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INSPIRING CHANGE

ONE
BYONE

2011 ACCOUNTABILITY REPORT

TABLE OF CONTENTS

3 INTRODUCTION

22 ONE CULTURE

• Celebrating success one by one • Who we are • Why we’re here • LoyaltyOne by the numbers • Never stop learning • Women in Leadership • Road maps to success • Learning… at the next level • The value of flexibility • A work environment that makes a difference • Rewarding recognition • Keeping associates in the know • Survey says… engaged, very engaged

4

7

OUR ACHIEVEMENTS

ONE RESPONSIBILITY

• A responsibility to inspire • Our accountabilities • Engaging our stakeholders

ONE ENVIRONMENT

11

• Working together for a healthier planet

Reducing our harmful impact

• Our organizational carbon footprint • How we have helped reduce our carbon footprint • Our paper policy

30

ONE COMMUNITY

• Enriching relationships, building communities • Our new Volunteer Time-Off Program • Canadian Red Cross Japan Tsunami and Earthquake Relief
• Holiday Charity Drive • Walk for Kids Help Phone • Alexandra Park Community Centre • CommunityOne Day • Motionball
• Purchasing Green Energy • Our Work at Home Program • Waste reduction • Sustainable purchasing

Adopting environmentally sanctioned facilities

• LEEDing the way • Challenges

Enabling associates to live more sustainable lives

• We’re passionate about green • The Green fleet • Eco-friendly entertainment

Driving and inspiring change

• Moving forward
• Moving forward

AWARDS

34

36 ABOUT US

• We help people make decisions that count • Our lines of business • Our international partnerships

38 GRI CONTENT INDEx

• Our GRI application level

FAST FACTS

42

• LoyaltyOne AIR MILES • AIR MILES

INtROduCtION

It’s great to be green

Welcome to our 2011 Accountability Report. Here you’ll discover the many ways that we, as a business and as individuals, are living and breathing sustainability. Keep reading to see

how we’re inspiring change one by one

at work, at home, and in our communities. This report includes all of LoyaltyOne’s office locations and five lines of business. The report does not include our international partnerships with the Brazilian loyalty program, Dotz, or the Indian marketing agency, Direxions. We considered all of LoyaltyOne’s sustainability impacts and selected those most relevant to our serviceoriented firm and our stakeholders. In 2011, we continued to integrate sustainability into the core of our business priorities, make measureable improvements in our environmental performance and become recognized leaders in sustainability.

As part of the reporting process, we welcome feedback. Please direct any inquiries to:

Debbie Baxter Chief Sustainability Officer LoyaltyOne Inc.

Hear from our CEO at

[email protected]

loyalty.com/accountabilityreport

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

OuR ACHIEvEmENtS

Highlights of our performance in 2011

Another year… many more reasons to celebrate! Here are a few highlights from 2011 to show you how we’re helping the environment, building communities, and inspiring change in everything we do.

Note: 2010 numbers may have been adjusted due to a more thorough review of our carbon footprint profile and updated emission factors.

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

OuR ACHIEvEmENtS

  • Our commitments
  • Business growth

• Further integrated sustainability into core business priorities
Evolved our AIR MILES for Social Change program to inspire Canadians to make more sustainable choices AND better health choices
• Increased the impact of charitable giving by creating an associate Cause Committee to help us select a strategic cause

• Culture committee defined a vision to guide our strategic framework to create a healthy, vibrant environment, fostering collaboration and celebrating success
Launched wellQ, which encourages Canadians to take their medications properly and build a relationship with their pharmacy team through a combination of incentives and education

Awards

• Named one of the 50 Best Employers in Canada by Hewitt Associates for the second year in a row

• Recognized as one of Canada’s Greenest Employers and one of Canada’s Greenest 30 Companies

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

OuR ACHIEvEmENtS

Work environment

• Introduced Career Pathways, a comprehensive guide to career building to help associates grow their careers

• Launched “Learn”, a new learning tool with access to over 6,000 online courses to give associates more opportunities to develop their skills

• 94% of associates believe that LoyaltyOne makes the communities where it operates a better place to live and work

Community

• Raised more than $1,500,000 for charities like Motionball, Kids Help Phone, the Canadian Red Cross, the CP24 CHUM Christmas Wish and more

• Associates contributed 2,691 hours on CommunityOne Day

• Put the focus on community building to maximize our charitable giving

Environment

• Reduced CO2 emissions by a total of 45% from
2010 to 2011

• Our Toronto Head Office achieved a 91% waste diversion rate

• Expanded our sustainable fleet program for associate travel

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE RESPONSIBIlItY

A responsibility to inspire

At LoyaltyOne, we recognize that every business has a critical role, and a responsibility, in creating a healthier environment and community. In 2011, we focused not only on how to act on these responsibilities, but how to integrate them into everything we do. We’ll do this by motivating our associates, continuing to reduce our impact on the environment and helping to build the communities in which we live and work.

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE RESPONSIBIlItY

We also established a Corporate Responsibility Team and added specific performance measures and job descriptions. This will help us ensure sustainability is truly integrated into the way we do business.

LOYALTYONE’S CORPORATE RESPONSIBILITY COMMITMENT

We are committed to making a difference. We will help others improve their potential, engage in and enhance our environment and create a meaningful impact by bringing people together in partnerships that deepen connections and change lives.

  • ONE Community
  • ONE Environment
  • ONE Culture

We will help improve the social quality of life by supporting programs that spearhead community building in the areas where we work and live.
We will reduce our own footprint, and influence, promote and demonstrate changes in behaviour that inspire others to do the same.
We will strive to create an engaged workforce by encouraging the efforts of our associates and supporting their health and wellness.

President & CEO

Bryan Pearson

Executive Leadership Team Chief Sustainability Officer

Environment

Our accountabilities

We’ve put a strong governance structure in place to manage our community-related, environmental, and cultural responsibilities.

  • Community
  • Culture

Associates

  • It begins at the most senior level within the
  • To support the Chief Sustainability Officer, we have

assigned responsibility for overseeing each pillar of our activity to staff in our Corporate Responsibility Team. Ultimately, however, it is our associates who drive many of the environmental and social company – our President and CEO, Bryan Pearson, directs all of the company’s strategic activities and serves as the Chair for LoyaltyOne’s Executive Team.

Next, our Chief Sustainability Officer, Debbie Baxter, reports directly to the Executive Leadership Team and is accountable for ensuring that our commitments to corporate responsibility are realized. responsibility initiatives within LoyaltyOne. In addition, our Senior Vice President of Human Resources, Sofia Theodorou, as part of the Executive Leadership Team, is accountable for ensuring that our commitments to create an engaged workforce and make LoyaltyOne a place where all associates can do their best work are met.

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE RESPONSIBIlItY

Engaging our stakeholders

We believe that building a foundation of mutual understanding and collaboration with stakeholders is integral to our sustainability journey. We are committed to proactive management, open communication and transparent reporting, which hold us accountable to continuous improvement and help us meet our goal of being a leader in the global loyalty industry.
We define our stakeholders as individuals or organizations that can affect – or are affected by – our company. Based on this definition, our key

stakeholders are our associates, Collectors, business partners, local communities and leading sustainability organizations.

Examples of our engagement with key stakeholder groups:

Associates

Associate Engagement Survey

Annual tool helps create and foster a culture of open communication and continuous improvement.

Associate Panel

Mechanism to share information and get feedback from associates on overall corporate programming, including sustainability.

Town Hall Meetings

Bi-annual meetings hosted by Executive Committee members provide associates with updates on important LoyaltyOne news, including sustainability topics.

President’s Focus Groups

Quarterly meetings allow our President to meet with associates in an informal setting and get their perspectives on the business and how it could be improved.

Annual Environment Fair

Annual event raises associate awareness about more sustainable products and services available through our Sponsors, Reward suppliers and Facility suppliers.

Contests & Prizes

Challenges issued throughout the year engage associates on corporate sustainability (e.g. internal contests to reduce office energy consumption and waste, Pollution Probe’s Clean Air Commute, etc.).

Associate Cause Committee

Associates from all over the company help to shape how LoyaltyOne approaches community investment.

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE RESPONSIBIlItY

Examples of our engagement with key stakeholder groups:

Business Partners & Leading Sustainability Organizations

Partners in Project Green

Provide corporate mentorship to community of businesses in the Greater Toronto Area working to green their bottom line (e.g. tours of LEED Gold Certified Customer Care Centre in Mississauga).

Greening Greater Toronto

Participate in workshops with other organizations committed to making Greater Toronto the greenest region in North America.

Network Business & Sustainability

LoyaltyOne is a member of a select network of leading organizations in the area of sustainability, whose overall goal is shaping management practice and research.

Sponsor Fundraising Campaigns

Launched program enabling Sponsors to launch fundraising campaigns with LoyaltyOne support.

MyPlanet Rewards Partners

Collaborate with Sponsors and Vendors to offer more environmentally preferable products and provide incentives for Collectors to purchase them (e.g. bonus AIR MILES® reward miles).

Facility Suppliers

Collaborate with all of our building landlords to meet stringent environmental performance criteria and work towards LEED certification.

Annual Environment Fair

Annual event raises associate awareness about more sustainable products and services available through our Sponsors, Reward suppliers and Facility suppliers.

Collectors

AIR MILES My PlanetTM program

Enable Collectors to earn or redeem reward miles on eco-friendly products and services and share green information and tips online.

AIR MILES for Social Change

Partner with government agencies and social change organizations nationwide – from energy utilities and transit authorities to waste diversion and health awareness agencies – to inspire people to make better choices for themselves and their communities.

Collector Panel

Solicit feedback and input from approximately 50,000 Collectors in regular survey on corporate programming, including sustainability topics.

wellQ

Encourage Collectors to take their medication properly through a combination of incentives and education.

Local Communities

Community Giving and Volunteerism Programs

Invest in the human and social capital of our communities.

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE ENvIRONmENt

Working together for a healthier planet

In 2011, we continued to work on reducing our environmental impact and integrating sustainability into our core business practices. We started new partnerships, launched associate awareness programs and strived to inspire change at work and home.

Watch our videos at

loyalty.com/accountabilityreport

Note: 2010 numbers have been adjusted due to a more thorough review of our carbon footprint profile and updated emission factors.

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE ENvIRONmENt

REDUCING OUR HARMFUL IMPACT

We understand LoyaltyOne’s environmental impacts and we’re doing everything we can to help reduce them in three main areas: our organizational carbon footprint, waste production and procurement practices. Read on to see all the ways we helped reduce our harmful impacts in 2011!

Our organizational carbon footprint

To help us measure our company’s carbon footprint, and ultimately reduce it, we established a baseline greenhouse gas inventory in 2008. Since then, we have measured our impacts against it. We’re proud to say that in 2011, all our facilities showed a reduction in green house gas (GHG) emissions compared to the year before, and we cut our total carbon emissions by 45%. We also reduced CO2 emissions per associate!

Total GHG Emissions by Locations (Metric Tonnes)

8000 7000 6000 5000 4000 3000 2000 1000
0
2011 2010 2009

LoyaltyOne Locations

We measure 3 significant kinds of emissions: fuel (Scope 1), electricity (Scope 2) and indirect emissions (Scope 3) that are the result of the manufacturing of paper, associate air travel and freight.

CO2 per Associate (Metric Tonnes)

76

6.36

5

In 2011, we recorded a total of 54.3 metric tonnes of CO2 Scope 1 emissions, 608 metric tonnes as Scope 2 emissions and 3,819 metric tonnes of CO2 as Scope 3 emissions. Paper contributed to the largest portion of our indirect emissions, followed by air travel.

4321

4.88
3.34

2011
0

  • 2009
  • 2010

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE ENvIRONmENt

GHG Emissions Breakdown by Scope (2011) 4,481 Metric Tonnes C02

2.19%
Scope 1 (Fuel)

Scope 2 (Electricity)

16.24%

Scope 3 (Other Indirect Emissions – i.e., paper use, air travel, freight)

81.57%

GHG Emissions by Major Activity (%)

Paper – External (56.04%) Air Travel (16.05%) Freight (5.55%)

16.05%

Mileage (3.81%)
5.55%

Heating (2.19%)
3.81%

2.19%
Electricity (16.24%) Paper – Internal (0.13%)

56.04%
16.24%

0.13%

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE ENvIRONmENt

How we have helped reduce our carbon footprint
Our paper policy

Paper remains one of our biggest environmental impacts. We continue to operate under our Sustainable Paper Procurement Policy which states that all paper we purchase must be FSC-certified and have a minimum 30% post-consumer content for both internal and external communications. We also seek to buy paper from North American mills whenever possible.
• We installed more efficient lighting options • We promoted our Work at Home Program to Customer Care Associates

• We purchased more efficient LCD display screens • We conducted an Energy Audit of our Corporate Head Office to identify opportunities for efficiency improvements and energy savings
In 2011, we also moved toward a new paperless

system for benefits and payroll deposits.
Fluctuations in the volume and frequency of our

paper-based communications to AIR MILES Collectors can occur each year. In 2011, this had a positive effect on our carbon footprint. We anticipate that this impact could fluctuate in subsequent years.

Purchasing Green Energy

While our main focus is onsite energy and carbon reduction, we also support clean, renewable energy choices. Our Mississauga and Calgary facilities include Bullfrog Power and in 2011, we purchased green energy from Bullfrog Power for our Toronto Head Office. Bullfrog’s green electricity comes exclusively from wind and hydro facilities that have been certified as low-impact by Environment Canada under its EcoLogoTM program.

By choosing clean, renewable power for its Toronto, Mississauga and Calgary locations in 2011, LoyaltyOne has reduced its environmental footprint by the equivalent of 739 tonnes of carbon dioxide (CO2), 1,973 kg of sulphur dioxide (SO2) and 1,224 kg of nitric oxide (NO).

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INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE ENvIRONmENt

  • Our Work at Home Program
  • Work at Home Program Participation   –

LoyaltyOne Customer Care Associates

Our Work at Home Program continues to provide

exceptional environmental benefits, cost savings and improved work-life balance for associates. The program was initially piloted in 2008 with 18 associates as a means to resolve internal seating capacity challenges and demonstrate LoyaltyOne’s commitment to the environment; now, we have 234 participating Customer Care associates.

1200 1000
800 600

  • 18
  • 114
  • 215
  • 234

400

200
0

The program supports several LoyaltyOne strategic goals, including:

  • 2008
  • 2009
  • 2010
  • 2011

Year

• Engaging associates to lead more sustainable lives • Enhancing work-life balance for associates who spend less time commuting and more time with family

• Demonstrating environmental stewardship through a reduction in energy use and CO2 emissions associated with daily commuting

• Identifying operational efficiencies by through more efficient use of office space

• Maintaining a high level of customer care service • Preserving business continuity by ensuring that associates are able to operate through localized power interruptions, severe weather conditions and transit disruptions

Waste reduction

In 2011, to help reduce the amount of waste that comes from our coffee/tea packets, we enrolled in a pilot program with TerraCycle and Mars Drinks to up-cycle our used Flavia coffee packets. As a result, LoyaltyOne diverted over 40,000 Flavia coffee packets from the landfill. Instead they were returned to TerraCycle, where they were turned into fun purchasable products like bags, purses, picture frames and more! A portion of the proceeds from these items was also donated to charity.

A waste audit was conducted at our corporate headquarters in Toronto. And we’re so happy about the results! Based on a 24-hour sampling period, it was estimated that 13.5 metric tonnes of waste are sent to the landfill and 130.3 metric tonnes of waste are recycled. That’s an 8% reduction from the year before!

15

INSPIRING CHANGE ONE BY ONE 2011 ACCOUNTABILITY REPORT

ONE ENvIRONmENt

Waste Management Trends – Toronto Corporate Office

  • 2009 2010
  • 2011

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  • Aimia Sells Air Miles Trademarks for Canada to Diversified Royalty Corp

    Aimia Sells Air Miles Trademarks for Canada to Diversified Royalty Corp

    Aimia Inc. Aimia sells Air Miles Trademarks for Canada to Diversified Royalty Corp. for total consideration of up to $67 million MONTREAL, Aug. 25, 2017 /CNW Telbec/ - Aimia Inc. (TSX: AIM), the data-driven marketing and loyalty analytics company, announced today that it has sold the Air Miles Trademarks for Canada to Diversified Royalty Corp. (TSX: DIV). Aimia transfers the Air Miles Trademarks, license and royalty agreements for Canada to Diversified Royalty Corp. for a cash consideration of approximately $53.75 million. An additional contingent consideration, up to a maximum of approximately $13.75 million, may be paid within the next three years, based on the performance of the program. Aimia expects to pay cash taxes related to the sale of these trademarks in 2018 of between $13 million and $16 million. Annual license fee revenue generated from the trademarks being sold has historically represented approximately $8.5 million on average. The Air Miles Trademarks for Canada are used under license and exclusive right by LoyaltyOne, Inc. "This transaction is part of our plan to simplify our business. We continue to evaluate and consider further disposals of non-core investments and assets to strengthen our balance sheet," said David Johnston, Group Chief Executive, Aimia. About Aimia Aimia Inc. (TSX: AIM) is a data-driven marketing and loyalty analytics company. We provide our clients with the customer insights they need to make smarter business decisions and build relevant, rewarding and long-term one-to-one relationships, evolving the value exchange to the mutual benefit of both our clients and consumers. With about 2,300 employees across 15 countries, Aimia partners with groups of companies (coalitions) and individual companies to help generate, collect and analyze customer data and build actionable insights.
  • Loyalty and Rewards

    A SPECIAL ADVERTISING FEATURE BY MEDIAPLANET LOYALTY & REWARDS SECRETS OF THE JET SET “Word Travels” co-host Julia Dimon shares her expertise as a seasoned travel rewards collector 4TIPS Spread the word Keep em’ coming FOR COLLECTING The research The science POINTS—AND behind consumer behind loyalty and MAKING THE MOST OF THEM opinion branding PHOTO: PRIVATE A FREE NIGHT HOW LONG DID IT TAKE YOU TO IS CLOSER THAN EARN YOUR LAST REWARD? YOU THINK. With over 6,500 locations, rewards are right around the corner. NO, REALLY. Really. Earn points for free nights, air travel, gift cards and more. Or, earn Aeroplan® Miles for award travel. Join for free at WyndhamRewards.com/Star Points or miles are earned for qualifying stays at participating properties. As of May 2011, Travelodge® hotels in Canada do not participate in Wyndham Rewards. © 2011 Travel Rewards, Inc. Visit wyndhamrewards.com for program Terms & Conditions and Privacy Policy. ®Aeroplan is a registered trademark of Aeroplan Canada Inc. 2 · JUNE 2011 A SPECIAL ADVERTISING FEATURE BY MEDIAPLANET CHALLENGES TIP 1 GIVE YOUR WE RECOMMEND REWARDS PROVIDER Rewarding FEEDBACK research Why consumers SO THEY CAN love to spread the SERVE YOU word—good and BETTER bad. PAGE 4 “Word-of-mouth is a powerful force, epsecially today when we have so many choices... We value what we hear from those we trust.” Treating you right p. 9 What should customers expect from their rewards company? Cut back on cards p. 10 How smartphones are ringing in the future of rewards collection. Who doesn’t love a perk? These days, it’s the norm for most retailers to award hard-earned points in exchange for hard-earned dollars.
  • Bill 47, Protecting Rewards Points Act— ASSESSMENT & POSITION

    Bill 47, Protecting Rewards Points Act— ASSESSMENT & POSITION

    Bill 47, Protecting Rewards Points Act— ASSESSMENT & POSITION REPORT – Bill 47, Protecting Rewards Points Act (Consumer Protection Amendment) 2016 Ontario, Canada WHITE PAPER INTRODUCTION The Ontario Government’s Bill 47, Protecting Rewards Points Act (Consumer Protection Amendment) 2016 is aimed at providing consumers who participate in loyalty programs with protection over rewards points earned from loyalty programs. As one of the foremost thought leaders in the brand loyalty industry, Bond Brand Loyalty has developed this report in order to help loyalty owners, operators and their partners better understand the implications of the amendment to the Act. In our opinion, there are several challenges with the way the amendment to the Act was written, which will create new and unwanted consequences for both businesses and consumers if left unchanged. This report will describe the key issues that we have unearthed, and we advocate that businesses closely examine the amendment to the Act with their legal, financial and strategy teams to draw their own conclusions. In our view, it is incumbent upon businesses to immediately engage in consultation with the Ontario Government to ensure that these issues and any others are adequately addressed. BACKGROUND Points expiry in the Canadian marketplace has existed ever since loyalty programs began issuing points to Members as a currency. Points are generally expired by loyalty program owners/ operators under several circumstances including Members who are inactive for a defined period, the passage of time alone, and/or in the event that a program owner decides to close down their loyalty program. Such points expiry polices are contained in the terms and conditions of loyalty programs.