, 2011 ACHIEVEMENTS The eco-sustainability challenge is too Recognizing that communication networks and on efficient storage and network At the end of 2011, we doubled the broad for any one organization to meet are important engines of growth in the coding for content delivery) over the number of researchers working on on its own, so Alcatel-Lucent has made green global economy, Alcatel-Lucent same period. Almost 10% of all patent green research. A focus on energy open innovation a strategic priority, has embarked on a path of “extreme filings from Bell Labs today are green- efficiency has been incorporated assuming active or leading roles in green” innovation spearheaded by Bell related, and its researchers are on into more than 30% of the projects numerous collaborative initiatives – Labs. Bell Labs has organized a formal the technical program committees of, in the research pipeline. This from consortia such as GreenTouch to approach to this green research, aiming or presenters to, most of the major number is expected to further partnerships, standards bodies and to realize dramatic improvements in green conferences and workshops. increase over time. industry groups. Open innovation will end-to-end network energy efficiency allow us to move towards realizing and services through out-of-the-box With this research highlighting some of a truly global, end-to-end network We increased the number of thinking, development of “clean slate” the longer-term barriers to sustainable approach that will fully address all facets research projects that have architectures, and open innovation. network growth – and the urgent of the eco-sustainability challenge. environmental sustainability as an need for innovation to address them indirect consequence (or as one Bell Labs green research involves – energy considerations have become 2.2.3 The GreenTouch™ Consortium benefit of many): three new more than 75 scientists around the an important concern in all new Bell The GreenTouch Consortium, launched projects were in place by the end of world, collaborating with more than Labs research. More than 30% of the by Bell Labs two years ago, is now a 2011 – smart grid, spatial division 50 companies, research institutes and projects in its pipeline have energy global research initiative dedicated to multiplexing and green DSL – up universities. This represents a doubling benefits as direct or indirect impacts. achieving a dramatic improvement in from zero in the previous year. of researchers and a five-fold increase the energy efficiency of ICT networks. in green university collaborations over By 2015, GreenTouch aims to deliver In 2011, we doubled the 2010. Bell Labs also more than doubled We also multiplied by five our green the architecture, specifications and number of research projects its number of research projects with university collaborations. roadmap – and demonstrate key with green as a major benefit green as a major benefit (e.g., work components – needed to increase on spatial division multiplexing for In December 2011: network energy efficiency by a factor of NN 11 research projects were 1,000 from current levels. A thousand- underway (versus two in 2010) fold reduction is roughly equivalent NN Five additional projects were to being able to power the world’s proposed for 2012 communications networks, including NN U.S. government funding request the Internet, for three years using the will be submitted for five to same amount of energy that it currently 10 additional 2012 projects takes to run them for a single day.

Since its introduction in January 2010, Our objective is to maintain this high GreenTouch has made significant level of commitment to extreme progress, now overseeing 12 green innovation for the next three research programs and more than years in terms of internal research 25 projects for all aspects of optical, efforts, external collaborations and wireline and wireless networking. university funding. 75 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics Environment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

that allows electronics to operate at – increasing the value and relevance to slower, less energy-intensive speeds. members as they start to see commercial PROJECT HIGHLIGHTS gains as well as intellectual and Wireless: Large-Scale Antenna System Apart from their specific findings, knowledge gains from their participation. (LSAS) the progress achieved by GreenTouch Because wireless networks need to also illustrates that cross-organization transmit signals in all directions – even INCREASE NETWORK ENERGY collaboration does enable faster though the signal only needs to reach EFFICIENCY BY A FACTOR OF 1,000 innovation. The two demo projects a thin antenna – wireless is the least are instructive in revealing a clear energy efficient communication focus on the most power-hungry technology, yet it is also the most gee rittenhouse greentouch chairman network functions (i.e., access). Wo h is part of GreenTouch? popular because of the flexibility it More than 50 members bring more affords. GreenTouch actively addresses Membership in GreenTouch has grown than 300 individual participants the wireless power consumption from 15 to more than 50, testament to from major regions around the challenge through its LSAS research, its importance to industry stakeholders. world, including from Asia, Europe which formed the basis of the The goal for year three is to grow beyond and North America, and all sectors consortium’s first-ever technology 75 members – not only universities, of the communications industry. demonstration in February 2011. The Watch the video ‘UPDATE ON GREENTOUCH™’ suppliers and equipment vendors but They include: goal of LSAS is to develop wireless also more operators and policy makers. NN S ervice providers such as China access systems that use hundreds to I n 2011, GreenTouch launched a demo Last year GreenTouch signed an MOU Mobile, France Telecom Orange, thousands of small antennas for based on the results of its Large-Scale with GeSI, creating further opportunities Korea Telecom, Portugal Telecom, wireless communication rather than Antenna System (LSAS) research project, to introduce technological advancements Swisscom and Vodafone large, power-hungry base stations. The proving that enormous energy efficiency into the policy environment. Together, NN Academics such as Cambridge LSAS research group has shown that can be gained in wireless systems by GreenTouch and GeSI have great University, the University of the energy required for transmission using many antenna elements working potential to demonstrate the ICT Melbourne and Tsinghua can be significantly reduced as the in a cohort. A second demo planned for industry’s contribution to mitigating University number of antenna elements is early 2012 will show that significant and adapting to climate change. NN T elecoms solutions and increased: an antenna array of 100 energy savings can be achieved in equipment providers such as elements might transmit just 1% of the wireline access through a new protocol As it has grown, GreenTouch has also Fujitsu, Huawei, Samsung and energy transmitted by a single antenna evolved. In November 2011, a new ZTE Corporation while giving the same quality of branch of the consortium was created NN I ndustrial labs such as CEA-Leti, service. lightRadio and other Alcatel- To experience to focus on pre-standardization in Lucent product offerings now use Augmented Reality, imec and INRIA 1. Download the preparation for deploying GreenTouch multi-antenna systems to improve app using the QR code technologies into the commercial market. their energy efficiency.I n November 2. Scan the video picture with your phone. This new branch allows the GreenTouch 2011, GreenTouch founding member community to present technologies to and Alcatel-Lucent customer Swisscom Read more standards bodies in a coherent way demonstrated LSAS to the Swiss and move from basic fundamental authorities at its annual technology research into the pre-competitive arena showcase as an example of the collaborative work done by GreenTouch. 76 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics Environment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

2.2.4 Other green research partnerships generation networks; Internet In addition to GreenTouch and services energy star rating W ireline: Bit-Interleaved Passive the multiple cross-organizational NN P rojects to reduce energy consumption Optical Network (Bi-PON) collaborations within, Alcatel-Lucent of transmission equipment: Energy In early 2012, GreenTouch demonstrated a new technology that will dramatically and Bell Labs participate in several efficiency of future modulation format; reduce energy consumption in fiber-to- other major collaborative efforts low energy point-to-point access the-home (FTTH) networks, as well as focused on green innovations. network; analogue to digital converters other applications. The breakthrough Some of them are listed below: Bi-PON technology is the second major Future possibilities: Energy efficient milestone reached by the consortium. Centre for Energy-Efficient wireless networks; fundamental When deployed, it will enable a power g reentouch™ demonstrates Telecommunications (CEET) limits of switching and information reduction of 30 times over current large-scale antenna A partnership devoted to innovation transfer; router power measurement technologies while improving in energy-efficient networks and performance and reducing cost. The Read more technologies, Bell Labs, the University C access network is a significant contributor to the total power of Melbourne and the Victorian State Centre for Telecommunications Value consumption of the overall Government jointly established a research Chain Research (CTVR) communications infrastructure. FTTH is center in Melbourne, Australia devoted The Centre for Telecommunications Value expected to nearly double over the next Watch the video to advancing research in energy-efficient Chain Research (CTVR) is a partnership five years, reaching 142 million networks and technologies. The Centre between the Alcatel-Lucent Bell Labs subscribers worldwide by 2016, (2) for Energy-Efficient Telecommunications Ireland & UK research cluster and the according to ABI Research . With (CEET) combines Bell Labs’ extensive Irish Centre for Science, Engineering & Bi-PON instead of the current optical technology in use, the impact on the experience in collaborative research and Technology. Its research goals include new carbon footprint is that of taking half a the University of Melbourne’s world- energy-saving heat dissipation techniques class research in telecommunications million cars from the roads. Bi-PON such as heat dissipation through vapor represents the next major leap in network infrastructure. chambers and energy harvesting. passive optical network (PON) Supported by Science Foundation Ireland, technologies. It is expected to be a This partnership includes: CTVR is a collaborative research center necessity as electronic processing will NN 22 researchers and technology involving seven Irish universities. increase with future 40GPON systems. experts over three years Current optical network units in access g reentouch™ NN P rojects to manage energy C Read more discard 99% of all processed data, shaping a consumption: Cloud computing, without ever being used, whereas sustainable future content distribution and information Bi-PON is built around a new protocol logistics; energy efficiency of next- that significantly simplifies the electronic circuitry by using a selective data (2) ABI Research estimates that worldwide fiber processing technique that dramatically To experience broadband subscriber numbers will more than reduces this energy consumption. Augmented Reality, double in 2016 to 142 million subscribers, from 1. Download the 69.6 million in 2011. Watch the video app using the QR code 2. Scan the video Read more picture with your phone. C

Read more Read more Read more 77 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

EARTH 2.3 Reducing the impact of our Bell Labs plays a leading role (including products and solutions overall technical coordination) in EARTH, We maintain high standards of a European consortium of 15 leading product stewardship and consider BOOSTING GREEN RESEARCH telecommunications service providers, EFFORTS IN INDIA the environmental impact of our component and infrastructure vendors products throughout their lifecycle, and academic institutions whose goal from design to end of life. is to reduce the energy consumption In India, Bell Labs has expanded its of LTE-based advanced wireless green research efforts by 2.3.1 Managing materials communications networks by 50% partnering with two of the most We place paramount importance Launch of the Centre prestigious research institutes in before the end of 2012 while making for Energy-Efficient on minimizing and managing the the country: the Indian Institute of broadband wireless service accessible to Telecommunications environmental impacts of materials a greater number of people in Europe. Science (IISc) in Bengaluru and the used in our products and supply chain. Indian Institute of Technology in Expectations for the control and tracking Read more C Delhi. These collaborative efforts of material content are specified in have resulted in several workshops our supplier requirements along with Gachon Energy Research Institute and other meetings for universities prohibitions against materials that are (GERI) in Korea Watch the video and businesses, including service banned, restricted or to be avoided Bell Labs continues to work with the providers, and have already in products or packaging provided to Gachon Energy Research Institute (GERI) To experience generated two proposals that have Alcatel-Lucent. Our materiality assessment of Korea’s Kyungwon University to Augmented Reality, been submitted for project funding has shown that the traceability of raw develop innovative business models 1. Download the to Indian agencies. These app using the QR code material is an increasingly sensitive topic for the next-generation smart power 2. Scan the video partnerships are furthering our and is one we take seriously. Suppliers grid (Smart Grid). The intent of the picture with your phone. broad green goals of pulling in the must track material content information joint research program, called Grid Read more best minds in the world for research according to the Joint Industry Material 2.0, is to fundamentally enhance the on sustainable network growth, and Composition Declaration Guide for efficiency, reliability, security and It implements a novel cloud-based, we expect innovations tailored to Electronic Products. We maintain a robust intelligence of electric power grids by high-performance demand response meet the sustainability needs of material/substance content-management exploiting the convergence between system that enables certain tasks to be India will also address rural process to aggressively limit the impact electric power systems and information performed without direct control from inclusion. Both the Indian Institute of hazardous materials and waste on and communications technologies. utilities and can fully exploit current of Science, Bengaluru, and the human health and the environment, network conditions. We also developed Indian Institute of Technology, Delhi upholding the following principles: Our research project focuses on the market models and strategies for the are now members of GreenTouch. development of an IP-based, decentralized effective deployment of micro-grid 1. We meet regulatory material and data-centric information infrastructure environments within the utility grid restrictions in all markets we serve. (SeDAX) that can reliably, securely and to facilitate broader penetration of 2. We are proactive in going beyond cost-effectively support the operation renewable energy throughout the grid. legislative material restrictions and innovative applications of the where there is a sound scientific next-generation grid. The prototype, basis for doing so – including demonstrated in July 2011, is self- abiding by regional legislative healing, self-configurable and reliable. 78 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

requirements on a global level and 2.3.2 Safety within the electromagnetic respecting material restrictions. HIGHLIGHT ALL NEW NETWORK environment 3. We invest in R&D both alone and Our principles in action INFRASTRUCTURE EQUIPMENT Alcatel-Lucent closely follows health SINCE 2010 IS DESIGNED TO BE through partnerships to minimize While compliance with materials- and regulatory issues related to wireless LEAD-FREE BY DEFAULT the eco-impact of materials – related legislation such as the EU RoHS communications, including those including research into alternatives, Directive(1) and REACH Regulation(2) is associated with the electromagnetic processes, technical feasibility primarily EU-focused, we have adopted environment. We are committed to and eco-impact quantification. these globally for all our products. LIFECYCLE ASSESSMENT (LCA) OF ensuring our product portfolio complies 4. We advocate the use and adoption Alcatel-Lucent is fully RoHS compliant PRINTED WIRING BOARDS with international standards and of lower eco-impact materials – and although network infrastructure regulations on human exposure. Our with our suppliers, customers equipment is currently exempt from position regarding the electromagnetic Alcatel-Lucent is contributing to the and industry at large. the requirement to eliminate lead- environment is based on the opinion HDPUG industry consortium on the based solders, we are taking steps to of expert committees mandated by For more information about our supply eco-impact LCA of printed wiring A completely eliminate lead from our national and international authorities chain, see p. 139 boards. This includes a comparative products. Our Enterprise products have to assess the advancement of scientific A For more information about our materiality assessment of the most commonly assessment, see p. 4 been lead-free since 2006, and in knowledge: we support worldwide employed materials and processes 2008 we started shipping our first research efforts and dialogue to for manufacturing today against lead-free network infrastructure promote the dissemination of scientific new halogen-free materials and 2011 ACHIEVEMENT equipment. All new network information and actively contribute to the manufacturing technologies to We are working with suppliers, infrastructure equipment since 2010 is international standardization bodies that determine their overall advantages industry standards technical designed to be lead-free by default. develop exposure assessment standards. from an eco-sustainable committees, academia and consortia Our research program – conducted in In 2011, this effort has been recognized perspective. to ensure the readiness of alternatives collaboration with industry partners, by the Dow Jones Sustainability Index to PVC. In 2011, we surveyed the including iNEMI, High Density (DJSI), which assigned Alcatel-Lucent suppliers who represent more than Packaging User Group (HDPUG) and the the best and highest score achievable 90% of our spend and completed an Unovis AREA Consortium – has helped in the Electromagnetic Fields category assessment to determine the technical advance global knowledge of lead-free of its Environment dimension. Read more and economic viability of PVC technology to enable a more reliable, Read more alternatives – driving our substitution rapid and complete transition to C lead-free assembly. Thanks to this plans. 2.3.3 Packaging and distribution research we were able to advocate Lean packaging industry acceptance for lead-free Packaging directly impacts the technology, which increased adoption environment by the consumption 2012 TARGET of reliable lead-free products for of raw materials and by the waste service provider applications. 1 stream created from those converted Alcatel-Lucent is proactively (1) EU Directive 2002/95/EC on Restriction of materials. Indirectly, product packaging pursuing the elimination of certain Hazardous Substances (RoHS) affects transportation-related GHG (2) EU Regulation 2009/1907/EC Restriction, emissions by defining associated polyvinyl chloride (PVC) from its Evaluation and Authorisation of Chemicals products globally by 2015. (REACH) transport space required to deliver

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2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

those products. This ultimately affects Efficient transport 2.3.4 Increasing the energy efficiency of Wireless access the number of vehicles (trucks, aircraft) Transporting products via airfreight is products in use lightRadio LIGHTRADIO HELPS to be dispatched. In 2011, Alcatel- significantly more carbon intensive than Lifecycle assessments (LCAs) repeatedly Alcatel-Lucent’s breakthrough lightRadio REDUCE THE ENERGY Lucent committed to reducing primary other modes of transport. Alcatel-Lucent show that the use of a typical network product line launched in 2011 for mobile CONSUMPTION OF packaging use of wood (plywood/solid continued to reduce the carbon footprint product accounts for 80-90% of its and broadband infrastructure equipment MOBILE NETWORKS wood) containers by 90% by end of of its logistics by further shifting freight total environmental impact – the bulk offers a way to satisfy the needs of BY UP TO 50% 2012. By switching these containers from air to surface transit, especially of which is associated with power mobile data users and network operators to cartons with high-recycled fiber ocean shipping. In 2011, Alcatel-Lucent consumption. Consequently, reducing everywhere, including under-served rural content, demands on natural resources deployed a transportation upgrade power consumption is a primary goal areas. At the same time, its design shrinks such as forests are lessened and the process (TUP). It requires project of our product eco-sustainability and simplifies current base stations and associated weights are reduced, thereby shipments to be shipped via ocean vessel strategy. Between 2008 and 2010 massive cell site towers, helping reduce lowering GHG emissions in transport. or truck, unless a waiver is authorized we met the target of improving our the energy consumption of mobile for an urgent material delivery. Overall, products’ functional energy efficiency networks by up to 50% over current Truck-fill optimization projects for some all Alcatel-Lucent regions report greater by at least 20% – with many products radio access network equipment. This is of our major North American suppliers than 81% compliance to TUP, above the significantly exceeding that target. Our significant given that Bell Labs research were undertaken in 2011. For example, target 80% (with the exception of EMEA target now is to improve functional has found mobile network base stations by adapting packaging to allow full double which reports 59.8% compliance to TUP). energy efficiency for key products by to be globally responsible for roughly stacking of pallet loads within transport We also implemented our LightTouch an additional 25% by the end of 2012. 18 million metric tons of carbon dioxide vehicles, the resulting truckloads were initiative – moving our manufacturing Highlights of our product-related energy per year. lightRadio reduces total cost of reduced by approximately 400 annually. centers closer to our customers. I efficiency achievements include: ownership by 51% which Bell Labs has Software optimization tools were estimated in 2010 was 150 billion Euros. employed to plan pallet and truckloads These combined actions have enabled Alcatel-Lucent studies have concluded 2011 ACHIEVEMENT to maximize the number of units shipped the company to shift freight from air to that the total addressable opportunity for Alcatel-Lucent is on track to meet per truckload. Similar efforts will surface transport, shipping more than the multitechnology radio market, which and exceed its 2012 goal. continue for key suppliers in all regions. 98% domestically by truck and more than lightRadio addresses, will be over 12 billion 40% internationally by ocean vessel. For Euros in 2014, representing more than Work also commenced to reduce package 2012, our goal is to increase international 55% of the total wireless RAN market. The volume associated with transport shipments by ocean vessel to 50%. 2012 TARGET cumulative total addressable market will of our products. By more efficiently be over 100 billion Euros from 2011-2018. packaging and eliminating unnecessary 1 over-pack layers, space may be saved SHIFTING OUR FREIGHT FROM AIR Our objective is to improve the lightRadio also holds the potential in transport vehicles to allow additional TO SURFACE TRANSIT: WE SHIP functional energy efficiency of key to extend wireless and broadband cargo. Alcatel-Lucent aims to eliminate MORE THAN 98% DOMESTICALLY access to regions not currently served. BY TRUCK AND MORE THAN 40% products* by at least 25% by end of more than 9 million kilograms of GHG By reducing the cell site to just an INTERNATIONALLY BY OCEAN 2012 (compared to 2010). emissions annually in associated air VESSEL antenna and leveraging anticipated and truck transport by this effort. *“Key products” are new or recently future technical advances, lightRadio developed products on an upward lifecycle has the potential to create broadband curve. coverage virtually anywhere power (electricity, sun, wind) is available.

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2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

Fixed access FP3 Converged Backbone Transformation VDSL2 line card The new FP3 chip enables greater speed, Combining best-in-class IP and optical Low-power line drivers, optimized better service delivery and applications, portfolios with emerging technologies interworking function, and greater and greener networks. With 400 Gb/s, the to achieve lowest cost-per-bit delivery, integration of digital and analog new FP3 400G network processor is four significantly reduce transport-related processing building blocks have times more efficient than its predecessor. capital expenditures (CAPEX) and cut helped cut power consumption in power consumption by up to 50% due to our latest VDSL2 cards by up to 20% Incorporating dynamic power-saving fewer IP ports and links in the network. from the previous generation. features to balance performance/ services and power consumption, Capturing the environmental lightradio a breakthrough for IP routing and switching it helps reduce IP network power advantages of the cloud the mobile industry 7750 SR-12 consumption by consuming 50% less Alcatel-Lucent solutions and technologies The Alcatel-Lucent 7750 SR-12 service power than its FP2 predecessor. It allow service providers to transform the router’s enhanced fan trays are capable also requires 30% less space. ways they create, manage and deliver of moving (SR) twice as much air as services to their customers. In 2011, previous fans – meaning that over the Optical transport we launched our CloudBand solution same operating range as the original 1830 Photonic Service Switch (PSS) portfolio, providing the foundation for Watch the video 7750 SRs, this new generation realizes The 1830 PSS platform, used by a new class of “carrier cloud” services. energy efficiency gains of 33–42% while more than 70 customers worldwide CloudBand brings together the computing To experience being more than seven decibels quieter. including 360networks, BT and power and flexibility of the cloud with the Augmented Reality, Softbank, reduces power consumption high performance, reliability and security 1. Download the app using the QR code Fans are the most visible components in by 69% over previous solutions. of traditional communications networks. It 2. Scan the video terms of determining the heat dissipation allows service providers to improve their picture with your phone. capabilities of a chassis, but a properly own operations while generating revenue Read more engineered design also addresses from cloud services. Bell Labs found aerodynamics and airflow characteristics. that moving to the cloud also reduces All the air paths within the Alcatel-Lucent both capital and operating expenses, 2011 ACHIEVEMENT SR portfolio have been designed to which in turn provide environmental We are on track to meet (and minimize turbulence and maximize the benefits through virtualization, energy exceed) our 2015 goal. aerodynamic cooling efficiency within the savings and footprint. These include system. Heat sink topologies and choice 100% savings in energy and real of materials are also very important for estate expenses for network elements cooling performance. Properly engineered reaching farther, eliminated through hardware reduction. 2015 TARGET heat sinks are custom-designed for faster each board assembly. SR portfolio heat orion and the 100g Utilizing alternative energy sources transport solution 1 sinks make liberal use of heat pumps Alternative energy base stations help Our target is to improve the to draw heat from warmer to cooler service providers deploy wireless functional energy efficiency of areas on the board for optimal cooling. networks even in areas not served lightRadio by at least 75% between by reliable electrical power. In such 2008 and 2015.

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2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

MAXIMIZE CAPACITY AND EFFICIENCY WITH A CONVERGED BACKBONE Integration of the IP and optical CORE layers across data, control and ROUTERS BREAKING THE 100G BARRIER – WITH management planes 75% LESS POWER CONSUMPTION SCALABLE BRANDWITH Efcient handling of massive trafc Alcatel-Lucent has led the volumes at the lowest possible layer commercialization of 100G networking reduces costs technology, which allows service INTELLIGENT CONTROL SERVICE OTN/PHOTONIC SERVICE providers to transport data, media and Improves resource utilization, ROUTERS SWITCHES ROUTERS other content at rates of 100 Gb/s. cross-layer visibility, network Since 2010, the company has been resilience and exibility

deploying a 100G solution for optical EFFICIENT MANAGEMENT CONVERGED EDGE CONVERGED BACKBONE INTERNET networks that reduces power Seamless network visibility, consumption by 75% compared to provisioning and operational troubleshooting across IP and optical SERVICEƒAWARE NETWORK MANAGEMENT slower transmission technology.

situations, powering wireless base manage applications as a service across a products for building scalable, high- Canada’s Ontario Research and stations with solar, wind and other range of data center deployment models. performance, cloud-like data center Innovation Optical Network (ORION) alternative energy sources removes the networks suitable for today’s virtualized adopted the 100G coherent optical need for traditional diesel generators. The winner of the 2011 Best of Interop applications. The design for the core of solution in 2011. Connecting research By drastically reducing operating award in the data center and storage the fabric includes the OmniSwitchTM and educational institutions in the expenses and carbon footprint, it is category, this energy-efficient solution 6900-X40, a new breed of cloud network province of Ontario, ORION anticipated possible to bring all of the social and dramatically reduces power requirements core switches with power efficiency being huge growth in the use of its network economic benefits of telecom services for large data centers. The award an essential value. Based on an open and needed a faster, higher-capacity to even the most remote areas. recognized Alcatel-Lucent for having the industry evaluation by the Lippis Report, network to keep up. A 6,000-km most compelling design and supporting a comparative analysis found that its fiber-based network with 26 points of Data Center for Enterprises WattsATIS/10GbE port is 3.38, offering presence (climbing soon to 29), ORION The Alcatel-Lucent Application Fluent the lowest power consumption rates went with 100G optics partly because Network helps enterprises address 2011 ACHIEVEMENT available in most markets. The Alcatel- its members are looking to make more today’s data center network challenges In 2011, Alcatel-Lucent’s goal was Lucent OmniSwitch 6900-X40 power cost use of video systems, video by recognizing the unique requirements to increase the number of deployed per 10GbE is calculated at $12.36 per teleconferencing and exchanging large of each application, user, device and base stations with alternative year, with the three-year cost to power video files for online learning, and conversational context to automatically energy power solutions by 40% it, estimated at $790.87, representing partly to support the use of cloud-based adapt the network to ensure optimal relative to the 2010 baseline. We less than 2.82% of its list price. applications. The accelerated network performance. It flattens and converges exceeded this target by 19%, meets the needs of Ontario researchers Read more data and storage networks and transforms bringing our total number of C who require bandwidth well above the power and cooling hardware into smart, deployed alternative-energy base previous threshold of 10G to make, adaptive systems. Our data center stations to 793. share and drive discoveries. switching solution enables enterprises to 82 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

2.1 Measuring impact from end to end 2.2 Research and innovation 2.3 Reducing the impact of our products and solutions

2.3.5 Take-back, remanufacturing and recycling WHAT GOES INTO OUR PRODUCTS: TWO EXAMPLES RECYCLED INPUT MATERIALS Alcatel-Lucent offers global product take-back, remanufacturing and recycling “The [low] total cost In 2011, Alcatel-Lucent delivered 72,729 metric Alcatel-Lucent works closely with its components services for any type of telecom of ownership is tons of equipment to market. Information on and materials suppliers to use a high percentage of products, regardless of vendor. Members another benefit of product compliance with environmental recycled input materials in raw materials of our global network of approved the Alcatel-Lucent regulations where the products are manufactured, processing and manufacturing. The following recycling vendors collect and recycle solution. It allows us distributed and sold is tracked at a local level. The shows the percentage of recycled materials products that have reached their end to reuse the existing following are examples of the kinds of direct typically contained within our feedstock metals: of life. Customers are provided with an materials that make up finished Alcatel-Lucent online request form to arrange equipment fiber plant, reduce products: pick-up. Where possible, Alcatel-Lucent our equipment footprint, and also participates in public recovery systems. NN Aluminum – 40% avg.; extruded forms – up to reduce the power 85%; sheet products – up to 63%; electronic In 2011, the company managed 6,314 consumption, which GPON ISAM 7342 (wireline product) components – up to 5% metric tons of electronic waste. Of is really important NN Total weight of finished product (typical NN Zinc – coatings – up to 36%; die castings – 10% this, 378 metric tons of equipment to us.” configuration supplied to customer): 88.4 kg NN Lead – battery plates – ~50% and components were remanufactured NN Metals: stainless steel: 60.6 kg; copper: 10.3 kg; NN Tin – solder – up to 5% EMMANUEL LEBEL, and/or resold. Approved recycling aluminum: 0.8 kg; tin: 0.6 kg; lead: 0.4 kg; other NN Steel – 47% avg.; structural parts – ~80%; rolled SENIOR NETWORK partners recycled 5,688 metric TRANSPORT metals: trace sheet goods – up to 35% tons. All told, greater than 96% was ENGINEER, ORION NN Percentage of metals in finished product: 82% NN Stainless steel – 60% avg. recycled or re-sold; less than 4% was NN Plastics: epoxy resin: 12.4 kg; polycarbonate: NN Copper –38% avg.; structural – up to 75%; disposed of via secure landfill. 3.3 kg; other plastics: trace electrical/electronic – up to 5% NN Percentage of plastics in finished product: 18% NN Nickel – 34% avg. IN 2011, MORE THAN In 2011, six new product families NN Other (e.g., ceramics, glass, elastomers): trace NN Packaging – ~50% in cardboard 96% OF 6,314 were added to our remanufacturing METRIC TONS OF packaging for shipped products and resale operations. The overall ELECTRONIC WASTE 9234e Base Station d2U (wireless product) number of Alcatel-Lucent product ASSOCIATED WITH NN Total weight of finished product (typical Example: for a single Alcatel-Lucent product families under current remanufacturing/ ALCATEL-LUCENT configuration supplied to customer): 139.6 kg (e.g., GPON ISAM 7342): PRODUCTS WAS resale has increased since 2008 NN Metals: aluminum: 55.8 kg; copper: 35.4 kg; NN RECYCLED OR Total weight of materials in product: 88.4 kg from 45 to 71 product families. RE-SOLD stainless steel: 10.7 kg; steel: 0.8 kg; other NN Total weight of metals in product: 72.7 kg metals: trace NN Total weight of recycled material in metals: 37.4 kg C Read more NN Percentage of metals in finished product: 73.6% NN 42% of recycled input material in product NN Plastics: epoxy resin: 32.1 kg; ABS/ polycarbonate: 4.5 kg; other plastics: trace NN Percentage of plastics in finished product: 26.2% NN Other (e.g., ceramics, glass, elastomers): 0.2%

83 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

3.1 The carbon-reducing capacity of ICT 3.2 Bringing new capabilities to smart grids 3.3 Propelling smart transportation 3.4 Building smart cities

In addition, the ICT industry is Engage with end users – through 3.0 developing methodologies and monitoring real-time usage and alerting SMART GRID PRODUCT OF THE standards for evaluating the carbon- consumers to opportunities to be more YEAR AWARDS OUR APPROACH reducing potential of ICT solutions. energy aware, with incentives and flexible PART 2: tariffs as ways of encouraging consumers In August 2011, SmartGrid.TMCnet. (1) According to the GeSI and Climate Group report, and enterprises to reduce usage during Smart 2020. com announced winners of its ENABLING A high-cost, peak production periods. second annual Smart Grid 3.2 Bringing new capabilities to Excellence Awards and granted the LOW-CARBON smart grids Integrate renewable energy sources 2010 Smart Grid Product of the ECONOMY Electricity generation and distribution Integrating renewable sources into Year Awards to the Alcatel-Lucent account for an estimated quarter of the energy supply chain poses a 7705 SAR product. The awards total worldwide GHG emissions. As technical challenge because their recognize achievers delivering part of its efforts to help customers output tends to be lower and less Smart Grid technology products regular than traditional electricity 3.1 The carbon-reducing capacity reduce those emissions, Alcatel-Lucent brought to market in 2010 and their generation (except for hydro). Alcatel- of ICT is combining its expertise in utility commitment to quality and Lucent mission-critical communication Information and communications communications with its experience in excellence while addressing real solutions let utilities connect to and technology (ICT) providers have a unique telecoms applications for the evolving needs in the marketplace. thoroughly supervise renewable opportunity to contribute to the battle smart grid markets, enabling utilities to: energy sources to balance them with against climate change. Although the ICT traditional production methods. sector as a whole is directly responsible Increase operational efficiency – by for only about 2% of total GHG emissions, collecting, aggregating and correlating Alcatel-Lucent is running more than 80 the use of ICT could help cut global metering data in strategic areas of the mission-critical networks and smart GHG emissions by as much as 15% by grid so utilities can reduce electricity grid transformations worldwide. We 2020(1). ICT applications and solutions wastage, for example by monitoring have helped utilities in Australia (Energy where Alcatel-Lucent technology distribution network transformers Australia), Austria (Kelag), Canada helps reduce the environmental and determining how to reduce their (AltaLink), China (State Grid Corporation impact of other sectors include: total number, minimizing equipment of China), Denmark (EnergiMidt), NN Smart grids deployed susceptible to power losses, or by Egypt (EETC), France (RTE), Germany for power utilities addressing electricity theft and loss. (Stadtwerke Pasewalk, Vodafone), New NN Intelligent transport systems for Only 35% of the total energy generated Zealand (Transpower) and the U.S. transportation and logistics companies worldwide is turned into useful (OG&E) implement smart grid solutions. NN Energy and building electricity: India, for example, loses nearly one-third of its electricity during managements for smart cities C Read more NN Remote patient care and monitoring, transmission and distribution, and in that state and local government, country electricity generation accounts and public safety and cloud for 57% of total GHG emissions. Losses could be reduced by 30% through better 170,000 CUSTOMERS SERVED BY services (virtualization and ELECTRIC POWER BOARD’S grid monitoring and management. dematerialization) for smart cities SMART GRID

84 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

3.1 The carbon-reducing capacity of ICT 3.2 Bringing new capabilities to smart grids 3.3 Propelling smart transportation 3.4 Building smart cities

manual reading of meters, using the built- management system, and Bell Labs is in, two-way communications capabilities working on a research project with EPB of the smart grid and meters instead. to design and develop analytical tools and techniques to mine smart meters and JOINT SMART GRID INNOVATIONS With its smart grid in place, EPB will be other data sources. This will inject further FOR MORE EFFICIENT able to offer customers the option to pay intelligence into the grid, turning raw data POWER DISTRIBUTION lower electricity rates when generation into information for control, operations is less expensive, and higher rates and planning. Novel models will be In 2011, Alcatel-Lucent announced a when it is more so. With near real-time developed to predict demand, detect partnership with China’s State Grid data about their own usage available voltage anomalies, estimate transformer living in a smart city Information and Telecommunication through smart meters, customers can reliability, and identify anomalies in chattanooga, TN Co. (SGIT) – a unit of utility company choose when to use electricity, managing home energy consumption. Detailed State Grid Corporation of China their consumption and budgets without requirements for implementation of these (SGCC) – to provide technology that sacrificing comfort and convenience. models along with initial prototypes accesses data used to track energy And if customers prefer, EPB can switch are also being developed; the project usage from devices such as smart off power to certain devices when they is currently in the early phases of data meters, analyze that data and are not in use, or turn on appliances exploration, model development and deliver that information to the Watch the video when power is less expensive. high-level requirements specifications utility company. This technology for a smart grid data analytics system. can help utilities more effectively EPB Chattanooga is in the process of The EPB smart grid is providing increased manage peak electricity demand, deploying smart grid technology as an power reliability, greater operational The fiber optic network that provides identify opportunities for power upgrade to its electric distribution system, efficiency and more power management the infrastructure for the smart grid savings and cut down on energy which serves 170,000 customers, with tools for the utility’s customers as well project is also being used to deliver high- usage. The information can then be more than 90,000 smart meters already as reducing customer outage minutes by speed, high-capacity cable TV, phone used by utility companies to installed. It is the fastest fiber-based 40%. Overall, the Electric Power Research and Internet services, contributing to monitor and control peak and smart grid in North America that manages Institute has estimated the value to economic development in the region. It off-peak demand, and to more electrical usage information in real time, EPB’s customers in the form of reduced helped Chattanooga build a broadband effectively manage delivery during giving customers unprecedented levels outages, energy conservation and other management and control system that those times, helping cut costs and of convenience and control. Full buildout efficiencies at roughly $300 million over incorporates everything from streetlight reduce outages and waste. These is expected in 2012. Once the system is 10 years, while several economists at the control to IP surveillance cameras. solutions will also provide the fully operational, EPB plans to further University of Tennessee at Chattanooga As a consequence, Chattanooga has customers of utility companies with reduce its carbon footprint by eliminating have projected the service area’s total seen reductions in crime, improved access to reliable power distribution economic and social benefits from the public safety and reduced operational as well as information on their own fiber project at $600 million during the costs (thanks to more efficient power usage, allowing them to make same period – results that will help drive lighting and controls). In the future, To experience educated decisions about their Augmented Reality, the customer-based value proposition the network is expected to provide 1. Download the power consumption (for example, for utilities in the years ahead. the infrastructure for e-services that app using the QR code changing their normal usage 2. Scan the video will help reduce carbon emissions, patterns to take advantage of lower picture with your phone. Alcatel-Lucent is supplying EPB with such as tele- and videoconferencing pricing structures at off-peak times). Read more smart meters and a smart meter e-learning and e-healthcare services. 85 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

3.1 The carbon-reducing capacity of ICT 3.2 Bringing new capabilities to smart grids 3.3 Propelling smart transportation 3.4 Building smart cities

3.3 Propelling smart With growing numbers of trains, transportation passengers and kilometers of track, rail The transport sector is the second operators are investing in communication leading source of global GHG emissions infrastructures to enhance safety INNOVATIVE COMMUNICATION after energy. ICT-driven transport and security and improve operational AIDS EFFICIENCY ON DELHI solutions could save 1.52 GtCO2e efficiency. They are also seeking to AIRPORT METRO EXPRESS by 2020. Alcatel-Lucent deploys improve the passenger experience by traffic management solutions for its addressing demands for multimedia, A lot of people still think of public customers that support this goal. Internet and voice connectivity transport as a poor alternative to during travel. Business commuters in individual travel, even if the trip by Smart rail particular expect broadband services car is a lot longer. Recent advances With fuel costs rising, road congestion, comparable to those they experience in interactive communication increased urbanization and the global in offices and at home. With more applications for passengers and goal of reducing CO emissions, rail than 75 years of experience in 2 onboard comfort features might has returned to the spotlight as a transportation systems integration, change this perception. To convince compelling transportation option for Alcatel-Lucent has proven expertise in customers to trade in their one- both passengers and freight. To cut designing, deploying, maintaining and hour car ride for an 18-minute CO emissions, a June 2011 European operating mission-critical networks. 2 metro ride, Delhi Airport Metro Commission report recommended moving Read more ALPTRANSIT GOTTHARD, SWITZERLAND: Express (DAME) decided it needed 50% of passenger and freight journeys C HIGH-SPEED CO EMISSION REDUCTION 2 to dramatically improve the from roads to rail and waterways. It also customer experience to encourage called for the completion of a European The new Gotthard base tunnel consists of two people to give up their cars. DAME high-speed rail network by 2050. parallel 57-km bores that will help shift trans- took steps to create a memorably alpine heavy goods traffic in Europe from road to comfortable travel experience by rail. It will also allow high-speed passenger trains providing their customers with to move at speeds of up to 250 km/h, which will in services such as real-time turn enable substantial efficiency enhancements information systems, airline

and help reduce CO2 emissions. The project is check-in facilities, luggage drop-off scheduled for completion early this year, with in two stations and other train handover to the customer in 2017. As part of this assistance services. Passengers project, Alcatel-Lucent is providing a turnkey radio have already voiced satisfaction tunnel solution to ensure operational security and with the level of services. The line is people safety. currently carrying 20,000 passengers daily and it could reach 30,000 to 40,000, helping to reduce

further CO2 emissions in one of the world’s biggest and busiest cities.

86 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

3.1 The carbon-reducing capacity of ICT 3.2 Bringing new capabilities to smart grids 3.3 Propelling smart transportation 3.4 Building smart cities

Smart roads extreme weather, road work or special NN Smart traffic management, enabling The rapid growth of cities has in events. Not only does ITTS contribute citizens to avoid traffic congestion URBAN TRAFFIC many cases intensified the challenges to safer, smoother driving conditions and efficiently find parking; MANAGEMENT SOLUTIONS HELP associated with urban living such as but it also helps reduce GHG emissions reducing the transit time of public REDUCE VEHICLE protecting public safety, managing traffic and the carbon footprints of cities. transport; and helping emergency CARBON EMISSIONS and transportation, maintaining public services respond more quickly BY MONITORING Read more infrastructures, disposing of waste, C NN Smart grids coordinating electricity AND MEASURING delivering basic public services and so on. generators and electrical consumption, TRAFFIC FLOW 3.4 Building smart cities reducing peak capacity requirements The world’s urban populations will Traffic congestion in urban areas has and delivering only as much energy grow by an estimated 2.3 billion over been increasing worldwide as a result as required, reducing waste the next 40 years, and as much as of demographic shifts and greater NN Smart buildings that include building 70% of the world’s population will live motorization. Increasing travel time, management systems to run heating, in cities by 2050. This catches the air pollution, fuel consumption and lighting, computing or display systems planet between the pressures of global traffic hazards reduce cities’ economic according to occupants’ needs ITTS ON THE MOVE warming and population explosion: cities attractiveness and competiveness. NN Smart logistics and multi-modal consume 75% of the world’s energy and Traffic congestion already represents transport optimization to reduce produce 80% of its GHGs. As well, the costs equivalent to 2–3% of gross Knowing that congestion costs transport needs, mix transportation composition of the world’s population domestic product (GDP) every year Europe 1–2% of GDP every year and modes and select the most energy- is changing: the percentage of those in industrialized countries. Smart that in 2010 gridlock cost the U.S. efficient end-to-end logistics over the age of 60 is climbing each transportation aims to reduce the more than $100 billion – the NN Smart environment applications year and by 2050 is expected to triple, time collectively spent in traffic. equivalent of $750 in time and gas including management systems outnumbering the population under 15 for the average commuter in many of to measure carbon emissions or for the first time in human history. In 2011, Alcatel-Lucent introduced the the nation’s major metropolitan areas other environmental performance Intelligent Travel Time System (ITTS) to – helps explain why relieving road metrics in cities and help monitor The concept of the smart city is a help reduce vehicle carbon emissions congestion has become a priority. In efficiency improvement framework for a particular vision by monitoring and measuring traffic September 2011, the City of Orlando NN e-substitutes and e-services such of modern urban development that flow. By placing Bluetooth scanners at began a trial of the ITTS; one month as videoconferencing (to replace recognizes the growing importance many points across a city and correlating later ITTS took a spotlight at the 18th travel), e-health (to increase of ICTs – broadly characterized here observations between them, ITTS can World Congress on Intelligent availability, and provide more as “networks” – in driving economic accurately compute travel time estimates Transport Systems. A second ITTS rapid, accurate diagnoses) and competitiveness, environmental between any two points in a geographic trial also kicked off at the end of e-education (to increase access, sustainability and general area. Using an intelligent, patent- 2011 – in Vélizy-Villacoublay, a key improve quality and reduce costs) livability. Smart cities leverage a pending algorithm from Bell Labs, it then commercial zone southwest of Paris broadband network through which suggests alternative traffic routes. This where roads are often congested at numerous devices are connected can help traffic authorities, planners, peak hours. Both systems monitor to share information with citizens emergency services dispatchers and traffic while also providing motorists and make daily living easier. everyday drivers plan ahead and react with journey times in real time, Practical applications include: quickly to real-time traffic situations advanced warning of delays, traffic – and anticipate the consequences of forecasts and alternative routes. 87 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

3.1 The carbon-reducing capacity of ICT 3.2 Bringing new capabilities to smart grids 3.3 Propelling smart transportation 3.4 Building smart cities

To better understand the dynamics of business model of the Emirate of Abu By leveraging ICT, Curitiba expects to In addition to building a broadband smart city development projects and Dhabi to one based on renewable foster economic growth, improve the network, we will integrate numerous identify potential applications and and alternative energy sources. lives of citizens, create opportunities for features to make the city “smart”, such solutions that deliver environmental NN The need or wish to reduce energy urban development and renewal, support as telecoms coordination, urban traffic as well as socio-economic benefits, the consumption (the eco-sustainability eco-sustainability initiatives, improve management, building automation, Alcatel-Lucent Market and Consumer motivator): The best example of this the political and democratic process, and lighting, energy management, Insight team conducted an in-depth is the Amsterdam (the Netherlands) provide access to advanced financial access and security networks. analysis of 52 smart cities in 2011. smart city project, where reducing services. ICT will affect the way the city Read more energy consumption and enabling evolves, and will allow it to develop smart C The research revealed that how and more efficient energy usage were buildings, smart infrastructures (water, Alcatel-Lucent smart applications where ICT is used to create smart cities the key motivations for the project. energy, heat and transportation) and TeleConsult, a healthcare application NN varies from project to project. However, The need to improve the quality smart services (health, entertainment). using new videoconferencing technology, it is usually applied to improve a mix of of life in a city environment (the Bluetooth sensors, video content, public and private services with direct social motivator): This is best Lusail – Qatar and voice and text applications, or indirect environmental benefits (as exemplified by the Suwon (South Lusail’s vision is to provide residents enables citizens to “visit” a healthcare mentioned in the above examples). Korea) smart city project where and users with a seamless, integrated professional remotely via a high-speed the initial goal was to improve the smart city offering, providing innovative network connection, reducing the need To achieve these objectives, smart lives and education of citizens, and next-generation services that inspire a for travel. Information can be transferred cities require common open platforms improve government services. new way of living. Lusail’s stated mission securely to the consumer’s healthcare and an underlying ubiquitous ICT is to offer city users and occupants the team electronically, minimizing physical infrastructure that includes high-speed Key smart city projects in 2011 most current and feasible telecom and medical files, images and reports. Internet access, wired infrastructure Curitiba – Brazil non-telecom services and systems. and wireless networks. They also Alcatel-Lucent is deploying a broadband Next Gen TV offers more connectivity need an ICT application and service network to provide better services to the Like in Curitiba, Brazil, by leveraging options and richer interactive services, enablement suite, which includes smart city of Curitiba, the largest in the south of ICT Lusail will foster economic growth; including video calling, e-health services, media service enablers and city-wide Brazil and eighth largest in the country. improve quality of life; pursue urban home power monitoring using RFID open access to sensors and actuators. A new service provider organization, development, renewal and eco- technology, and the ability to easily Horizons Telecom, was created to provide sustainability; improve its political and interact with TV programs in real time Each smart city development project high-speed government connectivity democratic processes; and provide (e.g., to learn where to buy a jacket being is driven by a variety of motivations. and ICT services for state and local access to advanced financial services. worn on a favorite television show). The Alcatel-Lucent analysis revealed authorities, initially via GPON. three major motivating thoughts Alcatel-Lucent is partnering with a local Safe at Home uses next-generation behind a smart city project: Curitiba wants to leverage its ICT service provider to design complete, wireless (LTE)-enabled routers and NN The need to construct or invent a infrastructure for urban traffic end-to-end solutions based on open mobile devices to deliver value- new economic model (the economic management – to reduce congestion standards and multi-vendor products added services, including security, motivator): This was clearly the by optimizing commuter trips, – ensuring the seamless integration of environmental management, automation, case in Masdar (Abu Dhabi, United directly reducing carbon footprint. different sub-systems over a single telecare and video, to what’s being Arab Emirates), where the driving telecommunications infrastructure. called “the connected home”. idea was to change the oil-based Alcatel-Lucent is responsible for the end-to-end integration. 88 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

Enabling e-health While Scope 3 activities are not part of Alcatel-Lucent and the University of 4.0 our 50% reduction target, we do have Pittsburgh Medical Center signed a joint considerable influence over emissions development agreement in March 2011 OUR APPROACH from our supply chain. For example, SMART BUILDINGS: SHERATON WAIKIKI to collaborate on the development of PART 3: emissions related to product logistics a new teleconsultation platform called amount to more than 200,000 metric Patient Centered Telemedicine (PCT). REDUCING OUR tons of CO2 equivalent emissions Sheraton Waikiki, managed by The platform will support a collection annually. By moving to a regionalized Starwood Hotels & Resorts of telemedicine services such as CARBON manufacturing model, using more, Worldwide Inc. and owned by scheduled real-time remote consultations, shorter-distance surface transport, Kyo-ya Hotels & Resorts, LP, emergent non-scheduled services and FOOTPRINT and further shifting freight from air to recently upgraded its legacy post-operation procedures. Through surface transit, we are taking concrete network to enable high-speed, PCT, a patient visiting a local clinic in steps to reduce our Scope 3 emissions. 4.1 Tracking and reporting on carrier-grade delivery of advanced his or her hometown might consult Similarly, investing in videoconferencing carbon emissions guest services using Alcatel-Lucent virtually with a specialist located 500 systems at key locations enables 4.1.1 Commitments and achievements solutions. The upgraded network kilometers away in a larger city. PCT faster and better collaboration among Alcatel-Lucent has committed to reducing provides state-of-the-art wired and would eliminate the need for the patient employees without the need for its carbon footprint from 2008 levels by wireless Internet access to all 1,636 to travel to receive specialist care. carbon-intensive business travel. rooms and suites over existing 50% by 2020 (direct carbon emissions from our operations [GHG Protocol(3) copper wiring, providing reliable In addition, PCT supports multi-party scopes 1 and 2]). Alcatel-Lucent also 2020 TARGET high-speed connections no matter collaboration on any web-enabled device measures and reports on Scope 3 where guests are on the property. (including third-party videoconferencing emissions, and has been recognized Alcatel-Lucent’s broad expertise systems) and does not require 1 by the Environmental Investment Alcatel-Lucent has committed to enabled delivery of a solution that dedicated tele-presence rooms. It also Organization (EIO) for its leadership reducing its absolute carbon was a cost-effective, more eco- incorporates hospital clinical workflows. sustainable and easy-to-deploy in Scope 3 transparency. Only three footprint from its operations(1) by alternative to copper replacement. public companies in the EIO Global 800 50% by 2020 (from 2008 levels). By integrating existing facilities with reported more on Scope 3 emissions ultra-high-speed networks, the categories than Alcatel-Lucent in 2011. (1) We have clarified the wording of our commitment, “reduce our absolute carbon Sheraton Waikiki can broaden C Read more about the EIO footprint (CO2 equivalent) by 50% of 2008 entertainment options, improve baseline by 2020”, by adding the term (3) The Greenhouse Gas Protocol (GHG Protocol) is “from our operations”, meaning Scopes 1 energy-control systems, make the most widely used international accounting tool and 2 only. The reason for this is that we possible other advanced capabilities for government and business leaders to are adding new Scope 3 indicators year understand, quantify and manage greenhouse gas and improve guest satisfaction. over year and need to keep a stable emissions. A decade-long partnership between the baseline from which to track our progress WRI and the World Business Council for on reducing our carbon footprint. Sustainable Development (WBCSD), the GHG Additionally, we constantly work with our Protocol is working with businesses, governments key suppliers to reduce our Scope 3 and environmental groups around the world to emissions, even though they are not part of build a new generation of credible and effective our 50% reduction goal (see our programs for tackling climate change. environmental indicators on page 16). C Read more

89 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

What’s ahead 2011 ACHIEVEMENT Alcatel-Lucent has successfully ALCATELLUCENT THREEPHASE PLAN In 2011, we reduced our carbon reduced its direct and indirect carbon TO REDUCE ITS CARBON FOOTPRINT BY 50% BY 2020 footprint from our operations emissions thanks to strong senior

(Scopes 1 and 2) by 11%. At the management commitment and a wide In tons of CO2 same time, we included a greater range of initiatives involving its entire 1,600,000 range of Scope 3 emissions than in workforce across the full breadth of its past years when calculating our activity, from facility operations and 1,400,000 carbon footprint. logistics to IT and business travel. As we advance toward our 2020 goal, we 1,200,000 Since 2008, we have reduced our are implementing a three-phase plan. carbon footprint from our 24% operations by more than 22% (or 1,000,000 TARGETS more than 185,000 metric tons of 800,000 42% CO2 equivalents), which is nearly halfway to our ultimate goal of 50%. 1 Reduce carbon emissions directly 600,000 related to our business operations 50%

The Carbon Disclosure Project (CDP) – for example by cutting electricity 400,000 Each year, Alcatel-Lucent responds to the usage and investing in our own Carbon Disclosure Project (CDP). 2011’s building infrastructure. We also 200,000 response yielded a score of 89 out of influence our supply chain’s energy 100 possible points, and a spot on the consumption, and will continue to 0 Carbon Performance Leadership Index. bring greater efficiency to our 2008 2012 2016 2020 The CDP performance score assesses product transport and logistics the level of action taken on climate activities and reduce business travel change evidenced in companies’ CDP through the use of technology. 1. GET OUR HOUSE IN ORDER 2. ASK MORE FROM SUPPLIERS 3. USE RENEWABLES FOR THE REST responses, and this honor highlights Improve onsite energy efciency Improve onsite energy efciency our ability to put commitments into 2 Reduce the use of air shipments Reduce the use of air shipments Use Renewable energy action. We also invested in a purpose- Engage with suppliers through Consolidate facilities Consolidate facilities Use Renewable energy credits built Enterprise Carbon Accounting audits to ensure they follow the Consolidate IT servers Encourage partner involvement tool in 2011 that will help streamline EICC Supplier Code of Conduct, and Reduce business travel and automate our GHG data-collection when needed help them reduce process, identify additional opportunities carbon emissions. for reductions, and reveal best practices for reducing the carbon footprint 3 of our operations – maintaining our Increase our use of renewable SINCE 2008, WE REDUCED OUR leadership position in carbon footprint energy sources, credits and offsets CARBON FOOTPRINT BY MORE measurement and reporting. if necessary. THAN 22%

90 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

Protocol to determine which elements to ALCATEL-LUCENT NAMED TO Because it comes from the most measure and report on. Each year, as the 2011 CARBON FOOTPRINT ASSESSMENT CARBON DISCLOSURE PROJECT’S visible carbon and climate change ability to collect and report information CARBON PERFORMANCE non-governmental organization, we improves, we add additional indicators, SCOPE 1 —140,335 tCO2™ 11% SCOPE 2 —511,844 tCO2™ 40.3% LEADERSHIP INDEX consider this a strong and in 2011 we added indicators to Direct Emissions from Stationary Purchased Electricity Combustion (54541 tonnes CO e) (505862 tonnes CO e) 39.8% acknowledgement of our climate our carbon footprint per the newly 2 2 4.2% In 2011, Alcatel-Lucent earned a change and sustainability program. It issued Scope 3 categories summarized Purchased Chilled Water Direct Emissions from Mobile (221 tonnes CO2e) 0% place in the Carbon Performance is particularly gratifying coming on at the beginning of this report. Sources (81153 tonnes CO e) 2 Purchased Hot Water/Steam Leadership Index of the 2011 the heels of being named a sector 6.4% (5761 tonnes CO2e) 0.5% Europe 300 report of the CDP. The leader in the DJSI in September We believe it is important to measure Other Direct Emissions (4641 tonnes CO e) 0.1% CDP is an independent, not-for- 2011, and being ranked fourth and report as many Scope 3 emissions 2 profit organization that has created worldwide in November 2011 by the categories as possible. By being the largest database of primary EIO for our comprehensive approach transparent about the emissions from corporate climate change to, public reporting on, and our supply chain, we can identify information in the world. verification of emissions in our the largest contributions to climate Representing some 550 investor annual Corporate Responsibility change made on our behalf and work groups with combined assets of $71 report as well as with the CDP. cooperatively with suppliers and partners trillion in 2011, its mission is to to reduce them. Going forward, we will “accelerate solutions to climate add Scope 3 reporting categories as change by putting relevant we are able to collect data for them. information at the heart of business, A For more information on our Scope 3 policy and investment decisions”. Read more categories, see p. 16-18 More than 3,000 organizations voluntarily disclose their carbon C Read more about the Greenhouse Gas Protocol emissions to the CDP. For the 2011 SCOPE 3 —617,885 tCO2™ 48.6% Europe 300 report, the CDP 4.1.2 Scope 1, 2 and 3 emissions 4.1.3 Green teams Category 1 Purchased Category 4 Upstream analyzed disclosures from 271 of Alcatel-Lucent reports emissions from Green team leaders and building Goods & Services: Contract Transportation & Distribution Marine Vessels (58768 (198782 tonnes CO e) 15.7% the largest European corporations all sources, including facilities, fleet managers ensure carbon footprint 2 tonnes CO2e) 4.6% Category 5 Waste Generated in based on market capitalization (90% operations, mobile sources of combustion data is provided on a regular and Category 1 Purchased Operations: Electrical of the FTSEurofirst 300 Index). The and all other Scope 1 and 2 sources reliable basis for major Alcatel-Lucent Goods & Services: Equipment Recycling (2951 tonnes CO e) 0.2% CDP provides companies meeting that result directly from our business facilities worldwide, and that local Contract Manufacturing 2 (94083 tonnes CO e) 7.4% certain criteria with a disclosure operations. We also report Scope 3 action plans are implemented to reduce 2 Category 5 Waste Generated in score and a performance band. In emissions from outsourced activities environmental impact. Organized Category 1 Purchased Goods Operations: Site Remediation & Services: Paper Purchase Activities (5602 tonnes CO e) 8% addition to being listed in the Carbon such as leased vehicles and vessels, into three regions, our Green teams 2 (1229 tonnes CO2e) 0.1% Category 6 Business Travel Performance Leadership Index, product logistics, company business work with experts from the Office of Category 3 Fuel and energy- (107184 tonnes CO2e) 8.4% Alcatel-Lucent placed in the “A” band travel, contract manufacturers, employee Sustainability who provide structure, related activities: Transmission Category 7 Employee Commuting and its disclosure score improved by & Distribution losses (39188 commuting, and purchased goods and direction and access to best practices, (104237 tonnes CO2e) 8.2% tonnes CO e) 3.1% 10% over the previous year. services. We follow the Greenhouse Gas and facilitate knowledge sharing. 2 Category 9 Downstream Transportation

& Distribution (5861 tonnes CO2e) 2%

91 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

In addition to reporting energy usage Greening our network Data center refresh data, Green team members identify HIGHLIGHT The Business & Information Technology In 2011 we completed the closure opportunities to reduce energy Reducing our emissions at sites Transformation function within Alcatel- of three data centers (536 servers consumption and emissions. These include around the world Lucent is actively supporting the decommissioned and 127 servers simple, straightforward behavioral Alcatel-Lucent has made it a top company’s commitment to carbon migrated). We continue to decommission changes and short-term payback priority to reduce GHG emissions at footprint reduction, progress against servers and migrate the remainder to HP initiatives such as lighting changes its 677 sites worldwide, which which is measured quarterly as a part of data centers, centralizing our facilities. as well as longer-term measures. account for more than two-thirds of the Business & Information Technology HP next-generation data centers provide the company’s Scope 1 and 2 Transformation operational scorecard, energy-saving solutions to reduce power emissions. Since 2008, emissions at Energy optimization projects available for review by all Alcatel-Lucent consumption and cooling requirements; In 2011, the company made several these sites have been reduced by employees. Programs currently underway new hardware and virtualization major capital investments to further more than 20% thanks to the cover four key areas: PCs, printers, data capabilities help reduce carbon footprint reduce energy consumption and related efforts of dedicated site leaders and centers and videoconferencing solutions. and contribute to our green IT targets. emissions in its buildings. More than 115 regional Green teams. energy optimization projects are now PC refresh Videoconferencing underway in 27 of our largest facilities In 2011, 6,500 laptop computers were Investments in our video and audio worldwide, targeting efficient illumination, 4.2 Living ouR best practices replaced with devices 85% more energy conferencing solutions help minimize occupancy sensors, time-of-day Actions implemented to minimize efficient as a part of a rolling program the need for travel within our company. adjustments and alternative energy use. our environmental impact: that will continue over the coming Currently, we maintain more than 300 years. The old devices were donated to videoconferencing rooms around the 4.2.1 Electricity consumption charitable programs where possible. world, covering most of the countries 115 ENERGY OPTIMIZATION Electricity accounts for roughly half in which we operate; we are enhancing PROJECTS IN 27 OF OUR LARGEST of our operational carbon footprint. Printer refresh these to increase usage as an alternative FACILITIES WORLDWIDE In 2011, we lowered emissions from Most printers in North America have to travel. Our Suffren (France), Plano our electricity consumption by 12% gone through this process, and additional (U.S.) and Shanghai (China) locations from the previous year and continued locations will be addressed in 2012. have access to state-of-the-art Halo to implement projects and invest in Old printers are replaced with new Telepresence video rooms; employees facilities to achieve ongoing reductions. units that consume less power, default attempting to book travel between these to black-and-white and back and front locations are advised by the reservations printing, can accept recycled paper system that videoconferencing is IN 2011, WE LOWERED OUR stock, and include intelligent ink-level available as a cost-effective and ELECTRICITY CONSUMPTION monitoring to minimize polluting waste. environmentally sound alternative. BY 12% New print devices are networked, so fewer are required per location. In 2011, 324 printers were removed and 300 VIDEOCONFERENCING ROOMS AROUND THE WORLD we plan to remove 1,737 in 2012.

92 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

Other power-saving initiatives arrangement turns machines on so they France: Powering down Switzerland: Reversible heat pump system Argentina: Time of day are ready to go when staff come in, A project launched in late 2010 aims Alcatel-Lucent Switzerland’s Facility adjustments pay off and shuts them down in the evening. to reduce energy consumption at our Management Team designed and installed At one of the key facilities for Alcatel- R&D labs in France by encouraging a reversible heat pump system that Lucent in South America, the company’s In 2012 the sophisticated testing and users to switch off unused electrical cut annual heating oil purchases at the Real Estate team worked with monitoring equipment located in Antwerp equipment during working hours as well company’s Zurich headquarters by more colleagues in the building to modify and running on alternative energy sources as overnight and on weekends. In 2011, than 75%. The new heat pump reclaims all the operational hours of its lighting will be available to multiple Bell Labs and the project led to an energy reduction waste heat from the facility’s testing and and HVAC systems to lower electricity other Alcatel-Lucent labs on a round- of 4.73% or 485 tons of CO2e. Other laboratory operations. This investment consumption. In 2011, this resulted in the-clock basis through communications actions, such as the implementation will be recouped by annual savings within a reduction of almost 100,000 kWh, networks. High-speed Internet access of smart metering devices, have been five years. In addition to installation of equivalent to avoiding the annual GHG will enable already-on equipment to set up at several sites allowing us to the heat pump, the project included a emissions of 11 passenger vehicles. be used by scientists in our facilities better monitor energy consumption new refrigeration system and renovation around the world. Taking advantage and to quantify progress made. of the existing boiler plant. Substantial Belgium: Our own technology to of communications technology – often savings in electricity consumption were reduce energy consumption invented in-house by Bell Labs – to India: Intelligent “sleep mode” also realized through the project. Alcatel-Lucent University delivers work more efficiently reduces our global Alcatel-Lucent IT developed an intelligent technical training to customers from a reliance on fossil fuels and contributes “sleep mode” that more precisely central lab in Antwerp, Belgium – but to a reduction of our carbon footprint. reflects our lab equipment’s power only the instructor enters the classroom. consumption requirements. The new Using high-speed network conferencing China: Energy-saving campaign sleep mode was introduced, tested capabilities, trainers present hands-on At Alcatel-Lucent Shanghai Bell in line with our Building Management lessons remotely. This reduces travel- headquarters, measures were taken Systems and monitored to ensure related impacts, results in optimum to encourage energy-saving efforts: proper functioning of lab equipment. equipment usage, and reduces the energy-saving tips were displayed in The result in our labs in Bangalore, environmental impact of classroom- all elevators, and a small public office India has been a net reduction of power based training. Alcatel-Lucent teams was prepared for employees working and related emissions. This intelligent also developed a database called overtime during weekends, while air- sleep mode is part of our Building “Labman” to keep track of equipment conditioning systems were switched Management System and an example of in the company’s 770 labs around the off for the rest of the offices. Hot how IT enabled a reduction of carbon world. This is now being combined with water systems are turned off over the emissions at our Bangalore location. our Eco-Server technology, which can weekends and temperatures were set be used to control equipment remotely. higher or lower in summer and winter to Rather than keep equipment running save power. These measures ended up all night, the Labman-Eco-Server saving 1,150 MWh of energy in 2011.

93 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

reduce carbon emissions by an estimated and to add one more relevant Scope 3 850 metric tons annually. This is emissions category to our reporting. We equivalent to planting 121 acres (nearly determined that employee commuting 50 hectares) of trees. The Murray Hill represents 104,237 tons of CO e. 2 FRANCE: TELECOMMUTING site was chosen in part because of the excellent incentives for solar power in Through this survey we learned that the state of New Jersey and because the average distance between home In France, 47% of our employees work from home at least one the site has sufficient unused land to and the office is 23 kilometers and the day per week. The result is annual economies totaling more than support the array (about six acres). car is the primary means of transport 3,000 tons of CO2e, the equivalent of removing nearly 550 Alcatel-Lucent consumes 100% of the for 59% of our employees. About passenger cars from the road for a year. On a global basis, further electricity generated by the solar panels. 20% use public transportation (bus or economies are achieved through flexible office space, which train) and 7 percent walk or bicycle to optimizes use of real estate resources. Because employees often work. The survey also revealed that travel or work from home or customer sites, the company aims to IN BELGIUM, AUSTRIA AND teleworking is highly developed at provide about 75 desks per 100 employees. Since 2010, the SWITZERLAND, 100% OF THE Alcatel-Lucent with 42% employees implementation of flexible office space enabled us to close more ELECTRICITY WE BUY IS FROM 2 teleworking at least one day per week. than 300,000 m of space used for offices. This not only reflects RENEWABLE SOURCES Some countries have rates above 50% the habits of a modern workforce, but reduces our need for such as Spain (75%), U.K. (72%), Belgium office space, cuts our carbon footprint and supports our (71%), U.S.A. (58%) or Mexico (56%). telecommuting efforts. As of today, we source less than 5% of our power from renewable sources; however, we are expanding our use of this type of energy. For example, in Belgium, Austria and Switzerland, 100% of NUMBER OF TELEWORKING DAYS PER WEEK M Alcatel-Lucent solar panel field, Murray Hill, the electricity we buy is from renewable New Jersey, U.S. sources. As availability and financial conditions warrant, we will expand SEVEN DAYS – 3% Use of alternative energy our purchases of renewable energy. A key area of our mitigation plan includes SIX DAYS – 1% the use and installation of alternative 4.2.2 Travel, commuting and FIVE DAYS – 9% energy projects whenever possible. telecommuting FOUR DAYS – 2% In 2011, we undertook a global employee THREE DAYS – 2% In 2011 we installed a solar array at our survey to provide accurate information Bell Labs and Americas headquarter about the commuting habits of Alcatel- TWO DAYS – 9% building in Murray Hill, New Jersey. The Lucent employees between their homes ONE DAY – 17% array generates 1.2 MW of electricity and their main place of work. Sent to NONE – 58% – enough to power approximately 5,000 employees and with a response 120 homes annually. The array will rate of 23%, the survey enabled us offset fossil-fuel-generated electricity to calculate the carbon emissions purchased from the local utility and associated with employee commuting

94 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

Dematerializing business travel At our Murray Hill, New Jersey campus, 4.2.4 Paper products Responsible for nearly 10% of the Alcatel- a new 10-acre meadow was developed In 2011, Alcatel-Lucent reduced carbon Lucent carbon footprint, business travel and has continued to mature with an emissions from paper usage by 2%. offers the company a double opportunity: increasing amount of wildlife present. Using more recycled paper is one major GOING PAPERLESS we can reduce our own carbon emissions The property is in the third year way we plan to reduce our carbon and demonstrate the advantages of our of a forest management plan that footprint in this category. Overall, we advanced multimedia communications encompasses 57 wooded acres. are committed to lowering our emissions ONLY THE PHONE IN THE BOX solutions. Thanks to alternatives such as from paper usage from 2010 levels by Apart from essential safety instructions, every new office desk videoconferencing, Alcatel-Lucent has 20% by 2013. As an example of our phone Alcatel-Lucent Enterprise division introduced to the market reduced emissions from business travel worldwide efforts, Alcatel-Lucent France in 2011 had no paper documentation. Instead, all user guides by 9% since 2008. At the same time, has reduced its paper consumption were made available electronically. Packaging was also minimized, videoconferencing for internal meetings by 61% in 2011 compared to 2006. with smaller box sizes having the double effect of reducing paper increased by more than 40% since use and enabling more efficient shipping, thereby reducing GHG 2008, a sign of the profound evolution 4.2.5 Conserving water emissions associated with transport. Paper documentation will be in corporate culture as Alcatel-Lucent Alcatel-Lucent does not require a removed from 8- and 9-series desk phones starting in 2012. employees embrace eco-sustainability. significant amount of water for its business processes or operations, which “FISCAL PAPERLESS” WITH FRANCE TELECOM & ORANGE 4.2.3 Protecting biodiversity focus mainly on integration rather than Since July 2011, as part of its Principal Operating Model (PrOM) On the ground on the manufacturing of equipment. transformation program, Alcatel-Lucent is moving toward M Alcatel-Lucent continues to assess its Murray Hill Meadow and Forest area The company does, however, measure completely paperless invoicing for its two major customers in real estate portfolio, creating natural its consumption and has managed to France – France Telecom & Orange (FT Orange). The company is habitat enhancements at company-owned Other locations of biodiversity interest reduce water use by 20% since 2007. We the first telecom supplier to do so with the FT Orange group. The locations and identifying remediation/ include Plano, Texas, U.S.A. (where are committed to a further reduction of step marks a logical progression in the electronic transmission of clean-up projects. Our property in we are planting native, heat-tolerant 20% by 2013 from our 2010 baseline. orders and invoices using the EDI (Electronic Data Interchange) Naperville, Illinois, U.S.A., for example, plants to eliminate the need for water flow implemented in 2006 between Alcatel-Lucent France and FT covers 117 acres including 28 acres of irrigation); and Ottawa, Ontario, Canada 2011 ACHIEVEMENT Orange, simplifying and automating information exchanges natural prairie and 55 acres of low- (where we have converted a campus In 2011, water usage rose less than between the companies, streamlining costs, minimizing the need maintenance areas that require grass lawn to forest/shrubs). A good number 1% year over year. The main for manual adjustments and reducing the risk of errors. cutting and mulching only at two- of our facilities have been pesticide- and reasons for this were an week intervals. Prairie maintenance herbicide-free for more than 10 years. extraordinarily hot summer in many is performed every year on a three- parts of Europe as well as better year cycle, with tree saplings taller Under the sea reporting from facilities. than two feet removed, promoting We make sure that when we lay growth of the natural environment. submarine cable on the ocean floor, we do so in compliance with specific environmental standards and after 2013 TARGET obtaining all the necessary permits from authorities. These cables are small, about 1 17 mm in diameter, and are designed to Reduce water consumption by 20% have no impact on the environment. by 2013 from 2010 baseline. 95 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

Water use within Alcatel-Lucent is 4.2.6 Handling spills best practices, and boost employee limited to cafeteria services, landscaping, Alcatel-Lucent maintains a process for engagement in all countries. The toilets and facility cleaning and cooling. monitoring spills in the countries where campaign’s centerpiece was an Intranet At each of our facilities we comply it operates; no spills above any legal site that included stories about our ALCATEL-LUCENT EMPLOYEES IN NIGERIA with local legal requirements for water reportable quantities took place in 2011. eco-sustainability approach; video- MARK WORLD EARTH DAY discharges. Any discharges from cleanups animations highlighting our environmental associated with historical operations also 4.3 Encouraging eco-awareness commitment, achievements and comply with local legal requirements. among our people examples of major initiatives; customer Alcatel-Lucent employees in Nigeria marked World Earth Day by Contaminants of concern, such as While many environmental goals video interviews; speeches from three cleaning the area around their offices. The team, led by Country metals and volatile organic compounds, are achieved through the disciplined company vice-presidents; videos Senior Officer Cenk Kivilcim, cleaned out the streets of Muri- are removed prior to discharge. enactment of large-scale company and blog posts from internal green Okunola. Staff cleared blocked drains of dirt and debris to allow policies, individuals everywhere can take experts; and tips on eco-friendly the free flow of runoff water. Plastic bottles, bags and other trash Despite the fact that water discharges powerful steps toward going green on actions people can take at work, such were picked up, and staff members cut tall grasses growing along are not significant due to the nature their own. Alcatel-Lucent seeks to inspire as carpooling, e-meetings, water saving, the street. Later the trash was sorted out into bins for recyclable of our business, we have implemented its people to be aware of environmental waste sorting, green printing, device and disposable waste. The entire staff participated, and while or initiated projects to reduce their issues and act in ways meaningful monitoring and reduced lighting use. they were out of the office they made sure to turn off the lights environmental impact. A prime example to them and their communities. For and air conditioning to reduce their own carbon emissions. relates to the use of hydrogen peroxide in example, as part of its new profit-sharing The campaign also invited employees the cooling water system at our Murray arrangement with employees in France, to share local initiatives and ideas The project was fun for the employees, fostered teamwork and Hill facility. We began investigating the company includes two criteria: 1) about eco-sustainability through gave each member more insights into what he or she can do to alternatives to the standard chemical customer satisfaction; and 2) the energy Engage, our internal social media protect the environment. The team is now focusing on fulfilling treatment of cooling system water in performance of Alcatel-Lucent France. platform, from which we selected and initiatives it committed to, including: 2007 due to concerns over increasing highlighted local best practices. 1. Using the recycling bins introduced in the office for paper and chemical costs and wastewater discharge. INDIVIDUALS EVERYWHERE CAN other recyclables A unique approach involving the use TAKE POWERFUL STEPS TOWARD 2. Reducing printing to the barest minimum of hydrogen peroxide was discovered GOING GREEN ON THEIR OWN and tested at Murray Hill, with a safety 3. Using large refillable water bottles instead of small bottles to and effectiveness study beginning in reduce plastic waste February 2007. That process concluded 4.3.1 Earth Week 2011 4. Turning off all lights and other electronics at the close of in September the same year, and a For Earth Week 2011, Alcatel-Lucent business every day temporary system was installed in launched a communication campaign 5. Sending emails with reminders that urge recipients to not conjunction with other water reclamation/ to raise internal awareness of the print the message. reduction initiatives. Alcatel-Lucent company’s environmental sustainability continued this program into 2011 and strategy and initiatives, share local plans additional installations at other M Earth Week 2011 – Alcatel-Lucent internal campaign sites in its global portfolio, including less use of water for landscaping purposes.

96 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN environment > 1.0 OUR ENVIRONMENTAL SUSTAINABILITY STRATEGY 2.0 OUR APPROACH PART 1: DEVELOPING ECO-SUSTAINABLE NETWORKS 3.0 OUR APPROACH PART 2: ENABLING A LOW-CARBON ECONOMY 4.0 OUR APPROACH PART 3: REDUCING OUR CARBON FOOTPRINT

4.1 Tracking and reporting on carbon emissions 4.2 Living ouR best practices 4.3 Encouraging eco-awareness among our people

Employees were invited to take part Tree Planting in Inner Mongolia. Student in the Billion Acts of Green campaign volunteers carried out the first of organized by the Earth Day Network. these initiatives in June 2011. With Alcatel-Lucent teams in China teamed Roots & Shoots, we conducted an eco- Reclaiming land for trees in Poland up with the WWF (World Wildlife Fund) office survey (assessing areas such as and launched an Earth Hour event on lighting, heating and cooling, kitchen, March 26 for the third consecutive washrooms, office equipment and Alcatel-Lucent employees have been supporting the challenge year, switching off unnecessary lights recycling), which gave a total score of facing the state forests organization in Poland, taking part in a and promising to donate 3,256 trees to 91.89 to Alcatel-Lucent, ranking number project that aims to reclaim and revitalize an old military training offset carbon emissions by 814,000 kg. one among 122 surveyed companies. field at Bydgoszcz near the Alcatel-Lucent facility. Within a few years, this neglected military area will be brought back to a state 4.3.2 Our people making a difference vRideAlong India where a new and healthy forest can grow and flourish. New, M Pictured above are some of the members of around the world the Japan “Beat the Heat (& the Competition)!” Two young Alcatel-Lucent employees organic soil and native flora and fauna are being introduced to Saving energy in Japan team from left: Ryota Maeda (Real Estate), Junko in Bangalore, Ritu Sama and Parashar the 74-hectare site; where the area has been revitalized, young The Alcatel-Lucent team in Japan rallied Ngao (Genesys Japan), Nozomi Endo (IS/IT), Naoko Shah, developed the carpooling website birch and pine trees are already growing. On October 12, 2011, Osawa (HR), Martin Jordy (President), Hirofumi behind a government initiative last Tsuchida (Leader of BTH team), Shin-ichi Sakamoto vRideAlong.org last year to encourage 50 new trees – lindens, rowans and buckthorn – were planted on summer to reduce power consumption (PDC) and Masao Inouye (CAT). Not pictured: green transportation among corporate behalf of Alcatel-Lucent employees. Patrick Consolla (Operations) and Yukiko Yamazaki by 15% in response to the lower capacity (Communications) workers. The self-funded, not-for-profit of the country’s electricity system site includes a mobile carbon footprint in the wake of 2011’s devastating calculator application. Since its launch earthquake and tsunami. By keeping commutes to work. The IP Division team in 2010, the site has gained some 430 indoor climate controls set two degrees in Mountain View worked with its in- registered active users, and the app higher than usual, relaxing the dress house electrical vendor in the summer of has been downloaded 1,700 times Carbon neutral communication – the Alcatel-Lucent code to permit cooler clothes, making 2011 to have five utility-charging stations in six months. In October 2010, NGO customer newsletter teleworking mandatory every Wednesday installed for employees and vendors to Mumbai Meter Jam joined as a partner. and setting lights on timers, Alcatel- use. Based on positive feedback from that C Read more The company continued tree-planting work last year to offset the CO2 Lucent Japan cut consumption by deployment, the company is now planning emissions generated by the production of its customer newsletter. 20%. Many of the steps taken, such as to expand the use of charging stations for The initiative began in 2010 when Alcatel-Lucent first assessed the removing bulbs from lights, are being EVs wherever it makes financial sense. environmental impact of its quarterly newsletter, determining how continued, helping Alcatel-Lucent keep much CO2 was generated during its creation and calculating the its energy usage down year-round. Shanghai Roots & Shoots number of trees that would need to be planted to counter it. Alcatel-Lucent Shanghai Bell sponsored Q Listen to an interview with Martin Jordy Twenty-five trees were planted in 2010; the 50 in Poland were part (Alcatel-Lucent’s President of Japan) the Green Action Program of the of 2011’s offset. To further minimize the impact of the newsletter, environmental non-governmental production has shifted from printing to online publication. Greening our California commute organization Shanghai Roots & Shoots The adoption of electric vehicles (EVs) in in 2011. The Green Action Program the U.S. continues to increase, including includes three initiatives: a Green among Alcatel-Lucent employees, Office Environment Audit, Green Act reducing the emissions generated by their Ambassador Selection and One Million Read more

97 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

WOULD INNOVATION HAPPEN WITHOUT PEOPLE INSPIRED TO ASK, “WHAT IF?” our people

The diversity of our workforce, client base and the communities where we do business supports our development of innovative approaches to a wide range of business and technological challenges. We believe innovation, which depends on breaking down boundaries and making new connections, is strongly linked to diversity. Increasing gender, cultural and generational diversity improves the company’s ability to perform.

98 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

he company’s human 1.0 2011 HIGHLIGHT resources policies and FOCUSED ON More than 76,000 employees Tpractices continue working and operating in more than OUR PEOPLE to ensure in innovative 130 countries and representing ways that the ongoing more than 100 nationalities. transformation of Alcatel- Lucent aligns with changes As part of our commitment to fulfill corporate responsibilities on the local affecting our customers, level, we encourage employees to markets and the world contribute to their communities by at large. Because we volunteering programs organized through the Alcatel-Lucent. serve global markets and The Power of Diversity customers who do business A For more information, see p. 128 OUR COMMITMENT Philanthropy on a global scale, our “We promote an agile workforce through open As we endeavor to remove boundaries collaboration, training and development, and Invest in our people and talents approach to HR management in our quest for constant innovation, we internal mobility. This is what leads to innovation while reflecting the diversity of the and development is increasingly use tools developed within throughout the company and how we will serve markets we serve and the likewise global. At the our own information and communication communities in which we operate. our customers’ needs today and in the future.” technology (ICT) department. For We will ensure our employees work same time, operating in example, Alcatel-Lucent is using social CHRISTEL HEYDEMANN in a stimulating environment of 130 countries, Alcatel- networking to encourage more open EXECUTIVE VICE PRESIDENT, continuous learning while fostering CORPORATE HUMAN RESOURCES Lucent nurtures a vast collaboration across the organization. The diversity and open dialogue via AND TRANSFORMATION web of local partnerships company has created a global internal job innovative tools to share knowledge market to expand the career possibilities and celebrate difference. and relationships – open to all employees. Platforms such The Alcatel-Lucent University with customers and as Engage are helping nurture skills provided 1.3 million hours of also with suppliers development throughout the company training I to our employees in by identifying needs, highlighting talents Watch the video 2011. Our award-winning Engage and subcontractors, and supporting community learning. internal social networking platform local communities and I To experience is enabling employees throughout educational institutions. Innovative social networking tools Augmented Reality, the company to share, collaborate 1. Download the foster a rich, ongoing dialogue between and exchange best practices on app using the QR code employees and management – critical 2. Scan the video each other’s expertise and talents. to our business success. This helps picture with your phone. everyone understand, embrace Read more and contribute to the realization of the company’s strategic goals.

99 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

2.1 a platform for LEADERSHIP 2.2 Global human rights policy

Our 2012 goals for human resources are to: 2.0 NN Support the organization by instilling a high-performance culture. We will OUR VALUES continue to support and develop people managers to be effective CORPORATE VALUES in their roles. Reinforcing the vital Customers first: We exist to serve importance of ongoing employee/ our customers. Our success will be people manager dialogue on determined by how well we objectives and development, we perform for our customers. will ensure all employees have well-understood goals aligned with Innovation: We are intuitive, company direction and success. curious, inventive, practical and NN Execute on our strategic workforce bold, which allows us to create new plan, maximizing use of our internal ideas for our customers, our talent. We are taking steps to more business and employees. These accurately anticipate the company’s ideas come from anywhere overall workforce needs and then throughout our global operations. execute on that plan accordingly. 2.1 A platform for leadership Alcatel-Lucent supports and respects the NN Invest in talent and skills upgrading, Alcatel-Lucent’s corporate values are principles of human rights defined in the with particular focus on expertise. Teamwork: Success requires currently being reviewed, with a revised United Nations Universal Declaration of We will launch our Technical Ladder teamwork. We are collaborative and set to be launched and communicated by Human Rights, the International Labor initiative to foster technical expertise respect the contributions of each mid-2012 through the company’s strategic Organization’s fundamental conventions career evolution and continue to grow person to the team’s success. plan. During this process, the current and the United Nations Global Compact. our leadership bench for the future, corporate values remain applicable. Our policy is to protect and enhance leveraging our renewed leadership Respect: We are a global company the dignity of everyone who works for pipeline with excellent, diverse talent. with many cultures. We respect and 2.2 Global human rights policy the company as well as those who have A For more information about commitments embrace people and perspectives dealings with it. We conduct business and targets focused on our people, see from all over the world. in many countries and believe that our pages 10 and 21 2011 HIGHLIGHT products, services and jobs improve the The company’s recently updated quality of life in each of these countries. Accountability: We do what we say Global Human Rights Principles we will do. We own a collective address four areas relevant to its responsibility towards customers, global business operations and colleagues, communities and ecosystem as an employer, supplier shareholders. of telecommunications infrastructure, a direct business partner and concerned corporate citizen.

100 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EmplOYEE HEALTH AND SAFETY 6.0 DIveRSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALenT ATTRACTION AND RETENTION 9.0 TALenT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

2.1 a platform for LEADERSHIP 2.2 Global human rights policy

As an employer NN We prohibit actions that create an As a supplier of telecommunications As a corporate citizen concerned about NN We comply with all country and local intimidating, hostile work environment infrastructure communities laws in the areas in which we operate. including corporal punishment; NN Alcatel-Lucent offers products NN The company respects and complies NN We adhere to a set of principles harassment; verbal, written, physical and services in compliance with with all human rights legislation, defined in the Alcatel-Lucent or psychological abuse; and threats or international standards, and regulations and standards in Code of Conduct that helps to intimidation as these are inconsistent supports transparency in the way the countries where we operate ensure we operate with the with a respect for human dignity. telecommunications technology and conducts business and sales highest level of integrity. NN We prohibit actions that threaten is used by sovereign countries. activities in strict compliance with NN We prohibit discrimination against or insinuate that an employee’s or international conventions regarding any employee or job applicant on applicant’s submission to or rejection As a business partner human rights. The company also the basis of age, disability, race, sex, of sexual advances will influence NN We maintain the highest levels of respects indigenous rights and civil color, religion, creed, national origin, any personnel decision regarding business ethics, personal integrity society where we operate and acts citizenship, sexual orientation, gender that employee’s or applicant’s and compliance with our suppliers, in full recognition of our social and identity, characteristics or expression, employment, wages, advancement, job subcontractors and business partners, environmental responsibilities. marital status, covered veteran status assignment, or any other condition of and expect them to adhere to these NN Alcatel-Lucent also plays an active or any other protected class, and will employment or career development. in their practices. We also encourage role, via the Alcatel-Lucent Foundation, treat everyone with dignity and with NN We prohibit retaliation against or suppliers, subcontractors and in charitable activities and supports its full respect for their private lives. other adverse actions against those business partners to be consistent commitment to social responsibility. NN We ensure employment with Alcatel- who report, in good faith, suspected and compliant with this policy and Read more about our Human Rights policy Lucent is by freedom of choice. violation of the law or policy. Any the Alcatel-Lucent Code of Conduct. C NN We uphold freedom of association and employee who believes that they NN Suppliers and subcontractors are A For more information about our Human the right of any individual to be fairly have been subject to retaliation asked to respect human rights by Rights approach, see pages 31, 51, 66-67, 124, 143, 147 represented by a labor organization of should report the issue immediately. complying with the Alcatel-Lucent their choosing, pursuant to local laws. Suppliers Code of Conduct (Electronic A For more information about our NN We offer employees remuneration Violations of this policy by employees Industry Citizenship Coalition Code Alcatel-Lucent Foundation, see p. 128 packages that meet or exceed should be reported using the appropriate of Conduct Revision 3) and all Further to the revision of our Human the legally required minimum. Compliance Issue Reporting Mechanism applicable human rights laws and Rights policy this year, in order to NN We comply with maximum as described on the Office of Business regulations, and to assure their reflect the UN Ruggie Principles, hours of daily labor set by Integrity & Compliance website. respect throughout the supply chain. Alcatel-Lucent is scheduled to design local laws and comply with and define at a corporate level a overtime pay requirements. training program for employees on NN We support the effective elimination Human Rights principles by 2013. of all forms of compulsory labor and child labor and make this a condition in the selection and management of our suppliers and contractors.

101 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN

OUR people > 1.0 FOCUSED ON OUR PEOPLE ur 2.0 o values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EmplOYEE HEALTH AND SAFETY 6.0 DIveRSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALenT ATTRACTION AND RETENTION 9.0 TALenT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

3.0 OUR EMPLOYEES

t the end of 2011, Beadr k own of employees by EmployeeAGE DISTRIBUTION age distri bOVERutio nTHE by REGIONS geographical area in 2011 Tolmberta nu and breakdown of geographical area in 2011 EMEA employees by type of employment the company’s total 70% AMERICAS contract employee headcount Following is a breakdown of permanent A APAC was 76,002. Our balanced 60% vs. fixed-term contract type for the global presence reflects “operational” employee population. 50% our constant aim to drive Table 1 displays percentage of Alcatel- innovation everywhere 40% Lucent total; table 2 displays percentage our technical environment of heads within each region. is changing and to remain 30% Operational Headcount Perm. vs. Fixed- close to customers. FRANCE 20% Term Contract Type – % of Total OTHER WESTERN EUROPE Contract Type REST OF EUROPE 10% Region Perm Fixed Grand Total ASIA-PACIFIC Americas 29.6% 0.1% 29.7% NORTH AMERICA 0% APAC 21.8% 8.9% 30.7% REST OF THE WORLD BELOW 30 30 TO 50 ABOVE 50 EMEA 39.4% 0.3% 39.7% Total 90.8% 9.2% 100.0% France 9,560 Below 30 30–50 Above 50 Reg Total 11,706 Other Western Europe Europe, Middle-East and Africa 11.9% 64.2% 23.9% 100.0% Operational Headcount Perm. vs. Fixed- 5,824 Rest of Europe Americas 6.6% 55.7% 37.7 % 100.0% Term Contract Type – % of Region Asia-Pacific 22,780 Asia-Pacific 27.0 % 69.5% 3.5% 100.0% Contract Type North America 18,254 Region Perm Fixed Rest of the World 7,878 Americas 99.8% 0.2% Total Group 76,002 APAC 71.1% 28.9% EMEA 99.2% 0.8% Total 90.8% 9.2%

102 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURINGx

4.1 Communication at Alcatel-LucenT 4.2 Employee recognition 4.3 Discussions with unions

Total number of permanent 2011 Attrition by Region and Gender Both our video-sharing service and employees AND breakdown by Attrition by Attrition Attrition 4.0 our Engage adoption rates have won Region Total Rate employment type awards indicating that these vehicles, Following is a breakdown of full-time Americas 2,309 10.11% FOSTERING and their use, are best in class. vs. part-time employment for the APAC 3,651 15.36% INTERNAL EMEA 2,021 6.66% C Read more about Engage (Jive) “operational” employee population. Total DIALOGUE Alcatel-Lucent 7,981 10.37% Table 1 displays percentage of Alcatel- C Read more about Engage (Jive) IT night award in French Lucent total; table 2 displays percentage Attrition by Attrition Attrition Gender Total Rate of employees within each region. 4.1 Communication at Alcatel-Lucent C Read more about 2011 winners of the Americas 2,309 10.11% Innovation happens when ideas are Intranet Awards Operational Headcount Full-Time vs. Female 596 11.49% shared. To ensure a good flow of Management also seeks the input of Part-Time – % of Total Male 1,708 9.68% information, open communication is employees through surveys targeted Information encouraged and facilitated at Alcatel- Contract Type Not Available 5 45.45% either by function or region. Topics Region Perm Fixed Grand Total Lucent in a number of ways. Video, APAC 3,651 15.36% include satisfaction, awareness and audio podcasts, Intranet stories with Americas 29.5% 0.1% 29.7% Female 583 11.69% communication effectiveness. Responses comments and ratings, direct push mail APAC 30.6% 0.0% 30.7% Male 3,068 16.33% gathered are compiled, reported back to and global online chats are all vehicles EMEA 38.4% 1.2% 39.7% Information employees and acted on as necessary. Total 98.6% 1.4% 100.0% Not Available 0 0.00% for sharing information with employees about the company. And communication EMEA 2,021 6.66% The most effective and personal Operational Headcount Full-Time vs. should not be solely a top-down activity. Female 363 6.16% communication channels remain face- Part-Time – % of Region Male 1,657 6.78% Open communication among colleagues to-face meetings. Whether through without boundaries or censorship is Contract Type Information large-scale, all-hands meetings and road Not Available 1 76.47 encouraged through collaborative Region Perm Fixed shows or the more intimate coffee-and- Total 7,981 10.37% platforms such as Engage. Currently, Americas 99.5% 0.5% connect sessions, personal exchange is Female 1,542 9.60% 26,000 employees actively use this APAC 99.9% 0.1% encouraged. These events occur with Male 6,433 10.57% internal social networking platform at EMEA 96.9% 3.1% varying regularity depending on travel Information least once a month. Management uses Total 98.6% 1.4% Not Available 6 48.45% schedules and locations. Due to the Engage to solicit input on decisions and, company’s global presence and our in 2011, to obtain suggestions on cost- * Attrition includes all termination activity, commitment to reducing our carbon including resignation, retirement, death, spinoff, saving measures that became the basis footprint, we leverage the power of the outsourcing, layoffs, redundancy, violation of of discussion at the company’s annual rules, and other miscellaneous payroll/company technologies we help make possible, management meeting. Between 2010 and terminations. The information about attrition such as videoconferencing and video-IM, breakdown per gender is not available in all 2011, active use of this forum increased countries where Alcatel-Lucent operates due to to foster interactive exchanges among by 80%. An advocate from the start, CEO specific data privacy policies. peers and virtual live interaction with Ben Verwaayen remains an active Engage senior managers. Although we want to contributor, using his blog to share ideas strictly limit business travel, we also and gather feedback from employees. want to foster more live interactions

103 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

4.1 Communication at Alcatel-LucenT 4.2 Employee recognition 4.3 Discussions with unions

among employees, so we encourage 4.2 Employee recognition videoconferencing. The result is that The “CEO Excellence Award: Recognizing 2011 HIGHLIGHT videoconferencing for internal meetings Change” program Employee Engagement increased by more than 40% since This global initiative is designed to In 2011 Alcatel-Lucent focused on designing an 2008, a clear sign that Alcatel-Lucent support transformation and recognize end-to-end employee engagement approach and employees embrace eco-sustainability. exceptional contributions to the ensuring active sponsorship from senior leaders company’s transformation effort. The CEO globally. The new employee engagement For more information, see p. 92 A Excellence Award is given annually to an framework has three elements: a detailed, online employee or team selected by the CEO survey; a best-practice results-to-action process; for contributions that can be replicated and an active network of employee engagement elsewhere in the company, either as an champions throughout the leadership pipeline. innovation or a way of working. Winners Combined, these will ensure a thorough choose a charitable organization to assessment of the key engagement opportunities receive a donation on their behalf. All and a sustainable action-plan response across the nominees’ submissions are published organization. In the meantime, several internal to spotlight internally the quality of organizations have completed measurements to work being done at Alcatel-Lucent. look at employee engagement levels within a specific organization. HIGHLIGHTS 2011 HIGHLIGHT 26,000 employees actively consult 2011 saw 64 nominations for the Engage collaborative platform CEO Excellence Awards from around at least once per month. the globe.

Sri Lanka/Maldives 80% increase in active users from M Michael Schabel and Jyoti Mahurkar-Thombre 2010 to 2011. accepting the 2011 CEO Excellence Award for their teams from Ben Verwaayen. Many local social activities were undertaken in Sri Lanka based on employee suggestions, including, in 2011, a blood donation campaign in Angoda. Apart from a monthly Country Senior Officer’s tea-time meeting with employees from various teams, quarterly sports events are held as well as a year-end office get-together with a Night Out Awards celebration for high performers. An anonymous suggestion box is promoted to invite employee suggestions, ideas and requests for improvements.

104 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

4.1 Communication at Alcatel-LucenT 4.2 Employee recognition 4.3 Discussions with unions

4.3 Discussions with unions Systems GmbH’s two company-related benefits and working conditions. We We inform and/or consult with union collective bargaining agreements have a signed agreement with the HIGHLIGHT representatives before making (regulating working conditions and the CWA that addresses safety and health European Committee any major change in organization, amalgamation of 10 establishments into and in particular requires a National Alcatel-Lucent is committed to respecting local regulations and those five) concluded in December 2011. Union-Management Committee to fostering an open dialogue with at the corporate level. Matters affecting meet at least three times per year. employees on important decisions individuals may require one to six In France, a company-level committee directly affecting them, and with the months of discussions depending on representing employees (Comité de In 2011 we conducted discussions with unions and other bodies that the implications, especially if there is a Groupe France) has been in operation the European unions to adapt our current represent them. The European transfer of work to a new location or since 1981. Composed of 30 trade agreement based on more than 16 years Committee for Information and a need for the individual to relocate. union representatives, it meets at least experience to improve our communication Dialogue (ECID), for example, twice a year (generally in June and with our unions at company level. We supports dialogue between senior Major collective agreements signed in December). The membership of the are currently waiting for the official management and European employee 2011 included the Agreement on Equality French Committee was renewed for two position of our union, which should representatives. It was renewed for at Work and GPEC (Gestion Prévisionnelle years in 2010. In 2011, the company- be available before May 2012. two years in 2011 when new des Emplois et des Compétences) in level committee met three times. members from Bulgaria were added. France. The Collective Labor Agreement It has 30 members, five of whom was signed in Alcatel-Lucent Bulgaria, In the U.S., Alcatel-Lucent regularly make up a coordinating committee covering these areas: salaries, benefits communicates with its unions, consistent – including representatives from and rewards; training and development; with local labor laws and commitments Belgium, France, Germany, Italy and and social partnership. In Alcatel-Lucent contained in our collective bargaining Romania. France is also in charge of Italy, there were three agreements agreements. Major agreements signed the secretariat of the committee. signed during 2011 (two agreements in 2011 include a one-year extension ECID meets at least twice a year for social tools and one on transferring of our collective bargaining agreement depending on developments at the company branch for Bari R&D site). with the Communications Workers of Alcatel-Lucent. In 2011, it met in In Germany, Alcatel-Lucent Network America (CWA) with respect to wages, March and October; five additional meetings with the coordinating committee were also organized. A dedicated meeting took place in December to consider updating the current agreement based on 16 years of experience and the evolution of the regulation at the European level.

105 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

Alcatel-Lucent’s reporting requirements To make health and safety information 5.0 for serious incidents and occupational more readily available, the Corporate accidents ensure all business groups EHS office created a common EHS EMPLOYEE provide the information to support SharePoint platform that allows EHS LOCAL INITIATIVES HEALTH AND effective trend analysis and root cause coordinators to input and utilize course identification, and to focus on accident- content and customize it to their specific, SAFETY prevention programs. We use this local needs. Additionally, Alcatel-Lucent, Last year Alcatel-Lucent engaged in a number of data to continually improve our safety through its travel services website, local EHS initiatives, including: performance as we strive to reach our keeps employees informed about any t Alcatel-Lucent, we goal of zero lost work days due to injury risks associated with serious diseases. In Turkey, the adoption of a GPS device to monitor or illness. We set internal objectives and control vehicle speed, with results showing a strive to drive the to reduce our work-related injuries/ Prevention and treatment of serious reduction in average speed and fuel costs – both Aidea of “think safe illnesses frequency rate. A preliminary diseases is managed on a local level. environmental and safety benefits. and be safe.” As stated trend analysis in 2011 pointed to slips, Incorporating safe working habits in our Employee Health trips and falls; strain and sprain-related into employees’ lifestyles is a process In India, an EHS Road Show in the city of Gurgaon injuries; and motor vehicle safety as areas that takes time, but the company is created awareness about EHS activities and and Safety (EHS) Policy, needing more attention. Consequently, confident in the steps it has taken to facilitated the implementation of EHS management we are committed to the company is revising its ergonomic make sure people understand doing systems for employees in Real Estate, Services, operating in a sustainable guidance to suit the current working things safely is part of doing them right. Human Resources, Operations, Quality Assurance manner that protects the style – for example, the increasing use of and Procurement. laptop versus desktop computers. We are 2012-2014 TARGET environment and the health also evaluating driver safety courses in In California, Alcatel-Lucent Real Estate/EHS and and safety of employees, all regions to ensure local issues related Corporate Insurance jointly sponsored an to motor vehicle safety are addressed. 1 engineering inspection of a critical California contractors, customers and Achieve SA 8000 certification in Alcatel-Lucent facility to evaluate earthquake Brazil and Mexico by year end the communities where we In 2012, health and safety courses survivability. This identified improvement areas 2012; extend to other countries do business. Meeting this are also being offered through our for employee safety and loss protection, and a that are already compliant with the online learning portal. We are utilizing brochure was developed for employees about commitment is a primary requirements by 2014. management objective Skillport, an off-the-shelf product what to do during and immediately after an with many applicable EHS titles that is earthquake event. and the individual and hosted in the Alcatel-Lucent Learning collective responsibility of all Management System, starting with In the Asia-Pacific region, the Alcatel-Lucent Hong employees. Our global EHS courses related to slips, trips and falls. Kong team received the Hong Kong Electric network of correspondents This will increase the availability and Company Good Safety Performance Award, and speed of delivery of EHS training. Alcatel-Lucent Singapore achieved BizSAFE Level ensures safety is part of 3 certification in December 2011. who we are rather than an add-on concern.

For more information, see p. 5 106 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

6.1 Gender diversity 6.2 being a multicultural company 6.3 Non-discrimination 6.4 Accessibility in the WORKPLACE 6.5 Generation diversity

As a measure of its global commitment, awareness on the diversity topic in 6.0 in 2011 Alcatel-Lucent announced a their organizations. Each Alcatel-Lucent 2012–14 TARGETS DIVERSITY AND Corporate Sponsor for Diversity (Paul organization has identified a measurable Tufano, Alcatel-Lucent Chief Financial diversity-related objective for its business 1 EQUAL Officer) as well as a Diversity Action and will show progress against it annually. In light of the steps that Lead group to formulate and track need to be taken to improve the gender corporate objectives, and to develop a In Asia-Pacific, the leadership team has OPPORTUNITY balance at the strategy and action plans to improve committed to sponsoring high-potential executive level of the diversity across the organization. women to prepare them for executive and organization, the upper management positions. Additional company has shifted 6.1 Gender diversity actions include support for flexible work the 2012 target of a Our corporate diversity strategy is to practices and attention to diversity 20% increase in the percentage of adhere to the principles of inclusivity within the staffing and development “I am a true fan of diversity. We executive women to worldwide, with an initial focus on gender processes across the APAC region. The 2011 HIGHLIGHT make much better decisions if we 2014, a realistic diversity on a global level. Countries and Networks group identified a plan based The company set a target for 2011 to have different viewpoints and timeframe within which regions are accountable for addressing on sponsorship of women, awareness increase the number of women in to enact the action backgrounds. Gender diversity is a diversity relevant to their local contexts. building among people managers and a executive positions by 20% of the plans and propel huge opportunity and leaders must While women make up more than 50% dedicated focus on improving women’s total available within the company. measurable progress set the example.” of most talent pools and represent development. The Networks leadership toward that goal. a large contingent of the company’s team attended a workshop in December Over the course of the year, the BEN VERWAAYEN number of women in these roles did We also commit to: CHIEF EXECUTIVE OFFICER, end users, they are not present in our to learn more about how gender ALCATEL-LUCENT management ranks in similar proportions. stereotypes influence the behavior of increase – by 6% – but the overall This implies a loss or misalignment of men and women in the workplace. proportion remained at 15% due to 2 Developing gender a large talent pool. Alcatel-Lucent is an increase in the number of male diversity awareness- executives. The Alcatel-Lucent Alcatel-Lucent is an equal opportunity focusing on this business imperative. A number of panel discussions with building training employer and actively seeks to promote top executives were organized at strategy and action plan to achieve and making it a diverse and open workplace. We firmly A global strategy and action plan was the end of 2011 with participants greater gender balance will entail available to all people believe that diversity and inclusion are put in place at the end of 2011 involving discussing what people managers can actions aimed at both genders. We managers by 2012 great sources of our strength. As an the assignment of accountabilities do to improve the diversity of their are committed to strengthening our equal-opportunity employer, Alcatel- at the organizational, corporate and teams and advice on how women leadership pipeline of women 3 Lucent acknowledges the unique country levels and the identification of can grow their careers. Participants through sponsorship, mentoring and Extending existing equal pay agreements: contribution that all potential candidates actions in five focus areas: awareness also gave an overview of their coaching, and providing awareness- – by 2014, reduce building sessions for people can bring in terms of their culture, building, leadership pipeline, staffing/ commitments as leaders on the topic. unexplained ethnicity, race, gender, nationality, age, recruitment, work/life balance, managers to help them re-examine gender pay gap of C Read more about ‘The week of diversity’ their attitudes toward men and religion, disability, sexual orientation, and equal pay for equal work. (in French) more than 5% education, experiences, opinions and women in the workplace and – by end of 2012, beliefs. Furthermore, we expect every HR and leaders were asked to identify increase understanding of the have a plan in place to address gender pay Alcatel-Lucent employee to respect and their own objectives, action plans differences between the two in terms gaps of more than 5% support a globally diverse environment. and diversity champions to raise of leadership style, communication, behavior and career cycles.

107 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

6.1 Gender diversity 6.2 being a multicultural company 6.3 Non-discrimination 6.4 Accessibility in the WORKPLACE 6.5 Generation diversity

7 The town of Vélizy launches “Club 9 Perspective Femmes”: This club supports professional women located near the Inovel Parc (Alcatel-Lucent, General Electric, Thales, Gunnebo, Internal women’s networks: Schindler, Auchan and more), this network meets Strong’Her/Women’s Leadership Network 2 once every two months to discuss concrete actions – especially in schools and universities – that will 2 6 7 2 encourage more women to enter scientific and Employee women’s networks help foster 2 technical fields. Members also attend conferences gender diversity by bringing motivation and workshops on professional evolution and 2 and inspiration to Alcatel-Lucent gender diversity in organizations. employees, allowing women and men to 5 share their experiences and ideas on 3 2 8 THE Women Empowerment PrincipLEs (WEP): These are principles for business, parity and women’s leadership. 4 offering guidance on how to empower women in the workplace, marketplace and community. They 1 8 9 are the result of a collaboration between the United Nations Development Fund for Women (UnIFEM, 1 Strong’Her: This employee networking and support group was set up by Alcatel-Lucent part of UN Women) and the United Nations Global women in 2011 on the Alcatel-Lucent collaborative Compact, of which Alcatel-Lucent is a member. Not only is Alcatel-Lucent a signatory of the WEP, but platform, Engage. Strong’Her organizes local events 4 Diversity Forum in APAC: To ensure there given the opportunity to meet senior executives in its growing number of worldwide antennas. is a consistent and focused approach on such as Ben Verwaayen and Rajeev Singh-Molares, we support its activities by providing real-life Today the network has nearly 600 members gender diversity in APAC, a diversity champion as well as other executives visiting the country. business practices and input on the gender (15% men) in more than 22 countries. was identified for each country in the region in dimension of good corporate citizenship. Alcatel- order to create an APAC diversity forum. The 6 College@work: In late 2011, many Lucent representatives participated in the WEP locations of Alcatel-Lucent France welcomed 2012 conference to share the practices we have 2 Women’s Leadership Network (WLN): Forum meets monthly to discuss corporate This network has local chapters and members- priorities, country-level execution plans and best secondary school students for one week as part launched to empower and advance women in the at-large across the U.S., Brazil, China, France, practices. The focus for 2012 is to create of the College@work project. College@work is workplace. Germany and India. The WLN’s mission is to awareness around gender balance, amongst men aimed at encouraging disadvantaged youth, provide an avenue for all women in Alcatel-Lucent and women colleagues, and develop the leadership particularly the young women among them, to 9 European RoundTable of to demonstrate their leadership abilities, for pipeline of women in the region. pursue a career in engineering. since its 2010 Industrialists: Alcatel-Lucent & Societal women to mentor and be mentored, and to be a launch at the Alcatel-Lucent Villarceaux location, Changes Working Group Alcatel-Lucent has agreed to be part of a European Roundtable of positive presence within the business and 5 Gender diversity in MalaysiA: This the program has been so successful that it was throughout the communities in which we work. quarterly online gender diversity newsletter deployed in 10 locations in France in 2011. Industrialists initiative to promote our corporate was launched, featuring five women per issue. The targets and actions on improving gender diversity During the week, students discover more about the 3 THE Women in CALA PrograM: This selected women will share their career aspirations among executives as an example of proactive program focuses on the three human and challenges with the rest of the employees. To activities and professions at Alcatel-Lucent and leadership on this issue among DAX 30 companies dimensions: the body, mind and spirit. Through support working mothers, Alcatel-Lucent Malaysia attend internally organized workshops facilitated in Europe. Other participating companies include a series of conferences and workshops, the increased the maternity leave entitlement from 60 by employees. Workshops range from meetings Deutsche Telekom, Vodafone Group, Siemens, program provides participants with tools for self to 90 days – well above the legally mandated level with operational employees to advice on building a TOTAL, GdF Suez and Royal Philips Electronics. development in a comprehensive way and for followed by most Malaysian companies. CV, having a job interview and practicing English. Read more achieving balance in different dimensions of life. Additionally, a lactating room was set up to enable C C Read more (in French) nearly 40 women attended the conferences, and female employees to continue nursing after 12 talent-pool women completed the training. returning to work. Women employees were also 108 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

6.1 Gender diversity 6.2 being a multicultural company 6.3 Non-discrimination 6.4 Accessibility in the WORKPLACE 6.5 Generation diversity

6.2 Being a multicultural company programs. About 25 cultural events were With more than 76,000 employees hosted during 2011 in which other representing more than 100 nationalities, employees could interact with and learn Alcatel-Lucent has employees of all about different cultural groups working at ages, from all walks of life. This is a Alcatel-Lucent. great source of strength that allows 2 1 C Read more 5 everyone within the company to 2 7 6 develop new ways of looking at issues 3 Local initiatives in Alcatel- and to contribute creative thinking. Lucent Hong Kong Alcatel-Lucent’s 3 4 In today’s global environment, we Hong Kong office was named a “Caring believe more than ever that it is crucial Company” by the Hong Kong Council of to understand the cultures, customs Social Service on April 19, 2011, owing to and needs of employees, customers its support of and participation in the New and regional markets. As a global Leaders Program hosted by Junior enterprise, we seek to ensure that our Achievement Hong Kong. Junior employee body reflects the diversity Achievement arranges for as many as 2,500 of our business environment. junior secondary girls in underserved communities to take part in programs designed to help them develop positive attitudes and the confidence to build a 6.3 Non-discrimination includes recommendations for brighter future. The Hong Kong office The company’s strong commitment employees, people managers and started this program in 2010 and is LOCAL INITIATIVES to advancing equality and non- HR on providing a welcoming and committed to continue it until November discrimination policy is reflected in supportive environment for employees 2012. Various ongoing initiatives around specific initiatives against harassment undergoing transition at Alcatel-Lucent. gender diversity, teleworking policy and and discrimination in several countries Employee training in Poland An employee volunteering continue to take 1 (France, U.S.). Ben Verwaayen was invited to serve intensive training program for all place in Alcatel-Lucent Hong Kong. on the World Economic Forum (WEF) employees in Poland aimed to enhance their A For more information, see p. 132 Some are “out” (i.e., open about their Gender Parity Group for 2011–2012. skills and abilities and increase their gender identity or expression) and The WEF Gender Parity Group is a opportunities for progression within Alcatel- Lucent globally. Certifications or promotions others may not be. Given that many multi-stakeholder community of highly are significant examples of direct results of transitioning employees come out to influential and committed leaders – 50% this program. their employers in order to be able to women and 50% men – from business, live consistent with one’s gender identity politics, academia, media and civil society. 2 Local Employee Enrichment full time, employers necessarily become It aims to identify the most successful Program (U.S. & Canada) These involved in an employee’s transition. interventions for closing gender gaps and include various location-based initiatives develop a framework for gender parity designed to educate employees and In addition, these guidelines have that can be widely replicated. enhance their lives through learning, been developed to foster dialogue It meets once a year, on the occasion volunteering and other enrichment and understanding of transgender of the WEF Annual Meeting at Davos. issues in the workplace. This document A For more information, see p. 32 109 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

6.1 Gender diversity 6.2 being a multicultural company 6.3 Non-discrimination 6.4 Accessibility in the WORKPLACE 6.5 Generation diversity

Strongly committed to advancing equality 5 Professional Equality Label 6 First class in equality in Spain between men and women, Mr. Verwaayen and Agreement in France As part The Spanish Ministry of Health, Social joined other CEOs in July 2011 to sign of an agreement between the unions and Politics and Equality bestowed Alcatel- the CEO Statement of Support for the the company signed in January 2011, Lucent with the award “Equality in the LOCAL INITIATIVES Women’s Empowerment Principles – funding was allocated to support programs Company.” Alcatel-Lucent is the only Equality Means Business. This worldwide designed to promote gender equality, company in the telecom suppliers’ market initiative was launched by the UN, including reducing the salary gap between that earned this designation. Also, an UNIFEM and the UN Global Compact. A See the map on previous page men and women. In the first year of the Equality and Transformation team was three-year program, the salary gap was launched to establish a teleworking Alcatel-Lucent’s company gender reduced from a 7% difference to 1%. best-practice website to give visibility initiatives were also included in the Gender Equality Project in 4 and promote teleworking. Policies for UN’s publication Companies Leading the India The Gender Equality Project Also, a specific training program has been employees were put in place to encourage Way: Putting the Principles into Practice, (GEP) is a Swiss Foundation that aims to implemented to fight against gender work/life balance (Alcatel-Lucent Club, which lists examples of actions and close the gap in opportunities between stereotypes and propose a professional flexible work hours included in the initiatives that companies are undertaking women and men in the workplace. In 2010 development model among the company, Collective Agreement) and promoting Alcatel-Lucent signed an agreement with to empower and advance women. based on skills only. a mentoring program for women. GEP to become one of the member C Read more companies in the GEP’s endeavor to launch Thanks to this agreement and other 7 Transgender transition the Global Gender Certification Label, with initiatives to improve work/life balance, policy in U.S. Gender transition Finally, Alcatel-Lucent was invited to Alcatel-Lucent India being the in December Alcatel-Lucent was granted guidelines were created and are consistent join the newly launched UN Women representative legal entity for our company. the Association Française de Normalisation with company policies and practices at Empowerment Principles Leadership The objective of the project was to be a (AFNOR) Label for Professional Equality, Alcatel-Lucent, which treats all employees Group and be a key speaker at its first participant in the gender certification pilot which was awarded officially on February consistently and without discrimination meeting on March 8, 2012, in New York. for testing and assessing the GEP 9, 2012, by Roselyne Bachelot-Narquin, based upon a protected classification methodology. The GEP methodology was France’s Minister of Solidarity and C Read more including, but not limited to, those a five-step process of gathering company Social Cohesion. employees who may be transitioning data, documents, employee surveys, or dealing with gender identity issues. structured interviews and pay-gap analyses, and the assessment framework was focused on five key areas: equal pay for equal work, recruitment and promotion, training and mentoring, work/life balance and company culture.

110 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

6.1 Gender diversity 6.2 being a multicultural company 6.3 Non-discrimination 6.4 Accessibility in the WORKPLACE 6.5 Generation diversity

6.4 Accessibility in the workplace 6.5 Generation diversity Alcatel-Lucent is committed to fostering In 2011, a series of generation diversity the professional integration of disabled projects was launched in the Benelux people into its workforce. The company countries along with local programs in LOCAL INITIATIVES Accommodation for disabled has defined and implemented a general, Mission Handicap in France employees in the U.S. France, Germany and the U.S.; all aim to proactive company policy to fight all produce a better understanding of the forms of discrimination and to increase specific work habits and expectations of diversity across Alcatel-Lucent. Mission Handicap is a program designed to successfully integrate Alcatel-Lucent provides reasonable various populations and communities. disabled employees into the Alcatel-Lucent work environment. The accommodations to qualified program has established training courses to educate employees on employees with a disability or the challenges of working with a disability, sensitize them to the handicap. Employees may request 2011 HIGHLIGHT special needs of those with disabilities and the benefits of working an accommodation through various Late in 2011, a global Generation Y with them. Awareness-raising activities are hosted at Alcatel-Lucent means, including by contacting their network was set up through Engage campuses every year and trainees with disabilities are commonly people manager or HR Partner, or to connect local diversity leads and welcomed into Alcatel-Lucent working teams. The program also by submitting a “Request for facilitate the exchange of ideas, invested in physical adjustments to Alcatel-Lucent buildings, Accommodation” form (on the share best practices and together providing handicap-adapted equipment and computer accessibility company’s Diversity, Inclusion and drive generation diversity tools between 2009 and 2011. Compliance webpage). While initiatives at Alcatel-Lucent. The accommodation is typically granted, objective is to build further @talentEgal in cases where it is not possible momentum on local initiatives, to other options are considered and enable and motivate the younger discussed with the individual and generation to connect with the A non-profit association called @talentEgal (at equal talent), created his or her management to see if one leaders in the company while recently by Alcatel-Lucent in France, helps disabled students follow of these options would meet the providing a focused framework for post-graduate studies to gain employment at Alcatel-Lucent. need. For more complex cases, the Gen Y networking and engagement Students participating in this program benefit from an internship or interactive process is conducted within the company, and to other work experience at an Alcatel-Lucent location and specific with the assistance of a committee stimulate upwards feedback training provided by the company. @talentEgal will help the involving representatives from HR (understanding from the youngest) company recruit 60 disabled people for 2012–2014, as the French and Health Services. The committee and education (learn together in a government requires that 6% of a company’s employee base consist helps ensure that requested way that fits the needs). of disabled employees (currently 2.5% in Alcatel-Lucent France). accommodation and other Another objective for the next three years is to create an ambitious alternatives are given full Alcatel-Lucent Handicap & Innovation program that will mix consideration. Information about handicapped students with R&D and Bell Labs project teams to job accommodations is available to focus on addressing e-accessibility projects. employees and people managers on Alcatel-Lucent’s North American HR policy guide.

Read more about @talentEgal

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OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

6.1 Gender diversity 6.2 being a multicultural company 6.3 Non-discrimination 6.4 Accessibility in the WORKPLACE 6.5 Generation diversity

5 ‘bell.y’ in Belgium bell.y was formed by and for the young talented people of Alcatel-Lucent Belgium. This initiative connects more than 100 young people across different domains, nationalities LOCAL INITIATIVES and education. Activities range from speaker events 2 5 4 and knowledge sharing to weekly coffee breaks and 3 1 6 after-work parties. Our goal for 2012 is to grow and 2 increase our presence in non-technical 1 Generation & Talents in France The Generation & Talents program is a two-part departments, such as sales and marketing. bell.y program seeking to improve generational diversity was awarded the public’s prize in the Epsilon within Alcatel-Lucent and to support younger Learning Awards 2011. generations in building lifelong careers in science France In 2009, Alcatel-Lucent launched an and technology. This program works closely with 6 initiative in France to develop our employer APEC, an external organization focused on branding using social media (Facebook, Twitter) for employee and executive development. the first time to recruit and promote our HR policy. In 2011, Generation & Talents proposed a complete The result of our strategy was the recruitment of program for senior employees, including 100 young (Gen Y) talents in three months. The conferences on career management and mentoring introduction program has three highlights: skills development. In a second part, a mentoring NN A seminar that includes a workshop on program was implemented, encouraging senior In 2011, URSP North America filled 338 student Vocational training in Germany Alcatel-Lucent strategy, open discussion with employees to mentor younger employees and be 4 positions in a variety of areas within our business. Alcatel-Lucent performs various cooperative members of the Management Committee, mentored themselves. Today a network of 41 In the U.S., 52% of the new graduate hires were education programs in Germany, helping more than mentors has followed the whole process of and feedback from participants about their students who had served an internship or co-op at 100 young people gain a solid professional validation. three or six months in our company Alcatel-Lucent. education. During their theoretical studies at NN A specific program called “Innovation Break”: university – where they graduate with a bachelor’s 2 Increasing generational diversity in Gen Y can meet together one day each Generation Y in Austria This project aims North America A renewed effort to 3 degree – they are employed at Alcatel-Lucent. quarter to find and develop innovative ideas to engage the new generation of talent in increase generational diversity in North America National and international internships at Alcatel- NN “Live my Life” session: One Gen Y Alcatel-Lucent, focusing on cultural diversity, skill was carried out through the company’s University Lucent (e.g., in China or the U.S.) account for as follows a member of the Management development and customer-facing activities. Twelve Relations & Student Programs (URSP) department. much as half the experience and are a substantial Committee for a day to see the job of a young individuals from eight countries successfully URSP works to create student positions that are pillar of the program. In addition, students are took part in the project in 2011 in the areas of top people manager; in a second part, the mutually beneficial to the student and the business. trained on their soft skills, such as priority setting, Project Coordination, HR, Marketing, New Product member of the Management Committee It makes it possible for learners to apply their collaboration and business etiquette. To further Introduction, Presales, Specialized Solutions and follows the Gen Y for one day. classroom knowledge to real-world situations, and deepen orientation for career entry, Alcatel-Lucent Finance. The team participated in major product to have the opportunity to network with company cooperates with local schools, building a win-win demonstrations and field trials, writing press We promote this process each year, and ask each leaders, learn about various areas of our business platform of dialogue between the educational releases and case studies, and participating in year’s graduates to serve as mentors for the next and develop their professional soft skills. The system and our innovative industry. customer demos. In 2012, the success of the project year’s entrants. business benefits include gaining a fresh will be replicated and expanded in the Middle-East, perspective and new ideas while also freeing up the Turkey & Africa region. time of more experienced personnel so they can focus on other business needs.

112 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

7.1 Workforce planninG 7.2 Employee learninG 7.3 Global FRAMEWORK 7.4 Online learning

With this new capability, the company 7.2 Employee learning 7.0 is able to manage its human capital Human Resources Learning & population in an organization-agnostic Accreditation is the company’s premier DEVELOPING way, by mapping all employees and learning organization, providing OUR WORKFORCE contractors onto approximately 100 customers and employees with standard profiles. The interchangeability tailored learning services. In 2011, the and consistency of skills and organization delivered an average 16.25 7.1 Workforce planning competence mapping across sub- hours of training per employee.(1) About Global Day of Learning In 2011, we strengthened our ability organizations is widely increased, 40% of training was delivered using In October 2011, Alcatel-Lucent University organized a Global to look beyond the one-year budget resulting in a significant rise of internal online formats, including e-learning. Day of Learning (GDOL), a first-of-its-kind event to increase planning from a human capital point of hires versus external recruiting. awareness of the wide range, quality and importance of learning view. In line with our long-term strategy opportunities available to Alcatel-Lucent employees across the and multi-year financial performance Beyond the initial 2011 objective to globe. GDOL presented a full day’s schedule of live, virtual and direction, we defined targets for the focus on long-term strategic workforce recorded sessions for each of the company’s major regions skills and talents necessary to execute planning over three years, Alcatel-Lucent (APAC, EMEA and Americas). our business strategy. To ensure our now includes mid-term (one-year budget long-term success it is critical that we and headcount cycle) and short-term Speakers from inside and outside Alcatel-Lucent were invited to have the people with the skills and planning (next three months recruiting highlight the strategic importance of building and leveraging a experience required by our high-tech cycle) process integration, enabling a highly skilled and knowledgeable workforce into a competitive business and are able to align our holistic, end-to-end resource planning advantage for the company. recruiting practices – both internal and approach from day-to-day recruiting up external – to ensure we can attract the to the strategic resource planning level. The goal of this event was for all employees to gain a better top talent in the field and then retain understanding of the company’s significant investment in their them through effecting training and 2012 TARGET 2011 ACHIEVEMENT professional development and the resources available to them to career development programs. It is key 1.3 million employee learning hours accelerate their performance and ability to effectively compete in for our long-term strategic direction delivered in 2011. the market. The employee participation was very successful, and with respect to product portfolio and 1 Launch a 3-year workforce plan 97% of employees surveyed said they would participate in the financial performance to align. with development plans and human GDOL in 2012. (1) Disclosure of total hours of training per gender capital performance metrics. Bank or employee category is not available as our on 2011 achievements to drive long reporting systems are not currently configured to Event highlights: collect this information. We will investigate 9,200+ employee sign-ins and mid-term resource planning possible configurations to improve our reporting 4,600+ webcast participants capabilities. system in 2012. 2,000+ campus event participants 3,000+ GDOL “encore” hits

113 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

7.1 Workforce planninG 7.2 Employee learninG 7.3 Global FRAMEWORK 7.4 Online learning

In 2011, the Learning & Accreditation In 2011, 550 employees worldwide Students have access to a variety department underwent a complete 2012 TARGETS achieved professional accreditations of learning opportunities through reorganization to more closely align for 16 different job-specific learning the SkillPort portal for skills-related training and learning know-how and 1 programs. This included customer- e-learning and books, the Product and capabilities to current and future Professional Accreditation: Double facing project managers, integration Solution Course Navigator to learn needs. The strategy of the new the number of new accredited professionals, solution and domain Alcatel-Lucent products, and video- organization is to run learning as a employees to 1,000 by year architects, technical project managers, based learning through the Learning2. business focused on growth. The new end 2012. network planners, and project g0 tool. In addition, the Alcatel-Lucent approach offers an innovative and management office professionals. University maintains its global offering competitive learning portfolio for 2 of training for all employees through both customers and employees. Community Learning: Launch 7.4 Online learning the Learning Management System. community learning for 7 most critical functions (“hot profiles”) as New forms of online learning are HIGHLIGHT parallel fast-track for learning from being introduced, including community Green learning solution the best-in-class employees. learning, largely implemented through Alcatel-Lucent University’s Going Engage, the company’s social networking Green initiative includes an ecology- platform. As well, Alcatel-Lucent friendly, non-print policy. The idea 7.3 Global framework University is working in the new space is to reduce consumption of paper To support strategic employee of personalized learning to develop an in classrooms by providing students development, the Learning & internal Personal Learning Environment, with course materials as electronic Accreditation organization runs People@ which will bring a unique collection of PDF files. By the end of 2011, 49% Alcatel-Lucent, a global professional targeted learning for each student in of all classroom materials were accreditation and development program the areas of corporate compliance, job provided in electronic format (up focused on building competencies and learning and building skills excellence. from 30% in 2010). skills. In concert with our Strategic Workforce Plan, People@Alcatel-Lucent 2011 ACHIEVEMENTS develops and deploys learning programs 22 training centers worldwide. 2013 TARGET for corporate-priority jobs. It is a group- wide initiative, spanning services, pre- 1 40% of internal training and sales and sales, and R&D. Implementing a Build a company-wide learning education is carried out online. job-oriented approach, People@Alcatel- architecture that combines existing Lucent reinforces the links between enterprise support for formal training and workforce planning. training with the new interactive employee-centric knowledge and learning platforms.

114 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

8.1 The Alcatel-Lucent Technical LADDER 8.2 Performance managemenT 8.3 Mobility 8.4 Remuneration

8.1 The Alcatel-Lucent Technical 8.2 Performance management 8.0 Ladder Launched in 2011, the Performance OUR TALENT DIALOGUE We initiated a pilot program called Management approach, OurTalent TALENT the Technical Ladder in 2011 and Dialogue, focuses on the importance into 2012 for the engineering and of continuous, person-to- GOAL PLANNING COMPETENCY CAREER DEVELOPMENT ATTRACTION & ASSESSMENT ASSESSMENT PLANNING & PLANNING research communities, allowing for person dialogue between people GAP ANALYSIS AND RETENTION testing and the further enhancement managers and employees: of the concept and process. Our goal NN To set direction, establish is to launch the Technical Ladder priorities, clarify goals and s a technology globally by year-end 2013. provide guidance and feedback company, it is NN Enabling employees to own their critical that we The Technical Ladder initiative career development paths A will provide employees: demonstrate how much NN Opportunities to excel in their In 2012, the focus of Performance we value expertise expertise with a better view of Management will be on execution and that we promote their career path in the group – for employees, people NN Career opportunities and managers and the company. technical careers for our development growth NN Practicing Performance Management innovators and technical NN Recognition of the technical excellence is a requirement in each experts, particularly and innovation they are delivering organization – employee/people those engaged in R&D. manager dialogue is a continuous practice throughout the year. 2013 TARGET NN Additionally, we will focus on reinforcing the people manager’s 1 role in the organization. Practicing Technical Ladder: Deployment of strong people manager “basics” career development path for – setting direction, providing technical professionals as feedback and fostering development complementary focus on best-in- – is not only essential to managing class versus leadership pipeline. performance, it is critical to enabling the company successfully execute on its commitments. M OurTalent Dialogue platform for Alcatel-Lucent employees and people managers

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OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

8.1 The Alcatel-Lucent Technical LaddER 8.2 Performance MANAGEMENT 8.3 Mobility 8.4 Remuneration

8.3 Mobility highlightS Providing opportunities to grow, change roles and contribute to the company in AIESEC new and challenging ways is a commitment Alcatel-Lucent’s partnership with AIESEC, the largest student-run organization in made to all employees at Alcatel- the world, showcases our commitment to supporting professional development Lucent. The Internal Job Opportunity of Generation Y. The internships offered within the business every year enable Market creates an open forum where all young people to acquire leadership skills and business knowledge. They take up employees are encouraged to post their a range of different internship positions in the areas of Marketing, professional information, experience and Communications, Human Resources, Finance, Submarine Networks and Optics. desired professional evolution. Vacancies are published as they are opened to Since the start of the partnership in 2004, we have provided internship ensure a transparent internal job market. opportunities to more than 300 AIESEC members. In 2011, 67 students and graduates joined our offices in France, Belgium, the UK, Austria, Singapore, Celebrating one year since its launch, Thailand, Australia, UAE, Egypt, China, Italy and Germany. the Internal Job Opportunity Market is a driver for our transformation, and helped us fill half of our vacancies in Young Science Achievers Program 2011. Accompanied by platform upgrades, The goal of the Young Science Achievers Program is to inspire and encourage regional job market newsletters and a more young women and minority students in high school to pursue careers in dedicated recruiting team, the Internal science, technology, engineering and mathematics. Job Opportunity Market has resulted in multiple success stories in more than 70 During the 2010–2011 school year, nearly 200 students from more than 25 countries. With a 48% increase in internal schools in the New York-New Jersey area participated in the program, winning mobility from 2010, we are heading college scholarships, grants, industry recognition and entry into nationally M Internal Job Opportunity Market: Our talent recruiting platform towards achieving best-in-class recruiting acclaimed pre-college summer programs. services. (The number of internal hires in 2011 was 4,561 compared to 4,331 2011 ACHIEVEMENTS Junior Achievement of New Jersey external hires.(2)) I Junior Achievement (JA) is the world’s largest organization dedicated to Successful deployment in 72 countries. educating young people about business, economics and free enterprise. We are improving internal candidates’ In New Jersey, Alcatel-Lucent employees participate in JA’s volunteer network, experience by building a diverse and which offers in-school and after-school programs for students from gender-balanced talent pool and providing 48% increase in internal mobility kindergarten to the twelfth grade. JA programs focus on seven key content a steady stream of communications from 2010. areas: business, citizenship, economics, entrepreneurship, ethics/character, around internal development opportunities financial literacy and career development. This year, JA of New Jersey will supporting the career evolution of our educate 46,000 students in the state of New Jersey. employees.

(2) Disclosure of proportion of senior management hired from the local community is not available as our reporting systems are not currently configured to collect this information. We will investigate possible configurations to improve our reporting Read more about Junior Achievement For more information, see p. 132 system in 2012. 116 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

9.1 Personal developmenT 9.2 Mentoring

Alcatel-Lucent wants to ensure career and Our compensation structure also called the Leadership Pipeline was management development for employees reflects both individual and company 9.0 implemented. This process focuses on in every location where it operates. performance through the selected delivering excellence and diversity in the The company aims to attract the most criteria. Our policy is for all employees TALENT pipeline for the senior leadership roles in competent managerial talent while to be fairly paid regardless of DEVELOPMENT the company, and relies on three pillars: respecting its diversity hiring policies gender, ethnicity or disability. identification of talent in a consistent way whenever external hiring is required. To across the company; talent movement this end, we have a goal of continually Particular emphasis is placed on securing 9.1 Personal development across geographical, functional or reducing our expatriate program, the future profile of our workforce, Alcatel-Lucent designed a new leadership business boundaries; and development and ensuring expats work to transfer rewarding the development of the skills profile to specify leadership skills and using a broad variety of methods. HR knowledge and skills to their host teams that drive company innovation and competencies needed to address business professionals ensure the execution of this to allow for both their repatriation and ensuring a long-term engagement with requirements. We also reviewed the strategy by supporting people managers enhancement of our global capabilities. us through appropriate and dedicated talent-identification process and better and talent through identification, policies, processes and recognition tools. positioned it to address its current movement and development. 8.4 Remuneration and future business requirements. The Besides our renewed commitment leaders and high potentials identified The new leadership profile is one of to provide our employees with a through this new process will populate the key foundations for our talent competitive compensation package by a strong and diverse leadership pipeline identification and development strategy. country and in line with those of major and will be purposefully developed The leadership profile describes the companies in the technology sector, our as potential candidates for the most key leadership characteristics needed compensation policy strives to strike senior positions in the company. by leaders in Alcatel-Lucent and is the a balance among various elements: basis for a set of development programs NN Clarity: Common worldwide We plan to refresh elements of our and tools, such as 360° Feedback: an incentive criteria current programs and deploy a new online tool proposed to employees NN Simplicity: Clear performance leadership development offer, maintaining and leaders to gather feedback achievement levels communicated the successful portions of current from colleagues and management to all beneficiaries programs and designing new segments about their behaviors at work. NN Global approach: Common sales to support the development of a new incentive policy and worldwide generation of leaders. This offer will be 2012 TARGET equity yearly grant and articulated around Alcatel-Lucent key harmonization of global policies business challenges and new leadership profiles and corporate values. 1 Continuation of 2011 efforts with deployment of best-in-class 9.1.1 New leadership pipeline high-potential identification Alcatel-Lucent has a tradition of investing process, usage of succession pools in identification and development and pilot of new leadership of leadership potential. Following an development offer. extensive and thorough review of practices, in 2011 a refreshed talent identification and development process 117 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

9.1 Personal developmenT 9.2 Mentoring

9.1.2 New leadership development offer Alcatel-Lucent differentiates itself from Forum organized by Passeport Avenir for corporate high potentials competition in the way we develop and supported by the Alcatel-Lucent Dedicated corporate leadership people and leaders, focusing on building Foundation. For many of the students development programs are proposed self-awareness, strengths and motivation it was their first contact with the for the company’s high-potential in our talents to deliver results. Taking professional world. The students population. These events focus on into account the new talent identification appreciated the opportunity to meet unlocking leadership capacity and process and the feedback from with recruiters to discuss internship building leadership effectiveness at executives, we are currently working and apprenticeship opportunities. The the organizational level to ultimately on redefining the Corporate Leadership corporate recruiters had a chance to meet improve business performance. Development offer to develop leadership ambitious young students with profiles Forum passeport effectiveness, including the collective different from those usually sent to them. avenir This customized offer has different ability of leaders to lead in different The recruiters offered their advice on siège alcatel-lucent components: a development center, markets, now and in the future. Pilot building a resume and considerations paris one week residential session focusing sessions are planned later in 2012. for thinking about their career path. on leadership identity and personal During the 2011–2012 academic year, leadership challenges, and a second 9.2 Mentoring Alcatel-Lucent is mobilizing more week focusing on collective leadership. For the sixth consecutive year, Alcatel- than 200 volunteers: 120 tutors in

Lucent is taking part in the Passeport France and 80 in the U.S. Each tutor Watch the video (in French) Avenir program, a public/private supervises one or two students through 2011 HIGHLIGHTs partnership dedicated to helping mentoring and knowledge sharing. In In 2011, we targeted to have 80% of young people from troubled urban addition, the Alcatel-Lucent Foundation our high potentials changing To experience areas in France. Formerly known encourages all student participants position over three years. We made Augmented Reality, as Cercle Passeport Télécoms, the to improve their English by arranging 1.Download the important progress as more program involves 12 ICT companies for the students to have conversation app using the QR code high-potential employees were 2. Scan the video and French government bodies. lessons with English-speaking mentors. picture with your phone. exposed to new opportunities via Passeport Avenir uses sponsorships Europe, Middle-East and Africa Read more about Passeport Avenir Read more and mentoring to help young people C (EMEA) and Global Customer enter top-rate French business and Delivery reorganizations. engineering schools and universities.

In 2011, 224 employees initiated 9.2.1 First Forum Passeport Avenir their leadership development in Suffren process. On March 31, 150 students and the HR teams of nine associated companies (Alcatel-Lucent, Accenture, Cap Gemini, Significant best practice Atos Origin, France Telecom/Orange, improvements were implemented SFR, Sagemcom and la SNCF et Gemalto) via the Leadership Pipeline process. met at Alcatel-Lucent Headquarters We will continue this goal in 2012. for the first Internship and Apprentice

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OUR people > 1.0 FOCUSED ON OUR PEOPLE 2.0 our values 3.0 OUR EMPLOYEES 4.0 FOSTERING INTERNAL DIALOGUE 5.0 EMPLOYEE HEALTH AND SAFETY 6.0 DIVERSITY AND EQUAL OPPORTUNITY 7.0 DEVELOPING OUR WORKFORCE 8.0 TALENT ATTRACTION AND RETENTION 9.0 TALENT DEVELOPMENT 10.0 ENABLING FLEXIBLE WORK ARRANGEMENTS 11.0 HOW WE MANAGE REORGANIZATION AND RESTRUCTURING

10.1 telecommutinG 10.2 services for employees

10.2 Services for employees 10.0 As part of its effort to create the best conditions for our employees, ENABLING the company provides services at LOCAL INITIATIVES FLEXIBLE WORK the workplace to alleviate day-to- day constraints linked to professional ARRANGEMENTS Teleworking in Europe futsal, carom and darts. A quarterly newsletter was activities. This translates into a In 2008 a collective company agreement on created to broadcast internal happenings to enhance multiplication of company-organized or 10.1 Telecommuting teleworking was defined together with the main communication. Festive lunch celebrations were company-financed services to employees. Encouraging flexible work practices is Alcatel-Lucent unions in Europe (ECID). Today, organized to celebrate ethnic diversity, reflecting widely recognized across the organization teleworking programs exist at Alcatel-Lucent Malaysia’s multi-racial population. as improving productivity. It also reduces locations in France, Belgium, Spain, Italy and Germany commuting time and costs, as well as involving employees working across different Child care in France 11.0 real estate costs, operating expenses organizations and at different levels of seniority. The “Crèche” project was signed in 2007 with 26 and our overall environmental impact. places in the Vélizy nursery “Les Lucioles” reserved HOW WE All employees may telework, provided an for the children of Alcatel-Lucent employees. Since To demonstrate the company’s support organizational analysis on his/her job activities is then, Alcatel-Lucent has become a member of the MANAGE of a better work/life balance for positive and there is mutual agreement between Club Crèches & Entreprises, and has places reserved employees, teleworking policies have the employee, his/her people manager and the HR in child-care facilities near Alcatel-Lucent sites in REORGANIZATION been put in place across each region and function. Ormes, Saclay, Villarceaux and Colombes. In total AND in nearly all countries where Alcatel- during 2011, 69 Alcatel-Lucent children benefited Lucent has a significant employee base. Teleworking in Singapore from these child-care facilities, with Alcatel- RESTRUCTURING Alcatel-Lucent Singapore officially announced its Lucent taking charge of the booking fees while the teleworking policy in September 2011, providing staff employees pay the hourly fees according to how long In 2012, the company will continue this 2012 TARGET with a flexible work environment that supports their daycare is used. practice to ensure reorganizations and needs and those of the business. restructuring are handled in the utmost 1 Concierge services in France optimal way, maximizing the skills and Further extend the number of Under the teleworking arrangement, an employee In order to ease everyday life, save time and talent of the employees in the company. countries with teleworking policies may apply to work from home or other locations improve work/life balance, Alcatel-Lucent France For this purpose, a special program by deploying agreement in China where applicable. The company will then assess the provides a concierge service at the Vélizy and will be initiated in early 2012 named and India by year end 2012. employee and their position to see whether they Villarceaux sites. Services provided include dry GROW (Grow Redeploy & Optimize our meet the criteria to be approved to work from home, cleaning, shoe repair, alteration, administration Workforce) to ensure our talent is located A dedicated global website with resources and whether the remote location is an acceptable and tasks, parcel reception, car cleaning and home where it can best serve the market. for improving work/life balance is being safe workplace. services (cleaning, handyman, etc.). Any employee put in place by Alcatel-Lucent University. on the site can benefit from these services, and Resources include how to be a more ALM Social Club in Malaysia membership is free. In 2011, 822 members benefited. effective home-worker as well as how To enhance social interaction and improve the A satisfaction survey showed 54% of customers to improve time-management skills. work environment, a social club was set up offering are men between 30 and 49 years of age. employees games such as bowling, table tennis,

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

WHAT IF A COMPANY BELIEVED CHANGING THE WORLD WAS ITS BUSINESS? society

Alcatel-Lucent builds the networks that bring people, businesses, countries and continents together. We are committed to making communications more sustainable, more affordable and more accessible as we pursue our vision – realizing the potential of a connected world. We achieve this through our High Leverage Network™, our research, specific partnerships focused on education, our Public Affairs and stakeholder activities, and our philanthropy.

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

1.1 why digital inclusion matters 1.2 Impact on communities 1.3 Innovation for communities 1.4 ensuring aCCESS TO EDUCATION

1.1 Why digital inclusion matters Alcatel-Lucent firmly believes that 1.0 Alcatel-Lucent has a positive impact on bridging the digital divide can only be the communities in which it operates, achieved with a reliable, eco-sustainable OUR APPROACH driven by its business vision to realize and affordable infrastructure – wireless TO DIGITAL the potential of a connected world. or wireline – that is capable of reaching Our business is communication and key populations, and robust enough to INCLUSION connection, making the world a closer, accommodate a variety of compelling smarter place. Our innovative products, and useful applications. These criteria solutions and applications help accelerate are included in our HLN strategy, our socio-economic development through research and our product development, For more information digital inclusion – extending access to and are exemplified by our direct actions A OUR COMMITMENT about innovation and information, as well as educational and with public stakeholders to promote communities, see p. 126 economic opportunities for citizens and the benefits of digital inclusion. A For more information communities regardless of location – Realize the potential of a connected about social innovation, while being environmentally sustainable. Alcatel-Lucent continues to expand the world and digital inclusion by see p. 127 social impact of its products through developing and deploying A For more information Digital inclusion and access are tightly innovation with communities and affordable communication solutions about digital inclusion, see linked to our portfolio strategy. We major universities in the domains of that will increase access to p. 36 provide environmentally sustainable, energy, education, health and food education and socio-economic A For more information innovative products and solutions supply. Our philanthropic activities development to the world’s citizens about access to education, through our High Leverage Network support this in our efforts to provide in a sustainable manner. see p. 128 (HLN)™ platform and our applications equal chances to all, regardless of We will address digital inclusion offering. They enable global connectivity origins or location – a key democratic through our innovative products “We need to have smart and universal access to information, principle. By providing universal access and solutions, through our High growth: it must be inclusive, while extending educational and to information and fostering freedom Leverage Network platform as well sustainable and help to economic opportunities to the world’s of expression, we believe that ICT can as our applications offering, citizens in a sustainable manner. have a positive impact on education improve people’s lives.” enabling global connectivity. and the socio-economic development Jeong kim, of communities, ultimately contributing This will change the way billions of president, bell labs & to support and spread democracy. people live and work, improve the chief strategy officer, quality of life around the globe and alcatel-lucent connect the world’s talent to new opportunities.

Engage, as a company and as individuals, with pride and passion as citizens of the communities where we are present across the globe.

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1.1 why digital inclusion matters 1.2 Impact on communities 1.3 Innovation for communities 1.4 ensuring aCCESS TO EDUCATION

In 2011, the Alcatel-Lucent Market and In 2010, Bell Labs produced a study and use embedded network intelligence to Consumer Insight team conducted an model in partnership with the World deliver the highest quality of experience in-depth analysis of 52 smart cities Economic Forum (WEF) to understand regardless of device or location, in both to better understand the dynamics of the impact of ubiquitous network access “The study shows the advanced and emerging markets. smart city development projects, and on social and economic development. investment in Ultra-Fast to identify potential applications and The converged, all-IP approach to wireline Read more solutions that deliver environmental C Broadband (UFB) and Rural and wireless access used in the HLN as well as socio-economic benefits. Broadband Initiative (RBI) architecture helps pave the path to next- In February 2012, Alcatel-Lucent pays for itself, with more generation, open-access networks while For more information, see p. 87 and key national stakeholders in A than $5 billion added to our maximizing return on investment from New Zealand applied the model to GDP over the 20-year life of existing networks. It also provides high increase Ultra-Fast Broadband (UFB) the buildout program. capacity while using less space, consuming and Rural Broadband Initiative (RBI) less energy and delivering higher investments across the country. Applications considered included teleworking, high- bandwidth at a lower operational cost. The same model was also applied definition videoconferencing, C Read more about HLN and universal access in Kenya, showing that ubiquitous online training, online access can increase the Human doctors’ visits, remote KEY FIGURE Development Index by 1%. This patient monitoring, remote Solutions based on the HLN translates to 400,000 more Kenyan classes, online herd comprise 48% of Alcatel-Lucent’s children having access to education, and management and cloud Network sales (Q4 2011) accelerated impact of mobility by as living in a smart city computing, amongst others. much as 36% measured in GDP. Alcatel- chattanooga, tn It also included additional Lucent’s portfolio addresses these As part of our HLN strategy, we are environmental benefits of opportunities by providing universal evolving wireless broadband networks access infrastructure with value-added these applications. It shows for the new generation of applications applications and services in critical areas the combined consumer and consumers. Our lightRadio™ solution such as e-health and e-education. surplus of using high-speed promises greener, simpler, lower-cost

Watch the video broadband applications mobile networks. By reducing a cell The High Leverage Network and significantly outstripped the site to just an antenna – and with the universal access GDP impact of building the technological readiness to leverage The Alcatel-Lucent HLN platform enables UFB and RBI networks.” expected advances in backhaul delivery of broadband to everyone, and compression techniques – this Read more anywhere and on any device, with less ANDREW MILLER, CEO, technology will eventually enable the power and more efficiency. Our access ALCATEL-LUCENT NEW ZEALAND easy extension of broadband coverage To experience portfolio is one of the key parts of the and will help bridge the digital divide. Augmented Reality, 1. Download the HLN platform. It enables fixed and mobile app using the QR code broadband access that uses the latest fiber, small cells (metro and femtocells), 2. Scan the video picture with your phone. innovations in wireline and wireless and converged RAN using 2G, 3G and technologies, including VDSL2, GPON, 4G LTE 2G. These technologies also Read more 122 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN

SOCIETY > 1.0 our approach to digital inclusion r 2.0 pu suing social innovation 3.0 How we give

1.1 why digital inclusion matters 1.2 Impact on communities 1.3 Innovation for communities 1.4 ensuring aCCESS TO EDUCATION

O ur lightRadio solution signals a Alcatel-Lucent’s high-capacity fiber and Alcatel-Lucent’s portfolio offers innovative products Ma y 2011 – Alcatel-Lucent opened a world-class and services that bring connectivity to all, as showcased compelling opportunity in a world copper access solutions help service technology center in Brazil highlighting a range of by the following examples: of increasing demand for mobile providers of all types – as well as advanced technologies and applications including 4G communications: the total addressable utility companies, governments and LTE video, cloud- and location-based services for August 2011 – Alcatel-Lucent signed a cooperation Brazilians. market for multi-technology radio citizens – get to fast, faster, meeting agreement aimed at developing broadband infra- equipment will be more than 12 billion universal access objectives and helping structure in Poland – the largest ICT project in Europe. Euros in 2014, representing over 55% to bridge the digital divide. We offer August 2011 – Alcatel-Lucent launched femtocell-based services in the northwestern region of the total wireless RAN market. The the highest capacity fiber solution on September 2011 – Alcatel-Lucent helped China of Russia, extending VimpelCom’s 3G network cumulative total addressable market will the market (ISAM FX) to support mass Telecom expand its network to bring high-quality coverage and capacity to buildings, office blocks and be more than 100 billion Euros from FTTH (fiber to the home) deployments. mobile broadband services to 26 million subscribers. high-traffic locations. 2011–2018. Five major global service In September 2011 we announced providers have agreed to trial lightRadio the world’s first commercialVDS L2 O cTOBer 2011 – The City of Charlotte, North Carolina September 2011 – Alcatel-Lucent accelerated the with us, including China Mobile. In vectoring technology to deliver up to approved a contract with Alcatel-Lucent to deploy an availability of superfast broadband with the launch of February 2012, we did a live 4G-network 100 Mb/s over copper (at 400 m). LTE public safety network in the dedicated public VDSL2, helping operators enhance their existing safety 700 MHz frequency spectrum. The state-of-the- copper access networks – in combination with fiber demo during Mobile World Congress art broadband network will increase the reliability of – to support tomorrow’s broadband speed today and Read more about our wireline portfolio with Telefónica leveraging lightRadio. C critical incident management data for first responders help achieve universal access. and enable 21st-century tools such as mobile video, C Read more about lightRadio S mall cells (femtocells) are small base field use of fingerprint and face recognition stations that can be installed in the home applications, and enhanced medical interoperability O cTOBer 2011 – Alcatel-Lucent and Etisalat agreed between first responders and hospitals. to collaborate to transform the efficiency of delivery of a customer or at a business location to for mobile broadband services in the United Arab provide expanded coverage and extended Emirates with lightRadio, and to define smarter, reach with voice and high-speed data O cTOBer 2011 – Alcatel-Lucent helped Rostelecom greener, more cost-effective means to satisfy growing services to any customer, anywhere. build super-fast data connections, deploying the first global demand for mobile Internet services. 100G coherent optical technology in Russia and the Alcatel-Lucent conducts rural trials with Commonwealth of Independent States. customers to explore new services and No vember 2011 – China Unicom and Alcatel-Lucent pushes the boundaries of application built one of the world’s largest fiber access networks to meet growing demand for super-fast broadband enablement by trialing small cells with December 2011 – Alcatel-Lucent announced new services across China. applications that can deliver local services additions to its optical solutions, enabling service to subscribers that extend opportunities providers to extend 100 gigabits-per-second signals over considerably longer distances and across fiber for education and income generation. F ebRUARy 2012 – Alcatel-Lucent, in collaboration of any quality. This enhances the ability of service with Telefónica, demonstrated a live 4G-network providers to address exploding demand for high- demo during Mobile World Congress, leveraging Read more about small cells C bandwidth services like video and fixed and mobile lightRadio and living up to its promise to dramatically broadband. reduce total cost of ownership and improve coverage and capacity.

F ebRUARy 2012 – Alcatel-Lucent and China Mobile signed a lightRadio architecture co-creation agreement F ebRUARy 2012 – America Movil selected to accelerate the development and delivery of Alcatel‑Lucent to provide next-generation mobile lightning-fast mobile broadband services in a broadband deployment using the lightRadio solution sustainable way in China and support growing as part of its package of LTE technologies for rollout customer demand. across Latin America.

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

1.1 why digital inclusion matters 1.2 Impact on communities 1.3 Innovation for communities 1.4 ensuring aCCESS TO EDUCATION

1.2 Impact on communities Our solutions and services are designed In the countries where we operate, We measure the impact of our programs to help people communicate more Alcatel-Lucent and its products respect on the communities we serve using social, easily and with more people. A robust and comply with local laws and environmental and economic indicators. telecommunications infrastructure regulations, standards and human rights For example, we measure the success of leverages economic and social progress, legislation. Alcatel-Lucent supports and our digital inclusion initiatives based on: helping raise equality with the respects, within its scope of influence: NN User time spent using the technology democratization of information and NN The principles of human rights defined NN User life-quality improvement promoting fundamental human rights. in the United Nations Universal NN Social changes and environmental Declaration of Human Rights benefits in the community NN The Guiding Principles on Business and NN Reputational benefits Human Rights NN Revenues. Ben Verwaayen NN The 10 principles of the United Nations CEO, Alcatel-Lucent Global Compact responding to kripi’s NN The International Labor Organization question Declaration of Fundamental Principles and Rights at Work NN The Organisation for Economic Co- operation and Development Guidelines for Multinational Enterprises.

Watch the video 'Message to Kripi' Alcatel-Lucent positively affects OUR COMMITMENT the communities we operate in by establishing policies and procedures To experience Alcatel-Lucent is a global that take into consideration hiring Augmented Reality, 1. Download the communications solutions provider. local personnel, evaluating local app using the QR code We firmly believe that enabling suppliers, minimizing the impact to 2. Scan the video picture with your phone. improvements to the the environment where we operate, communication capabilities of a and developing programs that help Read more country benefits its people by enhance the quality of life for people creating opportunities and in communities around the world. promoting the development of the population’s economic and cultural well-being – and ultimately its capacity to support or to evolve to democracy. We also firmly believe that reliable, affordable and widely available communications services are a critical engine for a country’s economic and social development.

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1.1 why digital inclusion matters 1.2 Impact on communities 1.3 Innovation for communities 1.4 ensuring aCCESS TO EDUCATION

1.3 Innovation for communities Alcatel-Lucent is committed to enabling Neo-urbanized areas are a powerful There is a huge opportunity for Alcatel- ubiquitous access and is delivering on alternative to the traditional city, Lucent to participate in understanding that commitment by developing new and enable citizens to have access community dynamics, including products, services and solutions, and by to opportunities as well as to create identifying trends that emerge in social engaging in related initiatives and market opportunity for others. Democratization networks – and as a result, determining studies to truly understand market needs. of information is facilitating customers’ technology needs. networks of cooperation and raising the potential of socio-economic In 2011, Alcatel-Lucent Market We know access to modern communication and Consumer Insights looked development regardless of location. services is critical for sustained economic at the phenomenon of neo- Neo-urbanization is a phenomenon growth and social development. urbanization. Alcatel-Lucent will continue to explore, sharing findings with customers as the company seeks to provide Neo-urbanization – a new mega-trend network solutions that unlock people’s rising in India and other parts of the highest potential and accelerate “Rajesh, a sales executive for world – is the extension of traditionally digital inclusion around the globe. industrial adhesives, lives in M Interviews with villagers shed urban benefits and opportunities to Kankrola village in the National light on the way ICT can unleash semi-rural and rural communities. potential in developing markets Capital region. He uses his mobile Neo-urbanization can transform market to access a local information search C Read the executive needs by empowering people in many presentation ways; it also brings access to urban service provider – Just Dial – to Sandy Pentland services such as banking, insurance, find potential customers. This saves C Read our latest blogs about neo-urbanization Director, MIT Media Lab healthcare, education and entertainment him time and effort, and has to people in non-urban areas. expanded his business because he does not always have to go door to The study explored the ways ICT is door to find potential customers. driving socio-economic development, neo-urbanization blurring the boundaries between rural Rajesh is pre-identifying potential the new paradigm shift and urban life and accelerating the clients using ICT. This has enabled Watch the video neo-urbanization trend. By focusing him to increase his income and use ‘WHAT CAN YOU DO WITH FIVE BILLION PHONES?’ on how the phenomenon is affecting his time more efficiently. people’s lives and the different social and economic factors that influence them, it found that a paradigm shift is Watch the video To experience underway – one touching the lives of a Augmented Reality, 1. Download the billion individuals around the globe. app using the QR code 2. Scan the video picture with your phone.

Read more

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1.1 why digital inclusion matters 1.2 Impact on communities 1.3 Innovation for communities 1.4 ensuring aCCESS TO EDUCATION

1.4 ensuring aCCESS TO EDUCATION network – helping create jobs and interactions with businesses and published in collaboration with global With more than 90 million students realize the talent in the community. citizens. The solution makes the experts, discusses how the ICT sector enrolled in higher education programs government’s systems and processes can help increase the adoption and worldwide last year (a figure expected to NN We continued our efforts to enable transparent and increases productivity scale of mLearning projects. climb to 150 million by 2025), new tools mobile learning in adult education, through employee and public Read more and approaches are needed to ensure working in partnership with the engagement. C educational systems have the capacity African Medical and Research NN We furthered the implementation of an A For more information about the World to deliver – and students have the access Foundation (AMREF) to address one of ICT-driven education project in Laos. Economic Forum, see p. 27, 32 to enjoy – the benefits of learning. the key challenges facing sub-Saharan Focused on providing universal access Africa’s health sector: an estimated to knowledge – using technology to NN Through the Alcatel-Lucent Alcatel-Lucent supports initiatives in shortage of 3.4 million health workers. expand the country’s pedagogical Foundation, we have devoted our local communities where we operate to The joint project provides mobile portfolio – the project enables philanthropy strategy to digital drive competitive advantage and societal access to the education people multimedia learning experiences and inclusion by addressing digital literacy progress – exploring new collaborations need to gain professional skills strengthens the ICT knowledge of of youth in underserved communities and co-creating solutions and business and benefit their communities. students and teachers. around the world. models with customers and partners. NN In October 2011, we supported the launch of a mobile learning A Read more about the Alcatel-Lucent 2011 HIGHLIGHT Foundation, see p. 128 M AMREF Better Life for Africa Some of the efforts in 2011 included: (mLearning) initiative in Ghana One of our commitments for 2011 NN Alcatel-Lucent partnered with both intended to help bridge the gap was to sign a memorandum of Read more about the Alcatel-Lucent the federal government of Canada between the education system and the C understanding with the African Foundation and the provincial government of job market. The initiative evaluated Medical and Research Foundation Québec, Eeyou Communications how to help increase graduate (AMREF) to educate health workers Network, Hydro-Québec and employability through ICT while also via mobile phones and other mobile local Cree communities to deliver increasing Ghana’s attractiveness as a devices. Working closely with broadband to remote and rural country for investment. This AMREF in 2011, we explored northern Québec. More than just mLearning initiative was part of the portfolio solutions and business broadband, the network capabilities WEF’s ICT Global Agenda Council models for a sustainable mobile we deployed support applications such activities in 2011–12. learning delivery. A pilot as telemedicine, distance learning, NN As part of our chairmanship role in the implementation and initial rollout is high-speed Internet, business and WEF’s Global Agenda Council on ICT, expected in 2012. residential traffic, high-volume we continue to explore the potential of data traffic, community networks, “education for all” through mLearning videoconferencing, and wireline and NN We continued to act on our applications and innovation. In wireless services for communities. The commitment to help governments February 2012 at Mobile World project set a goal to teach Cree youth become “dynamic enterprises”, Congress, Alcatel-Lucent – with the about telecommunications technology, showcasing a Fiji government data WEF – presented an mLearning white providing training in IT fields so they center that, since its unveiling in paper, “Accelerating the Adoption of can operate and maintain their own May 2011, has introduced operational mLearning: A Call for Collective and and cost efficiencies and enhanced Collaborative Action”. This paper,

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

NN In October 2011, the City of Orlando, NN The Gachon Energy Research Institute 2.0 Florida, announced a trial of new (GERI) in Korea is entering its third technology from Alcatel-Lucent that year of partnership with Bell Labs PURSUING SOCIAL can help monitor, manage and predict to define the base communications INNOVATION traffic patterns on roads and highways. technologies for intelligent The trial uses analytical techniques management and control mechanisms from Bell Labs and Bluetooth in smart grid systems and develop technology to provide accurate traffic- methods to ensure a secure and n late 2011, Bell Labs flow information in real time, including reliable flow of information. The held a two-day global travel-time information based on Grid 2.0 project takes advantage route selection, predicted and real- of Bell Labs’ research portfolios in employee summit Below are some examples of social I time traffic congestion and speed networking technology and security, innovation launched in 2011: exploring how societal distribution, and personalized travel- GERI’s expertise in power grid systems NN In March, the University of Pittsburgh time predictions. By contributing and applications design, and methods needs and challenges are Medical Center (UPMC) and Alcatel- to reduced traffic congestion, this and tools drawn from computational met by ICT, with the aim Lucent teamed up to develop a technology offers environmental economics and mathematics research. next-generation telemedicine solution of identifying areas in benefits and contributes to a reduced that would help lower costs and Read more about GERI which the company has carbon footprint. C improve access to high-quality care the greatest opportunities even for patients far from doctors C Read more about the City NN Though the EARTH Consortium, Bell to deliver innovative and hospitals. The solution will offer of Orlando Labs is leading the charge to address solutions that can make a secure, real-time clinical encounters in global environmental challenges by NN Bell Labs partnered with the real difference to society. a virtual “exam room” designed to fit investigating and proposing ways of the workflow of healthcare providers University of Melbourne and the drastically reducing energy waste and Clear areas of influence and the mobility of patients. Through Victorian State Government, and improving the energy efficiency of include education, healthcare a secure web portal, patients will chaired the advisory committee for mobile broadband communication and energy – in all of have access to both scheduled and a research program at the Centre for systems – without compromising users’ emergency care anywhere, anytime, Energy Efficient Telecommunications perceived quality of service or system which Alcatel-Lucent made using a variety of mobile devices. The (CEET), seeking ways to reduce capacity. significant contributions. portal will support real-time video and the energy consumption of C Read more about EARTH Consortium In 2012, Alcatel-Lucent audio communication among multiple telecommunications networks. In November 2011, CEET and Bell Labs will continue to evaluate participants in multiple locations – and will securely generate, retrieve patented a technique for increasing innovation opportunities and store patient data in a clinically the energy efficiency of optical fiber with clear societal benefits, relevant way. The solution is currently broadband access networks. including green. being trialed at UPMC and is expected C Read more about University of Melbourne to be ready for commercial launch in and the Victorian state government early 2013.

C Read more about UPMC

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

While the Foundation’s purpose is 3.0 to ensure the company meets its OUR COMMITMENT commitment to social responsibility Alcatel-Lucent Foundation mission how we give by supporting programs that serve and enhance the communities 3.1 Bringing digital literacy to all C Read more where employees and customers The Alcatel-Lucent Foundation is The Alcatel-Lucent Foundation leads live, it also sees to it that programs dedicated to making a difference in the company’s charitable activities. It contribute directly to Alcatel-Lucent’s the communities where Alcatel- manages contributions to programs 2011 business vision of realizing the Lucent and its customers are for underserved communities with ACHIEVEMENTS potential of a connected world. present across the globe. Its prime an emphasis on delivering education NN 46 programs mission is to respond to today’s and life skills training. It also organizes supported in In 2011, the Foundation supported 46 global challenge of digital inclusion and promotes volunteerism among 23 countries grassroot programs in 23 countries and and sustainability, focusing on Alcatel-Lucent employees. NN 1 Global Signature a Global Signature Program – ConnectEd providing innovative programs for “Over the past year, I have been Program – – across seven countries, benefiting underserved communities around Alcatel-Lucent has a strong commitment involved in all of our Foundation ConnectEd 45,338 young people. Through programs the world. We believe we can make to social responsibility – one its programs and I am confident that we – across supported by the Foundation, some 6,300 a difference by helping youth employees enthusiastically embrace, have the potential to build a stronger 7 countries Alcatel-Lucent employees donated about contribute as citizens and as evidenced by the more than vision and commitment to make even NN 45,338 young 47,500 hours of their time to contribute community leaders in tomorrow’s 47,500 hours of time contributed to more of a difference in our world. people benefited to more than 175 goodwill projects in global digital world. various volunteer projects in 2011. through all the 42 countries. All programs supported The Alcatel-Lucent Foundation is the It’s not just about the people who programs Alcatel-Lucent’s overall goal of promoting Via the Foundation programs, we most concrete manifestation of the benefit from our programs, it is also NN 6,300 Alcatel- digital literacy and digital inclusion. enable youth (particularly young company’s commitment to being an about “us.” Lucent employees women) to access educational and engaged and active corporate citizen donated about life skills programs. in the global community, providing 47,500 hours to NN We provide basic education Working with them, we also change. US$7.5 million I in funding for carefully We gain a better understanding of contribute to and keep young people in more than 175 selected programs around the world. the realities of people with very underserved communities goodwill projects different background from ours. We in school in 42 countries NN We help underserved youth come to respect the challenges they return to school face and the dignity in which they NN We provide underserved meet them. youth with life skills/vocational training. We evolve. We become better colleagues, better managers, better innovators, in other words – better M Digital literacy for all – bringing the world together citizens, proud of what we are doing”.

bishalakHi gHosh, ALCATEL-LUCENT foundation director 128 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

2012 TARGET I 1 Ernst & Young By 2013, create a company-wide statement strategy through the Alcatel-Lucent Foundation to guide corporate Foundation Reporting Tool philanthropic activities that includes In 2011, Alcatel-Lucent’s Foundation priorities aligned with business undertook a project aimed at drivers and a description of the monitoring the company’s system to measure results and philanthropic contributions and the impact. assessing their impacts. To do so, M Colors of life – South Africa M Colors of life – North America the Foundation adopted a specific model developed by the London To better measure and evaluate all of its Benchmarking Guidelines (LBG). This projects and programs, the Foundation initiative strengthens the has taken a membership in the London monitoring and evaluating system Benchmarking Group (LBG) and follows already in place, and allows their process and mechanism for Alcatel-Lucent and its employees to defining success. provide a quantitative and qualitative assessment of economic, societal, environmental and social impacts of their investments into philanthropic projects. Such impacts can include, for example, M Colors of life – China M Colors of life – India improvements to Alcatel-Lucent’s relationships with local communities and governments, contributions to environmental awareness, and development of new skills among employees.

M Learning is always fun with a friend M Education helps young mothers earn a better living

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.2 The Alcatel-Lucent Foundation: process, Marco Malfavon – a member Governance of the Central and Latin America HIGHLIGHT 2011 ACHIEVEMENTS Funded by Alcatel-Lucent, the Foundation marketing and communications Board of Trustees NN Our 46 grassroots programs is organized under the laws of the State of team – joined the Foundation’s Board As of December 31, 2011, the have shown steady progress, Delaware (US) and is a non-governmental, as employee representative. The Alcatel-Lucent Foundation Board which can now be measured non-profit private organization funded trustees now have defined roles and includes eight company executives, thanks to our monitoring and by Alcatel-Lucent. The Foundation is responsibilities to help implement among them an employee evaluating system. governed by its own Board of Trustees the Foundation strategy and mission representative and the executive NN We work closely with the which includes senior executives from in line with today’s global challenges director, and two external trustees, donor-funding agencies to Alcatel-Lucent and external organizations. and the group’s business needs. including the chairperson. measure impacts and help our Chairperson: Janet Davidson grassroots partners achieve their In 2011, the Foundation Board, mission, The Board meets on a regular basis External trustee: William Reese (CEO objectives and goals. In 2011 we M governance and processes were to make decisions about programs to of the International Youth joined the LBG to help enhance A sewing class in progress restructured. The Foundation mission support and the amount of funding Foundation) our metrics and impact and strategy was redefined to be able to to be allocated. It operates four sub- Alcatel-Lucent trustees: Stephan measurement. LBG is an industry address social needs as they relate to the committees: Executive, Grant Making, Vantomme (Treasurer), Yohann leader and advisor on output company’s business objectives. The new Finance and Nomination. Additional Benard (Secretary), Gee and impact measurement, and mission statement added digital inclusion committees will be organized as needed Rittenhouse, Christine Diamente we are following their guidelines as a focal point in line with the company’s to enable all trustees to contribute (Ex-Officio), Frederic Chapelard, for the same. vision of realizing the potential of a to the working of the Foundation. Mark Kassis and Marco Malfavon. NN We also provide our employees connected world, along with education Bishalakhi Ghosh is the Executive with access to training on policy, for youth in underserved communities 3.3 The Foundation Director of the Foundation. guidelines and procedures for across the globe. The use of technology grassroots program charitable contribution. to bridge the digital divide will also be the In 2011, the Alcatel-Lucent Foundation Foundation’s main focus going forward. Board concentrated on advancing a slate of 46 multi-year, global projects The Foundation brought on board new – regional programs proposed through Read more trustees and a new chairperson. Former employees with support and advice Management Committee member Janet from regional/country leaders. These Davidson retired from the company in address the most urgent educational For 2012, the Foundation has invited the May 2011 and was named Chair of the needs and necessities for those regions. renewal of existing projects and proposals Alcatel-Lucent Foundation, joining the The Foundation concentrated on working from employees for new ones supported other new Board members from across closely with these programs throughout by country senior management. The geographies and business divisions. The the year to create value and encourage Board of Trustees – primarily the Grant Foundation also created a seat on the community investment. Steady progress Making Committee – regularly reviews Board for an Alcatel-Lucent employee. continued to be made: employees have proposed projects, which must satisfy the participated in various volunteering criteria of benefiting local communities M A lot of smiles after a year of hard work The invitation for an employee activities and spearheaded significant and aligning with the Foundation’s new representative received an overwhelming initiatives. A selection of these projects mission and the company’s business. response. After a careful selection is described in the section following. 130 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN

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3.1i br ngING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAM 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.3.1 Bridging for Life: South Africa 3.3.2 Making a lasting impact in Uganda 3.3.3 Promoting women’s Rolled out in 2010 under the partnership The Alcatel-Lucent Foundation provided a entrepreneurship in Poland between the Alcatel-Lucent Foundation three-year grant to Promise International The Women’s Act project in Poland and the Valued Citizens Initiative, (a non-profit organization inU ganda) focuses on supporting women’s success Bridging for Life is a program that to support its educational program in business. It strengthens the social, helps students develop important life at Gateway Mercy Orphanage. The educational and vocational competences skills. Providing a platform for learners objective is to improve the chances of young women from underprivileged in six rural and township high schools for the children’s success through a communities to help them live more (180 eleventh-grade students and 120 focused program of education, self- safely and prosperously, shape their post-graduates in 2011), Bridging for improvement and vocational readiness. entrepreneurial attitudes, and understand P rOMOTING women’s Life encourages young people to lead In addition to the grant, local Alcatel- their rights as women, citizens and entrepreneurship their lives with self-discipline and focus, Lucent employees are working to improve professionals. The Alcatel-Lucent in poland taking responsibility for reaching their the education program at the school. Foundation also supports Women’s Clubs dreams in higher education and the Technical Manager Raymond Matovu (held within the Women’s Act project), world of work. Since its introduction, travels from his office in Kampala to which provide a venue for young women 204 participants have successfully the orphanage to lead computer classes to freely discuss topics such as career completed the program, which is for teachers and administrators; next and intellectual development, and school/ endorsed by South Africa’s Department semester he will be teaching students. work and private-life balance. The Watch the video of Higher Education and Training. concept was developed by Alcatel-Lucent C Read more about Promise International - Uganda employees, who also organized all club To experience meetings – 15 within the last two years. Augmented Reality, 1. Download the C Read more about the Polish Women’s Club app using the QR code 2. Scan the video picture with your phone.

Read more

M South Africa – Bridging for Life

C Read more about Bridging for Life

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3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.3.4 Grooming new leaders in Hong Kong recent study by the Boston Consulting 2010-2011 More than 400 girls in junior high Group shows achievers are 50% more Annual Report school took part in a series of activities likely to open their own businesses led by business volunteers at a Junior and make a positive contribution to Achievement New Leaders Program the economy, earn higher incomes and workshop in 2011 – marking the start be more financially independent. of an outreach project that eventually Read more about junior achievers in Canada benefited some 1,000 young women C in the 2010–11 school session. More 3.3.6 Mentoring in the United States than 30 executives from Alcatel-Lucent Alcatel-Lucent also supports Junior contributed their time alongside Junior Achievement programs in the U.S. Achievement volunteers to engage Last year we gathered 39 employee with the young women in games and Read more about Junior Achievement volunteers to take part in an all-day event C business-scenario discussions. in Newark, New Jersey, that gave eighth- grade students the chance to experience For outstanding Corporate Responsibility M Alcatel-Lucent employee Mike Calderone life as an adult for a day through work and achievement, Alcatel-Lucent made the cover of the 2010-2011 Annual interactive learning. Coached by trained Report for Junior Achievement of New received Hong Kong Caring Company volunteers, the students experienced the Jersey. Alcatel-Lucent has been a long-time status from the Hong Kong Council supporter of JA in New Jersey, with countless challenges of making financial decisions of Social Service (HKCSS). Each year employees devoting their time and talents to that are within their means, applying their mission of educating and inspiring young HKCSS awards its Caring Company people to succeed in a global economy. principles learned through a 24-lesson designation to qualified companies course in economics. Also in New Jersey, Read more about the Junior Achievement of in recognition of their community C 34 Alcatel-Lucent volunteers attended a NJ Annual Report for 2010-2011 involvement and commitment to being a second day-long event last year, serving good corporate citizen in the past year. as role models by delivering Junior C Read more about Junior Achievement – Achievement programs to students at Hong Kong South Street School in Newark – including components on financial literacy, 3.3.5 Developing junior achievers work readiness and the concept of in Canada globalization as it relates to production Alcatel-Lucent Canada has partnered materials and entrepreneurial thinking. with Junior Achievement of Central Ontario for more than 10 years, having a positive impact on the lives of thousands of students by helping them develop their financial literacy, work readiness and entrepreneurial skills. A

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.4 GLOBAL SIGNATURE PROGRAM 3.4.1 “ConnectEd” to youth Highlights from the ConnectEd program NN Working with children in In April 2011, the Foundation signed last year include: disadvantaged migrant communities a partnership agreement with World NN Partnering with Instituto Aliança com o on the outskirts of Beijing and Education to create its Global Signature Adolescente in Brazil to reach youth in Shanghai in China, who are often Program, ConnectEd. The program Ceará State and metropolitan Rio de excluded from the formal school was envisioned to work within the Janeiro. system and other government guidelines of the United Nations services, and with children in the Millennium Development Goals (which rural province Henan whose parents sees universal primary education for have migrated in search of work. all by 2015) and also to address key issues in specific regions/countries. It 2011 ACHIEVEMENT addresses factors limiting the work and Our Global Signature Program – life options of disadvantaged youth, ConnectEd – started in 2011. By with an emphasis on girls and women, March 31, 2012, the program has by preparing 13,500 young people provided digital training to 5,338 from marginalized communities in youths (60% of whom are girls). Australia, Brazil, Cambodia, China, Egypt, NN Partnering with Indian NGO Action Planning for Year 2 of the program France and India for the world of work. Beyond Help and Support (ABHAS) to is in progress. ConnectEd launched in April 2011 and improve the lives of youth – primarily NN Targeting youth in Cambodia’s Prey will continue through March 2014. girls – living in the slums of New Veng province, which has some of the Delhi (Tughlakabad), Noida and Uttar worst poverty levels in the country The ConnectEd program has a special Pradesh (Harola and Jhundpura). and struggles with low education rates 2012 TARGET focus on the use of technology to and high rates of unsafe migration, transform educational, work and life trafficking and child labor; and 1 outcomes for youth. Another important partnering with the Happy School in We will pursue our 2011 element of this initiative is the Phnom Penh to reach migrant youth commitment to provide digital active participation of Alcatel-Lucent who suffer from discrimination, poor training to 13,500 children between employees in ConnectEd activities, housing, extreme poverty, unstable 2011 and 2014. Planning for 2012 using their expertise to help with family life and exclusion from social is in progress. activity implementation and serving services. as role models, mentors and advisors to young participants in all countries.

C Read more about ConnectEd

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

NN Partnering with YWCA New South 3.4.2 The employee connection 3.5 Employee volunteering The Alcatel-Lucent Foundation supports Wales, Australia, to reach young people volunteering programs for employees in the Sydney Metropolitan, Western where they can reach out to their local 2011 ACHIEVEMENT 2011 ACHIEVEMENT Sydney, Shoalhaven and Northern communities. In 2011, 5,950 employees Employees donated some 2,000 Employees in 42 countries Rivers regions of New South Wales. across 42 countries donated 45,500 hours for the ConnectEd program. volunteered for more than hours to their communities, activities 175 projects. with an estimated value of more than Alcatel-Lucent employees are essential US$1.8 million. Alcatel-Lucent employees implementers and resources for have the opportunity to volunteer during ConnectEd – role modeling, sharing 2012 TARGETs their work time when customer priorities expertise and working directly allow, as well as during their time off. with students. Employees mentor 1 Volunteering helps employees develop individual students, assist in curriculum In 2012 we will continue to foster new skills and share their expertise development and suggest how the spirit of employee volunteerism with their communities. Participating in communications technology can be used across the company. We issued a Foundation programs has helped build to improve the overall effectiveness volunteering handbook to help employee pride in the company and their and reach of the program. Various employees connect with Foundation own roles, and connects the company’s employees’ engagement modules projects in their locations as well as brand with local community activity. NN Partnering with CPCV, a French NGO have been assigned to each country across the globe. The idea is to help C Read more with an extensive record of working as determined appropriate by World employees not only volunteer in with disadvantaged youth in urban Education, their implementing partners traditional/on-site projects but to areas, to implement ConnectEd in Les and Alcatel-Lucent ConnectEd volunteers. use technology to participate in our Yvelines, France. other global projects. 2 By 2013 we commit to introducing an executive program for employee volunteering, including skills enhancement and training for community investment.

M I love working with my computer

M Heather Volunteers @ YWCA

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.5.1 China to set up four computer classrooms – 3.5.3 Portugal Building classrooms in Jiangxi benefiting 2,500 teachers and students. Avós n@ Net Alcatel-Lucent Shanghai Bell and The seventh edition of Avós n@ Net Read more Jiangxi Unicom partnered to donate C (Grannies on the Net) was launched a multi-functional classroom to a 3.5.2 Brazil last year in Portugal – a program for school in the underdeveloped area Association for Valuing Persons senior citizens who lack essential of Gannan. The opening ceremonies with Disabilities (AVAPE) computer knowledge but want to were held on March 14, 2011. AVAPE aims to promote the inclusion of access the digital world to keep in young women 16 to 18 years old with touch with their family and friends. Kicking off Warm Breeze season 7 disabilities or who are social vulnerable. Volunteer recruiting for China’s Warm Since 2010, with the Alcatel-Lucent Breeze program got underway once Foundation, AVAPE has offered courses again in early April 2011, with activities that provide participants with skills 2011 HIGHLIGHTs planned for four cities: Shanghai, Beijing, needed to make them more competitive Alcatel-Lucent Shanghai Bell Qingdao and Nanjing. The theme in for a broader range of employment received several awards for its 2011 was “Green City, Good Citizenship,” opportunities. By improving their self- continued work in philanthropic and its goal is to inspire fourth- and esteem and helping them to succeed in and community service last year: fifth-year elementary school students the work place, AVAPE hopes to enhance NN Top Ten Charity Star for the to understand city functions, the the role of these young people in society. Private (Foreign) Sector principles of sustainable development Read more (Qingdao) and what it means to be a good citizen. C NN Excellent Company for Social Ayrton Senna Institute Responsibility Practices (State Giving young learners access to technology In 2010, the Alcatel-Lucent Foundation GRACE Association – G.I.R.O Project Owned Assets Supervision and Last October, Alcatel-Lucent carried initiated the Connected School project As a member of GRACE (Reflection Administration Commission) out a computer donation program for with the Ayrton Senna Institute in Brazil. and Support to Corporate Citizenship NN Shanghai CSR Promotion Award. a migrant school in Shanghai and three This program promotes social inclusion Group), Alcatel-Lucent participated in the village schools in Guizhou and Jiangxi, by education through technology. At the fifth edition of GIRO (Grace, Intervene, distributing 75 refurbished computers technology centers, youngsters and adults Retrieving, Organizing), the largest The company also received an take classes to learn how to use a computer corporate volunteer action in Portugal. Excellent Golden Bee CSR Report and the Internet. Every activity promoted On October 21, hundreds of volunteers 2011 award, its first-ever honor for by the Center allows the development from the private sector, charities and its Corporate Responsibility report, of essential capabilities required by social institutions gathered for one at the Fourth International the market. In 2011, the program was day to support various causes. Alcatel- Symposium on China’s Corporate extended to nine schools in the city of Lucent volunteers participated in an Social Responsibility Reports in São Caetano do Sul, Brazil and involved environmental activity: collecting trash Beijing in December. 86 teachers and some 470 students. along the cliffs of Cascais-Guincho.

C Read more

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SOCIETY > 1.0 our approach to digital inclusion r 2.0 pu suing social innovation 3.0 How we give

3.1i br ngING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAM 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.5.4 Spain 3.5.5 Indonesia 3.5.7 India 3.5.8 Cambodia School of Digital Literacy for underserved Helping Indonesian youth Club Empower continues Providing technology skills to youth in Spain (Fundación Adsis) access to higher education its winning streak students in Prey Thom In Barcelona, young adults from In August 2011, Alcatel-Lucent Club Empower spearheads Corporate Without access to computers, students underserved communities get help Indonesia launched a scholarship Responsibility programs within Alcatel- at Prey Thom Lower Secondary School defining their needs related to program to support young people’s Lucent India. Its initiatives stand out as in Prey Veng province have, up to employability; this includes developing pursuit of higher education in the field models for strengthening connections now, not been able to learn important their professional capabilities, of telecommunication, aligning with between the company and Indian society technology skills. In November 2011, expectations and learning potential. the Indonesian government’s goals at large, and last year included several more than 400 people attended the The program provides individualized of improving education, developing successful donation drives for books, opening ceremony for the new computer mentoring for these young adults who more capable human resources for stationery and clothes. Across different lab at Prey Thom made possible by have faced social exclusion based on the telecommunication sector and locations in India, a total of eight boxes Alcatel-Lucent. Parents, teachers, school school failure, low cultural or socio- enhancing access to education for with books, clothes, toys and stationery directors, government department economic status, risky behaviors, gender youths from underserved communities. were collected through this donation officials and youth beneficiaries were exclusion or migration. Similarly, in drive. Among the supported organizations excited about the opening of the lab Read more Madrid, the Digital Literacy Classroom C were the Prayatna School of Excellence; and the opportunities it presents. Many and Public Access to the Internet project Sarthak Prayas and Protsahan in the parents asked to see a computer for 3.5.6 Korea works to increase digital inclusion for National Capital Region; Aruwe in themselves so that they could tell people An extraordinary day at the office another set of underserved young adults. Chennai; Special World and Baliya in about it when they returned to their In August 2011, 10 children from the Bangalore; and BECC in Mumbai. Also villages. In addition to the computer lab, GyungSaengWon children’s shelter in in India last year, a “We Care” gala was students benefited from the donation Seoul – ranging in age from 11 to 18 – held at the Bangalore Manyata Campus, of bicycles, uniforms and scholarships. visited the Alcatel-Lucent Korea office attended by representatives from five to see what it’s like to work for a global different local NGOs. It turned out to company and visit the Alcatel-Lucent be an excellent fundraiser for these staff who volunteer as the children’s organizations, which seek to improve book club mentors. The shelter is home to the life skills and living conditions of more than 60 children whose parents are underprivileged children and women. unable to care for them. Following the trip Through employee contributions the total to Alcatel-Lucent, the students were off to funds raised was more than US $26,000. a bookstore – an excursion organized by the book club volunteers. In the past year, Read more M Digital literacy class in progress C staff hobby clubs have started to branch C Read more out into other volunteer activities with the GyungSaengWon children’s shelter. M Employees donate bicycles to students for an easier commute to school C Read more

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SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

3.5.9 Germany STAR CARE In 2011, Alcatel-Lucent’s IT department 3.7 Responding when disaster Raising funds for bringing The STAR CARE Truck that visits Alcatel- launched a PC refresh program; strikes kids back to school Lucent’s campus in Stuttgart offers wine, employees turned in some 3,500 old- The Alcatel-Lucent Foundation Monika Kugler and Nele Rubart on oil and traditional sweets to employees. but-still-functioning laptop and desktop instituted two disaster relief matching- Alcatel-Lucent’s Human Resource A donation of 5,000 Euros – the money computers, which IT arranged to be gift programs in the wake of natural team in Stuttgart conceived of and for goods bought by the employees – donated to various charities around catastrophes in 2011. In each case, organized a book sale last year to was made to the STAR CARE team for a the world. Country teams also donated the Foundation matched individual raise money for Off Road Kids, which new baby mobile intensive care unit. school items, clothes, food and other donations from employees, bringing works to reintegrate into society and necessary items to NGOs and disaster the total funds donated to US$190,060. education children and young adults Karlshöhe Ludwigsburg relief measures throughout the year. A specialized third party administered living on the streets in Germany. In 2011, Karlshöhe Ludwigsburg, the programs, making it easy for an institution for handicapped and employees worldwide to donate to addicted people, was invited to the charitable organizations designated by company’s Stuttgart campus, where the Foundation, and for the Foundation to it raised funds through the sale of Donation campaigns in Brazil measure the efficiency of the program. handmade artwork, wooden toys and honey – a total of 2,500 Euros. 3.8 Corporate charitable During the Christmas campaign in contributions Santa Catarina, various gifts were Christmas wishes Alcatel-Lucent’s Global Charitable donated to Institution Florianópolis Alcatel-Lucent employees in Stuttgart Contributions Policy empowers the Catarinense. fulfilled 75 Christmas wishes for children company’s regional offices and business from local social institutions. As with units to donate funds to worthwhile the year before, there was enormous When Santa Catarina was hit with causes, often in alliance with customers interest in the program; in less than heavy rain in June, a campaign was and suppliers. The policy requires close an hour all wishes had found an carried out to collect clothes for the tracking and auditing of all donations employee eager to be a wish grantor. children in this region. by the Alcatel-Lucent Foundation.

3.6 Giving in kind Additionally, every year clothes, Since December 2010, all requests for In addition to direct financial food items, toys and school supplies corporate contributions have been contributions and volunteerism, are donated by employees to processed through the EZ Visit Tool, a Alcatel-Lucent provides in-kind various charitable organizations. computerized platform used to manage donations to NGOs under the requested submissions, required guidelines of Alcatel-Lucent’s Global documentation and legal approval. Charitable Contributions policy. In 2011 Alcatel-Lucent donated more than USD2.6 million through various projects around the world and employee

137 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SOCIETY > 1.0 our approach to digital inclusion 2.0 pursuing social innovation 3.0 How we give

3.1 bringING digital literacy to ALL 3.2 the alcatel-lucent foundation: governance 3.3 the foundation grassroots program 3.4 GLOBAL SIGNATURE PROGRAm 3.5 Employee volunteering 3.6 Giving in kind 3.7 Responding when disaster strikes 3.8 Corporate charitable contributions

payroll giving. These addressed issues such as senior citizens’ health, sporting activities for community development, education, housing, child abuse, women France – TalentEgal Spain – Asociación de familias Russia – Children’s Hearts and issues, autism, technology scholarship, y amigos de la Fundación Podari Zhizn and employment readiness and García Gil Afandem assistance to people with disabilities. Fifty percent of people in France are touched by the issue of disability, Alcatel-Lucent ZAO (Russia) used either dealing with it themselves or The Association of Workers and 2011 budgets for customer New 2011 ACHIEVEMENTS through a family member. The Pensioners of Standard Electrica Year’s gifts to make a charitable Relief assistance after floods Alcatel-Lucent Foundation is working (ADFYPSE) aims to create and donation to two funds in Russia: In February 2011, the Alcatel- toward seeing that individuals with promote centers and institutions of Children’s Hearts, which battles Lucent Foundation launched a disabilities are welcomed into pedagogical, occupational, congenital heart disease; and Podari matching-gift program to provide mainstream society and receive residential, educational and labor Zhizn, which focuses on oncology relief assistance to residents of administrative recognition. character that work toward the and hematological diseases. Australia and Brazil after TalentEgal helps students during recovery and rehabilitation of those devastating floods, and to New their graduate studies, providing with handicaps – not only mental Zealanders to help them cope with their first job experience through but also physical and sensory. the February 2011 earthquake that internships and apprenticeships that rocked Christchurch. often feed into the company’s ADFYPSE pays special attention to recruitment activities. The program, adolescents and youth, with criteria based on training and participation, A helping hand for East Africa which runs in 15 centers in France, and directs the totality of its income Alcatel-Lucent acted on the helps individuals overcome cultural to the accomplishment of its goals. desperate need for food aid in censorship and increase their To celebrate the 30th anniversary Kenya, where more than three self-confidence to pursue careers in of their collaboration, Alcatel-Lucent million people are suffering the engineering and business studies, provided economic support, consequences of the worst drought and offers a bridge between high materials and ICT infrastructure for in 60 years – a situation that will school, higher education and the development of a new ADFYPSE M We like to work on projects together continue if the rains fail again in the professional integration. As well, the center in Arroyo Culebro. next season. The Alcatel-Lucent program increases learners’ matching-gift program responded knowledge and employability by to an emergency appeal of the expanding their skill sets. Kenyans for Kenya Initiative launched by the Kenya Red Cross Society (KRCS), raising US$173,864. The Alcatel-Lucent donation will greatly help the KRCS combat the severe humanitarian crisis devastating East Africa.

M Gaining hands on training 138 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

What if a company saw its supply chain as part of its Corporate Responsibility? supply chain

Alcatel-Lucent is fully committed to promoting Corporate Responsibility throughout its supply chain and, in particular, among suppliers – the third parties who provide us with components, products, software, support or services.

139 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASsessing SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS L 6.0 COL ABORATIVE INITIATIVES

1.0 our 2012 priorities ALCATEL-LUCENT HAS ESTABLISHED A COMPREHENSIVE APPROACH OUR 1 TO RESPONSIBLE PURCHASING THAT STANDS ON THREE PILLARS: COMPREHENSIVE Deploy our new supplier development tools and work SUPPLY CHAIN collaboratively with the industry to drive a satisfactory level of APPROACH corporate responsibility performance across the supplier base. This will enable us to reach our target of 80% of assessed suppliers earning a satisfactory level. OUR COMMITMENT 2 Collaborate and do business only Increase our use of CR requirements with partners, including suppliers, as part of our supplier selection REQUIRE ASSESS IMPROVE contractors and sub-contractors, criteria to incorporate socially Set clear CR require- Track suppliers’ CR Collaborate with who share and support our values. responsible companies into our ments for suppliers, performance through suppliers whose performance is not supply chain. and integrate them into CR ratings and on-site contractual purchasing audits. at the expected level to requirements and improve their standing. 3 product or service For more information, Develop programs to integrate new specications. see p. 146 section 4 For more information, see p. 149 section 5 requirements from regulators and other stakeholders (such as conflict For more information, see p. 143 section 3 minerals and supplier diversity).

R ead more about our CR in Purchasing program

140 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

2.1 Collaboration and communication 2.2 Enhancing our supplier SCORECARD 2.3 Engaging with suppLIERS

2.2 Enhancing our supplier Scorecards are shared with suppliers 2.0 scorecard during their business reviews. The Highlight Alcatel-Lucent revised its supplier new format allows for simple and 2011 Global Supplier Convention MANAGING OUR scorecard in 2011 to ensure we effective communication of subjective clearly communicate the company’s comments and quantitative delivery SUPPLY CHAIN More than 140 suppliers requirements and priorities where results that support the scoring, representing nearly 90% of product suppliers are concerned. as well as anonymous supplier- spend attended Alcatel-Lucent's to-supplier comparisons and 2011 Global Supplier Convention M 2.1 Collaboration and The scorecard covers eight areas: performance trending reports. The theme of the 2011 event was “Engage” – referring to NN communication On-time delivery our determination to establish We approach supply chain management NN Service 2.3 Engaging with suppliers Our goals for the meeting were to help better, deeper relationships with with a partnering mindset, endeavoring NN suppliers gain a richer understanding of our suppliers and to strengthen Flexibility 2.3.1 The 2011 supplier convention our supplier ecosystem by to work with suppliers to support their NN Costs In mid-April, Alcatel-Lucent held its 2011 our market, our customers’ expectations collaborating further with improvements and share best practices. NN Technical innovation Global Supplier Convention in Shanghai, and our strategy. The agenda included suppliers in ways that foster innovation and increase the NN Maintaining an open dialogue is essential Quality China, gathering more than 140 suppliers sessions on the latest developments and benefits to our customers, to this so we regularly engage suppliers NN Overall business strength who together represent almost 90% of trends and innovations in the Information suppliers and our company. in business reviews to discuss and NN Corporate Responsibility performance the company’s production spend. These and Communication Technology (ICT) manage their ongoing performance suppliers are an important source of sector, the market positioning of our across a broad set of criteria. These scorecards are developed through intellectual property, contributing to portfolio, and our strategic alliances. periodic supplier performance reviews the product differentiation that helps The second day of the convention involving members of our purchasing position us competitively in our market. targeted Chinese suppliers and was community (e.g., commodity managers, dedicated to Corporate Responsibility. technical experts, supplier quality The convention was a major step forward for more information, see p. 150 managers) and other relevant evaluators in this respect, representing the first A (our procurement office, business part of an extensive program that helps divisions and end users, for instance). bring our organizations together. CR scores are based on EcoVadis ratings, complemented in some instances by other parameters such as supplier diversity performance. These factors represent 10 to 20% of the total weighting (depending on the purchasing activity).

M Among the highlights were two presentations: one by an Alcatel-Lucent customer and the other by Alcatel-Lucent CEO Ben Verwaayen. Other senior managers from Alcatel- Lucent were also in attendance, participating in an open discussion that allowed suppliers to raise questions and concerns directly.

141 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

2.1 Collaboration and communication 2.2 Enhancing our supplier SCORECARD 2.3 Engaging with suppLIERS

2.3.2 Strategic alliances flexibility, responsiveness and inventory management, among other things. These alliances will help us transform our KEY FIGURE business, and we are already seeing 54 innovation projects initiated results. In 2011, this approach generated with our suppliers in 2011 more than 50 innovation projects.

In 2011, Alcatel-Lucent identified We also established closer relationships strategic suppliers within its supply chain with key suppliers who, in total, account and started developing new ways of for about 75% of the company’s spend on BUSINESS PARTNERSHIPS WITH FREESCALE working with them, evolving traditional components for production, and set up transactional relationships into trusting Corporate General Purchase Agreements and more collaborative ones. The goal of to strengthen our relationship with Alcatel-Lucent teamed with Freescale, the global this strategic supplier business alliance most of them. Over the course of the leader in embedded processing solutions, on two program is to facilitate the development year, we held four formal reviews projects for the baseband and digital radio and sharing of intellectual property and with each of these 140 key suppliers processing solutions that support the Alcatel- design capabilities for mutual benefit, and of components for production to Lucent lightRadio™ program. The selection of to create an environment that encourages discuss the relationship, their scorecard Freescale was driven by the following criteria: innovation, corporate responsibility performance and business opportunities. technical needs of Alcatel-Lucent product groups, and sustainability – while both we each candidate’s business and quality levels, A for more information about the new and our suppliers improve our quality, scorecard, see p. 141 technical fit with our product roadmaps, and level of confidence in the supplier and its management.

Setting up the alliance with Freescale also required establishing connections between companies at all levels through day-to-day follow up and regular meetings, including a monthly steering committee with executives of each side.

Through this alliance, both companies benefited from access to and influence over each other’s technologies, product roadmaps and communication between company structures and executive teams. It also opened the door to additional cooperative projects, stimulating innovation within both organizations.

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SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

3.1 Adherence to the EICC Code of ConduCT 3.2 Adherence to international stanDARDS 3.3 Products and services that support CR commitmenTS 3.4 Strong environmental performanCE 3.5 Product traceability and conFLict minERALS 3.6 Supplier diversity

3.1 Adherence to the EICC Code of 3.3 Products and services that and performing an EcoVadis CR rating C read more about the EICC 3.0 Conduct support CR commitments as a supplier management element, Code of Conduct Early in 2011, Alcatel-Lucent introduced Since 2009, Alcatel-Lucent has worked rather than imposing product or OUR new standard requirements for to improve the CR performance of the process specific requirements. REQUIREMENTS companies in its supply chain, namely products and services it purchases. We EICC (Electronic Industry Citizenship focused originally on the environmental The potential approaches are clearly FOR SUPPLIERS Coalition) Code of Conduct Revision 3, performance of a select subset, diverse and highlight both the breadth which addresses key CR issues, and addressing energy consumption, of our suppliers and the need for us to AND SUB- the United Nations Global Compact Ten adopting more environment-friendly involve additional players such as internal Principles. Although the revised code paper use practices, minimizing the customers/users. Such involvement CONTRACTORS is more explicit and prescriptive than use of chemicals and stepping up the allows us, for example, to better integrate its predecessor, these changes were recycling of plastics, aluminum and total cost of ownership considerations welcomed by suppliers, who willingly other materials. We expanded gradually in the purchasing processes. agreed to commit as a step toward in 2010-11 to other CR considerations 2011 HIGHLIGHT industry-wide standards. Industry (social impact, health, safety and We will continue to enrich the CR By the end of 2011, Alcatel-Lucent standards are easier to manage and ethics) and to additional products and elements of our purchasing requirements had specific Corporate bring more overall value than multiple services for our own use and for use in as they evolve, and include under Responsibility requirements for 59% company-specific requirements customer projects. These are the areas such requirements a greater variety of its procurement sectors for the from a variety of customers. where tailored requirements can be the of products and services in keeping purchase of own-use services/ most fruitful and easy to implement. with our own commitments and products. We didn’t reach our initial All Alcatel-Lucent suppliers who rising stakeholder expectations. target of 70% because some sign a business agreement with To achieve improvements Alcatel-Lucent requirements had been finalized the company are required through first identifies the most significant CR 3.4 Strong environmental with internal customers and third contractual templates to commit to elements for each product or service and performance parties acting on our behalf. the code and cascade its requirements then determines the most appropriate We are committed to seeing that throughout their own supply chain. actions according to the product/service our suppliers and contractors take and business context. These may include: the necessary steps to protect the 3.2 Adherence to international NN Adding one or several key CR environment throughout the production 2012 TARGET standards elements as purchasing requirements of the goods and materials they deliver Alcatel-Lucent encourages suppliers to to product/service specifications; to us. We systematically monitor critical 1 meet certified international standards NN Integrating specific requirements into metrics and indicators of environmental In the first half of 2012 our goal such as ISO 14001 for environment, the supplier selection process – instead impact for our manufacturing is to include specific Corporate OHSAS 18001 for health and safety, of the product/service specification – subcontractors, measuring energy Responsibility requirements in 70% and SA8000 for workers’ rights. in instances where key issues are more efficiency, reduced materials usage, of procurement sectors for the We track supplier compliance with a matter of company behavior than efficient distribution and transport purchase of own-use services/ these standards as part of our risk of the purchased product/service; of materials, and green packaging. products. analysis and supplier assessment NN Modifying our own internal processes; We expect major suppliers to report processes, and strongly encourage NN Maintaining a “global” approach by on emissions generated in support of suppliers to implement or enhance having contractual requirements to Alcatel-Lucent activities, and incorporate their CR approaches based on them. follow our supplier code of conduct 143 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

3.1 Adherence to the EICC Code of ConduCT 3.2 Adherence to international stanDARDS 3.3 Products and services that support CR commitmenTS 3.4 Strong environmental performanCE 3.5 Product traceability and conFLict minERALS 3.6 Supplier diversity

their information into calculations 2 Publishing emissions figures related C read more about EIO diligence. Alcatel-Lucent expanded its of our own Scope 3 emissions. to our shipment of products between activities by instituting a conflict minerals and among our own facilities and to A for more information on Scope 3 policy, participating in a multi-stakeholder disclosure, see pages 16, 18, 89, 91 In 2012 we started to implement an our customers. We recognize emissions workshop organized by the OECD, and enterprise carbon accounting tool to from our product logistics chain are 3.5 Product traceability and beginning to roll out a conflict minerals assist in our collection, analysis and significant, given that we transport conFLict minerals due diligence program that leverages GeSI reporting of environmental indicators, communications equipment around the Components and parts containing and EICC tools. We fall within the scope both internally and for those of our world. We are constantly seeking ways minerals such as tin, tantalum, tungsten of Section 1502 of the Dodd-Frank Act key suppliers. The benefit of this tool to improve the efficiency of our logistics and gold are commonly used in the and will comply with its requirements is the ability to better understand our operations, balancing cost with customer manufacturing of electronics and when they become effective. supply chain emissions, which will help need. One critical area in which we have telecommunications equipment. The Legal requirements such as the EU RoHS us set more concrete key performance implemented a shift is our manufacturing exploitation and trade of such minerals Directive and its recast, the REACH indicators (KPIs) and metrics around strategy, becoming more geographically originating from the eastern region of the Regulation, and the Dodd-Frank Act’s these emissions and understand which decentralized. By manufacturing products Democratic Republic of the Congo and Section 1502 are intensifying the demand suppliers are the most efficient. closer to our customers, we have the neighboring countries is in some instances for material disclosure. These and other opportunity to use more efficient and helping finance or benefit armed groups issues, such as take-back and waste laws, Environmental criteria are critical less carbon-intensive ground transport. (either directly or indirectly), with serious have important implications for Alcatel- elements in our selection and social and environmental consequences. Lucent and its suppliers. As part of our management of suppliers. Recent In 2011 the Environmental Investment These are called conflict minerals. commitment to integrate sustainability supply chain initiatives have helped Organization listed Alcatel-Lucent in its deeper into our supply chain, we include us improve our own efficiency Global 800 Report as having the fourth In the past few years, the ICT industry sustainability criteria in our contract and that of our suppliers, while most transparent and comprehensive has demonstrated leadership on this issue requirements and implement specific data reducing our collective impact on Scope 3 GHG reporting program in the through GeSI (Global e-Sustainability collection processes when necessary. the environment. These include: world. Contributing to this ranking is Initiative) and EICC by developing the fact that Alcatel-Lucent reports the a strategy and powerful tools to 1 Annually collecting and publishing environmental impact of its supply chain improve the traceability of minerals the carbon emissions of our contract in this annual Corporate Responsibility used in the industry’s supply chain manufacturers (who represent a report as well as in its Scope 3 disclosure. and ensure they do not originate from major portion of our supply chain We annually publish emissions figures conflict areas. Alcatel-Lucent began spending). We publish the location of related to business travel, major leased addressing the issue several years ago, each of our manufacturing facilities. assets, contract manufacturing, paper starting by investigating the sourcing C read more about GeSI This level of transparency signals use, product take-back and environmental of conflict-free tantalum capacitors. to our contract manufacturers that remediation. As our information systems 2011 saw increased focus on conflict C read more about EICC we take environmental matters – and those of our business partners – minerals, illustrated by the publication read more about the OECD guidelines seriously, and encourages transparency improve and mature, we will continue to of the U.S. Dodd-Frank Act, Section C and efficiency on their part. add and publish indicators. In 2012 we 1502 and the Organisation for Economic C read more about Purchasing Products will publish at least 10 Scope 3 indicators, Co-operation and Development (OECD) & Environment with a goal of reporting on all 15 Scope guidelines on conflict minerals due 3 emissions categories by 2013.

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SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASsessing SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS L 6.0 COL ABORATIVE INITIATIVES

3.1herence Ad to the EICC Code of CoNDUCT 3.2 Adherence to international STANDARDS 3.3 Products and services that support CR COMMITMENTS 3.4 Strong environmental PERFORMANCE 3.5 Product traceability and conFLict MINERALS 3.6 Supplier DIVERSITY

3.6 Supplier diversity opportunities through events and and the company’s business units. Women Business Council Southwest, and The Alcatel-Lucent Supplier Diversity conferences. We currently have some Moreover, we recognize our strategic the Dallas/Ft. Worth Minority Council. program is largely a North American 450 approved diversity suppliers in customers in the region want a more C Read more about WEConnect Canada based program designed to broaden our database, many of which we call diverse supply chain and have high Women’s Council business relationships with diverse on consistently (others are used only expectations – and requirements – for suppliers. It also drives inclusion once for a specific project or product). diversity performance, and we work to C Read more about the Women Business throughout the supply chain, while continue meeting those expectations. Council Southwest maintaining the company’s firm Diversity is important both in its obligation to its customers to base own right and because 85% of our In 2011, as a testament to its impact Also in 2011, Alcatel-Lucent joined supplier selection on merit. North America region revenue has and the expertise of the company’s American Airlines, Energy Future hard requirements tied to diversity Supplier Diversity team, the Alcatel- Holdings and Oncor as a recipient of the The company’s diversity program inclusion. We are close to meeting Lucent supplier diversity program first-ever American Institute of Diversity responds to customer expectations and all of those numbers as required. We received numerous awards including: in Commerce (AIDC) Circle of Honor complies with U.S. legislation (Small report supplier diversity performance NN Top Corp Award from the Women Awards, the highest award bestowed Business Act, Public Law 95-507, Federal to more than 14 customers on a Business Enterprise National Council by the organization. The AIDC is a non-profit organization that recognizes Acquisition Regulations). It has been quarterly and annual basis. M Lynn Scott – head of Read more recognized as “best in class” by the C and rewards both profit and non-profit Supplier Diversity program at Alcatel-Lucent – and Marilyn North American telecom industry and Examples of engagements organizations for their achievements in NN Corporation of the Year from Stewart – awarded Volunteer our aim is to continue improving it. through the initiative include: the areas of performance, validation, of the Year – at the Women’s the Dallas/Ft. Worth Minority NN TelcoBuy, a minority-owned research and education in diversity and Business Council Award Gala. Supplier Development Council In 2010, 17% of our North American company that has taken over the inclusion. Being named to the Circle of Honor is indication that a company has region spend was with minority- and management responsibilities of the C Read more women-owned businesses (MWBE). Alcatel-Lucent Dallas Distribution succeeded in all three judging categories: In 2011 that figure rose to 17.6% (the Center (DDC). TelcoBuy manages NN Recognition for having one of the supplier diversity, workforce diversity average for diversity inclusion typically material shipments as part of a Top 50 Corporate Supplier Diversity and corporate social responsibility. runs around 10%). Part of the increase significant multi-year contract. Programs for Hispanic Suppliers C Read more about AIDC can be attributed to the fact that Alcatel- NN Goodman Networks, also a minority- from Olive Tree Publishing Lucent’s supplier diversity initiatives have owned company, to which we have NN Honorable Mention from the National expanded beyond just purchasing goods outsourced deployment engineering Veteran-Owned Business Association and services to include outsourcing some and some integration engineering for Best 10 Corporations in 2011 internal functions to diversity suppliers. services. Goodman Networks took Read more on the responsibilities of this group C Through this initiative, we actively and supervision of some 500 Alcatel- Several organizations specifically engage with regional and national Lucent employees. This is also a honored Lynn Scott, who led Alcatel- diversity councils in the U.S. and Canada, substantial multi-year contract. Lucent’s supplier diversity program over using the resources of these councils the past years, for her contributions to to locate diversity suppliers in specific Key to the success of this program this field. These included the Women’s areas and to participate in networking has been commitment, innovation Business Enterprise National Council, the and senior management involvement WEConnect Canada Women’s Council, the from procurement, sales, engineering 145 ABOUT Content Ceo C orporATe Cp om any Supply Goe v rnance Ethics E onvir nment our people Society GRI V erification Glossary THis ReporT Summary message Responsibility overview Cah iN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASsessing SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS L 6.0 COL ABORATIVE INITIATIVES

4.1 Supplier risk assessmentS 4.2 EcoVadis CR ratings approach 4.3 Executing CR assessmentS 4.4 CR audits

4.0 TOTAL NUMBER OF SUPPLIERS ASSESSED ON CR CR ASSESSMENT PROCESS ASSESSING 1000 945 CR RISK CR RATING IMPROVEMENT FOLLOWUP SUPPLIER CR ASSESSMENT PLAN 885 QUESTIONNAIRE BASED ON DOCUMENTATION PERFORMANCE ACTIVITY 800 & LOCATION 676

lcatel-Lucent has 600 applied a fully 401 A integrated assessment 400 approach to consistently ON SITE AUDIT IMPROVEMENT FOLLOWUP evaluate suppliers’ ethical, 200 PLAN social and environmental practices. This approach consists of supplier 2008 2009 2010 2011 assessments that include risk analysis, CR management systems ratings and on- NUMBER OF SUPPLIERS ASSESSED NUMBER OF QUALITY AUDITS (INCLUDING CR) site CR evaluations. 300 300

278 4.1 Supplier risk assessments We perform risk assessments to evaluate 200 200 the business risks of new suppliers and annually reassess the risk level of our 188 major suppliers. These include criteria that measure the level of risk based on 124 100 100 the supplier’s type of activity, location 100 and other factors. If the overall risk 70 level is excessive, either the supplier 57 58 will be rejected or actions such as a 46 formal CR rating process will be taken 0 0 to ensure the supplier’s practices 2008 2009 2010 2011 2008 2009 2010 2011 meet Alcatel-Lucent requirements.

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SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

4.1 Supplier risk assessmenTS 4.2 EcoVadis CR ratings approach 4.3 Executing CR assessmenTS 4.4 CR audits

4.2 EcoVadis CR ratings approach Criteria taken into account in the 4.3 Executing CR assessments EcoVadis assessment In the future, Alcatel-Lucent will continue SUPPLIER’S CR ASSESSMENT: to monitor and communicate about its key SPEND COVERAGE EVOLUTION and preferred suppliers assessments and 60% environment its assessed suppliers spend and will take actions to continuously improve the spend 40% SPEND Operations coverage. However, because our suppliers’ SATISFACTORY

Energy Consumption & GHG (CO2) portfolios need to frequently adapt to 20% SPEND NOT ASSESSED Alcatel-Lucent CR assessments are Water changes in Alcatel-Lucent’s business Biodiversity SPEND performed by EcoVadis, a company Local Pollutions and strategic alliances that are difficult 0% UNSATISFACTORY that specializes in sustainable supply Materials, Chemicals & Waste to foresee, it would be inappropriate to 2009 2010 2011 management solutions. The EcoVadis set quantified targets on these areas. Product rating system focuses on suppliers’ Use social, ethical, environmental and health End of Life 2011 HIGHLIGHTS and safety practices, and on their Customer Health & Safety Sustainable Consumption In 2011 the percentage of spend management of their own supply chains. assessed on CR was 65%, versus 71% in 2010. However, a simple Each supplier’s EcoVadis rating is Labour practices & side-by-side comparison with determined by a team of CR experts human rights previous years is misleading who combine supplier questionnaire C read more about SGS because the reporting perimeter responses and supporting documentation Health & Safety was expanded and the data with independently obtained, public, 4.4 CR audits Working Conditions collection and reporting tools third-party information and risk factors Labor Relations Alcatel-Lucent conducts quality audits changed. mapped according to industrial sector Career Management & Training that include CR criteria as well as more and country. The EcoVadis rating Child & Forced Labor comprehensive CR-dedicated audits. Non-discrimination system is based on internationally Fundamental Human Rights The percentage of key* and recognized standards such as GRI preferred** suppliers assessed On-site CR audits are typically conducted G3 and the UN Global Compact. remained stable at 97%. for suppliers having significant CR fair business practices weaknesses identified during the EcoVadis By providing expert, third-party rating process and presenting a high CR risk * Key suppliers are defined as major, strategic evaluations, EcoVadis CR ratings give suppliers. profile because of their activity, location or Alcatel-Lucent a clear, external, objective Corruption & Bribery ** Preferred suppliers are those sources for a given other criteria. Quality audits are a supplier point of reference. Because assessment Anti-competitive Practices purchasing family we consider first for new selection element and can be performed Responsible Marketing projects. results can be shared with all EcoVadis whenever required from an operational platform member companies on request, standpoint. They are performed by the suppliers can decide to make a single CR suppliers Alcatel-Lucent Supplier Quality team. assessment available to many customers and thereby capitalize on their CR rating. Environment C read more about EcoVadis Labor Practices & Human Rights

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SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

4.1 Supplier risk assessmenTS 4.2 EcoVadis CR ratings approach 4.3 Executing CR assessmenTS 4.4 CR audits

Since early 2011, Alcatel-Lucent supplier CR- The CR purchasing team is responsible for In the audits conducted in 2011, the NN Lack of policies and/or communication to dedicated audits have been performed by SGS, systematic follow-up of all audit findings following most severe findings were: employees on compensation and benefits. the world’s leading inspection, verification, a process described in the Purchasing quality NN Lack of GHG emissions inventories testing and certification company, qualified to system, working directly with suppliers to achieve and reduction plans; We see a need for more focus on carry out social audits for major international acceptable results. The CR team is supported NN Lack of systematic and extensive implementing management systems that initiatives such as SA 8000. The audit referential by the Alcatel-Lucent buyers in charge of the health and safety risk assessments; cover social and environmental aspects. We is based on the EcoVadis CR ratings structure given suppliers and by internal experts, such NN Insufficient numbers of employees are committed to working with suppliers to ensure consistency with the EcoVadis CR as those with compliance or environmental trained in first aid; on these and other identified issues. ratings. In 2011, supplier CR audits were health and safety expertise, who may be NN Violation of local laws and conducted in Latin America, Asia (including asked to comment and make suggestions on regulations on working hours; China and India) and Eastern Europe. corrective actions proposed by the supplier.

MOST TYPICAL CR/EHS FINDINGS DURING QUALITY AUDITS

60%

50%

40%

30%

20%

10%

0%

AVAILABILITY/ SOCIAL POLICY WASTE HEALTH AND EHS TRAINING OF HEALTH ETHICAL EMERGENCY COMPLIANCE INFORMATION CHECK OF INFORMATION INVOLVEMENT JOBSPECIFIC ACCIDENTS ENVIRON HAZARDOUS USE OF DOES NOT MANAGEMENT SAFETY LEGISLATION SUPERVISORS AND SAFETY TRADING PLAN WITH EHS ON COMPLIANCE ON ENVIRON OF EHS TRAINING RECORDING MENTAL MATERIALS PERSONAL COVER ALL PROCEDURES/ TRACKING ON SOCIAL POLICY INFORMATION MANAGEMENT EXTERNAL DISCIPLINARY WITH SOCIAL MENTAL MANAGEMENT AND PERFOR MANAGEMENT PROTECTIVE THE EICC CODE INSTRUCTIONS PROCESS RULES COMMUNICA REQUIRE MEASURES RULES POLICY IN EHS INVESTIGATION MANCE EQUIPMENT OF CONDUCT TION MENTS TRACKING ELEMENTS

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SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

5.1 Supplier improvement pROGRAM 5.2 Developing innovative TOOLS 5.3 Spreading the sustainability MESSAGE 5.4 Supporting suppLIERS 5.5 Supplier stories

5.1 Supplier improvement program improvement plan module. The module 5.0 2014 TARGET Alcatel-Lucent requires suppliers with went live in December 2011 and will SUPPLIER unsatisfactory EcoVadis CR ratings to be available to all EcoVadis platform 1 draft and implement remedial plans that customers and their suppliers in 2012. IMPROVEMENT We will maintain our commitment address identified weaknesses. To support to have 80% of our suppliers them, we provide recommendations and PLANS earning a satisfactory rating, but determine if the overall improvement are extending the timeline to 2014 plan is sufficient. The CR Purchasing (versus 2012) to ensure completion team is responsible for systematic in a realistic timeframe, both for follow-up of the improvement plans suppliers and Alcatel-Lucent. following a process described in 2011 HIGHLIGHT the Purchasing quality system. “Since its We achieved 60% I against our participation as target of 63% suppliers earning a Alcatel-Lucent has decided to go 5.2 Developing innovative tools design partner in satisfactory rating on CR. This beyond a simple “compliance” approach To meet our needs, EcoVadis developed the launch of narrow miss of our target was to a more ambitious one aimed at a corrective actions module in 2011 to EcoVadis in 2007, because more suppliers than we strengthening our suppliers’ CR help customers and suppliers exchange Alcatel-Lucent has had anticipated had ratings that did management systems. This is the most information on steps being taken to always been one of not meet our expectations so we efficient way to develop sustainable address weaknesses identified in their our most innovative had to request improvement CR performance as it addresses root assessment scorecards. We worked “Alcatel-Lucent now has a customers, always plans. The percentage of suppliers causes for non-compliance and sets with EcoVadis to define and develop single web tool that gathers pushing for with a CR rating of 4/10 or below the ground for further improvement. In the tool and were one of its first users. improvements that increased from 35% at end 2008 suppliers’ CR ratings this respect, the “require” and “assess” could be leveraged (when the target was taken) to 47% scorecards, as well as an pillars of the Alcatel-Lucent approach Furthering our position as a pioneer in by the global ICT by end 2011, while at the same interface to communicate consistently support the “improve” one. supplier improvement plan management, supply chain. Being time their total number grew from with suppliers about we developed a CR toolkit to support the responsive to 400 to more than 900 suppliers. improvement actions. The Specifically: efforts of suppliers required to produce Alcatel-Lucent’s This increase in the number of small NN The EICC Code of Conduct improvement plans after receiving an tool also provides useful suggestions and suppliers assessed, who largely highlights the key role of unsatisfactory CR rating from EcoVadis. information for suppliers experience enabled were unable to meet all of the management systems in CR; The toolkit contains explanations of our about how to define these us to develop requirements of our CR assessment, NN The EcoVadis methodology is based CR expectations for suppliers and the actions. It has become quite innovative services meant we needed on average more on assessing these management EcoVadis assessment methodology, as easy to exchange with and share them time than expected to drive them to systems and identifying their well as suggestions about how to correct suppliers on sustainability with all our web a satisfactory level. weaknesses; short- and longer-term weaknesses identified by EcoVadis, topics.” platform users.” improvements are triggered by the and a list of helpful resources. We Consequently, we have developed correction of these weaknesses. discussed with EcoVadis the possibility Deann Hargis, Pierre-François additional tools to support supplier of further developing the toolkit jointly, Responsible Purchasing Thaler, improvement efforts. Director at Alcatel-Lucent Ecovadis and agreed to make it available on President the EcoVadis web platform along with the supplier CR rating scorecard and 149 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

5.1 Supplier improvement pROGRAM 5.2 Developing innovative TOOLS 5.3 Spreading the sustainability MESSAGE 5.4 Supporting suppLIERS 5.5 Supplier stories

5.3 Spreading the sustainability approach and tools to assess supplier message performance. The message was clear: At the Alcatel-Lucent Global Supplier Alcatel-Lucent expects to work only with Convention in April 2011, EcoVadis those suppliers who are fully committed OUR SUPPLIERS’ VOICES: described its CR assessment methodology to being or becoming fully satisfactory on “The workshop helped me and criteria to Chinese suppliers all aspects of Corporate Responsibility. whose CR systems have been or will more profoundly master the be assessed. Some 50 attendees Two suppliers presented Corporate content of Corporate from 20 supplier organizations joined Responsibility programs tailored to their Responsibility.” Alcatel-Lucent commodity managers specific activities and described the for the day-long workshop with a positive effects as concrete examples “The Alcatel-Lucent closing by Jean-David Calvet, Chief of improvement outcomes. These workshop did help our “This workshop M IPE President Ma Jun at the illustrates well Procurement Officer at Alcatel-Lucent. respresented good examples of a win- Supplier Convention CR workshop. further understanding of CR win relationship with Alcatel-Lucent and Alcatel-Lucent’s Alcatel-Lucent’s on CR, resulting in the establishment expectations as well, approach to CR of a management system that ensures especially the EcoVadis CR in its supply improved CR performance. NGO gives presentation on the chain, which is to environmental impact of evaluation methodology.” industrial activities express The April workshop marked a step requirements toward Alcatel-Lucent’s commitment Four successive sessions were held to based on analyze and answer typical company to have, by the end of 2012, 80% of China’s non-governmental IPE objective active suppliers assessed as satisfactory participated in the CR workshop at weaknesses, each covering a single elements, and to on Corporate Responsibility. the 2011 Alcatel-Lucent supplier CR area (social, health and safety, convention. IPE Director Ma Jun environment, ethics and responsible support its 5.4 Supporting suppliers gave a presentation on the impacts purchasing). Each session began with suppliers’ efforts M Jean-David Calvet, Chief Procurement Alcatel-Lucent held a second Corporate of human and industrial activities in a brief introduction by Alcatel-Lucent by providing Officer at Alcatel-Lucent, during Supplier Responsibility workshop in Shanghai in terms of water pollution and related experts, giving attendees the chance information, Convention CR workshop, China, 2011. November 2011. This session targeted health issues in China. IPE maintains to share and exchange concerns with expertise and The session highlighted the need for Chinese suppliers who had been assessed a database on companies’ air peers and receive knowledgeable opportunities for open and in-depth cooperation between by EcoVadis and needed to take steps to emissions, water discharge and solid recommendations. All the material suppliers to learn Alcatel-Lucent and its suppliers, and meet Alcatel-Lucent expectations. The waste pollution as established by prepared for and elaborated during from each other.” reinforced the strategic importance of CR day-long workshop drew 20 participants authorities. IPE’s data has been the workshop was distributed to in procurement sourcing and relationship from 15 different organizations. It integrated into our CR assessment the suppliers, who were asked to Pierre-Louis management. With participation from the focused on developing their capabilities for suppliers operating in China. send updated improvement plans Frouein, Institute of Public & Environmental Affairs related to sustainable and responsible based on the ideas exchanged. CR PROGRAM MANAGER, (IPE) – a Chinese non-governmental business practices and identifying and Purchasing organization – and EcoVadis, the sharing concrete suggestions to help ALCATEL-LUCENT workshop explored issues connected suppliers address weaknesses identified to sustainability and presented our in their assessments, which had been Read more about IPE conducted over the course of the year. 150 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

SUpply chain > 1.0 OUR COMPREHENSIVE SUPPLY CHAIN APPROACH 2.0 MANAGING OUR SUPPLY CHAIN 3.0 OUR REQUIREMENTS FOR SUPPLIERS AND SUB-CONTRACTORS 4.0 ASSESSING SUPPLIER CR PERFORMANCE 5.0 SUPPLIER IMPROVEMENT PLANS 6.0 COLLABORATIVE INITIATIVES

6.1 Collaborating with industry 6.2 Collaborating with small and medium-sized enterpRISES 6.3 Collaborating with NGOs

Lucent in the CR direction, enabling of Industry acknowledged Alcatel- Corporate Responsibility them to be ready for bids as other 6.0 Lucent for this action. The few claims workshop in Shanghai in major customers now require a clear received from suppliers related November 2011 Corporate Responsibility approach, not COLLABORATIVE mostly to administrative problems 20 participants from 15 different “green-washing” – and highlighted the INITIATIVES and not to principles of the charter. organizations. fact that the quality of exchanges on Corporate Responsibility enabled them 6.3 Collaborating with NGOs 73% of suppliers ranked this to move forward more efficiently. 6.1 Collaborating with industry Alcatel-Lucent began working with China’s M workshop as very good, and the Peter Xu, Asia-Pacific Alcatel-Lucent participated in several IPE on supplier environmental practices Purchasing Vice President, remaining 27% as good. A Chinese electronic equipment supplier during the CR workshop in CR-oriented initiatives in 2011. The management in 2010. That work led to The supplier declared that cooperating Shanghai, November 2011. company is part of the GeSI Supply Chain the integration of IPE data within the with Alcatel-Lucent not only yielded working group, which is developing EcoVadis platform. Last year, Alcatel- Attendee feedback confirmed financial benefits, but most importantly responses to such CR issues as conflict Lucent integrated IPE information into the workshop was well received, gave them access to an advanced minerals and supply chain education. We its own supplier management processes with suppliers stating the session and user-friendly management model also worked closely with EcoVadis and by identifying all suppliers in the IPE helped them build their Corporate as well as helped them discover industry members to improve existing database associated with environmental Responsibility improvement plans. sustainable business development. CR tools and develop new ones. issues and initiating follow-up actions Alcatel-Lucent shared its know- with each. This is one example of how for more information, see p. 149. 5.5 Supplier stories how, best practices and resources, A Alcatel-Lucent cooperates with a variety A European services supplier improved the cooperation process and of stakeholders and how we include 6.2 Collaborating with small and Alcatel-Lucent asked one consultancy shortened the procurement cycle, thus external information within our supplier medium-sized enterprises services supplier whose EcoVadis creating mutual value and growth. management system, in combination with After signing the French Charte de la CR rating was initially unsatisfactory tools such as EcoVadis ratings or audits. Médiation du Crédit et de la CDAF to to work on an improvement plan The supplier was impressed by Alcatel- improve its business relationship with read more addressing the weaknesses identified. Lucent’s supplier CR evaluation system; C small and medium-sized enterprises Appreciating the business benefits having little knowledge of CR before (SMEs) by defining 10 responsible of doing so, the supplier decided to the initial EcoVadis CR assessment, purchasing practices in 2010, Alcatel- implement a comprehensive and robust Alcatel-Lucent’s support in reviewing Lucent nominated an internal conciliator CR program, analyzing its situation each identified weakness and giving to act as an interface with suppliers to define its CR strategy, assigning improvement advice was most welcome. willing to discuss issues related to responsible persons in the domains The supplier also participated in the charter content. The French Ministry addressed, rolling out a comprehensive dedicated CR training, having never communications plan, and voluntarily attended similar trainings before (see seeking reassessment by EcoVadis – this section 9.3). Moreover, it was pleased time obtaining a satisfactory rating. to learn from Alcatel-Lucent’s supplier management tools and evaluation The supplier declared that Alcatel-Lucent systems, and will start assessing and had been a forerunner in Corporate auditing its own suppliers so that they Responsibility and was grateful for can work together to build a more stable having been pushed by Alcatel- and efficient industry value chain. 151 ABOUT Content Ceo Corporate Company Supply Governance Ethics Environment our people Society GRI Verification Glossary THis ReporT Summary message Responsibility overview ChaiN

GRI > 1.0 GRI Application Level Check A+ 2.0 GRI content index

GLOBAL REPORTING INITIATIVE RAISING THE BAR

For the second year, Alcatel-Lucent prepared its Corporate Responsibility report according to the G3 GRI sustainability reporting guidelines.

To be fully compliant with the Application level A+, we submitted our report to the GRI organization for its assessment.

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The Global Reporting Initiative (GRI) 1.0 is a network-based organization that pioneered the world’s most widely used I GRI Application sustainability reporting framework. Ernst & Young statement Level Check A+ We reviewed the GRI content index GRI is committed to the Framework’s communicated to the GRI and continuous improvement and verified that: application worldwide. GRI’s core NN the Index answered the required goals include the mainstreaming of number and set of standard disclosure on environmental, social disclosures for the self-declared and governance performance. A+ Application Level; NN the way in which the reporting For the second year, the report had been addressed was We prepared this year’s edition was prepared according to the GRI in-line with the self-declared according to GRI G3 guidelines and sustainability reporting (G3) guidelines. A+ Application Level. submitted it to the GRI organization Alcatel-Lucent has also applied for its assessment. the ‘Guidance on Defining Report Based on the procedures Content’ and associated Principles. performed, nothing came to We earned a GRI Application Level our attention that causes us to Check Statement A+. Aligned with our continued improvement believe that conditions set in of our CR and sustainability reporting, the G3 guidelines to achieve we raised the bar this year for A+ rating are not fully met. our CR report and we earned a GRI Application level check A+.

The GRI Application Level Check assesses to what extent the GRI Guidelines have been applied in the reporting.

The ‘+’ sign shows that this report was externally assured. It has been subject to an independent review process by Ernst & Young. The full scope of their review and conclusions can be found in the Independent Verification Statement.

A Read more on p. 171

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1. STANDARD DISCLOSURES PART I: PROFILE DISCLOSURES STRATEGY AND ANALYSIS 1.1 Statement from the most senior decision-maker Fully CRR: CEO Message section 1-Message of Ben Verwaayen CRR: 1, 31, 32, 21 of the organization. Alcatel-Lucent CEO/Corporate Responsibility overview 3.3-CR commitments for 2012 and beyond , 4.3-United Nations Global Compact, 4.4- World Economic Forum 1.2 Description of key impacts, risks, and Fully CRR: Corporate Responsibility Overview section 2.1-The CRR: 7, 8, 6, 4, 5, 3, opportunities. Alcatel-Lucent Corporate Responsibility Council 2.2-Corporate 9, 21, 34, 27, 51 Responsibility Operations and 1.4.4-Risks related to climate change, 1.2-Priorities and Values, 1.4-Environment, Health & Safety management, 1.1-The Alcatel-Lucent CR Vision, 1.3-Materiality assessment 3.1- 2011 CR achievements and progress, 3.3-CR commitments for 2012 and beyond 4.5 Global eSustainability Initiative (GeSI) 4.-Our Engagement with Stakeholders/Governance section 7-Our approach to Risk and Crisis Management 2. ORGANIZATIONAL PROFILE 2.1 Name of the organization. Fully CRR: Alcatel-Lucent Overview Section 1. About Alcatel-Lucent CRR: 39 2.2 Primary brands, products, and/or services. Fully CRR: Alcatel-Lucent Overview Section 1. About Alcatel- CRR: 39/20F:27 Lucent/20F: section 5-Description of the Group’s Activities 2.3 Operational structure of the organization, Fully 20F: section 4-Information About the Group/CRR: Alcatel-Lucent 20F: 17/CRR: 39 including main divisions, operating companies, Overview Section 1. About Alcatel-Lucent subsidiaries, and joint ventures. 2.4 Location of organization’s headquarters. Fully CRR: Alcatel-Lucent Overview Section 1. About Alcatel-Lucent CRR: 39

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2.5 Number of countries where the organization Fully CRR: Alcatel-Lucent Overview Section 1. About Alcatel-Lucent CRR: 39 operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. 2.6 Nature of ownership and legal form. Fully 20F: section 9-Stock Exchange and Shareholding 20F:141 2.7 Markets served (including geographic Fully CRR:Alcatel-Lucent Overview Section 1. About Alcatel- 20F: 27/CRR: 39 breakdown, sectors served, and types of Lucent/20F: section 5-Description of the Group’s Activities customers/beneficiaries). 2.8 Scale of the reporting organization. Fully CRR; Alcatel-Lucent Overview Section 1. About Alcatel-Lucent CRR: 39 2.9 Significant changes during the reporting period Fully 20F: 5.1-Business organization 20F: 27 regarding size, structure, or ownership. 2.10 Awards received in the reporting period. Fully CRR: Alcatel-Lucent Overview section 2.2-Managing innovation CRR: 43, 23 at Alcatel-Lucent/Corporate Responsibility overview section 3.4- 2011 Hall of Fame 3. REPORT PARAMETERS 3.1 Reporting period (e.g., fiscal/calendar year) for Fully CRR: About the report CRR: I information provided. 3.2 Date of most recent previous report (if any). Fully CRR: About the report CRR: I 3.3 Reporting cycle (annual, biennial, etc.) Fully CRR: About the report CRR: I 3.4 Contact point for questions regarding the report Fully CRR: About the report CRR: I or its contents. 3.5 Process for defining report content. Fully CRR: About the report/CEO Message section 1: Message of Ben CRR: I, 1, 4, 3 Verwaayen, Alcatel-Lucent CEO/Corporate Responsibility overview 1.2-Priorities and Values, 1.3- Materiality Assessment, 1.1-The Alcatel-Lucent CR vision 3.6 Boundary of the report (e.g., countries, Fully CRR: About the report/20F: section 4-Information About the CRR: I/20F:17 divisions, subsidiaries, leased facilities, joint Group ventures, suppliers). See GRI Boundary Protocol for further guidance. 3.7 State any specific limitations on the scope or Fully CRR: About the report CRR: I boundary of the report (see completeness principle for explanation of scope).

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3.8 Basis for reporting on joint ventures, Fully 20F: section 4-Information About the Group 20F: 17 subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations. 3.9 Data measurement techniques and the bases of Fully CRR: Environment 1.5-Adopting common carbon footprint CRR: 71, 14 calculations, including assumptions and assessment standards for ICT products/Corporate Responsibility techniques underlying estimations applied to overview 3.2-Social and Environmental indicators the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols. 3.10 Explanation of the effect of any re-statements Fully No restatements. NA of information provided in earlier reports, and the reasons for such re-statement (e.g.,mergers/ acquisitions, change of base years/periods, nature of business, measurement methods). 3.11 Significant changes from previous reporting Fully CRR: About the report/CEO Message section 1: Message of Ben CRR: I, 1,3 periods in the scope, boundary, or measurement Verwaayen, Alcatel-Lucent CEO/Corporate Responsibility methods applied in the report. overview 1.1-The Alcatel-Lucent CR vision 3.12 Table identifying the location of the Standard Fully This table CRR: 154 Disclosures in the report. 3.13 Policy and current practice with regard to Fully See letter from Ernst & Young in the Verification section CRR: 171 seeking external assurance for the report. 4. GOVERNANCE, COMMITMENTS, AND ENGAGEMENT 4.1 Governance structure of the organization, Fully CRR: Governance sections Corporate Governance ,1-Board of CRR: 45, 46, 47, 48, including committees under the highest Directors Governance System. 1.5-Board Duties, 2.2-Board 7/20F: 81 governance body responsible for specific tasks, Access to information/Corporate Responsibility overview section such as setting strategy or organizational 2-Managing our corporate responsibility/20F: section oversight. 7.1-Chairman’s Corporate Governance Report 4.2 Indicate whether the Chair of the highest Fully CRR: Governance section 1.1-Separation of functions/Corporate CRR: 46, 7 governance body is also an executive officer. Responsibility overview section 2-Managing our corporate responsibility

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4.3 For organizations that have a unitary board Fully 20F: sections 7.1-Chairman’s Corporate Governance report, 20F: 81, 83/ structure, state the number of members of the 7.1.2-Management Bodies of the Company/CRR: Governance CRR: 47, 46 highest governance body that are independent section 1.3-Selection Criteria and Independence of the Directors, and/or non-executive members. 1.1-Separation of functions, 1.2-Staggered board-membership and diversity 4.4 Mechanisms for shareholders and employees to Fully CRR: About the report/Corporate Responsibility overview CRR: I, 27, 103, 105 provide recommendations or direction to the Section 4.1-Dialogue and action/Our People 4.1-Communication highest governance body. within Alcatel-Lucent and 4.3-Discussions with Unions 4.5 Linkage between compensation for members of Fully 20F: sections 7.1.2-Management Bodies of the Company, 20F: 83, 106/ the highest governance body, senior managers, 7.2-Compensation and Long-term incentives/CRR: Governance CRR: 49 and executives (including departure section 3-Senior Management Remuneration arrangements), and the organization’s performance (including social and environmental performance). 4.6 Processes in place for the highest governance Fully CRR: Governance section 1.4-Ethics and absence of conflicts of CRR: 47 body to ensure conflicts of interest are avoided. interest 4.7 Process for determining the qualifications and Fully CRR: Governance section 1.3-Selection Criteria and CRR: 47 expertise of the members of the highest Independence of the Directors 1.4-Ethics and absence of governance body for guiding the organization’s conflicts of interest strategy on economic, environmental, and social topics. 4.8 Internally developed statements of mission or Fully CRR: Ethics, Compliance and Business Conduct section 1-Our CRR: 54, 56, 65, values, codes of conduct, and principles approach to ethics and compliance, 2.2-The role of the Board , 59, 47, 69, 96, 4, relevant to economic, environmental, and social 8.2-Internal communications, 4-Compliance hotline/Governance 39, 21 performance and the status of their section 1.3-Selection Criteria and Independence of the implementation. Directors/Environment section 1.1-How we approach environmental sustainability 4.3-Encouraging our Employees to be Eco-aware/Corporate Responsibility overview 1.2-Priorities and Values, 3.3-CR commitments for 2012 and beyond/ Alcatel-Lucent Overview 1.1-The company in brief

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4.9 Procedures of the highest governance body for Fully CRR: Governance sections Corporate governance, 1.1-Separation CRR: 46, 47, 48, 50, overseeing the organization’s identification and of functions, 1.2-Staggered board - membership and diversity, 51, 3, 7, 39, 56 management of economic, environmental, and 1.4-Ethics and absence of conflicts of interest, 1.5-Board Duties, social performance, including relevant risks and 2-Board effectiveness and transparency, 4-Social responsibility, opportunities, and adherence or compliance 7-Our approach to Risk and Crisis Management/Corporate with internationally agreed standards, codes of Responsibility overview section 1-Our approach to Corporate conduct, and principles. Responsibility 2-Managing our corporate responsibility/ Alcatel-Lucent Overview 1-About Alcatel-Lucent/Ethics, Compliance and Business Conduct 2-Our compliance governance structure 4.10 Processes for evaluating the highest governance Fully 20F: 7.1.3-Powers and Activity of the board of Directors/CRR: 20F: 95/CRR: 7 body’s own performance, particularly with Corporate Responsibility overview 2-Managing our corporate respect to economic, environmental, and social responsibility performance. 4.11 Explanation of whether and how the Fully CRR: Governance section 7-Our approach to Risk and crisis CRR: 51 precautionary approach or principle is management addressed by the organization. 4.12 Externally developed economic, environmental, Fully CRR: Governance section Corporate Governance/About the 20F: 43 and social charters, principles, or other report/Corporate Responsibility overview 4-Our engagement CRR: 45, I, 8, 27 initiatives to which the organization subscribes with stakeholders or endorses. 4.13 Memberships in associations (such as industry Fully CRR: Corporate Responsibility overview section 4-Our CRR: 27, 70, 67, 52 associations) and/or national/international engagement with Stakeholders,/Environment section advocacy organizations in which the 1.3-Engaging for Success: Stakeholder activities/Ethics, organization: * Has positions in governance compliance and business conduct section 9.2-Industry, Trade bodies; * Participates in projects or committees; associations/Alcatel-Lucent Overview section 2.1-About Bell * Provides substantive funding beyond routine Labs membership dues; or * Views membership as strategic. 4.14 List of stakeholder groups engaged by the Fully CRR: Corporate Responsibility overview section 4-Our CRR: 27 organization. Engagement with Stakeholders 4.15 Basis for identification and selection of Fully CRR: Corporate Responsibility overview section 4-Our CRR: 27 stakeholders with whom to engage. Engagement with Stakeholders

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4.16 Approaches to stakeholder engagement, Fully CRR: Corporate Responsibility overview section 4-Our CRR: 27, 70, 75, 96 including frequency of engagement by type and engagement with stakeholders/Environment section by stakeholder group. 1.3-Engaging for Success: Stakeholder activities, 2.2.3-The GreenTouch™ consortium, 4.3-Encouraging eco-awareness among our people 4.17 Key topics and concerns that have been raised Fully CRR: Corporate Responsibility overview section 4-Our CRR: 27, 4 through stakeholder engagement, and how the Engagement with Stakeholders, 1.3-Assessing Materiality organization has responded to those key topics and concerns, including through its reporting.

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STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs) DMA EC DISCLOSURE ON MANAGEMENT APPROACH EC Aspects Economic performance Fully 20F: section 6-Operating and Financial Review and Prospects 20F: 43 Market presence Fully 20F: section 5-Description Of The Group’s Activities 20F: 27 Indirect economic impacts Fully CRR: Society Section 1-Our approach to Digital Inclusion, CRR: 121, 127, 128 2-Pursuing social innovation, 3-How we give DMA EN DISCLOSURE ON MANAGEMENT APPROACH EN Aspects Materials Fully CRR: Environment section 2.3.1- Managing materials/Supply CRR: 78, 144 Chain section 3.5-Product traceability and conflict minerals Energy Fully CRR: Environment section 2.3.4-Increasing the energy efficiency CRR: 80, 14 of products in use/Corporate Responsibility overview 3.2-Social and environmental indicators Water Fully CRR: Environment section 4.2.5-Conserving Water CRR: 95 Biodiversity Not Immaterial to Alcatel Lucent. See CRR: Environment chapter, Not material CRR: 95 section 4.2.3-Protecting Biodiversity See environment section 4.2.3 Emissions, effluents and waste Fully CRR: Environment section 4-Our approach part 3: Reducing our CRR: 89, 14, 96, 83 carbon footprint, 2.3.5-Take-back, remanufacturing and recycling, 3.2-Social and environmental indicators 4.2.6-Handling Spills Products and services Fully CRR: Environment section 2.3-Reducing the impact of our CRR: 78, 79 products and solutions 2.3.3-Packaging, distribution and installation

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Compliance Fully CRR: Corporate Responsibility overview section 1.4.3-The EHS CRR: 6 Compliance Audit Program Transport Fully CRR: Environment section 2.3.3-Packaging, distribution and CRR: 79 installation Overall Fully CRR: Environment section 1.1-How we approach environmental CRR: 69 sustainability DMA LA DISCLOSURE ON MANAGEMENT APPROACH LA Aspects Employment Fully CRR: Our people section 1-Focused on Our People, 7-Developing CRR: 99, 113, 115, Our Workforce, 8-Talent Attraction & Retention, 9-Talent 117 Development Labor/management relations Fully CRR: Our people section 4-Fostering Internal Dialogue CRR: 103 Occupational health and safety Fully CRR: Our people section 5-Employee Health and Safety/ CRR: 106, 5 Corporate Responsibility overview 1.4-Environment, Health and Safety management Training and education Fully CRR: Our people section 7-Developing Our Workforce CRR: 113 Diversity and equal opportunity Fully CRR: Our people section 6-Diversity and Equal Opportunity CRR: 107 DMA HR DISCLOSURE ON MANAGEMENT APPROACH HR Aspects Investment and procurement practices Fully CRR: Supply Chain section 1-Our comprehensive Supply Chain CRR: 140, 141 approach, 2-Managing Our Supply Chain Non-discrimination Fully CRR: Our people section 2.2-Global Human Rights Policy CRR: 100 Freedom of association and collective Fully CRR: Our people section 2.2-Global Human Rights Policy CRR: 100 bargaining Child labor Fully CRR: Our people section 2.2-Global Human Rights Policy CRR: 100 Forced and compulsory labor Fully CRR: Our people section 2.2-Global Human Rights Policy CRR: 100 Security practices Fully CRR: Our people section 5-Employee Health and Safety CRR: 106 Indigenous rights Fully CRR: Our people section 2.2-Global Human Rights Policy CRR: 100 DMA SO DISCLOSURE ON MANAGEMENT APPROACH SO Aspects Community Fully CRR: Society section 1.2-Impact on communities 3-How we give CRR: 124, 128 Corruption Fully CRR: Ethics, Compliance and Business Conduct section CRR: 55 1.1-Communicating ethics and compliance, 1.2-Zero tolerance policy

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Public policy Fully CRR: Corporate Responsibility overview 4-Our Engagement with CRR: 27, 1 Stakeholders/CEO Message section 1: Message of Ben Verwaayen, Alcatel-Lucent CEO Anti-competitive behavior Fully 20F: section 6.10-Legal Matters. 20F: 74

Compliance Fully CRR: Ethics, Compliance and Business Conduct section CRR: 55 1.1-Communicating ethics and compliance, 1.2-Zero tolerance policy DMA PR DISCLOSURE ON MANAGEMENT APPROACH PR Aspects Customer health and safety Fully CRR: Corporate Responsibility overview section CRR: 5 1.4-Environment, health and safety management Product and service labelling Fully CRR: Environment section 2.1-Measuring impact from end-to- CRR: 73 end Marketing communications Fully CRR: Corporate Responsibility overview section 1.5-Approach to CRR: 6 marketing and communication Customer privacy Fully CRR: Ethics sectoin 5-Privacy Protection and Information CRR: 60 Security Compliance Fully CRR: Ethics section 2.1-A global compliance governance CRR: 56 organization, 2.2- The Role of the Board

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STANDARD DISCLOSURES PART IIII: Performance Indicators ECONOMIC Economic performance EC1 Direct economic value generated and Fully 20F: section 12-Consolidated Financial Statements of Alcatel- 20F: 175 distributed, including revenues, operating costs, Lucent and ITS subsidiaries employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. EC2 Financial implications and other risks and Fully CRR: Corporate Responsibility overview section 1.2-Priorities CRR: 6, 4, 69, 75 opportunities for the organization’s activities and Values, 1.4.4-Risks related to climate change/Environment due to climate change. section 1.2-Committed at the highest levels, 2.2.1-Extreme green innovation

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EC3 Coverage of the organization’s defined benefit Fully 20F: section 12-Consolidated Financial Statements of Alcatel- 20F: 175 plan obligations. Lucent and ITS subsidiaries EC4 Significant financial assistance received from Fully 20F: section 12-Consolidated Financial Statements of Alcatel- 20F: 175 government. Lucent and ITS subsidiaries Market presence EC5 Range of ratios of standard entry level wage Not See reason for omission and explanation Not available NA compared to local minimum wage at significant This is an “additional” indicator that we might report locations of operation. in the future EC6 Policy, practices, and proportion of spending on Not See reason for omission and explanation Not available NA locally based suppliers at significant locations of Our current reporting organization does not enable operation. us to report on local spending; we are investigating solutions for 2013. The information will be provided by 2013. EC7 Procedures for local hiring and proportion of Fully CRR: Our People section 8.3-Mobility and reference note on CRR: 116 senior management hired from the local page 136 community at significant locations of operation. Indirect economic impacts EC8 Development and impact of infrastructure Fully CRR: Society section 3.6-Giving in-kind CRR: 137 investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement. EC9 Understanding and describing significant Not See reason for omission and explanation Not available NA indirect economic impacts, including the extent This is an “additional” indicator that we might report of impacts. in the future ENVIRONMENTAL Materials EN1 Materials used by weight or volume. Fully CRR: Environment section 2.3.5-Take-back, remanufacturing CRR: 83 and recycling EN2 Percentage of materials used that are recycled Fully CRR: Environment section 2.3.5-Take-back, remanufacturing CRR: 83 input materials. and recycling Energy EN3 Direct energy consumption by primary energy Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14 source. environmental indicators EN4 Indirect energy consumption by primary source. Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14 environmental indicators

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EN5 Energy saved due to conservation and Not See reason for omission and explanation Not available NA efficiency improvements. This is an “additional” indicator that we might report in the future EN6 Initiatives to provide energy-efficient or Not See reason for omission and explanation Not available NA renewable energy-based products and services, This is an “additional” indicator that we might report and reductions in energy requirements as a in the future result of these initiatives. EN7 Initiatives to reduce indirect energy Not See reason for omission and explanation Not available NA consumption and reductions achieved. This is an “additional” indicator that we might report in the future Water EN8 Total water withdrawal by source. Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14, 96 environmental indicators/Environment section 4.2.6-Handling Spills EN9 Water sources significantly affected by Not See reason for omission and explanation Not available NA withdrawal of water. This is an “additional” indicator that we might report in the future EN10 Percentage and total volume of water recycled Not See reason for omission and explanation Not available NA and reused. This is an “additional” indicator that we might report in the future Biodiversity EN11 Location and size of land owned, leased, Not Immaterial to Alcatel Lucent. See environment section Not material CRR: 95 managed in, or adjacent to, protected areas and 4.2.3-Protecting Biodiversity See environment section 4.2.3 areas of high biodiversity value outside protected areas. EN12 Description of significant impacts of activities, Not Immaterial to Alcatel Lucent. See environment section Not material CRR: 95 products, and services on biodiversity in 4.2.3-Protecting Biodiversity See environment section 4.2.3 protected areas and areas of high biodiversity value outside protected areas. EN13 Habitats protected or restored. Not See reason for omission and explanation Not available NA This is an “additional” indicator that we might report in the future EN14 Strategies, current actions, and future plans for Not See reason for omission and explanation Not available NA managing impacts on biodiversity. This is an “additional” indicator that we might report in the future

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EN15 Number of IUCN Red List species and national Not See reason for omission and explanation Not available NA conservation list species with habitats in areas This is an “additional” indicator that we might report affected by operations, by level of extinction in the future risk. Emissions, effluents and waste EN16 Total direct and indirect greenhouse gas Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14, 89 emissions by weight. environmental indicators, 4.1-Tracking and reporting on carbon emissions EN17 Other relevant indirect greenhouse gas Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14 emissions by weight. environmental indicators EN18 Initiatives to reduce greenhouse gas emissions Fully CRR: Environment section 4-Our approach part 3: Reducing Our CRR: 89 and reductions achieved. Carbon Footprint EN19 Emissions of ozone-depleting substances by Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14 weight. environmental indicators EN20 NOx, SOx, and other significant air emissions by Not Immaterial to Alcatel-Lucent. Please see attached Excel file in Not material CRR: 14 type and weight. CRR: Corporate Responsibility overview section We have calculated NOx and SOx emissions and the

3.2.2-Environmental indicators result is 103 tonnes of CO2e. Against our baseline of over 1 million metric tonnes, this represents an insignificant amount of emissions and, therefore, we deemed it not material. EN21 Total water discharge by quality and Not Water discharge is immaterial to Alcatel-Lucent See CRR: Not material CRR: 95 destination. Environment section 4.2.5-Conserving Water Water discharge is immaterial to Alcatel-Lucent. See Environment section 4.2.5-Conserving Water EN22 Total weight of waste by type and disposal Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14 method. environmental indicators EN23 Total number and volume of significant spills. Fully CRR: Environment section 4.2.6-Handling Spills CRR: 96 EN24 Weight of transported, imported, exported, or Not See reason for omission and explanation Not available NA treated waste deemed hazardous under the This is an “additional” indicator that we might report terms of the Basel Convention Annex I, II, III, in the future and VIII, and percentage of transported waste shipped internationally. EN25 Identity, size, protected status, and biodiversity Not See reason for omission and explanation Not available NA value of water bodies and related habitats This is an “additional” indicator that we might report significantly affected by the reporting in the future organization’s discharges of water and runoff.

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Products and services EN26 Initiatives to mitigate environmental impacts of Fully CRR: Environment section 2.3-Reducing the impact of our CRR: 78, 95, 89, 96 products and services, and extent of impact products and solutions 4.2.5-Conserving water, 4.1-Tracking and mitigation. reporting on carbon emissions, 4.2.6-Handling Spills EN27 Percentage of products sold and their packaging Fully CRR: Environment section 2.3.5-Take-back, remanufacturing and CRR: 83 materials that are reclaimed by category. recycling Compliance EN28 Monetary value of significant fines and total Fully For 2011, Alcatel-Lucent has not identified any non-compliance NA number of non-monetary sanctions for with environmental laws or regulations regarding the provision non-compliance with environmental laws and and use of its products and services and, as such, the company regulations. had no fines (significant or otherwise). Transport EN29 Significant environmental impacts of Not See reason for omission and explanation Not available NA transporting products and other goods and This is an “additional” indicator that we might report materials used for the organization’s operations, in the future and transporting members of the workforce. Overall EN30 Total environmental protection expenditures Not See reason for omission and explanation Not available NA and investments by type. This is an “additional” indicator that we might report in the future SOCIAL: LABOR PRACTICES AND DECENT WORKING CONDITIONS Employment LA1 Total workforce by employment type, Fully CRR: Our people section 3-Our Employees/Corporate CRR: 102, 14 employment contract, and region. Responsibility overview section 3.2-Social and environmental indicators LA2 Total number and rate of employee turnover by Fully CRR: Our People section 3-Our Employees CRR: 102 age group, gender, and region. LA3 Benefits provided to full-time employees that Not See reason for omission and explanation Not available NA are not provided to temporary or part-time This is an “additional” indicator that we might report employees by major operations. in the future Labor/management relations LA4 Percentage of employees covered by collective Not This information is proprietary NA bargaining agreements.

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LA5 Minimum notice period(s) regarding significant Fully CRR: Our People section 4.3 Discussions with unions CRR: 105 operational changes, including whether it is specified in collective agreements. Occupational health and safety LA6 Percentage of total workforce represented in Not See reason for omission and explanation Not available NA formal joint management-worker health and This is an “additional” indicator that we might report safety committees that help monitor and advise in the future on occupational health and safety programs. LA7 Rates of injury, occupational diseases, lost days, Fully CRR: Corporate Responsibility overview section 3.2-Social and CRR: 14/20F and absenteeism, and number of work-related environmental indicators/20F Additional information: section Addl: 45 fatalities by region. 4-Social and Environmental Data LA8 Education, training, counseling, prevention, and Fully CRR: Our people section 5-Employee Health and Safety CRR: 106 risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases. LA9 Health and safety topics covered in formal Not See reason for omission and explanation Not available NA agreements with trade unions. This is an “additional” indicator that we might report in the future Training and education LA10 Average hours of training per year per Partially Total training hours are available at CRR: Corporate Not available NA employee by employee category. Responsibility overview section 3.2-Social and environmental Total hours of training per employee category is not indicators/20F Additional information: section 4-Social and available as our reporting systems are not currently Environmental Data. The split per employee category is not configured to collect this information. We will available as our data collection systems do not support such investigate in 2012 on possible configurations to split. improve our reporting system. The information will be provided by 2012. LA11 Programs for skills management and lifelong Not See reason for omission and explanation Not available NA learning that support the continued This is an “additional” indicator that we might report employability of employees and assist them in in the future managing career endings. LA12 Percentage of employees receiving regular Not See reason for omission and explanation Not available NA performance and career development reviews. This is an “additional” indicator that we might report in the future

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Diversity and equal opportunity LA13 Composition of governance bodies and Fully CRR: Governance 1.2-Staggered board - membership and CRR: 46, 14, 102/ breakdown of employees per category diversity/Our people section 3-Our Employees/20F: section 20F: 81 according to gender, age group, minority group 7.1-Chairman’s Corporate Governance Report/Corporate membership, and other indicators of diversity. Responsibility overview section 3.2-Social and environmental indicators LA14 Ratio of basic salary of men to women by Not Information is proprietary NA employee category. SOCIAL: HUMAN RIGHTS Investment and procurement practices HR1 Percentage and total number of significant Not See reason for omission and explanation Not available NA investment agreements that include human Data for 2011 is not available as we are not rights clauses or that have undergone human currently reporting on this information. However, rights screening. further to the revision of our Human Rights policy this year, in order to reflect the UN Ruggie Principles, Alcatel-Lucent is scheduled to define, by 2013, human rights diligence requirements for future material proposals of significant investment agreements. The information will be provided by 2013. HR2 Percentage of significant suppliers and Fully CRR: Supply Chain section 4.2-EcoVadis CR ratings approach , CRR: 147 contractors that have undergone screening on 4.3-Executing CR assessments human rights and actions taken. HR3 Total hours of employee training on policies and Not Further to the revision of our Human Rights policy this year, in Not available NA procedures concerning aspects of human rights order to reflect the UN Ruggie Principles, Alcatel-Lucent is that are relevant to operations, including the scheduled to design and define at a corporate level a dedicated percentage of employees trained. training program for employees dedicated to Human Rights principles by 2013. No training was available in 2011. Non-discrimination HR4 Total number of incidents of discrimination and Fully CRR: Ethics, Compliance and Business Conduct section 4.1-Data CRR: 59 actions taken. and metrics on violations of the Code of Conduct

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Freedom of association and collective bargaining HR5 Operations identified in which the right to Partially See explanation and CRR: Ethics, Compliance and Business Not available CRR: 67, 9 exercise freedom of association and collective Conduct section 9.2.1-Industry dialogue on human rights/ In 2011 we have carried on discussion with the bargaining may be at significant risk, and Corporate Responsibility overview section 3.1-2011 CR European union in order to adapt our current actions taken to support these rights. achievements and progress agreement based on more than 16 years experience to improve our communication with our unions at group level. We are currently waiting for the official position of our union, which should be available before May 2012 Child labor HR6 Operations identified as having significant risk Fully CRR: Supply Chain section 3.1-Adherence to the EICC Code of CRR: 143, 147 for incidents of child labor, and measures taken Conduct, 3.2-Adherence to international standards, 4.2-EcoVadis to contribute to the elimination of child labor. CR ratings approach Forced and compulsory labor HR7 Operations identified as having significant risk Fully CRR: Supply Chain section 3.1-Adherence to the EICC Code of CRR: 143, 147 for incidents of forced or compulsory labor, and Conduct, 3.2-Adherence to international standards, 4.2-EcoVadis measures to contribute to the elimination of CR ratings approach forced or compulsory labor. Security practices HR8 Percentage of security personnel trained in the Not See reason for omission and explanation Not available NA organization’s policies or procedures concerning This is an “additional” indicator that we might report aspects of human rights that are relevant to in the future operations. Indigenous rights HR9 Total number of incidents of violations involving Not See reason for omission and explanation Not available NA rights of indigenous people and actions taken. This is an “additional” indicator that we might report in the future SOCIAL: SOCIETY Community SO1 Nature, scope, and effectiveness of any Fully CRR: Society section 1.1-Why Digital inclusion Matters CRR: 121 programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.

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Corruption SO2 Percentage and total number of business units Fully CRR: Ethics, Compliance and Business Conduct section 3.1-Anti- CRR: 57 analyzed for risks related to corruption. corruption approach SO3 Percentage of employees trained in Fully CRR: Ethics, Compliance and Business Conduct section 8.1-Anti- CRR: 64 organization’s anti-corruption policies and corruption training procedures. SO4 Actions taken in response to incidents of Fully 20F: section 6.10-Legal Matters/CRR: Ethics, Compliance and 20F: 74/CRR: 59 corruption. Business Conduct section 4.1-Data and metrics on violations of the Code of Conduct , 4.2-Management of incidents declared through the Compliance Hotline Public policy SO5 Public policy positions and participation in Fully CRR: Corporate Responsibility overview 4-Our Engagement with CRR: 27, 35 public policy development and lobbying. Stakeholders 4.6-Public Affairs SO6 Total value of financial and in-kind contributions Not See reason for omission and explanation Not available NA to political parties, politicians, and related This is an “additional” indicator that we might report institutions by country. in the future Anti-competitive behavior SO7 Total number of legal actions for anti- Not See reason for omission and explanation Not available NA competitive behavior, anti-trust, and monopoly This is an “additional” indicator that we might report practices and their outcomes. in the future Compliance SO8 Monetary value of significant fines and total Fully 20F: section 6.10-Legal Matters 20F: 74 number of non-monetary sanctions for non-compliance with laws and regulations. SOCIAL: PRODUCT RESPONSIBILITY Customer health and safety PR1 Lifecycle stages in which health and safety Fully CRR: Corporate Responsibility overview section CRR: 5 impacts of products and services are assessed 1.4-Environment, Health and Safety management for improvement, and percentage of significant products and services categories subject to such procedures.

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PR2 Total number of incidents of non-compliance Not See reason for omission and explanation Not available NA with regulations and voluntary codes This is an “additional” indicator that we might report concerning health and safety impacts of in the future products and services during their lifecycle, by type of outcomes. Product and service labelling PR3 Type of product and service information Fully CRR: Environment 2.1-Measuring impact from end-to-end CRR: 73 required by procedures, and percentage of significant products and services subject to such information requirements. PR4 Total number of incidents of non-compliance Not See reason for omission and explanation Not available NA with regulations and voluntary codes This is an “additional” indicator that we might report concerning product and service information and in the future labeling, by type of outcomes. PR5 Practices related to customer satisfaction, Fully CRR: Corporate Responsibility overview 4.2-Customer CRR: 28 including results of surveys measuring customer relationships satisfaction. Marketing communications PR6 Programs for adherence to laws, standards, and Fully CRR: Corporate Responsibility overview 1.5-Approach to CRR: 6 voluntary codes related to marketing Marketing & Communication communications, including advertising, promotion, and sponsorship. PR7 Total number of incidents of non-compliance Not See reason for omission and explanation Not available NA with regulations and voluntary codes This is an “additional” indicator that we might report concerning marketing communications, including in the future advertising, promotion, and sponsorship by type of outcomes. Customer privacy PR8 Total number of substantiated complaints Not See reason for omission and explanation Not available NA regarding breaches of customer privacy and This is an “additional” indicator that we might report losses of customer data. in the future Compliance PR9 Monetary value of significant fines for Fully CRR: Ethics, Compliance and Business Conduct section 1.2-Zero CRR: 55 non-compliance with laws and regulations Tolerance Policy concerning the provision and use of products and services.

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independent verification statement

Alcatel-Lucent Year ended December 31, 2011

Independent assurance report on a selection of Corporate Responsibility (CR) indicators and statements

ERNST & YOUNG et Autres

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E&Y independent verification statement

urther to the request It is the responsibility of Alcatel-Lucent NN We conducted interviews with people (1) Total energy consumption and to establish the Reporting Criteria, update responsible for CR reporting and split between electricity and made by Alcatel-Lucent, fossil energy; CO2 emitted from them, ensure they are made available for performed auditing tests, on a sample facilities; Total water we have performed consultation and prepare the Indicators basis. The coverage(5) related to the consumption; Production of F hazardous waste; Production of and Statements according to these Criteria. selected sample of audited sites is a review of a selection of non hazardous waste; Number sustainable development presented for each indicator as follows: of days of absence due to It is our responsibility to express a work-related accidents per employee; Absolute carbon information contained in the environmental indicators Sample coverage conclusion on these Indicators and footprint (scopes 1, 2 and part of CR report for the financial Statements. Our review was conducted in 3); Amount of e-waste collected Electricity consumption 20% accordance with professional standards in 2011; Percentage of year ended December 31, Fossil energy consumption 7% employees who completed the 2011, including quantitative applicable in France and International 2011 Code of Conduct Review Total energy consumption 18% and Acknowledgment Process; (1) Standards on Assurance Engagements indicators (“the Indicators”) (ISAE 3000), published in December Water consumption 20% Percentage of suppliers assessed (2) satisfactory on CR at the end of and qualitative statements 2003. Our independence is defined by Total production of hazardous wastes 5% 2011; Philanthropic contributions based on cash contributions, French legislation and regulations and Total production of non hazardous wastes 7% (“the Statements”), both employee volunteering and the French Rules of Professional Conduct in-kind giving; Number of identified with the symbol CO2 emissions from facilities 22% for Statutory Auditors. student learner hours that ALU I in the report. Number of days of absence due to work-related accidents, per employee 7% University delivered towards Alcatel-Lucent employees for In addition, we verified that the 2011; Percentage of women Corporate Responsibility report fulfills the NN At company level, we conducted identified in the group; Number requirements of the A+ application level interviews with people responsible of internal job opportunities versus external hiring. of the GRI 3.1 reporting framework. Our for Indicators in order to assess the (2) Five qualitative statements conclusions on this matter are presented application of the Reporting Criteria. were reviewed, on the following NN themes: Environment, Our in the GRI index section of this report. At company level, we implemented People and Corporate analytical procedures and verified, Responsibility Overview. Our review aimed to provide limited Nature and scope of our review on a test basis, the calculations and (3) A higher level of assurance would have required more (3) assurance that: We performed the following review to be the consolidation of the Indicators. extensive work. NN the Indicators were prepared in able to express a conclusion: NN We reviewed supporting evidence (4) On site for Antwerp (Belgium) accordance with the reporting criteria NN We assessed the Reporting Criteria, with respect to the Statements. and Naperville (USA), and via conference call for Bydgoszcz applicable in 2011 (the “Reporting policies and principles, with respect NN We reviewed the presentation of (Poland), Ning Qiao Road (China), Criteria”), consisting in Alcatel- to their relevance, completeness, the Indicators and the Statements and Velizy (France). (5) Contribution to the group Lucent instructions, procedures and reliability and neutrality. in the CR report and the associated consolidated data. guidelines specific for each indicator; NN We verified environmental data for notes on methodology. NN the Statements have been presented five sites(4), selected according to in accordance with the principles of their location, their contribution to reliability, neutrality and clarity. environmental indicators and the risk of anomalies previously identified.

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E&Y independent verification statement

Limitations of our review indicators reporting rate Our review was limited to the Statements and Indicators identified above and Electricity consumption, fossil energy consumption, total energy 85% consumption and CO emissions from facilities6 did not cover other disclosures in the 2 annual report. Water consumption 65% Hazardous waste production 48% Information and explanation Non hazardous waste production 54% about the reporting process (6) The only sources of energy for which estimations are made, in order to reach 100% of the perimeter, Relevance are Electricity and Natural gas. For the other sources, the reporting rate is 100%. Alcatel-Lucent’s sustainability reporting is made up of a wide set of indicators allowing coverage of the sector’s key Reliability Neutrality and clarity Paris-La Défense, April 16, 2012 CR issues. Alcatel Lucent’s reporting process is A pedagogical effort is made in order supported by a new dedicated web-based to ensure a harmonized understanding The statutory auditors For the carbon footprint indicator, Alcatel- tool, implemented in 2011 and used of the indicators and their definitions ERNST & YOUNG et Autres Lucent decided to extend the scope of for collecting, reporting and analyzing and calculations, thanks to the written the reporting by including some of the CR metrics and information. This tool, protocols. However, definitions should Jean-François Ginies scope 3 greenhouse gases emissions. together with a fairly structured internal be clarified and more examples provided However, the greenhouse gases emissions process, helps monitor the evolution in order to ensure robust and replicable With the assistance of ERNST & YOUNG relating to the following items are not yet of environmental, health and safety results in the future. This applies more Cleantech & Sustainability included: Entering materials; Contracted performance at site level, and increases particularly to the number of days of road transportation of goods; Life-ending. the reliability of Alcatel-Lucent’s CR data. absence due to work-related accidents. Eric Mugnier

Completeness Reporting processes are formalized into Conclusion The Indicators’ reporting perimeter aims written protocols for most indicators. Based on our review, nothing has come to at covering all Alcatel-Lucent’s relevant However, the protocols should give more our attention that causes us to believe that: activities. However, for most indicators, detailed guidance on internal controls, NN the Indicators were not established, there are facilities which were not able as well as extrapolation methodologies in all material aspects, in accordance to report data. For the non-reporting to be performed. with the Reporting Criteria; facilities, extrapolation procedures were NN the Statements were not presented, performed on the data in order to cover All sources of information, calculations in all material aspects, in accordance 100% of the company’s environmental and internal controls performed should with the principles of reliability, impacts and sites. A description of the be more systematically documented and neutrality and clarity as defined extrapolation methods used is provided properly stored in order to increase the by international standards. in the social and environmental indicators traceability and reliability of the data. section. The reporting coverage of each environmental indicator is presented as follows:

173 ALCATEL-LUCENT 2011 CORPORATE RESPONSIBILITY REPORT

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